Friday, February 18, 2022

How to track user engagement and retention

CTR (click-to-install rate, or install rate) - the number of downloads per click

CTR demonstrates how clicks on links or clicks on your banner ad are converted into actual app installs. It is calculated as the ratio of the number of successful installs to the total number of clicks. The resulting value is multiplied by 100 to see the result as a percentage.


The average CTR in the industry is between 1-4%: if you are running an advertising campaign with pay per click, keep in mind that it will take 25-100 clicks for one successful installation.


Sometimes it is more profitable to pay not for a click, but for showing (more precisely, for a thousand impressions) an ad. But in this case, you definitely need to track the Click Through Rate, that is, the ratio of the number of clicks to the total number of ad impressions.


CR (conversion rate) - the degree of conversion

CR shows the percentage of app users who completed the target action. For expensive goods that are rarely bought without prior offline consultations, or for the banking sector, the target action may be an application.


In mobile eCommerce, the target action is a purchase. From the moment of installation to placing an order, the user needs to go through a series of steps - the stages of the sales funnel. At each of them, a part of potential buyers is eliminated. Some do not even enter the catalog, others are limited to viewing products, others add something to the cart, but do not complete the purchase process.


The average conversion rate to purchase varies by sales area (it is higher for books than for electronics), so it's best to compare it with the figures for your industry. To calculate CR, you need to divide the number of users who completed the target action by the total number of users and multiply by 100%.


If your online store has a wide assortment, it makes sense to calculate the conversion separately for different product groups. And in order to find a weak point and understand at what stage the bulk of users are eliminated, calculate the conversion for each step.

How to track customer acquisition

1. CAC Rate (customer acquisition cost) - the cost of attracting a new customer

CAC is the main metric that evaluates the effectiveness of your marketing strategy. It shows the amount you spend on attracting one "paying" customer - one who does not just enter the application, but makes a purchase.


To calculate CAC, divide the cost of an advertising campaign by the number of orders made by new users during the campaign period.


2. CPI (cost per install) - price per install

This is the amount you spend to bring a new user to your app, whether they make a purchase or not. CPI is calculated as the ratio of app advertising costs to the number of successful installs. This metric is similar to the cost per click (CTR) that site owners pay for a user to click through to their site after showing an ad.


3. RPI (revenue per install) - revenue per install

RPI shows the amount you receive from one successful application installation. To calculate it, divide the total revenue for the period of the advertising campaign by the number of installs.


This indicator is important in comparison with CPI, as it allows you to see the ratio of costs and revenues per installation. If the RPI is lower or slightly higher than the CPI, then this is a serious reason to think about changing your marketing strategy.

How to track user engagement and retention

CTR (click-to-install rate, or install rate) - the number of downloads per click CTR demonstrates how clicks on links or clicks on your bann...