In-App Purchase Implementation Best Practices

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Only about 5% of app users make any in-app purchase (IAP), but the average amount these users spend is about 20 times greater than the average spend of all paying users. In-app purchase is projected to be the primary source of app revenue, amounting to $37 billion by 2017. With these facts in mind, the optimization of in-app purchase design and implementation is vital in order to make the most of the huge revenue potential.

In-App Purchase Best Practices

Don’t Focus too much on In-App Purchases

IAPs should not take the attention away from the main function of the app. First and foremost, design an enjoyable and engaging app, and then design in-app items around it.

 

Keep In-App Purchases Simple and Practical

Don’t flood users with every thinkable item for purchase. Users should be able to use in-app items as commodities that can either aid in the gameplay or optimize the overall app experience. Apps with in-app purchases often alienate users as they see it as a “pay to win” scheme. Make in-app items a must-have but not necessarily the only means to proceed.

 

Be Upfront

Trust is something app users are wary of giving, especially to apps with game mechanics that are geared towards maximum monetization. As much as possible, be transparent especially if there are locked levels or in-app currency that can only be accessed through a purchase.

 

Pricing Strategies

  • Decoy Effect. There is a pricing strategy that looks quite irrational, but it is actually grounded in behavioral economics. One key concept is the perception of value in the context of other options. For example, users would most likely select an item that costs $4.50 over an item that costs $10.25. But if you add a third item costing $13 with an additional booster included, they would jump on the offer thinking that it’s a better deal. The second, more expensive offer was just used as a decoy to emphasize the value of the third offer and convince users to spend more than they would normally do.
  • Dynamic Pricing. This strategy basically entails that you offer flexible price points depending on your users’ spending propensity. There are three basic pricing points based on the main categories of app spenders: minnows, dolphins, and whales. Whales are the big spenders, accounting for 70% of revenue derived from in-app purchases but they only comprise 10% of paying users. Dolphins are considered as mid-level spenders while minnows are low-level spenders. Whales make on average 7.4 in-app purchases per month and opt for special and exclusive offers regardless of price. Dolphins and minnows, on the other hand, make only about 1.75 in-app purchases per month. These purchases also come in smaller amounts so you should offer them items with lower price points or currency bundles to extend the value of their purchase.

 

Create a Sense of Urgency

Free, sale and discount are powerful words in marketing especially if you add words like ‘limited time only’. You can use this to welcome new users and use as an incentive for engaged users. Offers like this can also increase app sessions since some users don’t want to miss out on offers that may suddenly appear.

 

Customize Common In-App Items.

You can get ideas for IAPs from your app users and even from your competitor’s users. App reviews, feature requests, and even social media comments can give you an idea on what users want but don’t fall into the mistake of just copying another app’s in-app purchases. Coins and gems are staples in games but make your offer in context to the app’s theme.

 

Give Purchase Suggestions during Key Moments

So, you’ve been upfront to your users and they know too well that there are virtual goods they can purchase. That means that you can’t just bug them at every move about making a purchase. The same approach when asking for reviews should be used. Prompts should appear during key moments in the user’s progress within the app. This can be during success/failure in passing a level or finishing a task.

 

Don’t Forget to Measure Monetization KPIs

Monitor and measure key KPIs for monetization. Use analytics to track user spending behavior and demographics. You can use data from these KPIs to then run A/B and price point tests.

 

Types of In-App Purchases to Consider

Aside from the regular power-ups, lives/turns, and gems/coins, there are also other popular in-app items that need some exploration. Some of these may not work for your app but can still give you some insightful ideas.

 

Remove Ads

This is considered as the most-utilized in-app offer. This can also be considered as a lifetime purchase so implementation is important. Visibility is the key. The ad removal offer should appear on every session, level, and after ads are shown. It needs to be as unobtrusive as possible, though, and seamlessly integrated into the app’s UI.

 

Bundled Items

As mentioned on the pricing strategies above, you can bundle in-app items together to create an enticing offer that’s difficult to refuse. One way to execute this is to offer bundled features for upgrades, mini-games, boosters, and in-app currency.

 

Lifetime Purchase

Single use or consumable items produce the most number of purchases but lifetime purchases are the money makers. You can offer subscriptions or upgrades and supplement it with secondary purchases like additional features throughout the app’s use.

One strategy that is commonly used in games is to include doublers. Doublers can be used for any booster or any other vital in-app item. The idea is that it will provide a lifetime value for your users.

 

Unlockable Features

This may include levels, mini-games, sequels, and character/item reveal. A common implementation of include users being able to bypass a locked advanced features of the game. This is perfect especially if users are required to wait for a certain amount of time to access said advanced features/levels.

