Half of your Mobile App user acquisition costs are wasted,  the problem is knowing which half.

We recently looked at a report by Appsflyer that showed the average uninstall rate for Android Apps was 49% in the first month with half of those uninstalled on the first day. The report stated that iOS uninstall tracking is limited after iOS 15 caused background pushes to only be delivered if the app has been used in the foreground in the past few weeks. However it’s probably safe to say that iOS Apps are not immune to similar rates of user churn.


The report made a reference to user onboarding “Clearly, creating a superior onboarding experience through deep linking and well-crafted tutorials is essential”  but somehow didn’t include Onboarding in the 9 key takeaways in their report.


When you think about the huge volume of App installs that fall foul to user churn it raises the question, how much development and marketing costs are wasted?.  Well almost 50% is the obvious answer but what if you had to put an actual dollar figure on it?


The Business of Apps has very helpfully published a report with exactly that information called App Marketing Costs (2023) and some of the underlying data is supplemented by the same firm as the previous report (Appsflyer).


The report split the App Marketing Costs into three stages Pre-Launch, Launch, and Post-Launch which we will summarise for you here:

Mobile App Pre Launch / Launch Costs

mobile app pre-launch costs
mobile app pre launch / launch costs

Post Launch costs /  cost per App.

When an app is readied for release, the primary marketing costs are: CPI, (Cost-Per-Install), and CPA, (Cost-Per-Action).  Both the big app developers and independents set aside a  significant portion of their app marketing budget towards acquiring users for their app, and even more towards incentivizing those users to perform specific actions such as registering an account, making an in-app purchase, subscribing to a service, or making a reservation.

Post Launch Costs

post launch costs
mobile app post launch costs / cost per app

Similar to how the earlier reports reference Mobile user Onboarding there is an equally oblique reference to Push Notifications.  


When you take these costs into account it’s surprising that Product Teams and Marketers fail to prioritise No Code solutions like Contextual that directly help product growth teams and app developers increase activation and reduce user churn.


For example let’s take a Mobile App that has a growth target of 100,000 monthly active users in one year.  Based on industry churn rates the product growth and marketing team need to achieve at least 195,000 installs to hit their MAU target.  However, doing it in 12 months is a tough ask! For example from a standing start of 1000 installs per month plateauing at 10,000 per month by month 10 it would take 24 months to reach 100,000 MAU’s provided of course there were no other impediments to growth and retention.


Based on the aforementioned “user Action Costs” of “Advertising cost per install” of $4 and “Install cost” $2 per install the App developer will have spent $1.17m over 24 months not including Pre-launch costs or any other User Action costs to reach the 100,00 MAU target by month 24.  However if the Product Team could improve Activation by 19% to 70% of App installs the team would not only hit their MAU target 6 months earlier but will have saved almost $165K in User Action costs being wasted due to User Churn


The cost of a No Code mobile app onboarding tool like Contextual is a small fraction compared with the software development and customer acquisition costs CPI, (Cost-Per-Install), and CPA, (Cost-Per-Action) hemorrhaging at a rate of 49%.  In fact Contextual customers commonly experience greater than 20%  improvement in activation and Contextual pays for itself in month 1 and returns between $2.2 to $9.50 for every dollar spent, gradually improving ROI as our customers achieve scale.


ROI aside, the lifetime value gained from the users Contextual helped retain via Mobile app onboarding and In-app Tooltips is an order of magnitude best left to the App Developer to determine.


As for the rest, with Contextual tools and analytics you will at least have a better understanding about why the remaining users are not converting.

Don’t let all your hard work acquiring users go to waste!  Click on the buttons below to get your 14 day free trial or contact us for a demo! 

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    Contextual & StreetHawk Inc 2023.