There’s a term you should know: CCA or CoCA – Cost of Customer Acquisition. In the mobile business we refer to this as cost per install (CPI) which, as the name implies, is the amount spent on marketing, business development and sales divided by the number of installs (roughly).
Currently the average CPI is about $1.80, meaning that your $0.99 app, while selling nicely and seeing installation numbers that make you happy, is still a losing proposition. Even more of a losing proposition if your app is free. Advertising is certainly one way to monetize the non-spenders, with higher yield inventory available for better defined vertical audiences.
If you have good information about your users – demographics, industry, use cases – there is another place you can look to monetize without turning to ad brokers. There is a growing referral industry where leads leading to installs can pay well.
Lead generation is nothing new. This was prevalent in the good old days of shrink-wrapped software and even today’s major SaaS/PaaS providers seek indirect and outside sales opportunities.
One new initiative comes from Google. By referring customers who then sign up for Google Apps, Google will pay you a $15 bounty per each new customer. The fine print: currently this is relevant for the first 100 users per referrer. I suspect that if the program is successful then Google will lift the limit or abolish it altogether as well as increase its geographical distribution (currently only available to businesses in the US and Canada).
Ideally apps that are complimentary to Google Apps (corporate Gmail, Drive, Calendar) such as CRM solutions, expensing, scheduling, business intelligence, and the like, have a natural audience for Google’s offering. But it’s alright (preferred!) to be out-of-the-box.
In making a decision on whether or not to enter a referral program look less at what your app does (unless you happen to be Zoho, Box, or another Google competitor in this case) and more at for whom it does. Does your user base demographic coincide with the classic user of the referred program? Perhaps it doesn’t but could your user base (for example high school kids on their way to university or college) find a need for the referred service?
Examine, also, your user’s motivation for checking out the referred service and if incorporating the referral program will somehow cheapen your product or company brand (why is a home décor app trying to sell me an online storage service?).
While affiliate programs are referral programs, referral programs aren’t necessarily affiliate programs. Affiliate programs have a somewhat negative connotation, and although they do involve lead generation, they typically involve some third party referral. The type of referral program we are referring to here is distinguished by passing on qualified leads who are already your customers and/or users. Both referral and fee are of higher quality, and therefore should link to brands and services that are at least of a quality “where you see yourself”.
How and how often to make a referral offer?
It comes down to distraction and annoyance. While the extra cash is nice (or even necessary…) the loss of customer goodwill and the cheapening of your own brand is a risk you take if you implement a poorly thought out referral strategy.
Clearly your app is the star of the show. You define insertion points for the referral opportunity that make sense. If your app is, say, a media player and limited to the physical storage on the local device, referring the user to an online storage service makes sense both in terms of opportunity and app value (your app’s value increases in the eye of the user since you are (indirectly) solving a problem by offering this solution). A good insertion point would obviously be when local storage gets low, but earlier opportunities will also present themselves (say, when a user loads an album or a movie).
Your timing of the offer will also impact its success rate. The industry refers to this as a “happy moment”. There is almost no way to intuitively decide when the “happy moment” occurs so the timing is best determined empirically. One such method is to identify insertion points and then conduct A/B testing until optimized. Yes, you need a large enough sample to make this work.
Interrupting work flow is obviously not a good thing, and will be detrimental to both your app and the referral opportunity, however, planned or user-initiated breaks in the (work) flow are good opportunities for referral promotion. Don’t forget to provide the justification (“You just loaded a movie. Need more online storage space?”) and the decision opportunity.
Currently the average CPI is about $1.80, meaning that your $0.99 app, while selling nicely and seeing installation numbers that make you happy, is still a losing proposition. Even more of a losing proposition if your app is free. Advertising is certainly one way to monetize the non-spenders, with higher yield inventory available for better defined vertical audiences.
If you have good information about your users – demographics, industry, use cases – there is another place you can look to monetize without turning to ad brokers. There is a growing referral industry where leads leading to installs can pay well.
Lead generation is nothing new. This was prevalent in the good old days of shrink-wrapped software and even today’s major SaaS/PaaS providers seek indirect and outside sales opportunities.
One new initiative comes from Google. By referring customers who then sign up for Google Apps, Google will pay you a $15 bounty per each new customer. The fine print: currently this is relevant for the first 100 users per referrer. I suspect that if the program is successful then Google will lift the limit or abolish it altogether as well as increase its geographical distribution (currently only available to businesses in the US and Canada).
Ideally apps that are complimentary to Google Apps (corporate Gmail, Drive, Calendar) such as CRM solutions, expensing, scheduling, business intelligence, and the like, have a natural audience for Google’s offering. But it’s alright (preferred!) to be out-of-the-box.
In making a decision on whether or not to enter a referral program look less at what your app does (unless you happen to be Zoho, Box, or another Google competitor in this case) and more at for whom it does. Does your user base demographic coincide with the classic user of the referred program? Perhaps it doesn’t but could your user base (for example high school kids on their way to university or college) find a need for the referred service?
Examine, also, your user’s motivation for checking out the referred service and if incorporating the referral program will somehow cheapen your product or company brand (why is a home décor app trying to sell me an online storage service?).
While affiliate programs are referral programs, referral programs aren’t necessarily affiliate programs. Affiliate programs have a somewhat negative connotation, and although they do involve lead generation, they typically involve some third party referral. The type of referral program we are referring to here is distinguished by passing on qualified leads who are already your customers and/or users. Both referral and fee are of higher quality, and therefore should link to brands and services that are at least of a quality “where you see yourself”.
How and how often to make a referral offer?
It comes down to distraction and annoyance. While the extra cash is nice (or even necessary…) the loss of customer goodwill and the cheapening of your own brand is a risk you take if you implement a poorly thought out referral strategy.
Clearly your app is the star of the show. You define insertion points for the referral opportunity that make sense. If your app is, say, a media player and limited to the physical storage on the local device, referring the user to an online storage service makes sense both in terms of opportunity and app value (your app’s value increases in the eye of the user since you are (indirectly) solving a problem by offering this solution). A good insertion point would obviously be when local storage gets low, but earlier opportunities will also present themselves (say, when a user loads an album or a movie).
Your timing of the offer will also impact its success rate. The industry refers to this as a “happy moment”. There is almost no way to intuitively decide when the “happy moment” occurs so the timing is best determined empirically. One such method is to identify insertion points and then conduct A/B testing until optimized. Yes, you need a large enough sample to make this work.
Interrupting work flow is obviously not a good thing, and will be detrimental to both your app and the referral opportunity, however, planned or user-initiated breaks in the (work) flow are good opportunities for referral promotion. Don’t forget to provide the justification (“You just loaded a movie. Need more online storage space?”) and the decision opportunity.