3 things I hate about the iBeacon hype

iBeacon Inverted Value Pyramid

iBeacon news is everywhere and changes in IOS 7 updates are making good news fodder but I want to clarify some real “value” points about iBeacon solutions. I’ll call this the “inverted value pyramid”

The iBeacon inverted value pyramid

The iBeacon inverted value pyramid

This pyramid helps you decode the value of iBeacons in a business context. The smaller the triangle, the lower the value.

Layers of Value: iBeacon, Passbook, Apps

So:

  • at the base of the pyramid, iBeacons are the lowest value
  • next step up the pyramid is the possibility for retailers, museums, brands, airlines to incorporate iBeacon with some of the features of Passbook. I’ll do a detailed post on Passbook iBeacon integration because its good but has a few hidden gotchas.
  • Most value at the top of the pyramid is integrating iBeacons with Mobile or Table Apps. The most flexible and meaningful uses for iBeacons are in conjunction with a specific experience. For example:
    • A Museum can help users discover exhibit information
    • Playgrounds and Museums will run treasure hunts for kids
    • Dating Apps will allow proximity matching for “similar likes”
    • Business Apps might exchange business card/contact data quickly
    • Retail can measure footfall and attribute to a specific marketing activity earlier on the App
    • Retail might trigger an event in Aisle 5 because a user put the Pasta Sauce on the shopping list.
    • etc. The possibilities are limitless.


iBeacon Hype Hate List

Hate 1: my first item on the iBeacon hype hate list is: Assigning magical properties to a new gadget.
Much of the press about iBeacons latches on to the magical properties of “never-before-available” capabilities. The green section of the pyramid is what iBeacons can do for you on their own…..the answer is “not much”.

They might be great as a talking point and as a sales tool in a meeting, they help people to grasp the potential, but other than that you can’t make much use of them.


Hate 2: Magic Happens. The great news about iBeacon and Passbook is that it allows long-tail retailers to potentially use coupons without delivering Apps. It also allows big retailers/brands to use Passbook as a new customer acquisition channel.

However, here is my list of “its not magic” points:

  • Implementation Magic – whether you do Passbook or Apps to implement iBeacons, there is a stack of planning and implementation to get this running. At this stage iBeacon needs technical people to get a deployment
  • Proximity Magic – iBeacons transmit “radio” signals – so reception varies. Problems include: iBeacon signal overlap, over-promising how accurate proximity will be. What happens when your phone is in your handbag
  • “Me, Me, Me” Magic – iBeacons will become pervasive. Why will a shopper prefer your Popup in comparison to all the other Popups in Passbook. Apple’s current implementation is to silently show the Passbook, so its a high probability your user won’t see your coupon. My discussion above on Apps shows that if a user is already engaged with your Brand/Location/Venue/Retailer then you are going to get the best engagement and response rates.
  • “One Beacon to Rule them All” Magic – Passbook is on Apple only – forget about Android users. In the US, EU, Australia this is roughly 50% of customers you are missing. In Asia Android penetration is much higher so the Apple users are a small part of your customer base. Some startups are doing Passbook things on Android but its not automagically installed on Android phones.



Hate 3: No talk of cost of ownership – Here is how it will play out…..

  • you’ve deployed iBeacons and your campaigns but you don’t seem to be getting much response.
  • Investigation reveals that your iBeacon near the front-door of the store has gone missing. Yep, stolen or “souvenired”. The replacement is more than $30 for the device, there is the setup of the new iBeacon ID’s and associated campaign configs.
  • Not stolen? So you shake it a bit, give it a bang on the cash register but still no luck. Its probably got a flat battery. Some vendors are cleverly and correctly providing monitoring but you also have to provide the data paths to get that info back to a central monitoring platform, so that introduces security holes that IT are going to want to audit.
  • Customer Hijacking – its possible to sniff other iBeacons. That means (as far as I can tell) your competitors could have an App that pops up a message when your customer enters your store – enticing them to come to their shop!

So there you have it. A quick fun post on the practicalities of introducing a new gizmo into your mobile marketing initiatives. The iBeacon technology wave will have great benefits but we think the big VALUE will be found in Apps.

 

 

 

Grow a viral loop and reduce churn in your App – Part 3 of 3

For those that missed them, here is: Part1, Part2.

