THE ULTIMATE GUIDE TO APP USER ENGAGEMENT

THE ULTIMATE GUIDE TO APP USER ENGAGEMENT

Contents Introduction... 01 Chapter 1 Exploring Mobile Engagement Techniques... 03 Chapter 2 Leveraging Personalization to Better Engage Users... 07 Chapter 3 Engagement Campaigns Use Cases for Every Vertical... 12 Chapter 4 5 Tips For Measuring Your Mobile Campaigns... 20 Chapter 5 An App Marketing Game Plan for Your Brand... 26 References... 28

Introduction More than 50 percent of Americans own a smartphone 1. 800 apps are downloaded every second from the Apple App Store 2. Despite these remarkable numbers, which are testimony to the popularity of mobile and its prominence in consumers daily lives, Localytics data reveals that many apps nearly 22 percent are never used more than once 3. Having a great product with compelling, useful, entertaining & informative features & content is no doubt the number one way brands can do in order to get people to use their app. However, data from Nielsen reports that US smartphones have an average of 41 apps installed a 32% jump from last year 4. With so much competition, many brands have found they still need to go one extra step to stay top of mind for users who are faced with an abundance of choices. With such bleak retention rates, it s not enough for brands just to have an app Brands also need to enable customers to engage with their app in meaningful ways towards monetization. Whether a brand s business model is driven by in-app purchases, paid subscriptions or in-app advertising, the key to unlocking app monetization lies in engagement and personalization. To make this happen, you need deep insights about your users, including how you acquire them, how they interact with your content, and every step they take 01 Introduction

through the conversion funnel. For digital marketers, this isn t rocket science - it s Marketing 101. When it comes to mobile, things aren t as easy. Fortunately, during the past five years, the industry has made huge strides in gaining a deep understanding of mobile users. There are app user engagement techniques like in-app messaging and push messaging that can help brands cultivate relationships with their users so they will use their app more frequently and spend more time engaging with the app. When done properly, in-app messaging and push messaging will drive users to the most compelling app features and help them establish optimal user habits within the app ultimately leading to higher lifetime value (LTV). Top-notch mobile analytics are the foundation for brands to achieve this. The discovery of an app s best features is accomplished through user behavior analysis, tracking in-app actions completed and correlating those actions to users with the highest customer lifetime value. Additionally, analysis of behavior leads to the identification of segments of users who are interested in particular app screens and features like particular news content and lays the groundwork for personalized and more impactful marketing campaigns. In this ebook, you will learn best practices for in app messaging and push messaging including cross-industry and some vertical specific use cases and how to measure the effectiveness of your mobile marketing campaigns 02 Introduction

Chapter 1 EXPLORING MOBILE ENGAGEMENT TECHNIQUES

Chapter 1 EXPLORING MOBILE ENGAGEMENT TECHNIQUES Let s take a look at the mobile user engagement options we re focusing on in this ebook: Push messaging and in-app messaging. You are probably familiar with push messages, which are also commonly referred to as push notifications. An important function of push messages is to drive users back into your app if they are not actively engaged with it. In-app messages, on the other hand, are contextually-relevant messages sent to users while they are in the app and are a great way to communicate with users as part of the app experience. 04 Chapter 1: Exploring Mobile Engagement Techniques

See the table below to learn some of the differences and similarities between the two. IN APP MESSAGING PUSH MESSAGING Sent In the app Outside of the app. Uses Great for deriving more value out of users who already use the app. Great for re-engaging latent users. Features In-app messages can be rolled out more subtly and tested without compromising the overall mobile user experience. Pushes are louder show up outside of the app and when people are using other apps and websites. Format Supports more complex messages with more room for longer copy and images. Only room for a few lines of text. Standard format, so no images. Simpler messages. Function You can only get this message to people if they have the app open. So if the message you want to send is time sensitive (like literally a timer going off) push is better. Push is great for time-sensitive messages - a sale ending today, flash sale, geo-targeted messages, breaking news, emergency alerts. Value Your brand is top-of-mind when the user is in the app. Therefore in-app messaging is a great way to ask for user feedback about your app in real-time as the user is actually using it. Push messaging is a great way to gently poke users back to your app and keeping top of mind. Can be used to convey time and location specific information. Set up Requires extra time to implement in-app messages effectively and make them look like they are a seamless part of your app. More design work. Push messages are meant to stand out and are in a standardized format. Requires just a few lines of text and the standard design for the app s operating system. 05 Chapter 1: Exploring Mobile Engagement Techniques

