6 Rules for Operating Your App as a Business

Are you prepared to compete with the millions of apps already available in the app stores, and more being developed daily?  According to Statista, as of June 2016, Android users were able to choose between 2.2 million apps. Apple's App Store remained the second-largest app store with 2 million available apps.  So how are some apps able to rise to the top of the charts (and stay there), while others fade away? The difference between achieving app success or failure to thrive is the ability to apply some basic rules for operating your app as a business:

Rule #1 – PREPARE TO PUT IN LOTS OF TIME!

First-time developers with a vision for an app or game might be tempted to think that launching an app is something you can set and forget.  An app is a business that requires continual refinement, growth of new users, and a host of measurement, analytics and optimizations around the monetization strategy. It’s an investment of time, and attention and focus to getting things right and to continue to serve your users and the market. Your time is the biggest expense of all, and you must want to give it.

RULE #2 – PREPARE TO SPEND ON MARKETING

There are financial costs to starting any new business, and more often than not, spending occurs before you start earning.  For mobile apps, it’s rare to launch an app and see instant uptake without spending on marketing to your audience.  For new or independent mobile app developers, these early stages can be a cautious time and rightfully so, since CPI rates (cost-per-install) are climbing.

Sure, there are free and organic methods to give your app an early advantage in the app stores (e.g., good descriptions, beautiful images, strong keywords), as well as setting up social media channels to foster word-of-mouth among fans, and app reviews to raise awareness. Yet looking at the top 100 apps in the charts, it’s safe to say that none of them got to the top by organic efforts alone.  There are ways to stretch your mobile user acquisition budget, but marketing expenses are a necessary cost of doing business. Accept it, and take action under the guidance of your mobile ad network partner. 

The great news is that mobile app users and game players now expect to see ads as part of their in-app experience.  According to recent research from deltaDNA and Unity Technologies, nearly half (56%) of the survey respondents - US mobile players of free-to-play games who play at least monthly - prefer viewing rewarded video ads.

Establishing a quality user-base is only the beginning.  Successful app businesses must focus on retaining your valuable users and attracting new ones on an ongoing basis. 

RULE #3 –QUALITY TRUMPS QUANTITY

With finite budgets and user acquisition costs climbing, spending requires a leap of faith that the marketing efforts will pay off. This is why focusing on quality rather than volume of users is important.

High quality mobile app users or game players are the ones who are spending on in-app purchases, and have high retention rates. They are the life blood of your app’s economic health, and provide the funds from which you establish your UA budget. The higher your LTV’s (lifetime value of users), the more you can spend on User Acquisition.  The economic principle is simple: You want to make more from your users than what you spend on acquiring them.  Therefore, the amount you can afford to spend on user acquisition is dictated by the quality of the users you attract, not the volume.  When you get this right, you have now created a positive sustainable loop.

Use your in-app data to identify the users who come back to the app regularly and spend on IAPs.  Using attribution data, you will then be able to identify the campaign sources that brought in these high-value users, and optimize your campaigns to continue to acquire more of them. By filtering for quality, you are eliminating wasteful spending on acquiring fleeting users that don’t contribute to your app’s health. 

Focusing on quality users and strong retention rates, rather than volume, is key to growing a healthy app business. Over time, your campaigns will become smarter, more efficient and more powerful.

RULE #4 – RESPECT THE LEARNING CURVE

There’s an old adage, “Inch by inch it’s a cinch, yard by yard it’s hard.” Growing incrementally provides the opportunity to learn as you go.  A successful mobile UA strategy involves several components, all of which requires stages of testing, learning, sharing the knowledge across your company and applying the new information. While a strong mobile ad network can provide automated optimization in real time (saving you time and manual labor of connecting the data points), it’s important to understand the factors that have the potential to help or hinder your marketing practices:

RULE #5 – MAKE A GOOD APP AND CONTINUALLY IMPROVE IT

Having a great game or app is essential.  The user experience speaks for itself as users and players will rate your app and comment in the app stores.  These ratings and comments influence potential new users.  Fix any bugs, add new features as you go, and refresh the experience from time to time (e.g., introduce seasonal designs or holiday-themed characteristics if possible) to keep existing users engaged.

Customer feedback in the app store is a great way to start understanding the real needs of your customers. Once you have monitored and gauged their interactions with your app you can start making it better, stickier and more engaging.  Listening to the comments and responding with improvements to your app will inspire users to come back, and do so with more affinity. Remember you don’t want your app to be a one-time thing, you want to give users a reason to return regularly.

RULE #6 – PROTECT YOUR APP FROM FRAUD

The mobile ad industry, much like the online ad industry, is susceptible to fraudsters seeking to gain the system.  Fraudsters sometimes use bots and other tactics to fake a download, and in other instances intercept and steal attribution data to take credit for the download.  You paid for REAL users – 100% humans, not bots or fakes – and you deserve to get them.  When partnering with mobile ad attribution companies, look for a partner who puts fraud detection and prevention at the very top of the priority list.  All suspicious traffic or activity should be declared to you, researched, and refunded if found fraudulent.