22 Feb 2017 6 Effective Ways To Improve Mobile User Acquisition Costs (CAC)
With the overcrowded app markets each customer demands your full attention. We already proved that current customers are the best sources for new users and there are multiple methods to achieve that, like Word Of Mouth, Content Marketing, User Generated Content, Social Media Influencers, App Store Optimization etc. And the best part is that most of them come with no cost. But how do you acquire those first users? While every solution in marketing environment implies a lot of effort some of them require more time and less money like the ones above and for others it is essential a budget from the start but the results are seen almost immediately. So, let’s discover the options available for fast solutions at a lower cost.
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What Customer Acquisition Cost (CAC) Means for App Developers?
Customer Acquisition Cost is the price you pay for convincing users to download your app. As a developer you must be sure that your app meets all the criteria required by users before launching it. It is pointless to talk about user acquisition if the app has bugs or they get lost inside it. Optimizing it is the first step you must make for preparing your app for advertising investment. Use crash reporting tools and check best practices of app onboarding for polishing your app and to spear money for customer acquisition. When you have your app ready to meet its customers you can gather your marketing team to create an efficient plan for attracting users.
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How to Measure CAC?
Customer Acquisition Cost is a very important metric, just like Lifetime Value (LTV). Your objective is to create campaigns for acquiring users with high lifetime value and low customer acquisition cost. You can obtain its value by adding all the marketing expenses in a period of time and divide the sum to the number of users acquired in that interval.
CAC depends on multiple variables like the period you run your campaign, mobile OS, the ad platform, app category and even region. So, for Android CAC is different from iOS and there are distinct elements for the market in Asia and the one in Europe. Follow the insights provided by analytics and study the fluctuations related to these factors.
6 Effective Ways to Improve CAC
There are various ways to reduce user acquisition costs and they are in some manner best practices for every app owner during the entire journey from developing the app to building a relationship with customers.
1. Find Your Intended Audience
Our permanent advice is to really get to know your users. This will make you save money and at the same time it will minimize your effort during marketing campaigns. You can divide your audience into two groups, the ones that download the app without advertising because it is created for solving their problems and another one with a wider area of users for which you need to define smart strategies. The latter need your full attention since you have to consult your data and to follow them on social media to discover their preferences. But if you are well prepared it will worth it in the end.
2. Focus On Engagement
After you concentrate your forces on user acquisition it is imperative to turn your attention on engaging those users, as we highlighted at the beginning of this post. After obtaining a stable version of the app you need to improve it for reaching the highest grade of performances. At the same time, useful characteristics will speak about the utility of the app. Of course, you don’t have to gather all the functionalities in the world. This is another proof that you need to define your target audience. Look for their feedback and understand what elements will impress them. After that, observe the potential of premium features. You need to find new ways to increase revenue from existing users in improving CAC.
3. Advertise Using Deep Links
For a more efficient campaign, it is imperative to use deep links to direct users to specific locations related to your ad inside the app. What is the point to promise attractive content inside the app and to send users to the general page? You risk to lose your money and at the same time precious customers. For the benefits of using deep links, you have our detailed article, which explains how this technique works along with best practices.
4. Cut Down On Special Events
If you want to reduce user acquisition costs stay away from holidays and other big events when you have to spend more money for each new customer. Observe the peak hours and avoid paying more for special periods of time. It is recommended to start your campaign in autumn after the vacation time of summer and before the great buzz of winter. The same phenomenon happens in spring, the costs are going down, as March Fiksu Index reveals.
5. Test Different Channels
You may be tempted to use all the available platforms for advertising your app but this is not a smart solution. Even if there are many sources that drive you users not all of them are efficient. Try some of them which look promising according to your app type and measure Return Of Investment in each situation. Keeping an eye on this metric for each campaign it will help you realize which strategy worth your budget and which ones aren’t that effective. After calculating all the important elements keep just one or two that bring valuable users at a lower cost.
6. Maximize LTV
Finding loyal users is the key to every successful campaign. A report published by Fiksu in April, last year shows the evolution of Cost Per Loyal User, which refers to the price paid by for each user which opens the app more than three times. The same analyzes highlight the importance of driving targeting strategy for more efficient effects.
In addition, you can take a look at our previous article to discover effective tactics to maximize LTV of your users.
Don’t Forget Paid Acquisition Boosts Organic
Talking about fast solutions, Tune reveals the results of a study made overpaid campaigns and their effect for organic downloads. As you can see, more than 90% of worldwide app installs are organic.
Another conclusion of the research states that for every paid install, apps obtain an average of 1.5 additional organic downloads.
Further, Tune explains the fact that the results are not the same for every app. All depends on app category since some apps like games or the ones that maintain the monopoly for the services provided like Uber are shareable by nature, while others need a paid boost to see the light of success.
Keeping an eye on marketing dynamics will help you optimize your campaigns. Different channels will show different results. Reducing user acquisition costs means to concentrate your efforts on what is really working. If you use the information gathered you will make the best decision in terms of time and money.