The key to successful customer engagement is to think about personalization and context. How to Use In-App Messaging and Push Messaging Together For the best results in your app marketing efforts, in app messaging and push messaging should be used together to engage with users based on where they are and what they are doing. There are two reasons why you should do this. First, in-app messaging is great for communicating with users who are in the app, while push messaging helps you stay in contact with users who aren t in the app. Second, context matters for your messages. Certain messages are better sent as in-app messages whereas others are better as push messages. For example, an app store rating request is probably best sent to your most engaged users in the app while your brand is top of mind. An in-app message would work great for that. If you sent that as a push message to people who haven t used your app in months, it would probably come across as intrusive, random and out-of-context. To use another example, a flash sale is a time-sensitive message. You don t want to wait for your users to open the app to see that message. Instead, in that case, use push messaging to get users attention. The key to successful customer engagement is to think about personalization and context. In the next chapter we ll learn more about the data that drives better personalization and in turn, greater ROI. 06 Chapter 1: Exploring Mobile Engagement Techniques

Chapter 2 LEVERAGING PERSONALIZATION TO BETTER ENGAGE USERS

Chapter 2 LEVERAGING PERSONALIZATION TO BETTER ENGAGE USERS With so much discussion in the industry about the value of personalization in marketing, it s worth taking a moment to elaborate on what we mean when we use that term. Context is important. An in-app message or push message should be relevant to the user because it is related to what the user is doing now or has done in the recent past. When we talk about personalization, while every marketer s dream, we don t mean down to the individual person level. In other words, we are not talking about the ability to market specifically to Emily, a 24-year old Bills fan in Buffalo NY. Rather, we are describing the ability to scale contextual messaging to thousands or millions of people like Emily Bills fans, women ages 18-24, app users located in Buffalo, NY - based on interests proven through their in-app actions. MARKET TO 08 Chapter 2: Leveraging Personalization to Better Engage Users

Segments A segment is a group of users with distinguishing characteristics who can be categorized into marketable, contextual groupings, through analysis of their common in-app actions, acquisition sources, devices and operating systems. With segments you can: Identify specific relationships of usage between different parts of an app Analyze conversion rates of various funnels registration screens, check out process, and more Identify groups of users interested in certain kinds of content or features See how certain features or campaigns impact likelihood to purchase, upgrade, register and lifetime vvalue Trigger in-app messaging and push messaging campaigns to segments Create more contextual and personalized app marketing. Your messages will be relevant to the segment s proven interest, as evidenced by an analysis of their current and historical actions While segmentation is an easy concept to understand, in practice creating and using data-driven segmentation is difficult given it entails shifting through thousands, if not millions, of data points, to be accurate. Solutions such as Localytics offer simple yet powerful segmentation tools to automatically enroll users into segments and workflows based on their in-app actions and on events completed or not completed. 09 Chapter 2: Leveraging Personalization to Better Engage Users

Setting Up Analytics to Provide Better Engagement In the app analytics and marketing world, the actions that trigger your marketing campaigns are called events. Events are used to describe interesting actions that happen within your app, such as a news article read or action posted to a social network. Additionally, events are used in funnels to determine drop off and conversion rates toward specific goals. Events are also used to define user segments that help identify different usage patterns such as users who did or did not do certain events, or a pair of events in sequence. In turn, events can help answer questions like Which app users have looked at a product page this week but never purchased an item? Events also have details that describe the action taking place, called attributes. While event names should be kept broad, attributes describe the specifics about the event. Attributes are essentially more details about your events that help you track the popularity of specific content at a more granular level. For example, if you have a magazine app and your event is article read, the title of the article would be the attribute. Here are some basic events and attributes every app should have set up for fundamental tracking of their users. These will set the foundation for analytics-driven marketing. EVENT NAME ATTRIBUTES (EXAMPLE VALUES) App Start: To describe how an app was opened Source (Push, Campaign, Organic) Registered/Login: This describes how users are registering/logging into the app. Type (Facebook, email, Twitter) Push Messaging Choice: This describes if the user has opted into push messaging or not. Choice (Yes, No) Social Media/Content Share: This describes the different social interactions available within your app. App Exit: To describe various high-level actions of your users in summary form. Platform (Twitter, Facebook) Content ID (Article 123, Article 456, Article XYZ) Action (Share, Like, Follow, Friend) News Articles Reads, Videos Watched, Items Viewed 10 Chapter 2: Leveraging Personalization to Better Engage Users

