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Tear down the funnel and build a pyramid: The shift from purchase funnels to mobile customer journeys

August 6, 2019 | By Peggy Anne Salz, Founder and Lead Analyst—Mobile Groove @peggyanne

In a market where the cost to acquire an app user is rising through the roof, and the increase in app abandonment (the number of users who quit an app after one use) is alarming, it’s clear that the traditional focus on top-funnel metrics is fatally flawed. Our focus on a linear journey is completely out of line with user lifecycles. Mobile had forever altered the consumer path to purchase and funnel models no longer fit.

Architecting campaigns and strategies that prize acquisition over retention doesn’t just force marketers to burn considerable cash. It blinds them to the key engagement activities and metrics that are the sure-fire indicators of highly valuable and deeply loyal consumers who are primed to engage with content—and more.

It doesn’t matter whether the goal is to drive registrations, encourage consumers to volunteer information such as personal preferences that will allow you to deepen the customer relationship, or sell subscriptions: Ensuring a predictable and sustainable cash flow quality trumps quantity every time. In the App Economy, success isn’t a numbers game. It requires strategies that get the right users into your app—and keep them coming back.

A strategy that harnesses AI and machine learning to connect with customers in a relevant way based on an analysis of the millions of data points and signals that communicate their context via mobile and in-app can be a bonus. But even the best mix of analytics and analysis will miss the mark if marketers segment their audience by static demographics, not dynamic actions.

Embracing the engagement pyramid

First and foremost, marketers need a firm grasp of the hard data around the “who” of their customer base. However, they must also command the soft skills around the “why.” They need to understand what motivates their audience to take action in the first place. Effective app marketing engages with users throughout the lifecycle based on these two inputs.

But an ongoing data investigation by Phiture, a leading mobile growth consultancy based in Berlin, and CleverTap, a full-stack customer retention platform, ads a third dimension. They’ve built a framework to measure and analyze the user engagement we observe.

Published for the first time last month, Phiture’s framework offers marketers a more nuanced view of user engagement and a roadmap to increase retention. The authors of this must-read resource (Andy Carvell, Kevin Bravo ,and Tessa Miskell) present the Engagement Pyramid, a model that breaks engagement down into three layers:

  • Acknowledgment, where users show an appreciation for the app, but not high intent. (For example, opening the app or reading a push notification.)
  • Interest, where users deliberately interact with the app and demonstrate a willingness to do more. (For example, tapping on items in a feed, consuming content and initiating search queries.)
  • Conversion, where users follow through and complete a core action that is aligned with the purpose and value proposition offered by the app. (For example, booking a trip with a travel app or managing money with a finance app.)

Maslow and measurement

The framework gets high marks on several counts. It bravely questions the practice of monitoring DAU (Daily Active Users) or MAU (Monthly Active Users), or employing performance metrics that simplify engagement into binary terms (counting users as engaged or not). It also gives the concept of a purchase funnel a rehaul, literally turning it on its head in a hat tip to Maslow’s hierarchy of needs.

Maslow’s theory in psychology divides our human needs into five levels, placing the most basic needs at the bottom of the pyramid and elevating our most complex needs to the top of the pyramid, the Engagement Pyramid inspires marketers to aim high—and be highly focused on outcomes.

Above all, the authors open our eyes to the model and the mindset marketers must embrace to increase meaningful engagement and stop churn before it starts. “It’s important to understand that engagement is a continuum, ranging from low-value to high-value actions,” they write on their latest blog. “A user may traverse this spectrum rapidly within the space of a few sessions, or remain stubbornly stuck in a low-engaged state for days, months, or years, without necessarily abandoning the app.”

Tracking events and asking questions

Applying the framework doesn’t just equip marketers to analyze key user actions and assign them to the proper layer in the Engagement Pyramid. It enables marketers to assess the value of user engagement and the potential impact on the business. “Observing how layers grow or shrink over time gives an indication of how well the app is performing,” the authors write.

Are more users performing actions that demonstrate Acknowledgement at the bottom of the pyramid than are striving to complete events associated with Conversion at the top? Review your app onboarding strategy and double-check that your user acquisition campaigns are designed to attract the right users from the get-go.

Is there a high correlation between the number of users who belong to the Acknowledgement layer and the number of users who progress to Conversion? Read that as a signal that you can scale campaigns, increase spend and aim high—because you can.

Courtesy of Phiture

Piecing together the retention puzzle

While the authors don’t specifically address it in their framework, insights into how users engage and how much it’s worth also empower marketers to enhance the user experience and—ultimately—increase customer lifetime value.

This was the focus during Cutting-Edge Retention Strategies, a recent webinar and fireside chat where I was a guest along with Jessica Osorio, Lead, Mobile Growth at Mozilla. While she doesn’t formally apply the AIC framework (our discussion preceded its release by roughly two months), her analysis of engagement metrics and their impact is just as rigorous.

“All apps face a really steep drop in retention on Day 1, just 24 hours after the app install,” she told me. To plug this “leaky bucket” and deepen user engagement with the app, Mozilla has improved the onboarding experience, adding what it calls the “welcome journey.” It’s during this stage that Mozilla delivers a series of automated push notifications and in-app messages to “walk users through all the things to do with the app that we know will drive the most value for them.”

Osorio is also realistic about the “natural usage frequency” and the importance of setting reachable targets for how (and how far) her company can drive app engagement. “We want users to come back and enjoy the app, but it’s not a target we miss if the users don’t come back on a daily basis,” she said. “For us, it’s not DAU or WAU. It’s about building products that meet users’ needs and journeys that surface that value from the start.”

Audiences evolve, and marketers must keep the pace with app messaging, ad creative and the value proposition tailored to match with the needs of users as they move through the app journey. Whether companies embrace new frameworks to assess engagement or architect customer journeys to boost loyalty, the increased interest in retention marketing has profound implications. It also demands marketers master the capabilities to reach and segment users based on what users do (and don’t do) in-app with messaging that motivates them throughout the customer lifecycle and the life span of the app.

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