How to Use Psychology to Increase App Monetization
Chuka Ikokwu is the Head of Analytics of the sensational board game turned mobile app, Exploding Kittens. Chuka is also the Founder of DIVERCITY, a job platform that consists of a huge network of minority professionals. It is focused on diversifying work teams and provides a channel for the underrepresented to find work.
In this interview, you will discover:
- A simple way to calculate LTV
- The most commonly overlooked retention tactic
- How to use psychology to increase app monetization
- The must-haves of a successful gaming team
Why is analytics so important, but often overlooked?
I've always loved numbers, games, and data. It was quite a natural fit for me to break into the gaming space.
More often than not, a lot of gaming teams go straight to development and game design. Analytics is playing catch up.
I studied economics and one of the biggest issues of mobile gaming is the opportunity costs.
What I also realized is that you cannot see whether what you're doing is working well if you don't see reliable and clean data.
My strategy is always to get in as early as possible and look at the analytics and information that you're collecting as the single biggest influence of how profitable your game's going to be.
What are the key metrics when there’s so much data that you can analyze?
The acronym that we use is “ARM”—Acquisition, Retention, Monetization.
These are the standard metrics, but there are some that are also unique to the application of the game itself.
As far as user acquisition goes, the thing you care about most is - where my users are coming from and are they coming profitably? Therefore, the LTV or the return on ad spend (ROAS) is the big thing we would always care about for UA.
Obviously the retention metrics, we care about our Day 1, 3,7, 14 and 30. Also, you should analyze the session length and the number of sessions.
Finally, on the monetization side, you care about how many of your users are starting to pay, and what is the value that they are bringing whether its the ad revenue, LTV or average revenue per daily active user (ARPDAU).
A simple way that you can calculate LTV is to take the average number of days a user comes to the game over the course of 30 days and then multiply that by the average revenue per daily active user.
Remember, it's very live operations-driven, so it's not just fire and forget, but it's a lot of iteration.
What’s the most commonly overlooked retention tactic?
If they stay, they will pay. In fact, the people who monetize as they join are not the ones you want to count on. It is the users who stay for a long time that are going to sustain your revenue base.
I hate to say it, but with mobile, it’s the lack of push notifications.
It is very important to make sure you properly ask the user to accept push notifications.
Rather than just like sending the native prompt for someone to allow push notifications, very crisply explain why you want to send them a notification. For instance, can we let you know about your rewards?
The key is to appeal to something that you suspect the user values and then they are more likely to allow the push notification.
When I worked at Warner Bros. for 3 years, one thing that we did to pull people back in was putting new champions and new challenges in the game. It's a very simple thing, every two weeks we'll release a new character and whenever there’s a new character, we would announce it. We saw a lot of users come back and engagement increases and monetization increases as well.
If you want to have the most profitable title that you can, then you do not want to ignore live operations.
The gaming space is now vastly saturated, you’d want to fight to be relevant.
How can we use psychology to increase app monetization?
I studied what they call ‘irrational behavioral concepts’, or IBC, the economic term of why humans are just irrational by nature.
In monetization, communicating value is something that a lot of apps still don’t do. For example, your app offers a hundred coins for $5, you can offer 20 more coins and save 20% more? And if you just saved 20% more, you give the impression someone’s getting a good deal.
It probably will not break the economy at all, but it will increase the conversion on that bundle. This is the theory of value perception.
Another is the theory of anchoring. Anchoring is where you have a really expensive product that no one will realistically buy to make the less expensive items appear more attractive. For example, you have an item that costs $1,000 and people see it and say to themselves “Oh no, I can never buy that! I'll buy the hundred dollar item instead.”
What are the must-haves of a successful gaming team?
You have someone on the UA side. You need to have a budget to take advantage of a lot of tricks that you can use to optimize your visibility and to get the best users in your app, so you can create look-alike audiences.
I may go as far as to say that someone who knows the ins and outs of Facebook ad buying because Facebook is the best. Creative is equally important. I've been told creative is the most important thing when it comes to the UA. Obviously, you want a good designer who knows how to put videos together and create basic banner and display ads.
On the Analytics side, you want to have a data engineer, someone who can put the SDK in the game, collect the necessary information and put it in the raw data warehouse.
Next is a data analyst or scientist who’s going to query that data, build reports, communicate to the executives, communicate to UA, and do all that magic.
And of course, the product manager or producer. Think of them as the CEO of the game responsible for the Profit and Loss statement. They are the ones who devise the launch campaign and manage a live operations calendar.
Then a game designer who can balance the game progress with the economics.
I would start with that as a bare minimum.
Pollen VC provides flexible credit lines to drive mobile growth. Our financing model was created for mobile apps and game publishers. We help businesses unlock their unpaid revenues and eliminate payout delays of up to 60+ days by connecting to their app store and ad network platforms.
We offer credit lines that are secured by your app store revenues, so you can access your cash when you need it most . As your business grows your credit line grows with it. Check out how it works!