Part 3: 10 questions to ask to create your viral loop

Returning to our simple viral formula:

k-factor = reach x response rate x engagement rate x share rate

we can start focusing on optimising each component. This makes it easier to track and implement, and breaks the task of viral loop construction into more easy to manage chunks.

The Viral Loop

By asking yourself the 10 questions below, you can start to add viral elements to any App.

 

Optimising Share Rate

The core of the viral loop is the incentive that encourages users to share how awesome your App is. But also Sharing needs to be inherently valuable to the user. Why else would they do it?

Question 1: What is the value that sharing will provide?

There are several categories of value:

  • Sharing upgrades the user’s own App or service. Think of Dropbox, which offers users more storage in exchange for shares. It’s easy to understand and very tempting.

  • Social benefits:

    • Community effects. The user is rewarded for having large and active networks on your App. One example is the benefit of connecting and interacting with others in communications Apps like WhatsApp or Instagram. Social games such as Farmville also play on the community effect. A different example is Living Social’s Me+3 campaign, which encouraged buyers of massages to invite three friends and create an occasion.

    • Finder’s effect. The act of sharing itself may have social benefits. If your App is interesting, useful or funny, people enjoy a sense of “look what I found” when telling other people about it.

    • Personal expression. The message being shared by the App conveys a sense of achievement or connects with a message the user is trying to convey.

  • Other incentives:

    • Affiliate marketing: monetary benefits, discounts on subscription plans, coupons

    • Socially conscious options. The sharing may generate some form of social action, such as donating to a charity of their choice or planting a tree

Note that the design and functionality of the App is important in affecting how much people want to share. Effective viral elements have to be integrated throughout the App design. Even for the finder’s effect, your App or offering has to be outstanding so that people want to tell others. If you have a terrible product or don’t understand your customers, no viral loop is going to make up for that!!!

If you use StreetHawk Marketing Automation, you don’t need to hardcode some of your “share” tests into the App logic. Setting up rules to trigger based on a user having a happy experience in the App may be a great way to share. For example, if a user finally completes a tough level in a game, then now is the time to brag about it. But don’t hard-code that for every user – use StreetHawk’s rules to test different users (A/B splits), Custom Tags or Usage Rates.

Question 2: How do I further increase the perception of value?

  • The offer has to be instantly attractive, generally by being simple and easy to understand. Think again of Dropbox. People using the service can instantly understand and appreciate the value of more storage space. No elaborate scheme or explanation is required. This is EVEN MORE IMPORTANT ON MOBILE – the trigger for offer has to be timed right because people are distracted – they could be on-the-go and distracted. We know one Taxi App that asks for feedback at the same time you are finalising payment and getting out of the taxi – who has time then!!!!

  • The offer to share has to be made at the optimum times, when it really makes sense to share. This may be just after the first successful use of the App or when a milestone has been reached. Experimenting with this help you find the best times for your App. Using StreetHawk you can measure the conversion rate to a particular experiment and then optimise.

  • Offers that fit your business and values work better than generic discounts or offers. As an App developer imagine if you told the Cartier marketing manager you can do “FLASH SALES”. You will probably get this look.

Artists impression of grumpy CMO

Artists impression of grumpy CMO. (obligatory cat photo)

Question 3: How do I make sure users complete their intent to share?

  • Make sharing insanely easy and intuitive, requiring as few clicks as possible.

    • Pre-generate the share-link and message

    • Pre-select relevant recipients (use StreetHawk filtering to break into real-time segments)

      Viral Fanout by Shares. Credit: crowd babble.com

      Viral Fanout by Shares. Credit: crowd babble.com

    • Don’t request another login. Connect with the user’s contact list, email or Facebook ahead of time, so there is as little extra work required as possible at the share stage

  • Limit the number of decision points. Conduct testing to see what networks & options convert the best, so you only have to offer the optimised choice

 

Optimising Reach

This is the on-ramp. The more exposure you get, the more awareness you gain and the more people will continue onwards.

Question 4: How do I maximise reach?

  • Make it really easy to share widely

    • Is your App running on a phone or on a tablet? Is the user “on-the-go” or is it a “lean-back” experience. Minimize the steps to get to sharing for each situation.
    • Pre-tick the share list with all contacts or relevant/recommended contacts (maybe this is a bit evil but might also be what the user wants – companies like LinkedIn seems to do this so they must have figured out it has high conversion).

