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December 24, 2014Mike Hines
Article 4 of 10 in the series: What the Top 50 Games do with In App Purchasing that the Rest of Us Don’t
By Mike Hines (@MikeFHines)
In the previous article in this series, we finished looking at what being in the top 50 looks like from a raw data point of view. In this article, we start to look at how the top 50 got these results, beginning with why the top 50 care so much about the small number of users still with a game after 7 days.
If you were under the impression that day 7 was a big cutoff for customers and apps, you are partially correct. After 7 days, about 80% of the customers who installed your app will not launch it again. But the 20% of customers that remain can mean a great deal to you. The graph above is how purchases break down by hour.
The first day of sales is a pretty big spike! Obviously the first day is really important to you; you’ll get about 18% of your revenue from that first day. But what I want you to take away from this graph is the 82% of the revenue that’s left. This graph has a long tail, and while it doesn’t go out for 30 days, the pattern continues even well beyond 30 days. So let’s go ahead and take a look at seven days. Seven days is 168 hours, and it’s true that by seven days you may have lost about 80% of all of your active users. Buy you should know that after seven days, you still have 74% of your potential revenue on the table. After 30 days, there is still 54% of your potential revenue left on the table. That’s what a long tail means, so please a lot to pay attention to the users to stay with you after seven days, and stay with you after 30 days.
One of the reasons that taking care of the long tail is such a big deal is because the average price a customer is willing to pay for an in-app item goes up significantly over time. If you were wondering how the top 50 were able to increase the prices paid for their IAP items? They are offering a different array of items with more expensive selection to users who’ve been there longer. Once an average customer has been using an app for 30 days, they will typically purchase items that are 60% more expensive than they did when a day one customer. The top 50 app developers get this, and you would do well to take a closer look at this as well. If your apps are offering the same in app purchase items to your customers at day 30 that you did at day zero, you may be leaving some money on the table and leaving your best customers unsatisfied by not filling needs they have in your app.
In the next article in the series, we’ll look at some of the stats that the top 50 app developers know that help them make smart decisions when building and promoting their app and in-app purchase items.