User acquisition

User acquisition (UA) is a practice used to gain new users for an application, platform, or other service. For mobile apps, UA is often a strategy around generating new installs, which often require advertising campaigns or promotional offers and without which, it can be difficult to find and convert new users. User acquisition tends to be a data-heavy practice that looks for trends and patterns and reduces the guesswork and wasted ad spend. For some, this strategy can be essential to finding and converting new customers. It can also be used to help companies develop roadmaps, which include the necessary actions for obtaining new users.

There tend to be three main reasons for developing a user acquisition strategy or hiring a user acquisition firm. These include to grow a new or initial product, to halt or reverse the decline of organic installs, and to create and boost in an app store. Especially where the freemium app model tends to dominate the space, those with a paid-to-use app or a free-trial period may use a UA strategy to drive awareness and interest in their application. Another part to consider is the lifetime of the average app download and customer use, as generally there comes a point when users may stop using the app or uninstall it completely. A UA strategy can be used to help re-engage and retain users while keeping new users coming into the app space.

Implementing user acquisition strategies can help users find strategies to attract new users. The goal for a UA strategy should be repeatable and sustainable, but as each company tries to reach different audiences, the business will need to find the appropriate UA strategy for its marketing strategy. Some methods that can be implemented include paid media marketing, owned media marketing, app store optimization, social media, and offline marketing.

Before developing any strategy, there are a few best practices where a business can start. These include nailing the app or product's message and ensuring the message is correct and appropriate; otherwise, any campaign or strategy may fail or reach the wrong audience. Second can be identifying the target market and ensuring the UA strategy is focused on reaching that target market and those target users. But without understanding those users, any UA strategy can fail to find success.

It is important for any business to determine and understand its competitors and their products. This includes considering what its rivals offer users and what its weaknesses are that the business's product can offer. It is also important to understand what users like about a competitor's app and metrics, such as the number of installs, and this can direct the development of the company's app to adopt or reject some of their competitor's practices or user experience.

Mobile app developers often pay different media channels to show ads that feature their apps on other platforms. Paid media marketing is digital advertising designed to help increase a brand's market reach. These ads can vary in form from simple text displays to intricate art designs or videos. This can also include targeted ads capable of focusing on specific audiences. And the business can define the audience it wants to reach by creating user personas or demographic information, such as the age, occupation, or hobbies of the users it is trying to reach. Common types of paid media marketing include the following:

• Search engine ads
• Display ads
• Email marketing
• Playable ads

Owned media marketing involves leveraging a brand's media platforms, such as a blog, company website, or social media page, and works to market to pre-existing users. Displaying targeted ads to an already established user base can be used to increase awareness of a brand, the brand's mobile app, and new features in an app, and works generally to maintain users' interest in the app to reduce overall churn. Other reasons for using owned media marketing include the following:

• No cost—mobile app developers do not have to worry about purchasing ad space because their platforms display the ads, and there is no cost for placing the ad. The company can use as many ads as it chooses.
• Versatility—brands are able to post whatever and whenever they want when it is on their own platform.
• No competition—since the company is advertising on its own space, there is no worry about competing with other companies for the ad space and having to measure its ads against other brands on the same web page or platform.
• Wider audience reach—targeted ads to pre-existing website users increase the likelihood of conversion to a mobile app, and existing and loyal users tend to be more likely to recommend the brand through word-of-mouth advertising.

App store optimization (ASO) is similar to search engine optimization, in that it uses a series of factors to drive a company's mobile app to rank higher on an app store's search or recommended results list. ASO is intended to increase traffic to an app's page and, more importantly, to increase app installations. Some common ways companies increase ASO include the following:

• Using keywords—companies can use targeted keywords in an app's title or description to increase visibility. When a customer searches a keyword, the company wants its app with the same keyword to appear higher in its search results.
• Choosing a category—it is important for a business to choose suitable categories to place its app so users can find it faster; especially as when an app is placed in the wrong category, it can limit the traffic to an app's page.
• Asking for user reviews—one factor for users is the number of positive reviews an app has, with the more positive reviews an app has, the greater the rate of conversion, increasing their overall importance.
• Using appealing screenshots—visually appealing and accurate images of an app and its interface can help users gain an understanding of their app quickly and what to expect, enticing users further.
• Including a video—similar to images, a video that shows navigation through an app and shows what it offers potential users allows a user to see what and how it works without having to download it.

An app developer can choose between paid social media advertisements or organic social media marketing (or both) to help boost brand and app awareness and increase the potential audience of an app. Users can share content in these areas, and using paid advertisements can drive ads to their desired demographics, which can be used to help create a conversation more organically. Similarly, a business can identify and then pay social media influencers to promote a product or service, which can further generate interest.