 

Character Customization

A lot of users may not see the sense in collecting virtual goods that can’t aid in the gameplay. That’s where character customization comes in. You can provide accessories for in-app avatars or even entirely new characters they can use and collect. Most often, these collectible characters enable users to explore a new theme (seasonal or not), also somehow enabling them to customize their app experience.

Mobile App Key Performance Indicators

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List of KPIs for Mobile Apps

 

Measuring the success of an app is at the top of almost all developers’ priority. But are you sure that you’re properly measuring and analyzing the right metrics? There had always been warnings about vanity metrics, metrics that are good to look at but doesn’t really contribute to the business side of things. Actionable metrics, on the other hand, are the best performance indicators. They measure metrics that ultimately lead to revenue and scaling success of a mobile app.

 

In this article, we would discuss key performance indicators for mobile app acquisition, engagement, and revenue.

Cost per Acquisition (CPA)

CPA is measured by dividing the cost of user acquisition by the number of acquired users. User acquisition models can vary but the most common metrics are install rate, cost per install (CPI), and cost per action (CPA).

 

Retention Rate

Retention rate is an important performance indicator, more so than downloads. It can determine the success of your app over a certain period of time and determine user lifetime (LT). LT  is one factor in determining the lifetime value (LTV) of an app user.

 

Retention is mainly based on the frequency of app sessions. The retention rate of an app is determined by dividing the number of daily users by the total number or users at a given time. Common time frames for the measurement of retention rate are 1 day, 7 days, and 30 days after download. The formula for retention rate is Day X users/Day 0 users.

 

Churn Rate

The churn rate metric is the opposite of retention rate. With the use of this performance indicator, you’ll find out the percentage of users that uninstall or abandon your app. The formula is 1 – retention rate. For example, if your retention rate is 20%, you’ll have 1 – .20 = 80% churn rate.

 

Daily Active Users (DAU)/Monthly Active Users (MAU)

The DAU and MAU metrics are very important for apps that use advertising as the main revenue model. The data these metrics provide will help you analyze user trends and also to calculate app stickiness.

 

Session Length

Session length is the measurement of the length of time users spend on the app from its opening to closing. Long session lengths are a positive sign of engaged users. This performance indicator also lets you assess the efficiency of your app flows.

 

Session Interval

Session interval, on the other hand, is the time period between a user’s first and second app session. This performance metric can signal if the user deems the app to have immediate value as to run the app the second time. Analyzing session intervals can help you optimize user experience and consider contextual app notifications and prompts.

 

Lifetime Value (LTV)

Lifetime value is the measurement of potential revenue throughout the length of a user’s usage of the app. LTV is commonly the main revenue metric, showing not only the lifetime value of each app users but also the financial value of the app. There are many ways to calculate LTV, mostly depending on how you define user value.

 

Average Revenue per User (ARPU)/Average Revenue per Paying User (ARPPU)

The ARPU performance metric determines the average revenue users generate. In order to determine the ARPU, divide the lifetime revenue of the app by the number of lifetime users of the app. Tracking this metric can determine if you are acquiring (or will acquire) users with the highest LTV at the lowest CPA.

 

 

How to Respond to Bad Reviews

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Bad reviews, just what I want – said no one ever. This statement could’ve even produced a bitter aftertaste for some, especially us app developers. App stores were rumored to be infested with one star ratings and all caps “reviews”. This is bad news since good reviews and high ratings heavily influence app installs. About 59% check app ratings and reviews before downloading an app. The difference in conversion between a one-star rating and a five-star rating is a staggering 770%! A majority of users won’t download apps that have a three-star rating or below.

 

So what will you do when bad reviews keep on coming, dragging your app’s star rating down?

