ROI or Return on Investment is the percentage of your net returns on the investment on its costs. Businesses estimate the ROI while making any investment to determine whether it will be a profitable move or not. App development is not an exception to this. It is quite a costly investment today that businesses go to make their services accessible online to the customers. While it certainly gives them positive results like increase in the customer base, more sales and online brand presence, how to know whether it is driving their profits too. Measuring the ROI of Android or iOS app development will help them know that.
Assuming that you are one of them, confused about how to find out the ROI of your app investment, here we have provided the key ways for that.
Get a grip over all your app’s objectives
This is the first and most vital step. You should be clear about what you want to accomplish with your app i.e. the objectives. All the aspects of the development including coding, designing of UI, its features/functions, required Call-to-actions depend on the objectives of the app. Few intended outcomes that help to measure whether the aspects have been rightly implemented are user acquisitions, active sessions, and retention rate.
Costs for developing the app
Calculate the costs involved at each step of the development of the app to keep the total costs confined to the decided budget. Mention your affordable budget to the team of app developers when you assign them the job, and it is their role to prevent the costs from exceeding it. The best way to measure the development costs is by segregating it into different categories which include costs for prototyping, implementation, software, and user interface, support and integration.
Decide the KPIs of your app
KPIs or Key Performance Indicators are the main aspects to see whether your app is capable of driving enough ROI. But, how to measure the particular KPIs of your app? They differ with types of apps or its objectives. So, find out the KPIs of your app by analysing your objective well. Some of the common metrics for most apps are the number of downloads, daily/monthly active users, users staying over 3 months, retention rate, churn rate, daily sessions, and average revenue per user.
Determine costs against each KPI
Once you have the KPIs for your app, the next or last step is to find out whether the KPIs are able to recover your costs. In case the KPIs overweigh your development costs, you need to reconsider about optimising the costs. While measuring the costs is easy, what’s difficult is weighing the KPIs against those costs. App experts say that once you know the expected lifespan of your app, it is easy to get a value of the KPIduring the span.
With businesses taking huge steps towards digitalisation, mobile app development remains one of the prime steps! However, a lot of small or mid-sized businesses are still in the confusion of whether to invest because they are not sure about how to drive enough ROI from it. If you are one of them, following these steps will enable you to discover the potential ROI of your app.