If you’ve been in the mobile space a few years, then you’ll know that acquisition was once the most important metric to follow. Mobile marketers focused on getting as many people to the app as possible, touting the number of users as success for the brand. But the fickleness of the average mobile user means that the net effect of acquisition doesn’t necessarily add up to much, with 21% of new users using the app only once, much less converting and becoming the type of customers who deliver real ROI.
The obvious take away: marketers need to focus less on acquiring new users, and more on engaging and retaining their existing ones. It turns out that those lessons from Marketing 101 were right: it costs five times more to acquire a new customer than it does to retain an existing customer, so you’re better off looking at the latter.
But brands are slow on the uptake. Currently, 88% of marketing budgets are spent on acquisition, leaving just a smidge for all those marketing activities that are dedicated to reducing churn and driving retention. This does not lead to growth - in fact it can deliver the exact opposite. When 80% of customers churn within a 90 day period, you can be acquiring users in sizable numbers but doing nothing to grow the business in a meaningful way.
In this piece I’m going to take a deeper look at why brands need to nurture their existing customers with engagement, retention and conversion strategies, rather than ‘buy growth’ from acquiring new customers, and how those engagement and retention strategies will work.
Why Brands Need To Beat Nature With Nurture
First things first, marketers need to address this massive 80% dropout rate and instead convert those users to become ROI generating customers. Acquiring new users won’t help a bit here, so the obvious alternative is to engage the users you have so they don’t delete (or just stop using) the app.
To do this, marketers need to develop and use engagement strategies across a multitude of channels, and ideally use them according to each individual user’s preferences. But this is easier said than done. We know from previous research by Twilio that 84% of marketing messages are deemed irrelevant by customers, with a further 71% admitting to being irritated by messages.
Whilst more channels mean more flexibility for the marketer, they also offer more opportunities to spam. In order to stay relevant in real-time, multi-channel communication, marketers need to focus on dynamic campaigns that avoid hardwired, predictable journeys. These dynamic campaigns should anticipate relevant moments along a customer’s unpredictable journey, using data which tracks the customer lifecycle, and step in to drive engagement, conversion, and retention. The right data will tell you who your customers are, when they would like to receive a particular message, what form that message should take, and which channel to deliver the message in, enabling marketers to send messages in near perfect conditions for that individual.
The result of this ‘perfect storm’, as it were, is your customer being two times more likely to stay within the app. Not only that, but targeted and personalized upsell and cross sell promotion can increase revenue per customer by up to 30%.
So you’ve figured out how to start retaining customers, but how do you measure it? Retention is measured by the percentage of users having at least one session more than 24 hours after install. Engagement is measured by how long and how often thereafter a person uses the app. And with consumers spending 70% of their digital minutes on mobile devices, and 90% of that time inside apps, engagement should be a relatively easy target. Right? But the reality is that delivering regular app usage requires a real commitment to delivering the most relevant and effective marketing communications possible.
This communication needs to be super specific. A casual ‘We miss you’ won’t do the job here. For example, highlighting new features can help turn users of your app into loyal paying customers. The key is to alert your users to those features because, through no fault of their own (or your own, depending on how you look at it) they might not be aware that those features exist. Following that, it is essential to highlight these features at the right place and time, and through the right channel, using your data tracking engine. Your app data will also tell you which features are retaining users and which features are giving them a guided tour to the emergency exit. The goal is to find a feature that is used by most users who stay engaged with the app, but is also not used by most users who disappear.
The next step, of course, is to tell your users how to use these features. Follow these steps and you’ll find your users flocking to your app’s best features in droves.
1. Promote the feature during onboarding. It’s not possible, nor would we advise that you include a tip overlay for every single feature in your app during onboarding. But it is important to showcase the features you know your customers love. So take some time during those all important first few minutes after installation to make your users aware of them. Onboarding screens give you the opportunity to do just that.
2. Even after your user’s initial experience of the app, there is still ample opportunity to point out features you want them to discover. Tip overlays are a great way to point out features at contextually relevant moments when the user is more likely to take immediate action. One of the great merits of waiting awhile is that it enables improved targeting. To be more specific, Swrve can send campaigns only to users who have failed to discover specific features while avoiding annoying those who have. If a feature is particularly important tip overlays, in-app messages and even well designed push notifications will help to steer customers in the right direction.
3. Before you begin promoting your app’s key features, don’t forget to A/B test different approaches. This applies to both the content and creative of the in-app campaigns themselves, but also for the UI and interaction design of the app. Some navigation and menu options are more effective when it comes to feature discovery, and A/B testing will show what works and what doesn’t.
To grow and develop mobile audiences, brands need to pull back from spending their marketing budgets on acquiring new customers and instead put more resources into retaining and engaging with existing customers. It is essential to follow your customer’s lifecycle and notify them of useful, relevant information at precise moments of truth. By making retention a KPI of success, instead of acquisition, marketers will see their mobile brands grow, retain more customers, and enjoy real ROI on all their development and acquisition spend.