    • Enable search on the contacts list so the user can easily share to exactly who they want

    • Provide the option to manually enter additional email addresses

    • Make it possible to share on multiple networks in the same step

  • Consider where new users can discover your viral loop and begin the process

    • App Store Optimisation, online marketing, website integration, SEO, newsfeed, blogs, etc

 

Optimising Response Rate

Here is the other side of the value proposition. Not only has sharing have to be valuable to the sharer, but it must entice new audiences to click on it. This is sometimes known as the viral hook.

Question 5: What is the viral hook?

The viral hook cannot simply create interest and awareness that eventually leads to a sign up, it must aim to convert instantly. Only by connecting the share with the new user can the sharer claim

Viral Hook

Credit: thewebpsychologist.com

the value they were promised. Without rewarding the sharer, future shares will dwindle.

There are three main types of viral hooks that will entice viewers to click instantly.

  • Savings driven. The user receives a limited time offer for a discount or subscription. They must claim the offer through the share, and the sense of urgency helps them decide immediately. A good example is giving both sides a coupon. Since not everyone will redeem the coupon, the cost is lower than the perceived value.

  • Value driven. The share highlights the benefits of the App and the values of the company. It may offer an exclusive initial experience that is superior to users who sign up independently. Revisiting the Dropbox example, users who sign up from a referral receive more storage than those that sign up directly. This mean keen users may even seek out a share link from a friend, and this encourages the culture of sharing.

  • Interest driven. The share highlights a unique or interesting aspect of the App or the sharer’s experience that intrigues the viewer enough to click through.

 

Question 6: How do I design the share to increase the conversion rate?

    • Sharer customised message: The best shares contains some personal aspect of the sharer’s experience or achievements with the App. This is especially important for interest driven viral hooks. An example of this is the SwiftKey App, which is a keyboard enhanced with predictive text. A custom message from them involves how many keystrokes you have saved.

    • Consider the sharer’s target audience. Even though a more specific audience lowers the reach of the share, it will increase the conversion rate. For example, you may not permit the user to share with everyone on their Facebook, but instead customise a greater offer for just a few select friends.

    • Consider the sharing platform What works on Facebook won’t work on Twitter and what works on those will fail on email. So not all types of media work the same across different platforms. This is just soooooo important when sending receiving on mobile. Be aware of inherent biases for platforms, and design your viral loop strategies to take advantage of these. e.g:

even small things like….

  • putting “.@username” instead of “@username” in a Twitter share has a difference in who sees the tweet.
  • Another example if you share via push on Android, you can also include specific quick buttons that appear in the notification centre (programmers can check it out here). IOS does not support this yet but could be conversion uplift on Android.
  • Reminders and follow-up. You may be able to generate follow-up or reminder emails after the initial share was made, to offer a second chance.

Question 7: Does the first time experience hook the user and draw them in?

  • The first time user experience must be highly optimised. Facebook game developers ‘Pretty Simple’ spends 30% of development time (approximately 6 months with 25 people) focused on the on-boarding tutorial and the first time user experience

    • Your App has to be immediately useful and obviously so!

    • The user interface must be high quality and intuitive

    • It has to just work

  • Sign up should be as simple as possible. Progressively gather information instead of doing it all at once. Use Facebook or Google connect if possible

  • Have a great story to tell. The user must be able to feel the essence and purpose of the App along with your company philosophy. This draws them in, creates the opportunity for delight and is very sharable

Question 8: What are the off ramps?

  • Track all usage to discover where the users churn and experiment to fix areas such as:

    • The App crashes or is broken

    • Loading takes too long

    • Initial use or sign up process is annoying

    • User meets in-App payment requirements too soon. Convince them first, then allow to pay for more

Question 9: How do you optimise your engagement to share funnel?

  • For a true viral loop, users must share during their first App launch. This encourages sharing due to discovery and ensures that users invite others before they churn

  • Reduce the number of steps in the engagement process before sharing occurs. Some Apps even push the Respond → Engage → Share part of the viral loop to Respond → Share → Engage. This works especially well if the purpose of your App is easy to understand, such as communication Apps.

 

Reducing churn with viral loops – combining retention with virality

Even more exciting possibilities arise from building combined retention and virality strategies.