  1. Don’t be too defensive. It’s natural to get defensive whenever we receive critical feedback. But this isn’t about you anymore, no matter how personal app users can get. Set aside any strong emotions and encourage the app user to look at the problem objectively. Instead of defending your app, ask for proof that the problem really indeed comes from the app and not from other factors on the side of the user.
  2. Ask them what really is the problem. Some reviews can be quite vague. Ask users why they that your app is ‘the worst ever’ or why they are discouraging other users from downloading it. You can learn a lot from user input and you can save some time from diagnosing app performance problems.
  3. Acknowledge any shortcomings and give apologies for the inconvenience. Even the best apps have “buggy” moments. Don’t deny any mistakes on your (and your app’s) part. Even if you can’t see any mistake, don’t tell your app users that they are downright wrong. There could be some unforeseen reasons why your app malfunctions – just acknowledge the possibility of that mistake and assure them that you are trying to get the root of it.
  4. Don’t just promise solutions, make it happen. Apologies and assurances go a long way in appeasing app users but if you can’t offer any solution, your app will be uninstalled. If the problem is something that can’t be easily patched up, offer users short-term solutions or in-app rewards that would lessen the inconvenience brought on by any technical problem.
  5. Don’t take the bait of trolls. Of course, you can’t answer all of your app’s reviews, but there’s also a good reason why you shouldn’t answer some of them. There are trolls that just want to get a rise out of you. Avoid them, especially if they look like they want to draw attention to themselves. If you feel the need to answer any allegations, make it brief and polite. Do not go down to their level. Explain everything in the first reply and if there’s a need for another reply, make it clear that it would be the end of the conversation.
  6. Don’t let false information spread. It’s difficult to tell if users that spread false information on reviews are trolls or just well-meaning but ill-informed individuals. Whichever of the two they may be, you should immediately correct them. If possible, address all your users in a way that the one who left the review won’t feel like they are being singled out.
  7. Report spammy reviews. Fake reviews are a reality in the app stores then, until now to some extent. Competitors may pay not only for positive reviews of their apps but also for bad reviews on your app. Fake ratings usually don’t come with a review and fake reviews are often quite short and generic. A few of reviews like this are legitimate, especially if your app is still gaining traction in the app stores. But if bad reviews flood your app without reason, you can report these reviews. In Google Play Store, you can flag a review as spam or unhelpful. You can report reviews in the Apple App Store through iTunes Connect. Click the “Contact Us” link under the “Support” tab. On the contact form, select “App Store Questions,” then “Customer Reviews,” and then “Report a Fraud Concern”.

 

The Conundrum: Single Player or Multiplayer Apps

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What Multiplayer Means in Apps

The majority of the multiplayer apps we see in app stores are asynchronous multiplayer apps. This means that the gameplay doesn’t require for players to be online at the same time. Simply put, the gameplay is turn-based. Commonly cited examples of asynchronous gameplay are apps like Words With Friends and Letterpress.

This seems like a simple concept, but what are the main differences? What about the advantages and disadvantages?

 

Single Player Apps

Advantages:

  1. Single player apps are easier and cheaper to make.
  2. There’s no limit to gameplay design and mechanics.
  3. There’s no waiting for other players to take their turns or worrying about other players abandoning a game session.
  4. The storyline is much more immersive than multiplayer modes. This is especially true with RPG, MMO, and other campaign-based multiplayer apps. Players are also able to learn more about the characters, design, and dynamics of the game in single player mode.
  5. The rewards are immediate and exclusive to a single player.
  6. There’s a sense of control for players.

Disadvantages:

  1. Gameplay can appear linear and predictable.
  2. Single play mode can limit multi-directional thinking due to lack of input and support from other players. This is quite evident in game planning.
  3. Players may not see the need for internet connectivity during gameplay. Single player apps that require online sessions can be cumbersome for those that are just want to pass time while on a break or traveling.

 

Multiplayer Apps

Advantages:

  1. It is easier to gain engaged users, especially if the multiplayer app’s design is that of a social co-op gameplay. Also, co-op and competitive plays improve the gaming experience not only because of the in-game interaction but also because of the skills and reflexes needed.
  2. The frustration of failure is lesser (in co-op plays). The added experience of other players can also aid in achieving the reward of either completing a level or performing a task more efficiently. The sense of accomplishment in competitive plays is also amplified by the very thought of winning against real players.
  3. Multiplayer apps allow for casual gameplay with the basic functionality and storyline of real-time games made for consoles and PC. Most multiplayer apps don’t have immersive storylines, which just plays well with mobile players’ behavior.
  4. You can intentionally design the game to give each player a unique gaming experience. The storyline and ending can basically differ depending on a player’s decisions and play style. This is something that is difficult to properly implement in single player mode.

Disadvantages:

  1. One weakness in the multiplayer gameplay is when players need to depend on each other in real time. This gameplay works well for other online platforms like PC and console. Not much for mobile apps. Mobile games like this generally struggle to scale in terms of users and design.
  2. Some games are just best played alone. Social gaming popularized “help-a-friend” co-op type of games wherein players can easily jump over hurdles in gameplay as long as they have friends willing to bail them out. Levels are sometimes intentionally gated just for this purpose. This is frustrating for many since such a feature does not have any real correlation with the aims of the gameplay.
  3. Another problem is synchrony. Though a majority of multiplayer apps are asynchronous, these apps’ designs still call for players to interact within the gameplay. Sometimes, you need to wait for forever before a friend answers to your requests or take their turns in the game.
  4. The lack of other people to play with is also a problem. A lot of multiplayer games have AIs that mimic or take the place of real players. One example is the AI for the Facebook game Criminal Case. Players can create teams whose members can share some in-game items and give a number of hints. What these members can share depend on how active they are in the game. The problem with this setup is when only a few or even none of your friends are playing the game. Hints aside, the AIs can’t give the three reports necessary for you to progress in the next case. Only your teammates can do so, so you need to wait it out for about three days. This setup causes a lot of players to lose interest very fast. If they want to play a similar game, they’d rather go to the game that their friends are also playing.
  5. The development of multiplayer apps demands more resources compared to single player apps. This is especially true with real-time multiplayer.

