Tuesday, October 23, 2012

Every Step Costs You 20% of Users

In a consumer mobile app, every step you make a user perform before they get value out of your app will cost you 20% of users.

Here's typical consumer app funnel. It applies to apps that do messaging (like GroupMe or DrawChat), but also posting content (like any app that ends with "-gram" a la Instagram and Cinemagram):

Your exact numbers might vary. With DrawChat, we found that 90% of people that land on the App Store page will install the app. The next step is to actually open the app, but only 90% of of the people who download your app will actually open it - I'm guessing that people are stockpiling apps for the impending apocalypse.

Sign-up is a much bigger hurdle than the previous steps: DrawChat's signup verifies your number via SMS which will get you completion rates around 70%. A startup I've talked to has seen completion rates as low as 50% with forced Facebook logins, while another one allows signing up with different methods (username/password, Facebook, LinkedIn) claims completion rates of 90%. Exact specifics may vary depending on what permissions you ask for.

Depending on the length of your funnel, you end up with 20-30% of the original users actually contributing to your ecosystem by creating and sharing new content.

What to do? There's not really much you can do until users get to the point where they've opened your app. But once a user has signed up, make sure you take them by the hand along the funnel. Make signup simple and unobtrusive. Make content creation easy. Come up with the simplest possible sharing experience. Because of the shape of the graph, you need to get each user to share with 3-5 friends for your viral coefficient to go above 1.


Updates / Reactions

1. mikebo asked on the Hacker News entry for this post how I know the number of App Store page views - it's not something that Apple provides. Excellent question. The answer is a bit involved.

People that don't have DrawChat yet get invited with an SMS that contains a link to a page on our server. That page redirects you to the App Store. So we know how many people see our App Store listing. On the other side, Apple provides you daily download numbers, which you then compare to the "first app open" counts on Flurry, Localytics, or your analytics provider of choice. We can also differentiate people who came to DrawChat organically vs. through invites by seeing if they had an invite waiting after sign up.

2. Shenglong asked on Hacker News if it's not better to start users in an "Explore" type experience instead of asking them to sign up immediately. This can be beneficial, but on the other hand, having an sign-in-less "Explore" type experience may actually hurt your signup conversions. Users get a feel for the app, decide that they'll sign up later, close the app, and never come again. I might be hallucinating but I think Instagram used to have an "Explore" screen with interesting pics pre-signup, and in the latest versions they got rid of that. Does anyone have data on this?

3. udit99 suggests that the 90% download-to-open ratio is not due to people stockpiling apps, but rather "attention-span-slippage caused by slow app downloads." I believe it.