In-App Purchase Like a Pro: Best Practices from the Top 50 Apps - Mario Viviani

MAR IO V IV IAN IT E C H N O L O G Y E V A N G E L I S T , A M A Z O N A P P S T O R E U K

l inkedin.com/in/marioviviani@mariuxtheone

I N - A P P P U R C H A S E L I K E A P R O :

B E S T P R A C T I C E S F R O M T H E

TO P 5 0 A P P S & G A M E S

I T ’ S A - M E !

M a r i o V i v i a n i

Technology Evangelist, Amazon Appstore UK

@mariuxtheone

Android Developer from 201095+ apps published12,000,000+ downloadsGoogle Developer Expert 2013-15Startup Founder, Co-WorkerSpeaker at: Droidcon, Casual Connect, Google I/O

IN-APP PURCHASE

LIKE A PRO

Take Care of Your Best

Customers

Casinos Defined

Common Terms

Whales, Dolphins, Minnows

Monetization strategy is segmented,

based on different customer experiences

at different price points.

F2P:• Minnows = 90-98% of users

• Dolphins = 50% of revenue

• Whales = 3-4% of paying users

(<0.1% total)

Source: GGV Capital, Feb. 2013 — http://bit.ly/1Ldu5Fu

Power-Users Are

Not New

Well-Known across Industries

Mobile isn't the first industry to recognize

the importance of highly engaged

customers.

They Spend on the

Things They Love

Substantial Spenders

When it comes to their passion

(whatever it may be), power-users

spend more money than the average

fan.

What Do They Look Like

to Us?

Amazon Appstore Power-Users

• Spend $50/month or more

• On average, spend >$200/month

• Are concentrated in US, Japan, UK, and

Germany

Source: Amazon Appstore

Power-Users Are Loyal

to a Few Apps

Focused Passion

In January:

80% of customers who spent $1,000 spent

75% (or more) of that on just two titles.


Offer Specials and VIP

Exclusives

Reward that Loyalty

Give your most dedicated customers

something extra, whether it be a special

discount, early access, or maybe

exclusive content.

Understand the

Connection

Emotion & Spending

Knowing why they buy is critical to making

your app attractive to power-users—and

more importantly, worthy of them.

Connect with Who or

What You Admire

Stand Out, or Fit In?

Go big: Identify with someone, a broader

community, or something that inspires you.

Go small: Establish yourself as part of an

elite tribe.

TAKE CARE OF YOUR BEST CUSTOMERSStrategy #1

• Recognize the importance of the "vital few"

• Reward loyal customers as VIPs

• Satisfy their emotional desires

Make It Easy to Buy

0 24 48 72 96 120 144 168 192 216 240 264 288 312

EARLY ENGAGEMENT IS CRITICALIn-App Purchasing by Hour


Hours since download

18%

Total customer value

KEEP CUSTOMERS ENGAGEDIn-App Purchasing Adds Up over Time


Engage customers early 37% of customers who will

purchase, do so on day 0

Keep them in the app 48%of repeat purchases happen

within one hour of a previous

purchase

Give them a reason to come back 64%

of revenue comes

from 3rd order +

74%

of revenue occurs

after the first 7 days

56%

of revenue occurs

after the first 30 days

69%

100%

145%

0%

20%

40%

60%

80%

100%

120%

140%

160%

1-5 Items 6-10 Items 11-15 Items

SELECTION DRIVES REPEAT ORDERSMore Is Better


# of In-App Items for Sale

ARPPU

INDEX: Average = 100% 1.14%

of customers generate

30% of sales

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

1 4 7 10 13 16 19 22 25 28


Days Owned

+60%

average

selling price

REGULARS SPEND MOREPrice Sensitivity Declines over Time

Conversion Rate

INDEX: Average = 100%

147%

100%

52%

0%

50%

100%

150%

200%

1-5 6-10 11-15

Price Points

MANY PRICE POINTS MAY BE CONFUSINGOffer Price Variety, but Not Too Much


What are the top-grossing

developers doing

differently?

COHORT ANALYSISDifficult to Compare Apps Directly

• Based on Behavioral Analytics

• Shared experience

• Usually limited to a specific time period

• Related individuals form "cohorts"

• People who had measles at age 9

• Tall pilots who flew for BA in March

• Customers who purchased within one week

of download

Examples

COHORT ANALYSISTop Earners vs. Everyone Else

Looking at all customers who installed

a Freemium app on a specific date.

