How to measure the ROI of a mobile application?


The ROI represents the financial ratio between the money gained or lost compared to the money initially invested.

The question of its measurement for mobile is, therefore, ESSENTIAL application projects. Indeed, if today there are many tools intended to collect information related to the use of the smartphone; most publishers are unable to use them enough to get an accurate measurement.

So yes! It is true that calculating the ROI of a Mobile Application is easier for paid applications because the income generated by the purchase represents a concrete and quickly usable indicator. 

The situation is more complex when it comes to free or freemium applications (free download and in-app purchases). In this case, it is not a question of relying solely on the number of downloads; installations or openings.

 The company must proceed to the elaboration of a complete strategy which will take into account a set of steps that are both distinct and complementary.

This is how the Forrester Research center proposed a 5-point methodology (just that), intended to specify these strategic steps; from the definition of objectives to the consistent and quantified measurement of return on investment.

Identify the benefits associated with mobile application

The first step is to ask yourself why to invest in a mobile application, for what purpose(s).

This may seem logical, but the ROI of a mobile application will depend in part on the objectives that the company will set according to its activity and its commercial strategy.

Ex: Direct and indirect revenue generation, customer acquisitiondevelopment of the CRM databaseimprovement of the brand imageincrease of the average basketreduction of the order timeenhancement of the customer experience, cross-sales opportunities channel, generation of point-of-sale traffic, cost reduction or simplification of internal processes…

Quantify these benefits

Once the objectives have been defined, it is a matter of prioritizing and quantifying them using consumer data, forecasts and figures from market research that will allow the company to precisely visualize how to reach the targeted audience and encourage these consumers to act the way they want. The challenge is to estimate the gains relating to these objectives.

For example, if the main objective of the application is to reduce costs; the application can offer sufficiently comprehensive services to avoid the user having to call a call center. The saving of time thus reduces the expenses of the company.

Evaluate the total cost of the application

In order to have a true measure of the cost of investment, it is necessary to integrate all the costs dedicated to the launching of the application. Beyond design and technical development, we must take into consideration the commitment of the people involved in the project, the complete creation process, maintenance operations, deployment, integration, marketing, advertising, etc.

Build an economic model

After having evaluated the total cost, it is a question of modeling, updating the benefits and the costs. For this, it is important to have a global vision in order to define the economic model adapted to the company and its objectives. Given that a large part of these elements is of the order of estimation; the solution may be to demonstrate their feasibility by quickly realizing the idea in order to find out the actual gain or loss.

Use analytics

Last important step of this methodology: data collection. Although this is the most sensitive issue of 2018 in the digital world, it will allow the company to enrich its economic model and adjust the application if necessary. Analytical tools are crucial in order to understand how applications are used (number of downloadsinteractionstime spent, etc.). But correctly used, they allow practicing a geographic and behavioral segmentation, to understand how users navigate, what are the brakes or how to solve them (graphic redesign, ergonomics, etc.).

Many companies don’t take the time to develop a specific strategy; nor the means to exploit in-depth analytics, which is nevertheless essential for measuring the ROI of a mobile application

Among the most used tools, MobileAppTracking allows knowing the sources of traffic and the origin of the users. Flurry, on the other hand, measures engagement, retention (customers retained over a monthly period), conversion or turnover. The tool also provides user files (name, gender, geographic location, etc.) allowing the company to know its customers precisely and to refine its segmentation.

At Arka, we chose Xamarin Visual Studio, for its ability to integrate multiple analysis tools.

It can thus identify any errors that have occurred during the journey; specify the exact origin as well as the nature of the material used (device, version of the OS, etc.). This feedback allows you to correct errors as you go along. Depending on the data collected by the tool (contact information in particular); it is possible to correspond with users and notify them of the correction of problems occurring during their sessions for example. Xamarin Visual Studio also has its own audience reporting and application usage units, all in real-time.

In summary

At the start of 201983% of the applications published on the App Store were “zombie apps”. They do not appear in the rankings or in the recommendations and total less than 500 downloads throughout their life. This figure currently represents just under a million applications out of the 1.20 million in the Apple store.

So it makes sense that if you don’t want to publish your app in general indifference; the development of a strategy including above all the definition of your objectives, becomes crucial. Marketing will also play an important role since it promotes the application as a product in its own right; by ensuring that it is packaged to be attractive, well-referenced to be seen and then widely used.

Finally, following the main steps of the methodology will allow you to offer an application adapted to your target and develop it to finally obtain your return on investment. This ROI is nevertheless specific and can be difficult to measure depending on the companies and the type of application.

Author Bio:

Rahul Mathur is the founder and Managing Director of Arka Softwares. He is a driven leader and technology enthusiast who takes pleasure in helping modern startups and enterprises to grow with the help of future-ready IT solutions such as, next-gen mobile appsweb and marketing solutionsIoTCloud solutions, etc. Arka Softwares also lets clients hire Python developersJava developers,.Net developers, and many more