Costs That You Can And Can’t Control

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Fiksu, the leading mobile app marketing platform, lately published the Fiksu Indexes for December 2014, almost every single sub-index of which reflects a cost increase in terms of Cost per App Launch (CPL), Cost per Install (CPI), Cost per Loyal User (CPLU). One of the major reasons causing the increase would be the extreme competition in the App Store and Google Play (including other Android markets). For example, Fiksu’s Competitive Index of App Store showed that in December top 200 free iPhone apps in the US reached 9.2 million downloads per day.

App Store Competitive

 

Let’s take a closer look at each of the indexes. According to Fiksu, the CPL of both Android and iOS in December reached $0.11 and $0.24, rising 32% and 28% from November, respectively.

Cost per Launch

The CPI of Android app climbed to $1.41, with a 25 percent increase compared to November. Although it’s not a very significant change, iOS developers paid averagely $1.17 for every install of their app, marking a 6 percent increment over November.

Cost per Install

And how much does it cost to acquire a loyal customer who opens your app at least three times and constantly market your apps? For acquiring one iOS loyal customer, developers spent 33 percent more in December than in November, averaging at $2.10 of CPLU (Android data is not provided).

Cost per Loyal User

So are these statistics astounding to you? Typically, Sales & Marketing is the last phase where cost happens during the whole app production and promotion workflow. The total cost could substantially pile up during promotion – bringing your apps in front of users, getting them engaged and active with your apps, and winning the competition. Due to the increasing competition in the app markets, the costs in Sales & Marketing is inevitable. In consideration that Sales & Marketing is the only place where revenues are generated, therefore, your apps have to be quality guaranteed, quickly shipped to the market, increasingly downloaded and used in order to cover the costs and create a great fortune for your company.

Production and Promotion process

Now talking about high quality and time-to-market, this is where Production fits. From app design to program coding to quality assurance, every step in the day-to-day process partly determines the success of your apps. An app with continuous high quality certainly would stay away from bad reviews and negative word of mouth, which enables you to spread the app easily, acquire more customers and produce large cost saving on the Sales & Marketing phase.

dev_and_test_integrationApart from the attribute of high quality, moving from Production to Promotion means how agile your internal process is and has a great impact on the moment you can start generating revenues. More specifically, the agile process in Production not only benefits you to have more time on developing new features, but also contributes to the continuity of revenue generation. Since you know your Daily Active Users and Average Revenue per Daily Active Users, it is very easy to calculate how much money you are losing in case of any delay of bug fixing, new features development, and app release.

As a developer or tester, in the past, you might not have a clear and direct picture of how costly it is to promote your apps or get a loyal customer. In the early days, the combination of a high quality and an excellent concept/design did do the trick, and acquiring a customer with this combo barely cost a dime. But things are changing that even successful gaming developers like Supercell nowadays are constantly running commercials in various countries to get more exposure and enlarge its market share. In the workflow above, costs take place in every phase – time costs, economical costs, resource costs, etc. To maximize the profits, it is vital to control and lower the costs occurring in every phase. In your territory, improving the efficiency of dev-testing cycle with an agile process and test automation is your highest priority and the very first effort you need to devote.

 

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