Mobile discovery vs. engagement

Posted on March 21, 2016 by Eric Benjamin Seufert

As the app economy matures and marketing costs inflate to reach the value that some of the best-monetizing (and thus most marketed) apps are able to generate from their userbases, the “post-discovery” phase of the mobile funnel — that is, the portion of the mobile funnel in which the user has already downloaded an app — has become an important battleground for developers, on which they attempt to retain their most valuable users and keep them engaged.

Engagement, of course, is of the utmost importance to not just app developers but creators of all consumer tech products and, really, all products. Take, for example, this industry-agnostic quote from a Bain study of customer attrition:

How do loyal relationships translate into cost savings? Consider the cost of serving a long-standing customer versus the cost of courting one. Across a wide range of businesses, customers generate increasing profits each year they stay with a company. In financial services, for example, a 5% increase in customer retention produces more than a 25% increase in profit. Why? Return customers tend to buy more from a company over time. As they do, your operating costs to serve them decline. What’s more, return customers refer others to your company. And they’ll often pay a premium to continue to do business with you rather than switch to a competitor with whom they’re neither familiar nor comfortable.

Platitudes aside, it’s easy to understand why retention and engagement are important on mobile. Recently, the CEO of Localytics, a mobile analytics company, penned an open letter to Mary Meeker, imploring her to consider adding a mobile engagement component to her famous Internet Trends Report. In the letter, the CEO writes:

Forrester also notes that the most popular business metric for determining mobile success is “views/traffic to my mobile site/app.” We already know this didn’t work for websites, so why would it work with mobile? Companies are investing a lot of money to acquire mobile users, but they aren’t focused on creating ongoing, mutually beneficial relationships with those users.

Taking as granted the supremacy of retaining existing users versus acquiring new ones, a question arises as to how much focus a developer should place on engagement versus discovery in terms of their resources. If keeping users is truly more important than acquiring new ones, shouldn’t a developer’s budget reflect that? And if so, what kinds of tools should developers be using to achieve that balance?

Unfortunately, it seems that the ecosystem of tools for discovery (acquisition) is far more robust than that of tools for engagement, many of which are not optimized for mobile platforms. The best and most obvious example of a mobile engagement channel is probably that of push notifications, but their implementation can be counter-productive: another study by Localytics finds that 50% of users consider push notifications to be annoying.

Other channels, such as email and social media, might experience friction being platform independent (eg. would an email alert for an upcoming event / promotion in an app work if the user opened the email on desktop?). Also, collecting a user’s email address or social media username in an app is no easy feat: consider that only 20% of Instagram users connect their accounts to Facebook, despite the obvious benefits of doing so.

While it’s uncontroversial to say that engagement is important, the platform layer between the user and an app creates difficulties in reaching users directly when they’re not using the app. This is where discovery shines on mobile: a developer can reach a potential user on mobile if they’re using almost any app with an ads SDK implemented. But really, outside of its own app, the only mobile-specific channel a developer has access to in reaching existing users is the mobile push notification. Until that access problem is solved, the disparity between attention to discovery versus engagement will likely remain.