The clearest model for this comes from social games. As a new player, you invite your friends to build your community to help each other achieve the goals of the game. They reward you for inviting as many people as possible. This is the virality element. However, another element is the free gifts and calls for help that you send to each other. This is the retention element. But these two elements are completely intertwined, because the retention mechanism works better the more friends you have giving you gifts and asking for your help. So the viral elements of the game fuel the retention elements. People who have stopped playing will be encouraged to start again by new players who need help. And by staying longer in the game, you ask more friends and help it to spread even further.

Another example is the coupons mentioned earlier as a high value reward for sharing. You provide a coupon to the sharer and a coupon to the new user. The sharer is encouraged to continue with the App, while the new user is encouraged to give it a try.

 

Question 10: How can you create an overall strategy of these two elements?

  • Share rewards that are based on enhancing or upgrading the App or service, such as Dropbox mentioned earlier, works particularly well. As users share more, the App becomes more and more valuable to them. The effort that was required to build up the App acts as an exit barrier as well

  • Encourage the community effect. Communication Apps have this built in. If you have invited all your friends to communicate over WhatsApp, everyone will continue using WhatsApp as  they keep receiving messages from their friends

  • Provide sharing opportunities not only at the start, but at moments when it makes sense throughout the use of the App, especially in related to milestones or achievements. The sharer’s own community will help to reinforce the achievement

 

Double viral loops

Double viral loops are networks built on top of other networks that are linked together in a way that when one grows, so does the other. Consider this as another possible strategy for your viral loops.

One example of a double viral loop between two platforms is eBay and PayPal. As each attracted more people, they funnelled users into the other and drove further success in both networks.

Within your own network, you can create a double loop by not only allowing old users to invite new users, but providing channels for the new users to engage old users. An example of this is with LinkedIn, where new users can tag people they have worked with, who gets sent an email to confirm. This reengages the existing user, who is then encouraged to tag their own colleagues or invite new users. The growing network of each user primes other networks for further growth.

As a final example, consider Gangnam style. It inspired many parodies and spinoffs, which in turn greatly increased the visibility and virality of the original by creating curiosity in people that was not part of the existing audience.

So as a bonus, consider how you can start building double viral loops or piggyback on a growing network for mutual benefit.

Double Viral Fatigue

Now for Caveat Emptor!!!

Double Viral Fatigue sounds like another nickname for mononucleosis! Not so. Think about the rise and demise of OMGPOP’s game Draw Something (acquired by Zynga). In just a few weeks after their acquisition, the user base dropped drastically. So they released Draw Something 2 but never recovered. The game was viral at its core but perhaps users got too tired of it too quickly – so the game and its usage had an expiry date because it fatigued the users.

Most people begrudgingly accept persistent notifications from Facebook but the question is for how long!


In summary:

Ask yourself these 10 questions to systematically increase the virality of your App. Viral loops cannot be simply tacked on as an afterthought but requires a deep integration with the overall design and strategy of the App.

However, using StreetHawk delivers flexible ways to trigger and track implementing certain portions of the viral loop – to find out more by simply getting in touch to request a demo.

Stats: App Revenue Share (In-App vs Paid)

I stumbled across a very interesting report yesterday released in January 2014 by Distimo.

Revenue Share per Business Model

App Revenue Share per Business Model

App Revenue Models

The chart covers the predominant business models (revenue share) for Apps inside the Apple Appstore (Android is lagging on IAP):

  • Free Apps with IAP
  • Paid Apps without IAP
  • Paid Apps with IAP

Thank goodness they didn’t include Free Apps with MASSIVE EXITS TO FACEBOOK as a business model. Its valid but definitely an outlier that you can’t see on any sane chart :)

The key takeaway here are that:

  • the “Fremium” business model is killing the other models.
  • comparing with the average revenue per download (chart below). There is a much higher download rate for “Fremium” Apps.
Average Revenue Per Download

Average Revenue Per Download

Aside from Japan and possibly South Korea, it means your optimal way to make money is to:

  1. Have free download
  2. Get engagement with the users
  3. keep them long enough to have them pay (IAP) for extra features inside the App.
  4. keep them longer to help them spend more via IAPs

We all intuitively understand this, which is why the web applications now operate mostly on a monthly or per-transaction model.

So the secret here is to engage with your users and drive down the amount of churn.

Thats why we think that segmenting your users and communicating with them “Right-Time” is your best path to a lasting business.

Grow a viral loop and reduce churn in your App – Part 2 of 3

Last time…..

