By Christine Dart, Global Head of Marketing, Helpshift
After shedding blood, sweat, and tears to launch a new app, it can be soul-crushing to watch its monthly active users (MAU) stagnate or plummet after an initially high number of downloads. The publisher might be left asking themselves why users aren’t sticking around and whether the app was even a good idea. The answer might just be that they didn’t have mobile product-market fit.
Successful apps have highly engaged users that return again and again — and maybe even tell all their friends to download the app. This means the app has high retention and is an indicator that they indeed established product-market fit. In this article, I’ll explain what product-market fit is and how to use feedback as a strategy to establish it.
Defining mobile product-market fit
Mobile product-market fit means that an app is consistently fulfilling the needs of its intended market. Why does any of this matter? A few reasons; retention, cost of acquisition, and virality can all indicate and dictate the long-term success of an app. Let’s dive in.
While it might be tempting to get excited about initial download numbers, this can actually be considered a vanity metric. This is because some users will download an app but either not engage with it at all or open it just a few times and then delete it. If a high percentage of users continue to follow this path, it will be very difficult to scale the app. It’s also a strong indicator that something is missing from the app or that it is malfunctioning. It also may not be being marketed to the correct audience. The goal for long-term success is a high retention rate, meaning the users keep coming back.
Cost of acquisition
According to Harvard Business Review, it can cost five to 25 times more to acquire a new customer than it does to retain one. A famous Bain & Company report noted that a 5% increase in customer retention could lead to a 25% to 95% increase in profits. While these numbers are not specific to the business of apps, the advice is sound. Marketing can be costly and an app’s shelf life can be cut short if product-market fit isn’t established early.
Much like webpages with great search engine optimization (SEO), apps with great app store optimization (ASO) are more likely to get discovered and “go viral.” The good news is that apps with many great reviews benefit from improved ASO. The bad news is that the opposite is also true. We’ll talk more about review management later in the article.
Use feedback to determine if your app has mobile product-market fit
In the early phases following the launch of an app, it can be difficult to predict whether new users are going to stick around long-term or not. You can observe your MAU volume over time to look to see whether it’s increasing, however that is a lagging indicator of product-market fit – and this is something that’s preferable to learn early on. If you pump spend into marketing and advertising campaigns aiming to get downloads and scale your user base before you know whether your app actually has mobile product-market fit, not only might you burn through cash advertising to the wrong market, but you could also be risking your app’s reputation. If your app isn’t meeting the market’s needs or isn’t functioning as expected, you could get an early onslaught of negative reviews, which will make it very difficult for your app to pick up traction.
Fortunately, there are ways to minimize this risk and it all starts with listening to your audience. Enter the art of feedback collection! Below are the four steps to take to use feedback to inform mobile product-market fit for your app.
1. Feedback collection & the soft launch
Some publishers prefer to open up their app to a pool of beta testers prior to promoting the app to the general public. Ideally, the beta testers should match the persona you believe your app is intended for — i.e. not just friends and family. Beta testers can help you understand whether your app meets all the needs of its intended audience, is intuitive to use, and is competitive with alternative apps already in the market.
When entering a beta test phase or soft launch, you will want to have a plan to collect feedback from these testers. You might consider running it as an in-depth focus group so that you can converse with these testers and ask extensive questions about their experience. However, this can be time-consuming and costly and is difficult to do at scale if you don’t have a lot of resources at hand. Alternatively, you can integrate an in-app automated feedback collection SDK that allows the testers and early users to submit feedback, report bugs easily, and make suggestions for improvement.
2. Moderate app store reviews
App reviews are fantastic for improving app store optimization (ASO)… when they’re positive. However, the world isn’t perfect and some users will leave less-than-glowing reviews as well. While it’s ideal to be able to connect with users experiencing challenges via support channels to alleviate their concerns, grievances sometimes get aired publicly. This is why it’s important to check in and moderate app store reviews. So how — and why — should you respond?
Well, according to my company’s research, 40% of users will revise and improve their rating of an app after receiving a response to a negative review they left. This is one of the reasons why it’s worth an app publisher’s time to moderate reviews! Additionally, reviews serve as feedback about how the product and customer experience can be improved. A great way to respond to negative reviews is to acknowledge the user’s concern and redirect them to reach out to customer support.
While it might initially seem less urgent to respond to positive reviews, it’s equally crucial. A user taking time to leave a positive review is likely highly engaged and could become a brand evangelist — and who doesn’t love word-of-mouth referrals?! Expressing gratitude for the positive review isn’t simply a kind thing to do, it’s also great marketing. An overwhelming 89% of consumers scour reviews, both negative and positive, before taking action. How your brand replies to these reviews can be a heavy-weighted factor in establishing trust.
3. Analyze the feedback and implement changes
Review the feedback critically and look at it from multiple angles. Are there trends or recurring suggestions? Feedback can tell you a lot about whether your app is checking all of your users’ boxes and whether it’s easy to navigate. Perhaps a commonly requested feature does in fact exist in your app, but it’s hard for users to find. Or perhaps competitive apps on the market typically offer a feature that was left out in your team’s product planning process.
You’ll particularly want to note if there are a heavy number of requests for or questions about a specific feature. High demand for a specific function may just become your crystal ball for predicting long-term retention. As noted at the beginning of this article, user retention is a lagging indicator of product-market fit. Organizations that have identified typical user behaviors that long-term customers share can then use those behaviors as leading indicators of retention and, therefore, clarity that they have found product-market fit. As an example, Mark Roberge of Stage 2 Capital mentions in his ebook, The Science of Scaling, that 70% of Slack’s customers send more than 2000 team messages in the first month of use.
Common errors or complaints could also indicate a bug. The key here is to look for patterns. Are users with specific devices experiencing similar challenges that users with other devices are not? This information can help your team troubleshoot the issue.
Once you feel you’ve connected some dots and gotten a grasp on what your users really want, make an action plan. Use this feedback to prioritize what needs to be modified or added first. Then, make it happen!
4. Test Again
Feedback loops should be a continuous process of listening and iterating, listening and iterating. The market evolves. Successful apps continue to evolve with the market. Additionally, the more users witness that a brand listens to and implements user feedback, the more they will trust that brand.
The reality is that establishing product-market fit isn’t always as intuitive as we think it might be. It’s great to begin our product creation process with educated guesses from our experience and knowledge about our audience, but echo chambers don’t push us to excellence. The “market” side of the “product-market fit” phrase also must play a role. Therefore, it is imperative to get feedback from your users to ensure nothing has been overlooked.