The challenge – accurately measuring user growth

When it comes to mobile apps, it is very difficult to discern fundamental changes that occur within an apps user base – especially if you’re on the outside and don’t have access to information from the developer.

Currently, there are providers of app store data that provide information regarding app store downloads and revenue. Downloads are an important item as nothing occurs until an app has been downloaded by an individual. Additionally, Top Grossing is helpful as it sheds light into where consumers are spending money – another form of validation. While the information is helpful and serves as a guide, it isn’t as useful as it could be.

One factor that is not accounted for and makes it challenging to measure the real growth rate of an app, is user retention. Generally speaking, user retention for the average app at 30 days is approximately 10% – the retention rate only goes lower over time.

The app stores report a download when someone downloads an app. When the app is uninstalled, the app store does not reduce the download figures by the number of uninstalls.

Typically, a business records revenue when they make a sale to a customer. The sale is added to total revenue, the app store equivalent of total downloads. When a customer returns an item to the business, the customers money is refunded and the business reduces its sales revenue. The app store equivalent is the uninstall.  To account for returns, the business reports net sales which is the actual money received for items sold. So app retention is only accounted for by the developer and not by the app stores.

App store data provides the first data point in the story, not the last.

creating a way to calculate the growth rates of mobile apps

Snapchat files S-1 on February 2, 2017

The Snapchat filing confirmed our calculation methodology used to determine if an apps user base was growing or slowing

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