 

In the last post we covered:

  • the basics of a viral loop: engage, share, view, click.
  • why viral loops are for everyone.

 

In this post we cover: k-factorreachresponse-rateengagement rateshare rate and the impact of “cycle time

Quantifying viral loops with the k-factor

How can our simple loop (in the previous post) help us in constructing a tightly integrated perpetual acquisition engine? (sounds sexy right????)

First we have to get specific and quantify just how much virality you have. This is done with the

k-factor kicks

k-factor kicks

concept of k-factors, or the viral coefficient.

We’ve already used k-factors in the previous section. It is simply the number of secondary users each new user you acquire brings in over their lifetime.

If your k-factor is greater than 1, that means every new user that comes in attracts at least one new user and so on. Congratulations, your App is now growing exponentially without any extra input. Your acquisition costs can essentially go to 0.

If your k-factor is between 0 and 1, you still benefit, as shown in the previous section.

 

So how is the k-factor calculated?

k-factor = reach x response rate x engagement rate x share rate

Basic Viral Loop with k-Factor

Basic Viral Loop with k-Factor

Let’s look at each of these.

  • Reach: Once a share is made, its reach is the number of people that was shared to, or sent an invite. This depends on how easy it is to find and select all the people you would like to share to and the type of network it is made to. Sometimes there is a trade off with response rate: a share to social media will have a larger reach but lower response rate than direct invites sent via email.

  • Response rate: The proportion of people who click through on the share once they see it. This depends on the relevance and interest of the shared message. Personalising the messages with the value the sharer found is one method of encouraging a high response rate.

  • Engagement rate: The proportion of click through visitors who engage with the App and becomes a new user. This depends on how intuitively useful the App is and the overall quality it exhibits. The first user experience should be carefully engineered.

  • Share rate: The proportion of users who share to others. This is affected by how easy it is to share and when the prompts to share appear in the engagement process.

These four elements can all be individually tracked. As well as this, these elements can all be individually optimised. Details and tips for optimising each component will be discussed in Part 2.

Considering the engagement rate and share rate, these elements in particular are heavily affected by the user experience in the App. This shows that creating a viral loop within the App is not only a marketing consideration but also a product decision. It cannot simply be an afterthought, but should involve the support of multiple teams.

The impact of cycle time

The k-factor says nothing about how long it takes to go around the loop for one generation. This comes from the concept of cycle time. The cycle time takes into account the time between one share and the next generation of shares. It is affected by a delay in each step in the cycle above. For example, if the user takes a long time to engage with the App before they decide to share it, or if there is a lag between when someone first receives an invite and when they decide to act on it, this leads to a longer cycle time.

Since the effects of a viral loop lasts over many generations, a faster cycle time decreases the overall time it takes for the effects to compound and allows you to recover your CPA more quickly.

Multiplicity

Metcalfe's Law

Metcalfe’s Law

Each run of the viral loop is not the same in the long run. The goal is to construct a product with a viral loop that benefits from the network effect, where more people makes it more useful. An example of this comes from the extraordinary success of communications Apps such as WhatsApp and Snapchat. As you invite more contacts to the network, the App inherently becomes more useful. This offers a natural reward for users to invite more and more people to join. Another example is social games, where players frequently run into situations where they need help. The more friends who are actively playing the game, the more fun the experience is.

The reverse of the network effect is a product where more people creates more noise, so excessive use actually discourages the further spread of the product.

Key lessons:

  • A carefully constructed viral loop is behind the growth in Apps like FaceBook, Instagram and WhatsApp

  • Viral marketing is about compounding viral growth rate, so a small improvement leads to a huge difference in outcome. Even Apps that are not inherently viral can use the idea of a viral loop to lower customer acquisition costs

  • k-factor = reach x response rate x engagement rate x share rate. Each component can be measured and optimised

 

What to look for in Part 3:

  • Optimising each component of the k-factor formula

  • How to integrate retention and viral loop strategies

  • Double viral loops

 

Grow a viral loop and reduce churn in your App – Part 1 of 3

You’ve heard of the old 80:20 rule?

Well, it applies to your customers as well…..

the truth is that it takes 80% effort to get a new customer and 20% effort to keep them!

In this post, we cover ideas of the most profitable and effective efforts you can make on that 20%.

