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2 Secret Retention & Monetization Strategies (Stolen From 7-Figure Apps) #retentionstrategies

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App Masters10:49Open on YouTube
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The bottom line

A seven-figure app picks one thing to do really well at each stage, and network effects and LiveOps are the strongest picks for retention and revenue. Buyers pay for apps that keep users, not just acquire them.

Key takeaways

  • An app needs at least three of its four rooms working to be worth a seven-figure exit. 9:16
    • Strong user acquisition with poor retention and engagement is not a real asset, and nobody pays seven figures for it.
    • WhatsApp had acquisition, engagement and retention, tried charging $1 without success, and still sold for billions.
  • The network effect is the best retention driver for most apps. 2:11
    • Every user gets more value as the product gains users, as in a dating app that needs 10 to 20% women to attract men.
    • It can be measured as unique connections created per user or per day.
  • Day one retention is the number to improve first. 2:55
    • Firebase shows the D1, D7 and D30 retention cohorts, and a network effect needs push notifications wired in to bring users back.
    • If D1 improves, D7 and D30 become a lot easier to improve.
  • LiveOps lifts revenue by making the app feel alive. 3:16
    • Three campaign types work: concept or seasonal offers, bundle offers, and personal offers for segments such as buyers and non-buyers.
    • Offers can launch every week, not only at Christmas, and dynamic paywall tools like Purchasely and RevenueCat support this.
  • Picking one thing per room and outsourcing the rest beats trying to do everything. 8:05
    • Trying to do everything means losing everything, so an indie can outsource ASO and focus on the core loop or network features.
    • Investors look at what users do after acquisition, and fast churn means the app cannot scale to hundreds of millions.

There is a saying: come for the tool, stay for the network.

A saying about network effects, quoted in the talk

Chapter summaries

0:00 The retention room and the network effect

Retention tools bring users back, but the network effect is the lever most apps miss.

  • The retention room holds the tools that pull users back into the app. 0:05
    • Push notifications and email marketing remind people to return.
    • Streaks give people a reason to come back and complete something.
    • Retargeting paid campaigns reach users who are drifting away.
    • The biggest gap seen across apps is a missing network effect.
  • A network effect makes the product worth more to every user as others join. 0:27
    • A dating app with one or two users has little value. A bigger pool means better choice.
    • Personal utility is the most interesting type.
    • A dating app is a two-sided marketplace, where each side attracts the other.
    • Any app that is social at its core already has some network effect.
  • Connections between users make the value of a product explode. 1:25
    • WhatsApp began as one-to-one messaging, and you had to know the other person's number.
    • Connections grow from one to one into one to many and groups.
    • There are many ways to design these connections, and each one lifts value.

3:02 Monetization and LiveOps

Of all the monetization options, LiveOps works best because it makes the app feel alive.

  • LiveOps is the monetization lever that really works. 3:02
    • It comes from gaming and makes apps more dynamic and engaging, which lifts revenue.
    • Other levers are data selling, subscription plan tuning, dynamic pricing, paywalls, ads and location selling.
    • An example concept offer is an Adventure offer for the weekend, delivered through a dynamic paywall.
    • Users who see an offer feel excitement, and the revenue increase is very significant.
  • Bundle offers turn two products into one exciting deal. 4:48
    • One product is free and the other is paid, so people think they get something free.
    • The products are connected dynamically through the paywall tools.
    • Many users have never seen a paywall before, and the first one creates excitement.

5:25 Offers push buyers up a price tier

A targeted offer can move existing buyers toward a higher price.

  • Buyers can be nudged to spend more 5:25
    • A $5 buyer gets pushed toward $7, $8 or $9.
    • This is straightforward for consumables.
    • Subscriptions and lifetime offers need more creativity, but it is possible.
    • Users are bucketed by how much they have spent so far, and the next tier gets a better offer at a higher price.

6:29 Winning offers become a protocol, tracked by cohorts

LiveOps turns offer experiments into fixed rules, and cohort revenue shows whether they pay off.

