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The 5 Tiers of Mobile Customer Loyalty

In the world of mobile apps, ‘customer loyalty’ is thrown around pretty loosely. At its worse, it’s a meaningless buzzword. At its best, it’s a metric developers and their customers have a very different measurement of – as 81% of brands feel confident in their understanding of their customers, but only 22% of customers share this sentiment.

Fortunately, with today’s mobile app analytics, customer loyalty no longer has to be a buzzword or a topic up for debate. From adoption to referrals, we as mobile marketers have access to an array of metrics to assess every element we categorize into the broad bucket of ‘loyalty.’

But before getting into these metrics, let’s go over what loyalty means:

Customer loyalty is not customers being loyal to your app. There are 1.4 million apps in the app store – and nearly as many alternatives for your app. It’s a customer’s world, and they have no reason to “be true” to one app over another.

Customer loyalty is about being loyal to your mobile customers. It’s about understanding customer needs and pain points and designing an experience that leaves customers wanting to come back time and time again. It’s about prioritizing your customers above all else and earning their loyalty.

To make the topic of customer loyalty a little more tangible, I like to talk about it in terms of what I call “Maslow’s Hierarchy of Loyalty.” It’s an upside down funnel that organizes your mobile customers into five levels of loyalty, each of which contains a significantly smaller proportion of your customers than the one below it.

Customer Loyalty
Like Maslow’s Hierarchy of Needs from PSYC 101, each ‘tier’ of the loyalty pyramid builds off – and depends on – the tier below it. A customer must already be satisfied and engaged with your app, for example, before he or she can achieve conversion loyalty.

All customers start at the base of the pyramid as simply installs or ‘users’ of your app. It’s your job as a marketer to incentivize your customers to climb each level of the pyramid until they have achieved the highest level of loyalty – advocacy.

In this post, I’ll introduce each of the five levels of loyalty with tips on not only how to measure that loyalty but how to earn it – for loyalty is truly something that has to be earned.

 

1. Unattained Loyalty

The base of the pyramid, this level of loyalty contains the vast majority of your app’s users. Customers who fall into this tier are seldom disloyal or unsatisfied. You simply don’t have enough data beyond their User IDs to further classify them – you’ve yet to had a conversation about them.

With 1.4 million apps in the app store, these customers have no reason to be loyal to your app. At the slightest hiccup in their experience, customers have every right to abandon ship and try out your competitor’s app.

You must, therefore, give them a reason to be loyal.

Earning loyalty at this stage often comes down to two elements:

Building an app customers love. Simply put, customers will continue to use your app as long as it meets a need. Focus on the product first, and loyalty will follow suit.

Humanizing your customers. Rarely in this post have I used the term “user.” There’s a good reason for that, too – they’re people, not users. They’re people with unique values, wants, and needs. Customers are in this category merely because you don’t know enough about them. Take the time to understand them – and to understand how to earn their love. Once you have this understanding, figuring out what it means to build an app customers will love becomes easy – all you have to do is listen.

The average company never hears from 96% of its disappointed customers. Don’t be the average company – listen and give customers a stage to voice their feedback.

While notions of listening and customer love may seem a bit soft for a post that promised to be about metrics, it may just be the most powerful measurement here. And the data supports it: Retention rates are twice as high among customers who are interacted with in an unobtrusive, relevant, and personal manner than among those who are not.

Related metrics:

  • Downloads How many people have downloaded your app? How many loyal customers do you potentially have?
  • Installs and registrations – How many people have installed your app and set up an account? A surprising number of people download but never install an app or register an account. If this is the case, a poorly designed registration process may be the cause of lost loyalty.
  • Retention – How many customers return to your app 24 hours after their first sign-in? (Industry benchmarks suggest this number should be between 60-80%) Customer churn is the most basic indicator of lost loyalty, and knowing how to retain a customer is the first step to knowing how to earn their loyalty.

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2. Satisfaction Loyalty

Among those customers who have made the leap to download, install, and begin to actively use your app, how many are satisfied with their experience?

Marketers place a lot of weight on customer satisfaction, but the metric has little intrinsic value. You can have the highest net promoter score in the world and your customers may still leave you the moment your competitor drops its prices. A satisfied customer is worth little; a loyal customer is worth a lot.

Customer satisfaction, in and of itself, is not incredibly meaningful. Yet, satisfaction is a necessary prerequisite for customer loyalty.

As was the case before, earning customer satisfaction comes down to an iterative process of collecting and analyzing customer insights and then using those insights to build an app and experience your customers love.

Related metrics:

  • Net Promoter Score (NPS) – When asked, what proportion of your customers say they would recommend your app to a friend?
  • Love Ratio – When asked a single yes-or-no question: Do you love this app?, What proportion of your customers say they love your app instead of saying No or opting out? (A simpler variation of the NPS that sees virtually no opt-out.)
  • Customer insights– Collected from customer conversations or in-app surveys, these are longer-form instruments for asking both qualitative and quantitative questions regarding a customer’s experience with your app.

 

3. Engagement Loyalty

Once you have established customer satisfaction, it’s time to track how your customers interact with your mobile app.

By tracking engagement, you can understand your customer’s usage behavior with your app: Are they opening it for a specific purpose and exiting the app once they have completed a task, or do they launch the app frequently and for long periods of time for general browsing and enjoyment?