Customer acquisition is hard. Most start-ups struggle or fail at it. In the end it all comes back to the simple equation – LTV > CPA. When your App or your business’s ability to generate revenues from a customer does not exceed the cost it takes to acquire them, the business model flops. (with the exception of venture economics which is a different discussion!)

We’ve focused in the past on increasing lifetime value (LTV) by enhancing retention, but what about the cost per acquisition (CPA)?

There is one concept that every startup should understand that can significantly reduce CPA. It’s even possible to lower it to zero ($0) and create a perpetual growth machine – this was famously stated by WhatsApp CEO as the “$0 marketing budget”. That elusive concept behind a low or zero CPA is viral loops.

What are viral loops?

A viral loop is a self-fuelling cycle of users generating more users – it looks like this:

Basic Viral Loop

Basic Viral Loop

First, your App is shared. People in the sharer’s network see this, click through and engage with the App. Through a series of optimised steps, these people go on to invite the next set of new users.

Apps such as Facebook, Instagram and WhatsApp have all relied on viral loops to accelerate their dominance. However, this simple concept just evolves from the basic idea of personal recommendations.

It’s often not thought about, but the best customer you can get is the one that is recommended by a friend. Think about it, if a friend recommends a café or a website, you usually check it out. According

word of mouth

word of mouth (Credit: http://melissajeansmusings.blogspot.com.au)

to a study by Nielson, 90% of people surveyed places at least some degree of trust in a recommendation from people they know. This is much higher than the trust placed in information seen in traditional and online advertising.

But with the ease of sharing these days, people are not only recommending things that they are absolutely addicted to. They just recommend something that is interesting or helpful and then they move on. So the trick is to have your App be recommended or shared before a user churns off.

Why viral loops are for everyone

You may associate viral loops with social games, where the whole concept of playability is hinged around the concept of invites and cooperation. However, you don’t have to go to that extreme to benefit from an understanding and implementation of viral loops.

Going back to the link between viral loops and recommendations, think of a viral loop as bonus return on investment for all your acquisition techniques.

Once every couple of new users, one successfully passes through the viral loop and invites someone that brings them on board.

That user is like a bonus that you did not have to spend any money to acquire…

That user is like a bonus that you did not have to spend any money to acquire, allowing you to stretch your acquisition costs over more customers. Thus your CPA drops. You don’t need a completely viral product to benefit from viral loops.

Let’s highlight the benefit more by looking at a numerical example. Say that one in every 5 new users successfully recommends the App to a friend.

Share and Virality

Share and Virality

  • We start with an advertising campaign that brings in 400 users

  • These users will bring on another 80 users due to recommendations, based on the 1 in 5 rate

  • The 80 will then each bring on 16 users

  • And so on…

  • Eventually, this will equal a total of 500 users that signed up because of this campaign, 100 more than those that were brought on directly.

This 25% bonus to your customer acquisition is a great reason why viral loops are worth setting up right.

At the same time, since this is compounding, an increase in virality (not virility or vitality!) makes a huge difference in the final outcome. If instead of 1 in 5 users successfully recommending to a friend, it was 1 in 2, the eventual outcome of the campaign that brought in 400 initial users would be an increase in 800 users instead of 500 users.

Next time…..

In the next post: learn about k-factor, reach, response-rate, engagement rate, share rate and the impact of “cycle time

Your App has a crowd (Part 2)….Strategies for different segments

Continued from Last Time….

 

Last time we introduced some common segments you are likely to find inside your App audience:

Zombies, New installers, Type kickers, Grinders, Sharers, Whales and many others all represent common types of users at different stages of the user lifecycle. In this post, we suggest for strategies for different segments.

Strategising for different segments

App Audience Segmentation

Audience Segments in order of increasing value

If we revisit our segment diagram from the last post, each bubble represents these groups mapped by time and value. The higher up the Y-axis – the greater the value!

Your goal is to move these users up and to the right, to increase their value with time. This means that each segment needs special treatment to move them along to the next lifecycle stage.

However, also recognise that there are many paths and there is not only one ideal journey through the segments. For example, some users are monetarily valuable, but others are sharers or promoters that help with your customer acquisition. You may never get a sharer to make a purchase, but they may happily continue telling all their networks about how great your App is.

Step 1: Gaining clarity on your crowd – based on characteristic criteria

How do you identify and cluster all your users into the different segments you set up?