Split into to two populations (cohorts):

Cohort 1: Top 50

App or game was one of the

Top 50 Highest-Grossing titles

Cohort 2: The RestApp or game was NOT one of

the Top 50 Highest-Grossing

titles

Top 50

The Rest

0%

20%

40%

60%

80%

100%

120%

140%

160%

0 1 3 7 14 30

Days Since Installation

Re

lative

Pe

rfo

rma

nce

SALES & REVENUEPurchase Count x Average Transaction Amount


Does item quality alone

account for the difference in

average IAP transaction

amount?

ASSORTMENT BY PRICE POINTTotal Marketplace

31%29%

7%

12% 11%

5%3%

1%

14%

11%

6%

3%

16% 16%

11%9%

0%

5%

10%

15%

20%

25%

30%

35%

$0.99 $1.99 $2.99 $4.99 $9.99 $19.99 $49.99 $99.99

% of Assortment % of Sales


ASSORTMENT BY PRICE POINTTop 50 Only

28%

15%

10%

13%11%

9% 9%

5%

32%

19%

7%

4%

10%12%

5% 4%

0%

5%

10%

15%

20%

25%

30%

35%

$0.99 $1.99 $2.99 $4.99 $9.99 $19.99 $49.99 $99.99

% of Assortment % of Sales


MAKE IT EASY TO BUYStrategy #2

• Keep customers engaged

• Maintain a healthy selection

• Limit number of price points

• Offer higher-value items

Optimize the Experience

REDUCE USAGE BARRIERSDon't Inhibit Frequent Use

Encourage Longer

Sessions

Tune Usability / Difficulty

Too hard, and users will abandon. Too

easy, they may get bored.

Top 50

The Rest

0%

10%

20%

30%

40%

50%

60%

70%

0 1 3 7 14 30


Active

Use

rs


USER ACTIVITYAt Least One Session/Day over First 30 Days

Top 50

The Rest

0

5

10

15

20

25

30

0 1 3 7 14 30


To

tal M

inu

tes


TOTAL TIME IN-APPSessions/Day x Average Session Length

Show Clear Value &

Bonus Savings

Simplicity Sells

Use tabs and tiles to allow users to shop

by item type, function, and price. Show

“extra” value of more expensive items.

Catalogs following this format raised

ARPPU 75% over the store average.


Explain How to Purchase

Items in Your App

Tutorials Really Help

The best tutorials show features and

benefits of each items so the customer

can gauge value, boosting conversion by

up to 150%.


Show Customers How to

Apply Their Purchases

Tutorials Really Help

Good post-purchase tutorials can have a

dramatic impact on repeat sales. The

best ones we saw showed 65% more

repeat purchases.


OPTIMIZE THE EXPERIENCEStrategy #3

• Reduce usage barriers

• Tune usability / difficulty

• Simplify purchasing choices

• Explain how to buy items

• Explain how to use purchased items

Support Social Engagement

Let Them Tell the World

Why They're Great

Enable Status Updates

Users like to highlight in-app

accomplishments and ascribe social

status to the reactions they get from

friends and followers.

Achievements and

Leaderboards

The Lowest Bar for Social

A little friendly competition can be a

powerful motivator to play longer and

remain engaged.

SUPPORT SOCIAL ENGAGEMENTStrategy #4

• Let users share their activity

• Include achievements and leaderboards (games)

Encourage Advocacy

Let Them in on Your

Cool Plans and Updates

Communicate with Your Users

The right message at the right time can

help you build a connection beyond a

single app or transaction.

CELEBRATE USER ENTHUSIASMNurture Creative Expression

LET USERS EXTEND THE EXPERIENCEEnable User Contribution

Minecraft Trivia Crack

MERCHANDISEPhysical Goods

ENCOURAGE ADVOCACYStrategy #5

• Engage with influencers

• Celebrate creative expression

• Allow user contributions / content creation

• Offer branded merchandise

Quick Recap

5 STRATEGIES OF TOP EARNERS

1. TAKE CARE OF YOUR BEST CUSTOMERS

2. MAKE IT EASY TO BUY

3. OPTIMIZE THE EXPERIENCE

4. SUPPORT SOCIAL ENGAGEMENT

5. ENCOURAGE ADVOCACY

AMAZON

IN-APP PURCHASE

PA I D M O N E T I S AT I O N M O D E L S

Paid

Apps

In-App

Items

Subscriptions

In-App Purchase API

I N - A P P I T E M S

B U I L D M U L T I - S C R E E N E X P E R I E N C E S

T Y P E O F I N - A P P I T E M IN-APP ITEMS INFO

Consumables

Entitlements

Subscriptions

• Title• SKU• Content delivery• Availability & Pricing• Subscription Periods

(subscriptions only)

• Description• Images

S TA RT TO D AY W I T H A M A Z O N I A P !

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THANK YOU!

Mario Viviani@mariuxtheone

@AmazonAppDev

[email protected]

developer.amazon.com/appstore

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