5 Mobile Metrics That Matter For SMBs5 Mobile Metrics That Matter For SMBs

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Having a mobile strategy doesn't just mean having an app. It should include clearly defined goals for how mobile can positively impact your small and midsize business (SMB)--and which numbers you're going to track to help you get there.

Among the reasons to pay close attention to mobile user data: Even a strong app can disappear into the marketplace black hole. It's vying for attention among a crowd of thousands, and after it's downloaded to a device it still faces an uphill climb for regular, long-term usage. Tracking and analyzing relevant data to help inform decisions at key stages can go a long way toward standing out from the pack.

Jeff Tseng, CEO of mobile and social analytics firm Kontagent, typically groups mobile metrics into three categories: testing, acquisition, and engagement. (A fourth category, monetization, would apply to companies wanting to generate revenue directly from their apps.) The names really aren't as important as the fact that these buckets reflect the various stages of an app's lifecycle, from development to deployment to user growth to optimization.

[ Right now, Facebook advertising doesn't make sense for most SMBs--but that can change. See 4 Ways Facebook Can Woo SMBs. ]

Granted, the numbers that matter most to your business will depend on, well, your business. A mobile games developer and a car dealership don't have the same goals for their apps--nor should they. But no matter the business goals, useful analytics mean more than just the number of downloads an app produces. In an interview, Tseng shared five metrics that can apply to a wide range of SMBs.

1. Cost Of Acquisition

Companies that hope to generate revenue from their apps may need to spend money to make money. "If you can get organic, free acquisition, that's fantastic," Tseng said. "Most folks end up having to pay for some type of distribution, so measuring your cost of [acquiring] your users is really, really, important." Tseng does note that paid acquisition isn't a fit for every SMB. If your mobile app doesn't connect in some way to your bottom line, it makes little (or no) sense to spend money getting people to use it.

Tseng said a key challenge in tracking acquisition costs today is that Apple doesn't make it simple to do so for iOS devices. "Apple essentially blocks the ability to easily do attribution of what advertisement your actual download was driven by," he said. In March, Kontagent spearheaded the launch of an industry group, the Mobile Acquisition Transparency Alliance, to develop an open standard for acquisition reporting.

2. Day One Retention

There's usually a significant drop-off in usage after the initial installation of an app; tracking your retention after day one is a good way to ensure it doesn't drop off a cliff. The proper benchmark depends on a variety of factors, but Tseng said this data point is the first step in getting a real idea of what your actual usage is like. Hint: If seemingly everyone opens your app once and then never again, that's probably a bad sign.

3. Day Seven Retention

Likewise, keeping tabs on retention one week after the initial installation begins to reveal whether your app will work its way into the user's regular mix--keep in mind they probably have dozens, if not hundreds, of other apps on their phone or tablet. Some call this "activation"--it's the critical difference between a download and actual usage. "That gives you a sense over the long term whether your app is engaging enough," Tseng said.

4. Average Revenue Per User

This one's a no-brainer for SMBs hoping to generate revenue directly from their apps. That could mean mobile commerce, as one example. It could also be slightly less direct, such as via some form of a "freemium" model. Certainly, if there's a cost per acquisition, you'll want to know how much money you're making from that user--otherwise you might be sending your marketing dollars into the aforementioned black hole.

5. Session Time

This one's critical for a wide range of SMBs hoping to stick with their prospects and customers wherever they go. How long those users spend on your mobile site or running your app reveals a good deal about how much they like it--and whether they're likely to keep returning to it over time. There's a big difference, for example, between someone who spends five minutes in a session and someone who spends one minute. "That gives you a pretty good sense of the type of engagement and activities that people are doing in a session with your application," Tseng said.

Of course, those aren't the only five data points a business might want to track--they're just five important ones, according to Tseng. Security-minded companies will want to monitor certain activity to ensure nothing's afoot, for instance. That would vary by industry, but could include things like wildly different IP addresses for the same account in the same day--one in China, and one in the United States, for example--or irregular transaction sizes or frequencies. "There are a number of different signals you can detect from a fraud standpoint," Tseng said.

Developing the right set of mobile metrics for your particular business can also come from asking the right questions. That's particularly true if you're dissatisfied with adoption and usage. If you notice a lot of uninstalls, you might ask: What were the last three things the user did before abandoning the app?

"The business question, at a high level, is: Why are people dropping out of the application?" Tseng said. If you have a miniscule day-one retention rate, consider the first several steps your app requires a user to take--and which of them might be driving people away.

Your questions--and the numbers you use to answer them--don't necessarily need to be negative in nature. You can just as easily ask: What are the common attributes of your highest-value users? The right answer is the one that helps you find more of them.

SMBs have saved big buying software on a subscription model. The new, all-digital Cloud Beyond SaaS issue of information SMB shows how to determine if infrastructure services can pay off, too. Also in this issue: One startup's experience with infrastructure-as-a-service shows how the numbers stack up for IaaS vs. internal IT. (Free registration required.)