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Loyal app users more likely to make a purchase: study

Building relationships with app users and fostering long-term usage are more important for driving in-app purchases than getting users to the sale proposition quickly, according to a new study from Localytics.

The study found that, of all the users who made an in-app purchase, 44 percent did not do so until they had interacted with an app at least 10 times. Only 22 percent made a purchase in the first session and 33 percent made a purchase between sessions two and nine.

?The big news is that user loyalty and retention is bigger than we thought,? said Daniel Ruby, director of online marketing for Localytics, Cambridge, MA. ?Apps with in-app purchasing as a monetization structure are becoming more and more popular, and determining how to maximize their success is extremely important.

?The biggest surprise is that users who buy in their first session appear to be less likely to become loyal users of an app than users who wait,? he said. ?It points to the value of crafting an app experience that brings users back as often as possible.?

?Every app should be designed with the user in mind. If you create an app that people truly enjoy using, with an easy and pleasant interface, you'll be rewarded with a base of loyal, engaged users who want to use your services and want you to succeed.?

Building loyalty
The study also found that, on average, a user who makes an in-app purchase will do so 12 days after first launching the app.

App publishers have been moving away from incentivized downloads in response to research showing that many consumers use apps infrequently after downloading them. A Localytics study from last year, for example, found that 26 percent of apps are used only once after being downloaded.

Instead of incentivized downloads, app publishers are focusing more on building engagement and overall customer lifetime value as in-app purchasing grows, a trend that Localytics? latest research supports.

The research also shows that the users who interact with an app multiple times before making their first in-app purchase are more valuable in the long run, making 25 percent more in-app purchases over their lifetime as a customer.

In comparison, first session purchasers will make an average of 2.8 purchases in a given app during their user lifetime, compared with 3.5 purchases for all other purchasers. Only 16 percent of users who make a purchase during their first app session will go on to engage with that app 10 or more times, compared with 26 percent of overall app users.

Driving revenue
The results show that by building an app?s engagement and the brand?s presence in a user?s mind, app publishers can generate better overall revenue based on a loyal base of repeat users.

Localytics analyzed nearly 30 million users? in-app purchasing for the study.

?Looking at the numbers, the average initial in-app purchase doesn't happen until 12 days after the first time a user launches the app,? Mr. Ruby said. ?Without building an app that is inviting, interesting, and brings users back over and over again, users won't reach that point - you won't be able to build the relationship with the user that prompts him or her to take advantage of your in-app offers.

?I think app developers are doing the right thing, and creating great apps that focus on the user experience,? he said. ?Continuing to do so will help the ecosystem of in-app purchase driven apps grow and flourish.?