Right now, most apps both have single player and multiplayer modes. But not all games need multiplayer modes, even if you build it into the game’s design. Most of the time, the addition of a multiplayer mode doesn’t affect the core game. It tends to appear that there’s really nothing to gain in playing multiplayer mode aside from the social aspect. This often makes or breaks turn-based multiplayer games. The game needs meaningful turns done in a reasonable amount of time. This is, of course, difficult to fulfill in reality.

 

Word and board games are now mostly multiplayer but there are also a lot of misses in the implementation. Sometimes, the asynchronous multiplayer mode doesn’t just make sense. Gameplay will slow down and become less compelling. Examples are games like Angry Birds, Head Soccer, and Asphalt 8: Airborne. The same is true with games with synchronous multiplayer modes.

How to Succeed as an Indie Developer

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How to Try to Succeed as an Indie Developer

Just like in the real world, only a few control the wealth of the app stores. So what can an indie developer do? Well, there’s one: just give up. But we won’t go that negative route. There’s still hope. Even if you feel lost in the flood of millions of apps in the app stores, or even if indie developer horror stories keep on coming, there’s still a way up.

These tips can help you jumpstart your career as an indie developer. Though these tips don’t cover everything that can get you from point a to b, it can encourage you to stop and think about what it really takes to make it in the app industry.

 

1. Set clear goals from the start.

Why do you want to be an app developer? What do you want to achieve? Take some time to just sit down and think about what direction you want to take. Most of the time, indie developers just plow into “mobile space” without any clear goal or plan. Some do have goals, but most often it’s not attainable. Think of plausible ways to achieve your goals. It’s either you start from scratch, slowly work your up, or just see how it would go. There would be obstacles, so be sure that you have “Plan B” for every step of the way.

2. Find your niche and excel in it.

As nice as “following your passion” sounds, sometimes being passionate about something is not enough. You need to excel in order to compete in a marketplace setting. As they say, you can’t be everything to everyone, or you can’t be what you’re not. You may love gaming but you don’t have the technical skills or back knowledge to design and sell one. But you’ve been in the software utility niche for so long, you know it inside out. Pick a problem in that niche and solve the heck out of it.

3. Believe that there’s a place for you in the industry.

Sometimes, you just need to believe. If you dwell so much on the numbers, you somehow become subjective. “It’s difficult for me to make it because I’m not a big budget developer.” Think that you will be one of those exceptions, not to give you false hope but to encourage you into thinking big.

4. Get it started now.

Just do it – now.

5. Buy into your idea and own it.

Ideas are flexible things, the only part that could go wrong is the execution. Instead of imagining details about your idea, set on to work to see if it is feasible even before you get invested. Consider it as a project and do the necessary research and see if it can be scaled and marketed to the public. If you can’t convince yourself that your idea will work, it’s time to go back to the drawing board. You should believe first before you can even convince others to do so.

6. Learn from apps that didn’t make it.

More often, indie developers jump into the temptation of emulating top apps. It’s not bad so to say; you’re basically reusing a formula proven to work but this strategy had also been the downfall of many indie apps. Study these apps’ shortcomings and learn from them. It is great to learn from mistakes especially if it’s not your own.

7. Optimize app development time.

Success may come slow and disappointingly out of reach if you just wait for one app to bring you there. Create simple apps at first so that you can publish several apps in a year. This way, you can test your ideas and tweak it as you go. Your likelihood of success also increases as you build your app portfolio.

8. Keep the quality up.

Keep it simple, stupid but design is still everything. Find the sweet spot between simplicity and good design and you will have a practical app in the process. Quality need not sacrificed. This is especially important in a highly competitive and ever-changing market.

9. Be critical of your own work.

You can get too invested in your idea that you can no longer notice obvious flaws in your app. Put yourself in the shoes of your prospective users and objectively critique your own app.

10. Don’t sell out even when success seems out of reach.

Just don’t give up. Experts advise that instead of seeking for investors you should build apps in your spare time. You don’t need to pack your bags and leave everything behind just to be an indie developer in the first place. You can work for “the man” as they say. This way, you can still have control over what little success you will achieve.

11. You don’t need to do it all by yourself.

Build a team or join a team or other indie developers that’s on the same boat as you. This way ideas can be shared and developed more efficiently. Resources can also be pooled so that app distribution and marketing would have more impact.