Additionally, depending on your app category, various app features will lend themselves to different events to be tracked. Here are some vertical-specific event ideas: VERTICAL EVENTS TO TRIGGER PERSONALIZED ENGAGEMENT News apps Article viewed, Article shared, Ad clicked, Subscribed ecommerce apps Browse item, Share item, Add to cart, Begin checkout, Complete checkout, Error encountered by app Social apps Friends added, Interact with friends, View content, Post content, Subscribe No matter what kind of app you have, event-tracking should help you achieve two things: 1 First, events should build upon each other in a sequence to create the conversion funnels you envision for your users such as a product screen view, adding a product to a shopping cart, and a checkout. 2 Second, tracking events should help you identify what you would qualify as your ultimate conversion event such as an in-app purchase. App users who repeat this event most consistently over time provide the highest lifetime value (LTV). The nature of the app will also help determine what is its ultimate conversion event. For many apps, like games (which are often free), that would likely be an ad click. For a health and fitness app, total pounds lost would be a measure of engagement with the tool that indicates customer lifetime value better than other metrics. Using an analytics solution like Localytics, you can set a dollar value for your event and track it over time no matter what that event is or how you define lifetime value for your brand. 11 Chapter 2: Leveraging Personalization to Better Engage Users

Chapter 3 ENGAGEMENT CAMPAIGNS IDEAS FOR EVERY VERTICAL

Chapter 3 ENGAGEMENT CAMPAIGNS IDEAS FOR EVERY VERTICAL You now have a good understanding of what in-app messages and push messages are, as well as how to personalize these messages with context, events, attributes and segments. We are now ready to create campaigns to engage with customers. We have collected nine tried and tested engagement campaigns; five that work across every app category and four industry-specific engagement campaigns for push messaging and in-app messaging. TOP 5 ENGAGEMENT CAMPAIGNS FOR EVERY APP CATEGORY 1 NPS Survey The Net Promoter Score survey has become a standard business metric for customer happiness. The 1-question survey asks customers to rate on a scale of 1 to 10 how likely they are to recommend your company. Use an in-app message to send an NPS survey to app users. App and brand Promoters can be pursued with follow up in-app message campaigns requesting an app store rating. Detractors can be sent to an internal feedback channel. 13 Chapter 3: Engagement Campaigns Ideas for Every Vertical

2 Upgrade Your App! To drive engagement, you want users on the latest and best version of your app. Prompt users to upgrade to the latest version a push message campaign. Localytics customer Swagg uses in-app messaging to prompt users to upgrade their app. They make the call to action that much more enticing by drawing attention to a feature the user can take advantage of in the new version. 3 We ve Missed You! (So Try This Feature) On it s own, We ve Missed You! isn t a very interesting push campaign. But as you become more sophisticated in your analysis of your users, you will see connections between particular features and repeat app use. Once you discover these signature features, you will know what the most compelling features are that you ll want to draw attention to in order to bring latent users back into the app. 14 Chapter 3: Engagement Campaigns Ideas for Every Vertical

4 Sales and Coupons Mobile users love great deals. In fact, according to Juniper Research, consumers are 10x more likely to redeem mobile coupons than print coupons! 5 Time-sensitive offers like flash sales work particularly well for push message campaigns, while in-app messages are especially great at driving in-app purchases. 5 Earn Rewards In the same vein as the previous suggestion, mobile users love ways to use their apps to save money and earn rewards. To do this, users may need to complete a user profile or add membership credentials. However, this requires the completion of several steps in the app that the user may forget, or decline, to complete, no matter how much they want to earn those rewards. Track users who drop-off from registration funnels, segment them and roll them into re-engagement push campaigns that remind them of the value that awaits them once they complete registration. 15 Chapter 3: Engagement Campaigns Ideas for Every Vertical

4 INDUSTRY-SPECIFIC CAMPAIGNS 1 News Apps For news apps, your monetization goal is two-fold. First, you want to drive ad revenue. To do this, you need to increase time users spend in the app. With targeted push messages, you can pull users back into the app toward content they have previously shown interest in. Secondly, you may offer paid subscriptions. Nudge users down the purchase funnel toward a paid subscription upgrade with in-app messaging. Push Campaign Say you have identified a segment of users who have shown interest in sports news through an articles read event. Alert those users of today s top sports news stories with a push message campaign. In-App Messaging Campaign The readers who click through that push message are clearly an engaged and prime audience for a paid subscription upgrade. Offer them a free trial. 16 Chapter 3: Engagement Campaigns Ideas for Every Vertical