  1. You DEFINITELY don’t want to be doing it manually based on lists.

    Ugly Slow Sql Queries

    Ugly Slow Sql Queries

  2. You REALLY don’t want to use “Ugly Slow Sql Queries” that you have to bug your developers for.

You should rely on characteristic criteria that make it easy to automate the segmentation process.

For example, a sharer may be found through your social sharing tracking data. Someone who shares your App, content or brags about their in-App accomplishments several times is a great candidate. Maybe they are specifically active on a certain type of social media. It makes sense to identify these segments – it might even be useful to drill-in and segment these groups further.

A grinder may classified as someone who has opened your App a certain number of times in the past week, or spent over a certain amount of time in-App, but purchases and sharing from them is zero. A whale may be defined based on size and frequency of purchases. A zombie may be someone who has last opened the App about a month ago (some users have been gone too long – attempting to revive is likely to get low conversion).

Step 2: Ask the right questions

There are two objectives you can aim for once you have segmented your users in terms of engagement and value.

  1. Move users into a more valuable segment

  2. Maximise the value of the existing segments

Surprise and Delight

Credit: http://www.gomonews.com

Apply a logical progression to these segments, for example, if you have a new user, the logical path to move them to is a registered user, or a power user. What are the right incentives/offers/information should you provide to facilitate that transition? Can you surprise-and-delight them as part of their on-boarding phase?

You can maximise the value of a grinder by making them into sharers. And you try to reengage zombies to bring them back to normal users.

This progression allows you to ask specific and smart questions to help move the users in the right direction.

For example, with a new user you should first think about how to engage them. How to get them to try out the basic options and enjoy the experience enough to come back. Once they are engaged, the next question to ask is how to make it a habit. With power users, the question to ask is how to encourage them to make a purchase, and then increase the value of these purchases until they become a whale. The question for grinders is to how to encourage sharing.

When you ask the right questions, you can plan great campaigns.

For the grinder, they are quite invested in the App in terms of usage and are quite likely skilled in the advanced functions of the App. Allowing them to show off their expertise with the App by highlighting their achievements may be a good incentive to share. One version of this would be encouraging the sharing of good case practices or unique ways of making the most of the App’s functionality. Attaching a prize of premium features for good shares may have the additional bonus of letting them try out the extended features of the premium offer.

 

Step 3: Implement campaigns and track conversions

A key benefit of segmentation is that it allows you to discover and apply insights into the behaviour of your users. These insights should always be focused on business objectives, so it makes sense to continually adapt your segments and your campaigns to better meet your objectives.

To continually adapt, you must track the effectiveness of your campaigns and test alternative ideas to find the strategy most suitable for your user base.

In previous posts we’ve spoken about how right-time notifications and App content drives this engagement and transition to a higher value segment. We’ll do  case studies in a future post to illustrate what really works and how you can apply it.

 

Step 4: Advanced – Improve segmentation further by using personas

Segmentation on engagement is one dimension, and this provides us with a basic overview of a customer lifecycle. However, with the proper definition of user personas, you are able to trace a more effective customer lifecycle that will allow you to shortcut the process of meeting your objectives.

For example, you may discover one particular persona of user that always responds well to discounts. You can take this insight into defining a more effective lifecycle that fits specifically for this persona. This persona may move quickly into being a grinder, who browses but never purchases, unless they are given the right offers. Their high level of response and engagement with discounts means that you might consider targeting them with a personalised offer instead of offering this discount to everyone.

By combining these elements into highly advanced and targeted segmentation, you can cater to the individual needs and patterns of each user, instead of treating them like just one of the crowd. More details on discovering and setting up user personas will come in a future post.

Key lessons

  • Defining the right segments is vital. But even more critical is the personalised engagement plan for the segment

  • The earlier you start considering your segments, the easier it is to design and guide them through the best journey

  • Combining multiple dimensions in your segments will allow you to gain enough granular detail to attend to individual needs without needing to deal with each individual.

Your App has a crowd, now segment for value and engagement

Think of a time when you were part of the crowd at a sports or music event. The performers probably see you like this:

Lonely as a crowd

But joining this crowd did not make you instantly the same as everyone else there. You still expect to have your individuality recognised. The same is true with any crowd. What about Apps? Consider this circled number:

a crowd of users

credit: androidcentral.com

That’s a lot of downloads – a whole crowd of them. What do you think of when you picture that many downloads? Do you see one identity like the crowd above? Does it remain only a number? Do you try assign each of these 10 million downloads to an individual? Is it possible to even come close to keeping track and delight that many individuals?

