Ultimately every mobile app has to dig on Return on Investment referred widely as ROI. Fetching the ROI of a mobile app us fundamentally no different than what it is done with other products. Modeling ROI is vital to evaluate your product and to boost the ROI metrics from time to time.
There have been a lot of talks on boosting ROI and about effective ways to do it. After explaining the intricacies of modelling ROI, we will also take a deeper look at it.
The importance of proving mobile ROI
Just like the importance of mobile BI in online marketing, proving ROI has become immensely important for marketers. As developing mobile app requires huge budget every company is serious about the return from every penny invested in it. Naturally, it is very much up to product managers to prove the ROI. When you can come with your ROI figure ahead of the project, you have the much bigger opportunity to scale up your development team, budget and positioning of the product in the post development situation. ROI is widely considered as the robust tool to enhance the scope within mobile product management.
How to model ROI?
As the importance of ROI from the perspective of product management is established now, we can show how to model it with least complexities.
Basically, for the mobile teams, there are two principal ways to prove mobile ROI for the products they are responsible for. These two ways are mentioned below.
- Through the individual product knowledge and available internal business data of the company.
- The same can be done more professionally through hiring an ROI expert who is capable of leading the project.
While the first one has limitations regarding the expertise of employees, the second option can be great to ensure top notch expertise. But there are other problems when hiring ROI experts from outside. The common problems faced by us regarding both these groups include budget, time, knowledge gaps, etc. To help people in the developer company to practice the process of ROI determination, we will mention here the key considerations.
Make an estimate of the enhanced profits
As soon as you have shown the business problems solved by the product features it is time to identify the benefits the company can generate thanks to the new solution.
1. Give an estimation of the loss in case the feature is not built
This is proving the same thing from the other way round. Instead of showing profitability with the new solution you will show the business loss in case the solution is not unleashed.
2. Now offer an estimated cost of development
Now make a complete assessment of the product development cost by considering the time it requires and the small hardware pieces that can be necessary for development.
3. Put the entire equation nicely together
To model the ROI for your app, you now have three distinct variables. These are the relevant variables:
- Revenue gains through the release of the app.
- The loss of revenue in case the app is not released.
- The cost of developing the app.
- Now combining all these variables you can make the right ROI model.
Essential tips to boost app ROI
Until now we have discussed on modelling the app ROI. Now how can you boost the ROI of your app we will see here.
1. Check installs outside of paid ones
Initially for a time frame you probably agreed for paid installs. But within that same time do you find installs that fall outside of this category? If yes, you have something to feel optimistic about. Focusing on organic installs is very crucial to boosting ROI for your app.
2. Validating avenues
A user can get to know about your app through an ad page of another app. Or it can be known through a different app. But how many clicks the app required, how many advertisements the user came across before choosing the app, all these would tell about the cost per install and also about ROI.
3. Finding the right users for your app
You need to know the characteristic properties of most of your engaged users and doing this for several days finally you know your users to target on a priority basis. The better targeting you can do the less cost you need to incur and thus can boost the ROI. Using a lookalike model can be hugely helpful in this regard.
4. Demographic and regional considerations
You can gradually get closer to your target audience by following a lookalike model, but there are times you need to go beyond this. Demographic data like age groups or region are important to know your audience in detail. Every important aspect of conversion, engagement, ROI, and LTV when put in the context of demographic data, they grab a new meaning and give explicit insights about the audience.
5. Evaluating attribution models
Among your ad partners, all of them do not need to be subjected to the same attribution model. Marketers need to consider which attribution model is right for which type of ads. It is quite effective because video ads and banner ads get different kinds of engagement. Thus when you evaluate different attribution models, it quickly offers insights concerning which model can fit a particular situation.
There are different types of attribution models. Linear attribution results in equal credit for all interactions while with attribution based on the depleting user’s recent interactions receive more credit than the older ones.
Finally, to boost your mobile ROI it is important to make the complex marketing data simple. When your report can decipher the deep lying insights from mobile data, boosting ROI becomes easier.