2 Retail Apps In addition to all other channels, mobile is yet another valuable customer touch point that will help you drive more lifetime value out of that relationship. As a retail company your objective is to drive in-store purchases, and you can help users do just that with the help of the app. Push Campaign A retail store can send a one-day-only 50% off all new merchandise offer to frequent shopper club members. For those who aren t in the frequent shopper club, the store can in parallel target non-members with a campaign that encourages them to login to the app and join the frequent shoppers club in order to take advantage of the discount. In-App Messaging Campaign Retail apps can unify the in-store and mobile experience through app features like in-store barcode scanners that reveal in-app product reviews that help customers make more informed in-store purchases.. 17 Chapter 3: Engagement Campaigns Ideas for Every Vertical

3 ecommerce Apps As an ecommerce company, your primary goal is to drive in-app purchases. Highly personalized messages based on real in-app behavior can drive the user further down the funnel toward conversion. For brands with retail stores, geo-targeted messages can drive in-store traffic by promoting new brick and mortar locations. Push Campaign Whether it s a fishing pole or a pair of high heels, abandoned items left in the cart is pressing issue for ecommerce companies. Push messaging truly shines in this use case because of its ability to communicate with these users outside of the app. Nudge forgetful, but high value, users out of limbo with a push message campaign offering free shipping or a discount In-App Messaging Campaign Registered users are more frequent buyers. Stored credit card credentials facilitate easier repeat purchases and email subscribers have your brand top-of-mind with daily updates on sales and other special offers. Encourage users to register during onboarding with a series of in-app messages. 18 Chapter 3: Engagement Campaigns Ideas for Every Vertical

4 Games Since mobile games are generally free, your goal is to drive ad revenue by increasing session length and time spent playing the game in your app. You can achieve this by creating an engaging app experience with the game and by pointing out the most interesting aspects of the game to users whose in-app behavior suggests they are missing out. Push Campaign A push campaign is a great way to encourage users who have not played in a while to come back and play again or to remind them when it is their turn. It is also an effective way to introduce your new games to your audience. In-App Messaging Campaign Trigger an in-app message if the user has been lingering for a while without making a next move in the game. Offer the user the option of skipping a turn or offer help. For example, for a game like Scrabble, use an in-app message to offer a link to an in-app thesaurus to help get users to play their next move. This provides helpful content and prevents the user from getting frustrated and losing interest in the game. 19 Chapter 3: Engagement Campaigns Ideas for Every Vertical

Chapter 4 5 TIPS FOR MEASURING YOUR MOBILE CAMPAIGNS

Chapter 4 5 TIPS FOR MEASURING YOUR MOBILE CAMPAIGNS As we saw through practical examples in Chapter 3, both in-app messages and push messages can be a valuable tool for both customers and businesses. By measuring your campaign efforts, you will be able to better understand and optimize your customer engagement. Here are five best practices to follow for measuring your mobile campaigns. 1 Think Beyond App Opens Let s say a department store with an iphone app is launching a push messaging campaign to promote a highly sought-after new line of handbags. For this promotion, the retailer will send push messages to users who have previously shown interest in handbags to pique their interest in a 20% off coupon off their first in-app purchase of the new line. The goal is to drive in-app purchases of the handbags. The retailer runs an A/B test, sending at least two versions of the campaign to significant samples of its target audience to see which message yields more conversions: A B 23 Chapter 4: 5 Tips For Measuring Your Mobile Campaigns

A B 20% of those customers who received Message A took the first step and opened the app while 15% of those who received Message B took the same action. At first glance, it seems that Message A wins the contest, because of its higher open rate. But the contest is not over yet; the retailer wants users to make an in-app purchase. If you were only tracking app opens from this campaign, you would continue to invest in Message A which may actually have a lower conversion rate to in-app purchase than Message B. Because of this unknown, it s critical to look at the full picture. 2 Define Conversions for Your Brand Have a clear goal in mind with your campaign. Like all good marketing, app marketing should start with your short and long-term goals in mind, and the metrics you pay the most attention to will be dependent on those prioritized goals. Are you looking to drive in-app purchases, or are you looking to increase time spent in the app? 3 Improve Impressions and Clicks We now know it s important to think beyond app opens and to track conversions. But between the point of app open and the point of conversion lies a great deal of opportunity for optimization. 22 Chapter 4: 5 Tips For Measuring Your Mobile Campaigns

