What is Growth Rate?
Put simply, growth rate defines how well applications acquire and retain customers. This complex metric is used by app creators worldwide to identify how much interest exists in their product, and how frequently it is used, to grow their business and drive up profit margins. Growth rate is highly significant for businesses, as stakeholders keen to invest in the app will wish to see positive, upward growth trends before handing over their cash. If you’re an app creator, you might already be doing some of the important things needed to understand and act on your growth rate, without even knowing.
How is App Growth Measured?
Measuring an app’s growth rate can be a complex task, but several metrics can be used to determine how successfully it is performing. Some of the most helpful Key Performance Indicators (KPIs) that you can use to determine an app’s growth rate are:
- Retention Rate
An app’s retention rate is the number of users who consistently return to the app over a specific period of time, be it a week, a month, or a year. A high retention rate is valuable for any company, so organizations must take action dedicated to improving the long-term customer journey and rewarding loyal clients.
- Churn Rate
The opposite of retention rate, the churn rate of an app determines how much revenue has been lost over the same period of time. If customers downgrade their accounts or delete them altogether, net income can be affected, so churn rate plays a key role in understanding an app’s growth. For example, while signing up 100 new users might encourage you to think that your app is growing rapidly, if 99 of those users leave within their first two weeks, your growth rate will not be as high as initially expected.
- DAU
The DAU, or Daily Active User, rating of an app is a helpful way to measure its growth rate, as it gives both internal and external stakeholders a clear picture of how much value is being delivered to customers daily. The DAU score is also a good way to track your app’s growth, as you can directly compare current data to previously achieved stats.
- CLV
Once you understand your DAU and retention rates, you can more accurately calculate your CLV, or Customer Lifetime Value. This involves assessing the overall value that an average app user can bring to a business for the entire duration of time that they remain a customer. Understanding this value allows you and your team to decide how much to invest into your marketing and acquisition costs to accurately predict your present and future growth.
How Much Do Apps Grow Per Year?
Apps can be developed for a range of different devices, with one of the most popular for worldwide users being mobile phones. Thanks to the subsequent range of stores that apps can be purchased from, it can be tricky to ascertain exactly how much they grow each year.
Another key point to note when it comes to growth rate is that the speed with which a company grows depends on the sector it sits within– for example, financial services start-ups take the lead when it comes to growth, averaging at a projected rate of 900% in the first year. These businesses dominate the field, well ahead of the retail and wellness sectors, which come in at a projected 400% and 300%, respectively.
This means that when you’re developing your app, you should consider the sector in which you operate when estimating your growth rate and pitching your product to investors. This will give your team the best chance of building an app with the future in mind and achieving higher adoption rates post-launch.
How Do I Increase App Growth?
So, you know you need to increase your app growth rate, but how do you actually do this? There are some key strategies that you can include in your growth planning that can drive impressions, conversions and retention rates. By following these top tips, you can see enhanced growth and bring more users to your app.
Choose The Best Delivery Method
Before you start developing your app, deciding how you’d like to deliver the final product is essential. One of the biggest reasons for the failure or popularity decline of other apps on the market is that they are offered through the SaaP method, Software as a Product. SaaP is used for apps developed by a company that then licenses the product to be hosted by an end user, typically through downloading the app onto their hardware. Once they have downloaded the app, the customer has to stay on top of updates, which can be time-consuming. In addition, SaaP companies are often somewhat inaccessible when it comes to getting help – once a user has downloaded a SaaP product, they tend to be left to work things out on their own.
An increasingly popular alternative to SaaP is SaaS, or Software as a Service. These apps are typically hosted online, so users can access them over the internet. Any updates or changes are managed directly by the company in an organized and structured way.
What’s more, in recent years, SaaS start-ups have seen far higher levels of growth, making this an excellent option for companies who want to build a product that not only makes money, but also puts customer satisfaction at the forefront.
Perfect Your UI/UX
UI, or 'User Interface' and UX, or ‘User Experience,’ are vital components of app development that can propel your growth rate when executed correctly. UI/UX centers around creating a product that places the customer at the forefront to foster long-term user relationships, and it does this through thoughtful design that makes using the app seamless. The quicker a person can begin using the full functionality of your app, the quicker they will be able to make the most out of its offering and get value from your product. As a result, this also means that if your app is difficult to use or sends customers searching for guidance on its use, your retention rate could take a serious hit.
As part of your app-building process, it’s therefore crucial to ensure that you have experienced UI/UX designers on your team to prioritize the front-end experience.
Pay Attention To Your Advertising Metrics
To increase your app growth, it’s important to clearly understand all areas of your business. This will give you an overall picture of how certain functions impact your app’s uptake and continued use. Advertising is a key example of this, and there are plenty of metrics that you can use to track your success, such as:
- Impressions
The number of impressions, or views, that your advertising receives can play a big part in your growth. If you have an effective promotion strategy, but your adverts aren’t reaching anyone, you’ll struggle to get the numbers needed to fuel your business’ visibility. You can use a range of data tracking tools to view the number of impressions that your advertising and marketing material receives, to see whether your promotion has the desired reach.
- Conversion rates
Once you know how many impressions your content receives, you can then see how many viewers are converted into app users. This is a great way to ascertain whether your growth rate is improving, and come to a clear conclusion that you can present to your stakeholders.
Make The Most Of SEO
Search Engine Optimization, or SEO, is an invaluable tool that is often overlooked when business owners begin to promote their applications. SEO is more than just placing certain keywords on your website – propelling your site to the top of the search results requires you to provide clear, measurable value to potential customers through your content, but many people don’t realize that this actually includes your app store ranking, too. Having the right information, keywords and value doesn’t just help your search engine results; it can also drive visibility and traffic to your app through App Store Optimization, or ASO.
Statistics show that the higher an app ranks on the app store, the more downloads it will receive on average, so the correct ASO approach is vital if you want to drive growth. There are a variety of factors that you should consider optimizing when promoting your app through the store, including:
- Name:
Your app name plays a big part in your brand identity, but also how you rank in the app store search results – having a name that is easy to remember, and that at least hints at what you offer, is a good way to find the balance between your brand identity and advertising methods.
- Keywords:
Having the right keywords and terms within your app description allows users to find you when they are searching for specific services or content. The best keywords are relevant but also competitive – your keywords should be searched frequently enough to help your app rank highly, but not so much that you face an over-saturated market.
- User Reviews:
While you can’t directly change the content of user reviews for your app, you can make a difference to your ASO by positively responding to them and doing your best to address any reviews that might not paint your app in a positive light. Following a negative review, it’s important to publicly address the user in a professional tone, with an explanation of any action you’ve taken to rectify the problem. This helps to build customer trust in your product and improve your ASO, driving download numbers up and boosting your app growth.
Drawing in new users and building engagement with your app through ASO is a great way to increase your app growth rate and drive sales figures for in-app purchases or advertising collaborations.
Encourage Shared Content
For any business, an engaged customer base is vital not only to survival but also to long-term success. For app start-ups, however, this is even more important. With studies suggesting that the human attention span is decreasing, and some even going as far as to suggest that the brain can only hold its attention for as little as 8 seconds, thanks to the emergence of new technology, customer engagement has never been more important. To address this, apps have been successfully introducing shared content functionality for years, and your start-up app should be no different. Having the ability to share content and conversation with friends and family increases the overall interaction features of your app and encourages users to spend more time on your site, which is a great way to boost your app growth and sustain your business long-term.