  • Offers that work become standing rules 6:29
    • A calendar assigns a new offer to a new user segment each day.
    • The adventure offer, for example, goes to users on their first weekend after day seven.
    • The speaker saw another app run exactly this calendar but could not find its name.
    • It borrows a proven gaming concept.
  • Cohort revenue per download shows the effect 7:03
    • Track revenue per download, or average revenue per DAU, by weekly cohort.
    • One cohort was worth 52 cents in week zero and 13 cents in week one.
    • Summing the weeks gives an easy LTV estimate.
    • LiveOps showed about 0.81 of optimization in week zero.

8:02 One easy win per room is enough

Doing everything is impossible, so each room gets one strong move.

  • Choose the win you know or can outsource 8:02
    • Viral effect, core loop, network effect and LiveOps are examples of such picks.
    • The speaker recommends the ASO expert Steve and says she has worked with him.
    • Seven-figure exit is the goal this unlocks.
    • Investors rarely back a bare idea. Later on they want retention and post-acquisition metrics, because quick user loss cannot scale to hundreds of millions.

In the growth library

Steve P. Young (host) and a guest app growth consultant with a gaming background, Steve P. Young hosts App Masters; the guest advises app founders on retention and monetization using gaming LiveOps ideas. Apps keep users and earn more by building a network effect for retention and by running gaming-style LiveOps offers for monetization. The episode shows how to measure both, and why picking one strong move per growth stage can make an app attractive for a seven-figure exit.

Lessons that draw on this:

More from App Masters · The whole library, and ask it anything

Transcript263 lines
0:00

the third room is retention how can we bring them back to death so in this escape room exit room we have push notifications email marketing the stricks that people want to come back to complete some kind of stck we have a retargeting paid campaigns that we can see that people are trying to do the biggest thing that we see that people are missing out is the network effect Network effect is a concept that the more users the product has the more value every user gets so let's say you have make new friends app the dating app if you have one or two users there is not much value in the app but once more users are joining to this ecosystem the users are getting more value because they can choose from a better selection of other users the most interesting Network effects type is personal utility coming back to the dating app there must be at C at least 10 to 20% of girls in order to attract the easy side the guys so we have here

1:07

two sided Marketplace that interact with each other and the more users we have we have a better value to the whole ecosystem so this is something that an app that is like social in its Essence it's already having some type of or kind of network effect on the other side we have the like let's say WhatsApp which also the network effect product they started as a one to One Communications so you can only communicate with each other and you should know its number so the value of this product is even higher so there is a saying come for the tool stay for the network and once they start to interact with each other and creating these connections one to one one to many inside groups there are so many ideas and way to think about it you actually Spike and explode the value of your product how do you measure success for every Network effect you can measure unique connections how many unique connections created for this user or in

2:06

a day or whatever metrics that is Mak sense to focus on but roughly speaking for most apps when we want to increase retention the network effect is the best retention driver we can measure it easily every app has a Firebase connection and inside you can actually see the retention curve but on the left side you can see the D1 retention cohort D7 and D30 and once you implement some kind of network effect you will of course you need to connect the push notification into it and make the all the ecosystem like notify the users that something happened so they can jump in but you will see supposed to see growth in retention day one once you see retention day one better you will see all the other graphs growing as well unless like you missed something out later on so focus on day one if you can prove day one day s day30 becomes a lot easier so this is the last thing monetization we have data selling

3:04

optimization of subscription plans Dynamic pricing to show different pricing for different segments of users pay walls and advertisements and location selling data selling but something that that really works is liveops liveops the full name is live operations again it's coming from gaming the goal of liveops is to make apps more Dynamic and engaging which in turn boost player engagement and therefore Revenue opportunities actually we can see in the pictures like in the examples here three types of liveops campaigns one is concept or seasonality offer so we can see here like Adventure offer in the weekend or something okay you can create a payall dynamically and if you need tools there is the purchas Le which I really recommend on and to revenue cat they have also this functionality yep all the industry is aligning toward the dynamic pay walls Okay so it's really powerful you create something you

