According to Internet Retailer, mobile commerce grew nearly three times faster than e-commerce in the United States in 2015. Additionally, U.S. mobile commerce itself grew to $104 billion this year, a 38.7 percent jump from 2014. There remains little doubt that consumers increasingly turn to their tablets and smartphones to make their purchases, which should be a wake-up call to businesses that aren’t yet optimizing their mobile presence.
For most organizations today, mobile strategy means either a mobile-friendly website, or the deployment of a mobile application.
So, how can organizations measure the success of these mobile-based tactics?
Despite the evidence that consumers are increasingly drawn to mobile-oriented businesses, many organizations still struggle to prove that their mobile strategy will result in a demonstrable return on investment (ROI).
In a 2015 eMarketer report, nearly 80 percent of marketers indicated that they would invest more in mobile if they could track ROI more effectively. Yet, ways to determine the ROI potential for mobile initiatives do exist.
Over the years, several metrics have proven their effectiveness in measuring the value that your organization can expect when putting its mobile strategies into action. With so many metrics now available though, it is imperative when growing your mobile strategy to use the right tools in order to more concisely determine ROI. This will help your organization plan future budgets, make revenue-generating design improvements more effectively, and support its mobile offerings with the appropriate marketing campaigns.
Here are three of the most important ROI metrics to consider when reviewing your mobile strategy for effectiveness:
This metric represents the percentage of visitors to your site that leave the page without reaching your organization’s goal, whether it be to download material or make a purchase. Bounce rate is a crucial statistic to track for organizations working to determine the ROI of their mobile strategy, because it points out the flaws of your site or app within integral parts of the user experience (UX) design. High bounce rates may indicate problems ranging from poor landing page design to confusing navigation, or even trust issues arising from the checkout page. In terms of ROI, bounce rates reflect potential revenue that your organization is losing. Taking action to mitigate a high bounce rate will clear the way to the true ROI of your mobile strategy by eliminating pernicious UX issues.
Average revenue per user (ARPU)
ARPU is calculated by dividing total revenue by the total number of active users within a given time frame. ARPU measurements at various intervals will provide insight into how particular mobile strategies are affecting revenue. Additionally, ARPU can be broken down for various demographics, allowing you to learn which portion of the market provides the most revenue for your organization. This will help you determine how to allocate funds within your marketing strategy in order to continue focusing on the most profitable demographics, or to redistribute funding to underserved portions of your market.
Cost per install (CPI)
CPI focuses solely on mobile applications, and calculates the cost of customer acquisition by taking your organization’s ad spend and dividing it by the number of new installations of your mobile application as a result of the campaign. While your costs for designing an application may be set in stone, the amount that you spend on advertising can vary greatly, and this metric is vital for determining the effectiveness of mobile app marketing campaigns. In addition, tracking CPI will enable your organization to determine which ad campaigns work well for which particular demographics, therefore enabling more effective targeting in the future based upon the results.
It is becoming more and more important to optimize your business for mobile customers, and one of the most straightforward and effective strategies to accomplish this goal is through the use and assessment of the above metrics.
Regardless of your specific mobile strategy, it will without a doubt increase in effectiveness through the utilization of these carefully calculated techniques