What exactly makes a user a loyal user? Put simply, it’s someone who keeps using one app instead of a competitor’s. That’s it. That’s really all there is to it.
Obviously the more a user opens an app, the more likely they are to spend money in an app, but “likely” doesn’t mean it’s a sure thing. Getting users to open an app multiple times is relatively easy for a fun, engaging game. Getting them to part with their hard-earned money is still another matter.
It’s a well-established fact that a small amount of users make up the majority of mobile revenue. The number of converting players has been pegged around 2% overall for the past couple of years.
Corroborating the conventional wisdom
Free-to-play (F2P) games supported by in-app purchases (IAP) has become the most popular method for games to monetize, and for good reason. 98% of the revenue for Google Play and 92% of revenues in the App Store comes from IAP.
A little while ago, we conducted our own survey of 1,000 mobile gamers.
56% of mobile-device owning gamers only give a F2P game two to three tries before deleting if an app didn’t grab them by then. 35% were even harsher critics – if it didn’t blow them away on the first launch, it gets summarily removed from their device entirely! This matches with other industry findings that between 80-90% of users delete an app after using it once.
Luckily, if a game does grab a user, 70% of our survey respondents said they keep playing “as long as it’s worth [their] time.” We know that individuals over-estimate and exaggerate how long they play a game (how many of them are still playing the Cro-Mag Rally?), but with loyalty, end-user perception is key. Users who perceive themselves as loyal tend to be loyal.
7.5% of respondents reported that they make an in-app purchase at least once a month. That would be a great IAP rate for a specific app, but falls short since most people play more than one game in a given month. Another 35% said they “rarely” purchase things in apps.
Putting the data to use
That’s all very interesting data, but it’s not overly compelling on its own.
When we put longevity and conversation rate together we get a true measure of loyalty. 43.6% of respondents who said they play a game as long as it’s fun also said they would plan to make an IAP at some point. All of those who said they make an IAP at least once per month play as long as a game offers an incentive to do so. That incentive is the important part. Offering new items, messaging about new levels, power-ups, and challenges is an important aspect of keeping loyal users engaged.
For most games, the number of sessions and revenue are linked in a fundamental way. The more sessions someone plays, the more likely they are to make IAP or view and engage with ads, both of which generate revenue for the publisher.
That’s where mobile engagement and CRM programs come in. Broadly, these programs can be classed as ‘loyalty’ programs.
For F2P game users using a loyalty program, the IAP conversion rate quadrupled, from 1% to 4%. For power users, it jumped from 3% to 8%.
Putting it together
Every user’s wallet is finite.
The more apps a user has demanding their money, the less money there is to go around. Increasing loyalty and engagement results in an app getting more ad engagements, increasing developer revenue incrementally. Increasing IAP rates increases revenue directly, as well as increasing ad interactions through greater engagement as users make use of their IAP items and currency.
Join the Conversation
What’s been your most successful tactic for keeping loyal users? How do you keep your best monetizing users? Tweet your thoughts to @AdColony. For the latest AdColony mobile news and updates, follow @AdColony on Twitter, like us on Facebook, or connect on Linkedin.