In the current state of the mobile market, the success of a new mobile app is nearly impossible without investing in user acquisition (UA), sales, and marketing. The metric we’re examining in this article is a good indicator that helps app publishers ensure the sensibility of their overall business expenses.
Mobile app acquisition costs is one of the most crucial metrics used by app companies to see the price they pay to attract a new user over a given time period. It’s also known as customer acquisition costs for mobile apps or simply CAC.
To calculate your customer acquisition costs, you have to divide the total of all costs associated with getting new customers over a certain time period (including hidden costs like overheads and development) by the number of users you managed to acquire over the same period.
It’s important to keep track of your mobile app acquisition costs because:
- Only monitoring customer acquisition costs along with your average revenue per user and user lifetime value will help you plan a sensible budget that ensures sustainable growth;
- It also gives you a better understanding of how your marketing efforts translate to installs going beyond one-sided ad campaign reports.
- CAC helps you identify over-expenditure risks and optimize your strategy accordingly.
Here are a few tips for reducing your mobile app acquisition costs:
- A deep understanding of your target audience is a must as it ensures more efficient paid UA campaigns via different ad channels.
- Don’t neglect your organic growth. The thing is, app store optimization (ASO) done right favors better performance of your ads. SplitMetrics is the place to go for it.
- Make user retention improvement one of your top priorities.
- Utilizing deep links can increase the impact of your click-through advertising campaigns.
All in all, CAC can’t be ignored as it’s a valuable source of actionable insights for your app’s performance.