Offline marketing uses advertising through channels unrelated to the internet. This can help users reach markets and audiences that they may otherwise not reach through online advertising. Although offline marketing may not offer the reach it once did, this can still help companies vary their efforts for capturing new users. Some ways companies can market their apps offline include the following:

• Event marketing—businesses can often find events relevant to their app to attend, such as trade shows, community events, or pop-up shops, where they can set up booths or tents and increase awareness and potentially generate word-of-mouth advertising.
• Billboard ads—billboards can showcase an app to a large segment of the population, especially when the billboard is placed in a high-traffic area that may elicit higher brand awareness and conversion rates.
• Print ads—ads in magazines, newspapers, and brochures are one of the oldest forms of advertising but can remain useful with user acquisition as it targets a demographic of people who do not spend as much time online.
• Networking events—networking can help businesses place their app or service in front of the right people, either as users or as individuals placed to increase awareness in other circles the business wants to reach. These events can include industry-specific conferences, seminars, and retreats where businesses can connect with others and include collaboration opportunities.

UA strategies for mobile games do not differ greatly from other apps and services; however, there are some strategies that make more sense in the context of a mobile game to help developers drive user adoption.

One strategy can include soft launches, in which an app developer pre-launches their game in select markets and test app retention and monetization ahead of a worldwide launch while potentially generating greater interest in the game. The soft launch can include influencers and creatives to drive that interest.

Another is interactive ads, which allow users to play and test drive the gaming experience. These can be more impactful than traditional or static ad experiences, as they can generate more interest in the game and lead to conversions with higher-quality users.

Similar to strategies, the UA channels are the various places where ads or interactions can occur to help the app reach a wider audience. Generally, using as many acquisition channels (depending on the targeted user audience) works best, as they can generate more interest. There are various effective channels, such as email marketing, website advertising, and paid search.

There are several metrics by which a business can assess its UA strategy and performance. Depending on the business, product, or service, which metrics to focus on will differ. These include metrics such as customer acquisition cost, customer lifetime value, and churn rates. What is important for any of these performance metrics is to ensure they are specific, measurable, achievable, realistic, and on a timeline for defining a business's goals and the metrics they use, and to help a user make goals numeric, time-sensitive, and objective.

Customer acquisition cost (CAC) is a metric related to the company's cost to acquire new customers, including sales and marketing activities, fees, travel expenses, and related expenses to the efforts to acquire new customers. To calculate the measure, a business is required to sum up sales and marketing costs and divide them by the number of customers acquired. And to allow a business to understand its profit, all it has to do is compare the CAC to the revenue these clients brought.

Customer lifetime value (CLV) is the revenue a brand can expect from a new customer during a specific timeframe. This metric can be calculated by multiplying the average sale by the number of repeat sales and the average lifespan of a customer relationship. Once this is estimated, it can be compared to the CAC to understand recurring revenue.

Churn rate is the percentage of customers who stop interacting or buying from a brand. Regardless of the business, losing customers is to be expected, but this number should not exceed the number of customers acquired. And once a businesses churn rate is understood, a business can take measures to retain these customers. Along with the above metrics, they can also have an understanding of how much to spend on these initiatives and work to anticipate the revenue retaining customers rather than losing them can provide. Part of customer churn is understanding what causes customer dissatisfaction, which, once understood, can be corrected for better customer retention. Otherwise, to identify the number of customers churned out, the business can divide the number of customers lost during a specific month by the number of customers at the start of the month.

There are a few common reasons for customer churn rates. Some have to do with the product, and some have to do with the customer themselves, which is why churn rate is inevitable. Some of the most common reasons for churn rate include:

• Change in financial status
• Change in geography or living situation
• Unhappiness with the product
• Loss of interest in the product
• Loss of interest in the brand overall
• Change in life status

Further, in understanding churn rate, there tend to be two important formulas to pay attention to: customer churn rate and revenue churn rate. There are, realistically, all kinds of calculations which can be used to find a churn, including whether the customers lost were ones worth focusing on, and when identifying the customers a company wishes to retain, it is important discover what can be changed to retain those customers.

The customer churn rate offers a snapshot of how a company is doing in customer retention. This can be achieved by calculating the number of customers lost during a given period (such as a financial quarter) versus the total number of customers at the start of the same financial period. This can also be garnished with data on the number of customers acquired in the same period for a total picture at the churn rate.

Along with the churn rate of customers comes the financial impact of that churn, which is often as or more important. Calculating the revenue churn rate is similar to measuring the impact of the customer churn. So, as above, for the same period, a business can divide the total of recurring revenue lost by the original total of recurring revenue for the period. This can also be further garnished with incoming customer data to get a fuller picture.

User acquisition can be impacted by various technologies and their rapid development, especially as the world of technology continues to develop to outdo competitors with better versions of their products or services. User acquisition faces several challenges, which include the following:

• Mobile ad fraud—as a result of fraud, all traffic driven to an app can be fake.
• Ambiguous advertising costs—ad networks provide publishers with aggregated data, which does not contain details or transparency about the ad campaign.
• Global markets—it may be difficult to acquire and engage users depending on where those users live and on individual cultures; often those features have to be dealt with by specific advertising campaigns.
• Organic traffic—the most valuable channel for users to come from tend to be organic, as those users are typically the ones searching for the application and are likeliest to convert into customers. The challenge is to drive as much organic traffic as possible.
• Low return on investment in ad campaigns—this comes when paid traffic efforts to keep a customer acquisition process afloat begin to become more expensive than the conversion rate can maintain.