The wisdom to draw from this train of thought is that crowds don’t use your Apps, individuals do. Your marketing and engagement efforts shouldn’t be aimed at the crowd, but individuals….and to automate that.

Smart Marketers and App teams are humanising their App audience from Day 1.

But at the same time, you cannot possibly cater to each individual. So what’s the balance?

The answer is segmentation.

By creating the right segments, you can gain the right level of visibility into your user base. This allows you to learn, test and adapt. It also allows you to optimise the experience for each of them.
Segmentation is critically useful in a wide variety of contexts. For now, let’s take an example of segmentation in terms of engagement and activity.

Segmenting user engagement to increase value

Let’s use this model to explain the benefits of segmenting. This categorises users into their level of engagement with the App.

App Audience Segmentation

What do these segments mean?

  • Zombie: They may have your App downloaded, but their engagement levels are pretty much dead. The App now sits as one of the ignored, ready to be deleted when space is needed. The question is…how do you move someone out of this segment…and how do you stop them from becoming a zombie in the first place?
  • New installer: Fresh users with a low initial value but they are full of potential. A well designed on-boarding process is essential to making sure that they don’t just open the App once.
  • Type kicker: Here’s someone who is not actively engaged, but instead just playing around with a few basic features. Many new users start here. They don’t push the App to its potential, but are just observing how well the App handle the core essentials. Engagement is low and they are in danger of becoming zombies without proper nurturing and communication.
  • Grinder: This is a segment of heavy users that never make any in-App purchases or takes on a premium subscription. A vital consideration for freemium model Apps is how to convert this segment to sharers or purchasers.
  • Sharer: Provides high value, not in terms of direct revenue but from viral promotion. Engaging your sharers and providing them with incentives to share more is a key investment in your marketing strategy.
  • Purchaser: These are these are probably your “long-tail” they make one or two purchases which means which is good for bottom line – but can you convert them to a whale?
  • Whale: These are the guys that makes your bottom line happy. They not only purchase, but are highly invested in your App and provide enormous value for your business. They can also be your strongest advocates as they’ve made a financial investment in your products.


In the next post…

We’ll continue this post and discuss strategies for each segment, what other segments
you didn’t know you have
and how you execute on driving low value segments to higher value. Also why “higher value” is not always about money. To get notified about the next post just register by clicking below.

Open Source examples for Phonegap (Cordova) Developers

Phonegap (now known as Cordova) is one of the hugely popular solutions for developing cross platform code and deliver in Native Apps. This is a quick post to let developers know that you get access to all the power of StreetHawk even if most of your code is inside HTML/Javascript.

Here is the IOS Source Code

Here is the Android Source Code

Its a quick and practical set of steps to get up and running. Make sure you read the Wiki for each to get the integration instructions. Takes about 5 minutes!


Cordoba Horses of the Royal Stables

Cordoba Horses of the Royal Stables (credit: http://www.spain.info/)

By the way I digress….last time I was in Spain (well the first time) I visited Cordoba just to see the horses. The show is totally amazing and enjoyable. As a friend of mine says: “sort of mindblowing”.

I’m assuming the horses are well-treated, the hosts certainly were strict on the guests! NO PHOTOS!!!!

IOS 7.1 update for iBeacons

Just a quick note that follows up our recent semi-technical presentation on the current state of iBeacons on IOS and Android.

With the release of IOS 7.1 it makes a fantastic change that allows iBeacons to be monitored even after an application is killed (not just when foregrounded or backgrounded). This is a nice side-effect of Apple’s approach of using Location Services to implement iBeacon callbacks to Apps and it increases the utility for both App marketers and App users – great for retailers and brands!

Here is an interesting article that digs into the detail more and is pretty readable for most folks.

How App Marketers can reduce churn and re-engage users

Ever since the early days, when studies showed that 26% of Apps are only opened once, “churn” has hung like a shadow over the economic viability of Apps for B2C companies. But even as Apps become more sophisticated, interfaces improve and user experiences are optimised, churn remains as high as it has ever been, leading many to ponder just how to hold on to those elusive users.

This is a common scenario that StreetHawk tackles with its automated communications.

The impact of churn

Leaky Bucket

Beware the leaky bucket


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