Editor's Note: The following is a guest post from Ken Rudin, director of growth and analysis at Google.
App marketers have come off the biggest download season of the year, but not all are set up for strong, sustainable growth. While some might pin their hopes on a killer feature or other “silver bullet,” the best will approach growth as an iterative, repeatable, data-driven process. They think of growth as a four-quarter game, not a 60-second drive.
Read on to learn how you can give your growth strategy legs based on principles we use to drive lifetime value for our own apps like Google Photos and Google Search.
Approach growth as a game of inches
Small wins are the building blocks of long-term growth. Looking at a growth curve, many focus on the inflection point where things climb dramatically. But it’s the many small features and optimizations along the way that typically make up the majority of a product’s growth — usually exceeding the growth impact of so-called “killer” features.
We applied this idea to the Google Photos app. User research showed that people were quickly running out of storage on their phones and unaware that Google Photos could help them free up space. However the feature was buried deep in settings under a header that said "manage device storage." By changing the name to “Free up space” and moving this button to a more prominent spot in the app — and then running marketing campaigns around it — we significantly increased usage of this feature which has been sustained, even after the campaign ended.
By focusing on identifying and delivering many small improvements to the app, our teams could continually drive engagement — without having to find any silver bullets.
Growth begins and ends with data
Data doesn’t merely reflect what’s knowable. It’s the fuel of smart, informed decisions. Certain user actions within your app could hold the keys to unlocking greater lifetime value.
Our Google Search app teams in Australia and Japan noticed that some users downloaded the app but never searched. We analyzed data to identify the types of users who were most likely to do a search in the Search app, and used those insights to revamp our paid advertising strategy.
Consequently, we were able to begin targeting users who might mirror the desired behavior (i.e., engagement within the app) rather than just one-and-done downloaders. Once we optimized our app campaigns in tools like AdWords for “first search” — that is, identifying the users most likely to perform a search — we saw a 40%+ relative uplift in retention. Using data to understand user flows, drop off, usage and retention rates helped inform our marketing decisions, leading to overall higher lifetime value.
This example serves to introduce our next rule of thumb for consistent growth:
Think retention before acquisition
It may seem like a chicken-or-egg scenario, but it’s not. If you don’t have good retention, your future acquisitions hold very little long-term value. Think of it as a leaky bucket: Without good retention, pouring more users in only guarantees more will fall through.
First, draw a retention curve from a cohort of users who started using your app on a certain day. Then, for each subsequent day, plot what percentage of that cohort came back on that day. If you have poor retention, your curve will keep dropping.
So what does good retention look like? The numbers differ from business to business, but it’s essentially a curve that flattens rather than continuously dropping. Eventually, the curve will become pretty flat. That’s the goal — and the point at which you can start focusing more on acquisition.
And sure enough, data can help there too. Most studies point to the fact that a small percentage of an app’s users typically drive the majority of the app’s revenue. Given the majority of apps are free, analyzing your data to identify the types of users that are most likely to monetize is important. When only a small subset of your users contribute to your total revenue, product and marketing efforts must focus on finding people who are more likely to stick around.
Give data some legroom
Mobile marketers know that data can help drive decisions that improve lifetime value. Even so, product data and marketing data have historically been incredibly siloed. Growth is not a product challenge, and it’s not a marketing challenge — it must be a business priority. So when you’re looking at data, it’s vitally important to look end to end.
Again it’s about moving one inch at a time — not necessarily focusing on finding the killer new feature. By thinking of growth as an iterative, repeatable, data-driven process that’s continually ongoing, you’ve put your team within striking distance of scoring. Add data to the mix, and you’re dancing in the end zone.