Call them ‘power users’, call them ‘VIP’s, or call them ‘whales’, the fact is that a tiny proportion of an app’s users generate the majority of its revenue, and it’s time to turn the spotlight on to them. One Swrve study revealed that in mobile games 50% of the revenue is generated by only 0.15% of monthly users, and whilst that may be an extreme example, close analysis would normally reveal a small percentage of customers providing the majority of revenues. However, revenue isn’t the whole story. These power users can also offer insights that can help you grow occasional users into power users in their own right.
Who Are Your Power Users?
The term ‘power users’ has often been used to mean simply ‘those users that spend the most time in app’, but that kind of simplistic view doesn’t necessarily translate to a healthy ROI. The users who are really powering your app are the ones who are bringing the most value to it, and the first step to making the most of your power users is to define exactly what ‘valuable’ means in terms of your app.
For some, it could be the users that engage with the most ad content, whilst for others it could be those that make the most in-app purchases. There’s no point spending time investing in the users who are spending the most time in the app if they’re actually generating next to no revenue. Likewise, focusing on a user who has historically spent the most money in the app might not pay off if this is based entirely on a few big transactions made last year.
A good starting point for establishing who your power users really are is to look at lifetime value (LTV). The general principle for LTV is to establish the average amount generated by a user in a month, and then multiply this value to indicate how much they are likely to bring to the app across an average user lifespan. Power users are, generally speaking, those with the highest LTV - frequent engagement, high revenue and longevity are all good indicators of a user who is giving you a good return on your investment. LTV highlights how boosting the spend of existing users and increasing retention rates rapidly adds up to a significant gain in terms of the bottom line. Look at those users who have the highest lifetime value, and you’ll have a decent approximation of your ‘power users’.
Giving The VIP treatment
Now that you’ve established who your power users are - and, just as importantly, who they definitely are not - you can use this information to ensure you hold on to them. Split your metaphorical whales from the small fry, those who’ve just started out with the app or who are only sporadic users. Targeting your campaigns according to user engagement ensures that everyone is approached in a way that suits both their history with the app and your plans for their development. It encourages the little fish to grow, and keeps the big fish in the pond.
Rather than bombarding power users with irrelevant and potentially irritating interactions, creating a specific segment for these users allows you to focus your efforts on boosting their customer loyalty with personalized content and rewards. Learn from offline, traditional business and spare no expense when it comes to delivering the best possible levels of service to your top customers.
Learn From Their Success
Power users are an app-specific example of what success looks like. Looking back over the early activity of current power users can suggest patterns of behaviour that correlate to a future of high spending and high engagement. This brings two main benefits:
A) Identifying future power users early on. By looking at power users’ early interactions, you’re in a good position to predict which users are on course to become equally valuable. Giving these users particular attention can keep them on the course to a high LTV, and avoid them drifting. For example, let’s say that a significant number of a travel app’s power users signed up for their loyalty club, and then, soon after, booked long haul flights. Keeping track of which new users do the same allows you to target them with specific offers and experiences in order to keep their custom.
B) Encouraging ‘power user behaviours’. Looking at your power users’ histories can also indicate which behaviours could be worth encouraging amongst users in order to put them on a similar path. Returning to our travel app example, those users who have just signed up to the loyalty club might be sent notifications about deals on long haul flight deals, guiding them along a well-trodden route to higher LTV.
Identify Acquisition Power Sources
Let’s be frank: acquisition can all too often be a money pit. Focusing on finding new users rather than building your relationship with existing customers is like pouring more water into a leaky bucket, rather than attempting to fix it. That said, acquisition is also a necessity to growing an app’s audience. The solution? Use the insights you can gain from your power users to ensure that you target the people who are most likely to have a considerable LTV.
Looking at the acquisition sources for your most valuable users can highlight which platforms are likely to be the best use of your resources, and most worthy of your investment. Although your campaigns will be reaching fewer people overall, both your acquisition rate and the LTV of these users is likely to be considerably higher, as you’re putting yourself in the optimum position to reach the right people. Rather than approaching acquisition by looking for an immediate revenue increase, playing the long game can pay off by gaining users who continue to deliver over time.