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Three Reasons Why Focusing Too Much on Acquisition is a Mistake Article

User acquisition tricks are all the rage these days. Sure, everyone needs to grow their user base, and the stakes are high as costs steadily rise. The opportunity to capitalize on the mobile audience is huge:

Growing a large user base is an important part of meeting mobile goals, but there are many other priorities that are just as, if not more, important. Because of higher costs and uninstall rates, user retention has become more important than ever. Here are three reasons why focusing too much of your time and resources on user acquisition is a mistake:

It’s expensive

Competition in the mobile app marketplace is fierce, with millions of app options fighting for users’ time and attention. CPI costs are exploding. According to Bain & Company, it costs 6 to 7x more to acquire a new app customer than to retain an existing one. All of these are reasons why new apps risk getting squashed by more established apps with large budgets. Don’t try to match their resources and investment on the user acquisition front, focus on retention and re-engagement to grow more cost effectively.

It doesn’t increase conversion rates

New users driven from mass acquisition campaigns are unlikely to engage with ads or make in-app purchases, and many will uninstall if they don’t get value from their experience. Retention tactics can build a base of loyal, active users that are more valuable over time. According to a user study by Localytics, of those who made an in-app purchase, 44% did not do so until they had interacted with the app at least 10 times. On average, a user who makes an in-app purchase will do so 12 days after first launching the app.  

It focuses only on the short term

To be sustainable over the long term, apps need to offer benefits to users that differentiate them as more valuable than other options available in app stores. Rather than obsessing over short-term user numbers, focus more on what happens after the install. Offering users something of value will increase retention, engagement, referrals, and lead to better ratings and reviews – all of which will help you grow your user base and build lasting relationships.

Try another approach

There is a new breed of solutions in the mobile app space that leverage loyalty and rewards to keep your users right where you want them – in your app. Offering a better ad experience and rewards of real value can keep users coming back for more, as well as improve ratings/reviews and referral rates. Loyalty and rewards also help you better monetize your user base, whether you depend on ad revenue, in-app purchases or both.

Come see Appsaholic at Booth #210 in the Expo to learn more about how apps are effectively using rewards to retain and monetize users.

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