Alpha Software Blog

5 Steps To Calculating Mobile App ROI

Mobile App ROI

Measuring Mobile App ROI is notoriously difficult, but it doesn't have to be.Measuring Mobile App ROI is notoriously difficult, but it doesn't have to be.

When building mobile apps, developers often ignore an important first step: Determining whether it makes financial sense to build it in the first place. Measuring return on investment (ROI) of mobile apps is notoriously difficult to do. But in an interview in SD Times with Adam Fingerman, Chief Experience Officer at app design and development firm ArcTouch, Editor Madison Moore lays out five steps you can take to help figure out the ROI of any mobile app. Here’s how to do it.

1)     Create a plan to measure ROI

Before building the app, determine how you’ll measure the mobile app ROI. If it’s an ecommerce app, for example, you may want to use the number of checkouts as the gauge of success. For internal business apps, you may want to measure how many people use it, and determine the overall efficiency increase it leads to. Take care to spend a good deal of time on this, and look for the input of important stakeholders.

2)     Calculate the lifetime value of a customer

If the app is a consumer-facing one, calculate the customer lifetime value (CLV) each new customer will bring your company. How to do it? If your company has a web site, use the CLV of web site visitors as a starting point, Fingerman says. If you believe the CLV of a mobile user will be higher, adjust it accordingly. And once you’ve determined the CLV, multiply it by the expected number of users to get the app’s expected overall value.

3)     Recognize not all users are the same

When figuring the benefits from users you expect to get from the app, keep in mind that not all users will be equally valuable to your business. Fingerman says that many businesses have found that existing customers who download their apps are more valuable than people who are not yet your customers. That’s because existing users have already proven they’ll be loyal to your business because they are satisfied enough with it to download your app.

4)     Calculate your costs

ROI needs to take into account not just revenue, but costs. Start off with the expected development costs. But don’t stop there. How much will it cost to support and maintain the app? How much will have to be spent for developing new versions? And how much will you spend in marketing?

5)     Make sure your metrics are actionable

When choosing the metrics you’ll use to measure ROI, make sure that you can take actions based on them to improve app performance or business performance. For example, a retail application may set as its primary success metric the number of people who complete the buying and checkout process. That’s simple to measure, but also simple to improve: You can test different checkout designs and see which leads to the most completed checkouts. As Fingerman says in the interview, “An app is a living thing; you have to be committed to giving it the care and feeding on a regular basis.”

Try a mobile app builder for free.

Case study on how one company measured ROI on their new mobile app (and saved $300,00 a year in mobile data costs).

How to use analytics to increase the value of your ROI.

Read this recent survey data that shows why investment in mobile can lead to such high ROI.

Seven critical capabilities your mobile app development software must include.

Prev Post Image
Why Artificial Intelligence Will be Big In Mobile App Development in 2017
Next Post Image
Alpha Software's Top 5 Blog Articles of 2016

About Author

Amy Groden-Morrison
Amy Groden-Morrison

Amy Groden-Morrison has served more than 15 years in marketing communications leadership roles at companies such as TIBCO Software, RSA Security and Ziff-Davis. Most recently she was responsible for developing marketing programs that helped achieve 30%+ annual growth rate for analytics products at a $1Bil, NASDAQ-listed business integration Software Company. Her past accomplishments include establishing the first co-branded technology program with CNN, launching an events company on the NYSE, rebranding a NASDAQ-listed company amid a crisis, and positioning and marketing a Boston-area startup for successful acquisition. Amy currently serves as a Healthbox Accelerator Program Mentor, Marketing Committee Lead for the MIT Enterprise Forum of Cambridge Launch Smart Clinics, and on the organizing team for Boston TechJam. She holds an MBA from Northeastern University.

Related Posts
Top Security Concerns for Low-code and No-code Development
Top Security Concerns for Low-code and No-code Development
New Webinar: How to Integrate ChatGPT with Alpha Anywhere
New Webinar: How to Integrate ChatGPT with Alpha Anywhere
Featured App: Tracking COVID-19 in Sports
Featured App: Tracking COVID-19 in Sports

The Alpha platform is the only unified mobile and web app development and deployment environment with distinct “no-code” and “low-code” components. Using the Alpha TransForm no-code product, business users and developers can take full advantage of all the capabilities of the smartphone to turn any form into a mobile app in minutes, and power users can add advanced app functionality with Alpha TransForm's built-in programming language. IT developers can use the Alpha Anywhere low-code environment to develop complex web or mobile business apps from scratch, integrate data with existing systems of record and workflows (including data collected via Alpha TransForm), and add additional security or authentication requirements to protect corporate data.