Solving Your Cost of Acquisition Problem

User acquisition costs are the highest they have ever been. The reason is simple: more mobile app companies are in the business than ever before. More money is being invested in mobile products overall; the mobile app economy is expected to reach $143 billion by 2016. Getting noticed is even tougher since Apple cut their iOS top ranked apps in half last year. There’s ever-increasing competition for ad space, app store top rankings, and users’ time.

Acquisition costs by the numbers:

  • The cost of user acquisition rose 34 percent between 2013 and 2014. Cost-per-loyal-user index (someone who will open the app 3 times) has increased by 21% to $2.25 each in September, up from $1.86 in August. Fiksu theorizes that it shows the growing competition to capture users’ attention in the mobile industry.
  • Cost-per-launch (CPL) index increased to 29c, a 48% increase from last year. CPL tracks the cost of driving engagement from mobile users.
  • Cost-per-install (CPI) index increased 6% last month from August to $1.23, up 41% from 2013. That’s how much it takes to have an individual user simply download your app (and not necessarily be loyal).

How do you compete against this uphill battle when most developers rely on self-funding? You need a solution that lasts. Lowering the cost of acquisition for your product is now a priority to even exist in the app world. Luckily, the answer is simpler than you might think: fulfil the promise your brand makes to customers.

Making Your Customers a Brand Promise

Bear with me: imagine your app is a shoe store in a mall. You’ve spent money on designing the space, invested in a nice sign that brings users in, and your shoes are also pretty good. Many assume that’s all it takes to have a successful business. Yet what happens when a customer walks in and needs help, but there’s no one to support them? They go to the store next door for similar shoes. Your acquisition cost is money wasted.

Being the next big app isn’t just about proving your idea is viable. Truly unique ideas are far too rare. In 2014 there were 1.2 million iOS and 1.3 million Android apps available in stores (and rising). It’s safe to say that most mobile apps have a few thousand direct competitors each, let alone the millions that compete for customers’ time. They all run acquisition campaigns to improve their products’ organic search, paid ads, social outreach, and more. What can make your product stand out?

It’s the brand promise you make to your customers. Success is about affirming that you’re the best around, and keeping users happy by fulfilling that promise. Does your mobile app fulfill its promises? That question is the first step toward defeating competitors.

There’s a reason that when you walk into retail stores the first thing you hear is “How can I help you?” It costs less money to charm you the first time than it does to pay for your attention again. 80% of users delete mobile apps after one use. Once they churn, it effectively means you’ll have to pay their acquisition cost all over again. You have one chance to make an impression. Smart businesses don’t simply react to customer problems–they proactively solve them.

How to Keep Brand Promises

The mobile app equivalent of “How can I help you?” is in-app feedback. Mobile developers are rapidly adopting in-app feedback to quicken response times by 104% and greatly increase contact rates in beta. It makes no sense to abandon users–or make them leave the app to be helped–after you’ve spent resources acquiring them. Improving customer engagement is worth it: your app retention will double after week 1 when you interact with them. In-app feedback provides the opportunity to transform customer support into affordable acquisition.

How? Imagine you have 500 app users contact your support. It’s more than you would get with email to begin with, and you’re able to contact them all with a faster native option. 100 of them convince one person (via the appstore, word of mouth, etc) to try your product. Then, 20 out of that 100 do the same thing. Eventually your 500 paid loyal app users just became 625 organically. Loyalty becomes evangelism, evangelism becomes virality, and that community reduces costs with organic growth.

Every user that needs help from you or provides feedback is a potential evangelist. After all, those customers are engaged enough with your product to speak up. On the other hand–Salesforce estimates 89% of customers would stop doing business if you have slower options, forcing you to convince them of your promise twice.

Excellent Service Lowers Acquisition Costs

Forrester advises that in order to succeed, your contact center and customer service metrics must support your broader business objectives. Why not use a medium that improves your overall end goals? If you want to reduce your acquisition costs, make your support act like it.

Customers choose your app because you’ve promised them that you’re the best among your competition. Creating a brand through outstanding service is fundamental when customers are more empowered than ever–they set the brand expectation you have to match. Forrester found that the most profitable factor differentiating companies is the service they provide.

Solving your cost of acquisition problem is about focusing on how to impress the customers themselves. Become obsessed with them; Forrester advises that “winning, serving, and retaining customers is the only possible response” to technological forces.

Want more in-depth strategies to lower acquisition costs? Christian Calderon–Head of Marketing at Dots–shows you How to Engage Your Players & Spark Virality in Helpshift’s latest webcast.

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