To earn engagement loyalty, build incentives around engagement into the very core of the app. Keep customers coming back with fresh content, well-timed pushed notifications, peer-to-peer messaging, or gamified achievements. (To give you a better idea of what an app designed for engagement looks like, I conducted an app teardown of Tinder, an app with astonishing engagement, and the lessons developers can take from its success.)

Related metrics:

  • Session frequency – How many times do customers launch your app in a month? In a week? In a day?
  • Session duration – How long does the average customer spend in your app in a single session?
  • Screens per session – How many pages (screens) of your app does a customer see in the average session? Do customers use your app for a single purpose and leave, or spend time browsing its features and consuming content?
  • Interactions – What percent of my customers have had a meaningful interaction with my app, in the form of giving or being asked to give their feedback? What percent of customers feel as though they have a “voice” to communicate their experience, report bugs, or seek technical support within the app?
  • Responses – What percent of customers provide a response when shown a ratings prompt, an in-app survey, or feedback form, instead of dismissing the prompt?

 

4. Conversion Loyalty

Conversion loyalty is a measurement of the value your customers provide to your app.

Value, here, is another purposefully ambiguous term as it can only be defined within the context of an individual app. For many apps, value comes down to revenue – how are your most engaged customers moving the needle on your mobile revenue? While apps focusing on growth and customer acquisition, for example, often define value in terms of specific activities or events within the app. In these scenarios, value can be in the form of user-generated content (how are customers improving the experience and offerings of my app for others?) or social interactions (how are customers improving engagement by creating a community within my app?).

Earning conversion loyalty is a matter of both communicating and delivering value to your customers. Before adding a new transaction option to your app, ask yourself (or ideally, your customers): Is this something customers would be interested in? And if so, how much would they be willing to pay?

For non-monetary value exchanges, incentivize conversions within the design and merchandising of the app – make it easy for customers to add content, share your app with friends, or build a community.

Related metrics:

  • Average revenue per user (ARPU) – How much revenue does the average active user generate (via ad impressions/clicks) or contribute (via in-app purchases, paid apps)? This figure is typically reported in per-month terms.

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  • Conversion rates for events – What percent of mobile customers complete an action or event within the app that has been identified as a key value driver?
  • Opt-ins – How many customers want more out of my app and have signed up for additional content or beta tests? (The antithetical metric, Opt-outs, is perhaps even more valuable to your app’s success as it paints a picture of how customers don’t like to be engaged, and how loyalty can be won back by creating a more personally relevant experience.)

 

5. Advocacy Loyalty

The final and most valuable kind of loyalty is advocacy – transforming your customers into evangelists.

To do so, build your app to be shareable. Integrate it with social networks and contact books, reward customers for sharing content or referring friends, make social sharing as hassle-free as possible, and prompt (nicely) for ratings and reviews.

Personal recommendations are stronger than any marketing campaign; leverage them to your advantage. If a customer is already active, satisfied, engaged, and valuable, chances are they’re more than happy to evangelize your app – you just have to make it easy for them to do so.

Related metrics:

  • App store ratings and reviews – While it may not seem like an act of loyalty to leave a quick rating or review, the fact that less than 0.5% of your customers actually take the time to do this suggests otherwise. Just to review your app, customers have to leave the app, launch the app store, navigate to the reviews page, sign in, and write their review on a keyboard not conducive to longer writing. Take each rating and review for what it is – a gift. Positive reviews make your app more desirable and boost app store conversion, while negative reviews give you actionable insights on what steps you can take to win back the loyalty of a disappointed customer.
  • Word of mouth – How do customers amplify your message by sharing their experiences with others? (A difficult metric to track on a per customer basis, but one that can be tracked in more general terms using various online and social media tools.)
  • Referrals – How many app installs can be attributed to an individual customer’s promotion of your app?
  • Customer Lifetime Value (CLTV) – A final tally of average revenue per user, customer acquisition costs, predicted customer lifecycle based on historic retention or a cohort analysis, and referral value to identify your most profitable and loyal customers and reward or engage them accordingly.

 

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Tools for measuring and earning mobile customer loyalty:

As an added bonus, here are a few of my favorite tools for making measuring each of the above metrics a breeze:

Apptentive – Tools and prompts for boosting the collection of app store ratings, reviews, and customer insights, with the analytics to track customer sentiment over time.

Apsalar – Mobile revenue tracking for enterprise apps, including attribution performance and average revenue per user (ARPU) data.

Branch Metrics – Sophisticated referral tracking via the creation and sharing of deep links.

Google Analytics – Detailed reports around customer engagement, usage, and purchase behavior that can then be analyzed by cohort.

Mention – Real-time media monitoring to track online word of mouth for your app.

 

In summary…

  1. Loyalty is something that has to be earned, and it comes down to truly understanding your customers and building an app and experience around the needs of your customers.
  2. There is no one way to measure loyalty. Customer loyalty is unique to the goals of your app and how you define a valuable customer transaction, but there are a few standardized metrics around each level loyalty.
  3. Like all relationships, it takes time and effort to foster loyal customers. Customers will only be evangelists after they’ve been humanized, satisfied, and engaged.
  4. Contrary to popular belief, loyalty is something app developers and marketers have a fair amount of control over, and the customer experience can be designed specifically around fostering loyalty, engagement, and advocacy.

The word ‘loyalty’ is all too often tossed around lightly without the backing of any real metrics, but it’s important to remember that loyalty is real – and incredibly valuable.

I hope this brief introduction helps as you evaluate what customer loyalty means within the context of your mobile app. If you think I missed any important metrics or tips, I’d love to hear them in the comments below. 🙂

 



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