How App Companies Can Increase Retention, Engagement and Customer Lifetime Value

Mobile Marketing

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By: Mike Stocker

Let’s face it: apps are a major new component of our digital lives. In an April 2014 study, Flurry found that the average American spends 162 minutes on their mobile device daily, 86% of which is spent in apps. Personally, I have at least 100 apps (five full screens) on my iPhone.

Parallel to this, a new ecosystem of mobile app companies has emerged and come into their own. In previous blog posts and presentations, I’ve discussed why marketers should embrace and extend technology, building continuous, relevant, and personalized relationships with their customers. The rising mobile app space is a prime example.

Mobile app businesses have unique marketing challenges. First they need users to download their app. Next, they have to compete with hundreds of other apps on the user’s device for attention and continued usage. Lastly, and arguably most important, they must drive additional engagement and revenue over time to allow for continued app product improvement and additional future install acquisition. That’s also why successful app companies have shifted away from siloed acquisition/retention marketing practice, and toward customer lifecycle marketing.

Here are three examples of companies using modern marketing automation to increase retention, engagement, and/or customer lifetime value.

1. MyFitnessPal

MyFitnessPal is a mobile app/website focused on improving customer health. The company has a community of more than 65 million users who using their app to eat better, track activities, and lead a more fit, healthy lifestyle. MyFitnessPal consistently ranks among the top apps for both iPhone and Android smartphones.

The company has been laser focused on building an excellent product with rich features and functionality, and they’re now using Marketo to develop their communication, lifecycle marketing, and messaging programs. Their 15 million email subscribers can receivea weekly newsletter, recipe round-up, and “workout of the week.”

MyFitnessPal is also taking advantage of segmentation and testing through Marketo, including testing subject lines to optimize open rates and engagement. Tara Nicholle Nelson, the VP of Marketing at MyFitnessPal states: “The ability to test emails without engineering involvement has allowed us to create experiences that boost user engagement on our apps.”

MyFitnessPal also uses push notifications reminding users to load in their daily meals, and to engage with the app more to meet fitness goals.  Lastly, the team at MyFitnessPal collects information around customer join dates and most recent login dates, which can help them improve retention and engagement.

2. Kahuna

Marketo LaunchPoint partner Kahuna works with thredUp, an eCommerce company who buys and sells “practically new” clothing. thredUp wanted to use marketing automation to deliver personalized push notifications, improving user engagement and customer lifetime value. According to Lauren Miller, thredUp’s Sr. Director of Marketing, the company has increased monthly engaged users by 21%. Since adopting marketing automation, they’ve also a 50% increase in mobile revenue – tremendous results for any company!

3. Starbucks

The last example is from one of my personal favorites – the Starbucks Mobile app, which powers their loyalty program. Once you’ve downloaded the app, you have to get 30 stars (by buying 30 coffees) to achieve “Gold” status. Gold status guarantees you one free item for every 12 stars. Thanks to this program, I’ve upped my Starbucks consumption from once or twice a week, to nearly every day.

Starbucks also uses marketing automation to send welcome emails, tips on ways to earn more stars, app features, notices of rewards (I bet these have a very high open/click rate!) and even birthday announcements (these are triggered off of a great data point – my birth date). Also, Starbucks has tied this excellent mobile experience with the offline stores by making the mobile app a vehicle for payment in the stores, and sending out physical gold cards (see below). I was so excited to get the physical gold card – a minor thing, but talk about increasing brand loyalty, and creating enduring customer relationships.