4:01

deliver it to the store Adventure week of course if there is a Christmas or something like that but you should not wait for the actually Seasons because there are not too many and you actually can launch a new offer every weekend every week every whatever your best day your worst day whatever you will think of so you just create a concept you deliver some promotion around this concept the users that are coming into the app feeling that the app is alive it's not just a static app like we spoke about single player versus multiplayer with network effect here we are talking about like you think about it you're jumping to the app and you see some offer and you see some excitement around it people will take it okay and the increase in Revenue will be very significant so this is concept and seasonality offer then we have bundle special offer so you take I don't know two products that you have you combine

4:56

them you can say one is for free one is for payment and again everything is dynamic you connect all these products like from this tools okay and you deliver it and again the results are very amazing people think that they get something for free if they just buy this and this creates excitement they never saw this payall this is the first time they saw the payall you can Target buyers you can Target people that did not buy so far you can increase the offer for people that let's say already bought Steve in $5 now I want to push them toward the $7 or $8 or $9 okay H depends what we are talking about I'm not talking about a game here I'm talking about an app in this case it's consumables okay there is another question how do you do it with subscriptions or with lifetime um offers right but it's uh it's just that more creativity but it's very possible the last thing is personal offer again you

5:56

segment your users buyers and you put them in the buckets buyers versus not buyers and people that bought how much they spend so far if you have a consumable app and then you put a better offer with increased pricing to the segment to push them to the next let's say tier I just came across an app alone that was doing the same exact thing where I love this because I know from a gaming perspective this stuff works and so I love that you're trying to bring some of the gaming Concepts into the app world and I I came across another app that did exactly this and I'm trying to find it and I can't find it but anyways behind it there is like a calendar that they're handling like every day is happy day and there there is a new offer to a new segment of users and you actually learn some stuff once you learn something that really works let's say the adventure offer the live Ops that you deliver to all the users is becoming

6:51

a protocol so let's say every first weekend that the user is entering after the the seventh day he will get the adventure offer why because I know that it works okay so this is something that all Left Behind success kpis so usually it's good to measure RPD Revenue per download or average revenue per Dow um and we should look at the cohorts when we want to see and in this like example we can see here an app that cohort of users means like let's say from December 3rd to December 9th I don't know how many users entered but on average in week number zero they worth 52 cents and then in week number one they worth 13 cents etc etc and you can calculate like this easily the LTV and see if you are getting better with your monetization in general but in liveops we can see here that there is optimization of about already 0.81 in week zero so there is a huge percentage of increase and this is how you can actually check if this stuff

7:59

works for you all right summarizing we can have so much to do and if we're going to even think to do everything we're going to lose everything let's say so in every room the acquisition room the engagement room the retention and the monetization we just need to pick one thing and do it really really well once we do it we are opening up the opportunity for a seven figure exit and now you can think okay in Indie I cannot do it all maybe I'm too focused on I don't know some features that I'm trying engagement and trying maybe retention but I'm not really building the core loop as we spoke or I don't care about viral effect the network effect who can think about it even not to say liveops but the scope is to pick just one thing from each room each screen and to do it really well and you can also Outsource it so for ASO you can go to Steve easily you have the best expert in the industry for sure and I'm not saying it because

9:01

it's stepen is hosting me I actually worked with him and you can get amazing results and you can focus maybe on the cor Loop which means like actually coding or network effect features which is exciting etc etc Steve I don't think I saw somebody that can make his app worth a seven figures exit without at least three like rooms let's say out of the four that we see here let's say you're doing very well user acquisition but you don't have any retention on engagement or it's least it's poor not to say monetization you don't have a real asset and nobody will spend seven figures just to get it okay so you need to have at least three I saw app owners that are not doing maybe good monetization but still let's say let think just like again WhatsApp right they had amazing user acquisition engagement and retention they never monetized they tried $1 but it actually didn't work they for billions of dollars right so it can

10:02

happen but we need to think about it this way we saw the viral effect the core Loop the network effect and the liveops as an examples but again go to your easiest win that you're familiar with or you have a good Outsource to reach out in order to take care of this let's say part of the game and you can actually go your app to a seven figures exit which is like you can see the faces of people that are actually like seeing seven figures in this this is what even like BC that want to invest like maybe not super early stage where there is only an idea but later on they want to see this metrix what's the retention what the users do after you acquire them if you lose them very quickly there is something here that cannot scale to a billion dollar company or even hundreds of Millions