App Launch - These Factors Determine Your Success in the App Store

Every day, nearly 1,000 new apps are available for download in Apple's store. But not only is the supply high, the demand for mobile solutions is also steadily growing: small aids that make everyday life a little better with a few clicks are very popular.

Apps like Teleclinic, Headspace or Yazio are good examples of this. A few years ago, there was hardly any alternative to going to the doctor for a sick note or tracking your nutritional values, but now this is quite uncomplicated with the help of a smartphone. 

But that doesn't mean that every app offers real added value and therefore has the potential to land on the home screen of many millions of people. For this reason, we want to devote ourselves here to the question, what distinguishes a good app from a bad one. We explain to you what is important before the app launch, how your success can be measured and which ways there are to turn your idea into hard cash.

What should be considered before an app launch?

The value of a physical product like a new winter coat is clear: the person who buys it will be well dressed through the cold months and not have to freeze at any time. But how do you define the value of an app? After all, it works only in the digital world, can't be dressed, tasted or smelled. In general, all successful digital products have one thing in common: They make the life of their users easier, more convenient or cheaper.

Fitbit users buy the watch and download the Fitbit app because they want to motivate themselves. Netflix users strive for good entertainment. For over four and a half million Weight Watchers users, the app fulfills the need for community and support. Apps like these offer clear added value. That's why it's no wonder that their users keep coming back to them. 

If users do not recognize the value of an app, they will quickly stop using it. In the worst case, the app may even be thrown off the smartphone immediately after download. To prevent this, it is important to define the value of the app clearly before its launch. This requires taking a step back and asking yourself: What do my users expect from my app? And what is my product really about? 

The exact value of an app becomes a little clearer when you look at other companies that have successfully set up something similar. For example, Tinder makes it easier to find a suitable date. What would hardly be feasible in "real" life can be done here playfully with a swipe to the right or left.

And with an app like Teleclinic, patients have the chance to get medical help via smartphone, can receive a prescription or get a sick note – and that even without having to leave the house and sit in the waiting room for hours. The value of apps like these is clearly visible and ensures many satisfied users. The same should be the case with new apps and should be defined before the launch.

Product analysis for your successful app launch

How can the success of an app be measured?

Opinions differ as to what constitutes the success of an app. This is partly due to the fact that often KPIs such as the number of active users are used to make this measurable. However, since apps vary greatly depending on their area of focus and added value, this is not practical.

The reason for this becomes clear when you compare different apps. While Teleclinic users, for example, only use it actively when they are sick or need a new prescription, which may only be the case a few times a year, the use of Tinder may be excessive for a while, but ends at the latest when the right partner is found.

Instead of just looking at the active users, it is more sensible to define the "Value Moment" of your app. Afterwards, you can measure how many of your users have experienced this with your app in order to assess your success on this basis. But what exactly is a "Value Moment"?

The "Value Moment" can be defined as a specific action, an event or a series of events that represent the point at which the users have found a value in it. In the case of Teleclinic, for example, this could be the successful issuing of a prescription or a sick note. With Tinder, it's an extended conversation with a match. And with streaming apps, it's for example a played song or movie.

In all of the mentioned examples, the User Journey looks completely different. Moreover, with some apps, it is necessary to register or enter your credit card information in order to experience the value for the first time. This initial phase is crucial: The sooner the users experience their first "Value Moment", the more likely it is that they will use the app again and thus the measurable success increases.

Four ways to monetize an app

Just like with physical products, the goal of developing apps is usually to build a thriving business. But unlike at the supermarket, where goods are exchanged for money at the checkout, there are different ways to generate revenue in the digital world.

Which is the best depends on the specific added value offered to users - after all, a dating app works differently than the service of streaming providers and therefore perhaps should choose a different method of payment.

Here are the four most common models to monetize your app:

• The transaction business: Similar to buying a new pair of sneakers, a fixed price per product unit is also set here. This pricing model is often used in gaming apps. So if customers want to download a new strategy game for their smartphone, they pay for example a fixed price of 3.99 euros and can then play as often and as long as they like.
• The subscription: The subscription model is different. Here, users pay a fixed price which is valid for a certain period of time and receive a certain number of units during this period. With audiobook apps, this could be one audiobook per month, for example. With another product like a meditation app, it might be 4.99 euros per month if the subscription is taken out for a whole year.
• Licensing: Here, users pay a licensing fee for the use, sale or copying of a product. This is also how Airbnb works, for example: people who want to rent a property or offer it for rent pay a fee to the operator of the platform when a booking is made.
• The freemium model: This monetization method is used by Spotify or YouTube, among others. Here, it is possible to use a free version of the app, which usually does not offer all functions or is adorned with advertisements. Users who opt for the paid offer do not have this restriction and can, for example, also listen to music offline or stream videos with the app.