Low Impressions If your metrics indicate low impressions, you need to broaden the reach of your campaign. In particular: If your in-app message campaign is triggered by app opens, think about driving more app opens through a push messaging campaign. If your push message campaign is seeing low impressions, it is likely a case of low monthly active users (MAUs) and you may want to crank up your user acquisition efforts. If your campaign is triggered by an in-app event, you need to evaluate whether or not the audience, which could be relatively small, is achieving a sufficient conversion rate and LTV to validate the campaign. If not, you may want to redirect your efforts to larger segments. Low Click Through Rate (CTR) If your metrics indicate a low click through rate, consider the following: Design performance: Does the ad creative on your in-app message show up blurry or warped on certain devices or operating systems? Investigate further. Ad copy: The text, and even the translation to other languages, could potentially use improvement to more clearly nudge users towards a call to action. Once you have your campaign up and running, A/B test your copy and creative to drive more clicks and conversions. Similar to other marketing channels like banner ads, landing pages and email, simple ad copy tests like comparing the effectiveness of Buy Now and Checkout on conversion buttons can deliver major results. 23 Chapter 4: 5 Tips For Measuring Your Mobile Campaigns

4 Evaluate How Your Campaign Ages Monitor how interest in your campaign trends over time. As per the example chart below, an initial spark of interest and conversions may happen in the beginning of your campaign, especially for in app messaging campaigns triggered by app opens. But once less frequent app users begin to see the campaign, clicks may trail off after a few weeks, indicating it is time for a refresh. 5 Tie Campaigns to LTV Finally, the most effective way to know if a campaign is successful is to compare the lifetime value of app users who were impacted by the campaign against those who did not. In your analytics, you can set a value for every subscription, product purchase, ad view, or time spent in app. Next, create an event for Seen In App Message with an attribute for the specific campaign. When reviewing your lifetime value report, filter the report with this information to evaluate whether your app engagement strategy is translating into long-term value for your brand. 24 Chapter 4: 5 Tips For Measuring Your Mobile Campaigns

If you re a Localytics customer, once you have set up lifetime value tracking for your app you can head on over to the Monetize tab to analyze your lifetime value report. To see how your app marketing efforts impact your lifetime value, apply a filter to the report. In this case, we created a segment for users who saw the in-app message. Now you can see the impact of the in-app message - a 12% lift in lifetime value! 25 Chapter 4: 5 Tips For Measuring Your Mobile Campaigns

Chapter 5 PUTTING THESE LESSONS INTO PRACTICE

Chapter 5 PUTTING THESE LESSONS INTO PRACTICE App user engagement strategies like in-app messaging and push messaging can drive more lifetime value for brands and more delightful, informative and useful app engagement experiences for consumers by increasing awareness of an app s best features. Push messaging is particularly great for re-engaging latent users, while in-app messaging can pull engaged users further into your app ultimately and towards conversion. Taking into account the context users will encounter your messages is a good starting point for more effective marketing campaigns. Additionally, some messages lend themselves to one format or the other, such as time sensitive ones which are best suited to push messaging. In-app and push messaging fundamentally complement one another and the best user engagement strategies are ones that use them together. Ultimately, brands looking to monetize their apps will find that robust user engagement and personalization can lead to increased conversions, revenue and lifetime value for your brand. In Chapter 4, we looked at effective techniques for measuring your campaigns. We learned that while app opens from push messages are great, conversion is king. Your definition of conversion needs to be aligned with your app monetization strategy and that is how marketing campaign success should be judged. We talked about how to diagnose and remedy common campaign issues such as low impressions and CTRs, and the potential to create long-term brand value in linking the LTV of your customers to campaigns. Ultimately, brands looking to monetize their apps will find that robust user engagement and personalization can lead to increased conversions, revenue and lifetime value for your brand. To achieve this level of engagement requires deep, actionable insights about your users. Analytics solutions such as Localytics can help you achieve this quickly and effectively. 27 Chapter 5: Putting These Lessons Into Practice

References 1 - http://pewinternet.org/reports/2013/smartphone-ownership-2013/findings.aspx (pg 1) 2 - http://www.apple.com/pr/library/2013/05/16apples-app-store-marks-historic-50-billionth- Download.html (pg 1) 3 - http://www.localytics.com/blog/2013/localytics-app-user-retention-data/ (pg 1) 4 - http://thenextweb.com/insider/2012/05/16/nielsen-us-smartphones-have-an-average-of- 41-apps-installed-up-from-32-last-year/ (pg 1) 5 - http://www.information-age.com/technology/mobile-and-networking/2162288/shoppersto-redeem-10-billion-mobile-coupons-this-year------research?goback=%2egde_4862881_ member_215803984#%21 (pg 15) 28 References

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