Which app users have the most potential?

Just as apps differ in terms of their added value and their "Value Moments", the users who use them can also be varied. Understanding users despite their differences is, however, essential, on the one hand to get a better understanding of how they interact with your product and when they drop out. On the other hand, it also provides information about what adjustments may still need to be made - and where additional potential lies.

In the hope of learning more about users and their needs, they are often segmented according to their country. Are users from Austria more active than those from Germany? And do they experience more of the previously defined "Value Moments"?

Such data is not only interesting but can also present potentially high benefits for marketing and app optimization. However, when it comes to making specific decisions, information about how users use an app and where they drop off tells much more about them than their demographic data. 

Instead of dividing users by country, it makes more sense to segment app users according to activity into the following three groups:

• Power users
• Core users
• Occasional users

As already indicated, in the case of Teleclinic, a power user could already exist if they request a prescription via the app once a quarter. With streaming providers, on the other hand, one can only speak of power users when at least one film or episode of a series is watched daily. But also factors like breadth and depth can be extremely helpful in assigning the user segments.

To further explore this, it is worthwhile to answer the following questions: Is always the same function used? Or do the users have a wide range and use not only the prescription function, but also the option for sick leave or medical consultation, as is the case with Teleclinic? In terms of depth, one can consider how long a user is active, how much they engage with the product, and how much money they spend.

Depending on the app, you should be completely honest with yourself when dividing these three user segments. Only then will you have the chance to gain a data base that gives you really helpful insights - about which users are most valuable, but also where there is a risk of migration.

As already said, it is more likely that users will use an app permanently the sooner they derive a benefit from it and experience a "Value Moment". Nevertheless, it is not unlikely that at least some of them will drop out sooner or later.

There are three classic dropout points: Either right at the beginning, before the "Value Moment" or before the value exchange. Most dropouts occur before the latter - for example when the person has to provide their credit card details and complete the purchase. However, the most important point that should be followed is that of the "Value Moment". Because the fewer people experience it and do not recognize the value of the app, the fewer will also reach the point of value exchange. 

The fact is that if you optimize your app to make users pay for it, but not so that they receive a value, you will quickly find yourself confronted with a migration problem.

What is important after the app launch to grow?

Of course, companies and their digital products don't grow on their own. If the aim of the app is to create a value, then the goal of growth is to identify all people who can benefit from the value your app provides. Right after the app launch, it will probably be a very small niche audience. But once the app's place in the market is found, the measurement of growth and value becomes even more important. 

At this point, you need to understand that at some point it should not only be about new users. Because the bigger the app gets, the more important it is also to keep existing users. In fact, it is not enough to ask if your app provides a benefit. Instead, the question should be: Does your app provide your users with a benefit - again and again?

Because only then will you be able to win paying customers not only once, but keep them permanently. For this reason, not only the drop-off rates and points should be analyzed. Those that ensure that users keep coming back are also essential. And these should be optimized continuously.

Are you ready for a product analysis of your app?

If you want to create an app that has the potential to be really successful in the long term and might even replace existing competitors from their place, you can't do without a deep product analysis. For this, you can rely on analytics tools such as mixpanel or Amplitude. Because even a great idea can only be converted into sales if you understand the exact value you can deliver - and whether it is actually received by your potential users. More analytics tools for your product analysis can be found on OMR Reviews.

Because a purposeful product analysis requires ruthless honesty towards yourself, it can sometimes hurt a bit. But only if you get to the bottom of the "Value Moments" of your app and understand who your users are, how they tick and where you may lose them, can you work on these cracks and optimize them.

Your goal should always be to keep the time from downloading the app to experiencing the first "Value Moment" as short as possible - and to ensure that it still works the thousandth time, which is why your users not only keep coming back to you, but are also willing to pay for the added value you offer.