How app reviews can grow your app's LTV and lower CPI

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Vera Rabkina
How app reviews can grow your app's LTV and lower CPI

Table of Content:

  1. Why app reviews are important?
  2. How do app reviews are affect business metrics?
  3. How to build a review strategy?
  4. Conclusion
Positive ratings and reviews can mean more downloads of your app, and customer feedback gives you insight into real world usage that helps direct future development efforts.Apple Developer Guide

App rating is one of those rare metrics that influence both CAC (CPI) and LTV. User reviews can help you grow your rating relatively fast and easy. Let’s get into details and understand how to build a proper ratings & reviews strategy to cut your user acquisition costs and increase LTV.

Why app reviews are important?

Let me preface this with a simple truth: a successful product is the one that sells. It’s not cheap to create a well-made app and update it regularly. Even if the app itself is good, it’s all for nothing if there is no ROI out of it. At the end of the day, what matters is how expensive it is to acquire a user and keep them - meaning the user acquisition cost and their overall lifetime value. That’s clear as day, simple math.

Ideally, the acquisition costs to LTV should be on a ⅓ ratio. You shouldn’t spend more on user acquisition than you get back from their lifetime value — unless that is your specific strategy with a grander design in mind.

Ideally, the acquisition costs to LTV should be on a ⅓ ratio. You shouldn’t spend more on user acquisition than you get back from their lifetime value — unless that is your specific strategy with a grander design in mind.

While you can clearly see what works and what doesn’t to acquire new users when it comes to paid ads (the clickthrough rate is indicative of that), the LTV is much harder to define, since a lot of factors are in play. How can you really tell if your app is good or not? Why should the users stay and pay?

You can’t really - unless your users tell you about it. And that’s what the reviews are for. Should you look at the big picture, you would see that your entire sales process is directly or indirectly affected by the impact of the user reviews and ratings of your app.

Low star rating doesn’t incite the user to try and install the app, sinking your conversion to install. Bad reviews hurt every rating - potential new users read them and don’t install, and those who did simply don’t stay. Would you rather try an app with a 2.3 or 4.8-star rating? It’s a split-second decision for most of us.

I can’t help myself but quote Apple Developer guidelines with the simple direction for every app developer:

How do app reviews are affect business metrics?

Why don’t we take a look at the important metrics to always keep in mind - along with some real cases to give a fresh perspective.

Conversion to install

I’ll start this one with a case:

Playtika, a mobile game developer, did not respond to reviews at all - until they have decided to run an experiment and answer every review with a 1-4 star rating, just to see what happens.

And something amazing did happen. The CR grew by 15% in three months - and that’s just by replying to reviews with a simple strategy in mind. The rating of the app rose by 0.7 (that’s a LOT). What really happened is that this single initiative started a domino effect that improved the conversion rate, the install rate, the retention rate, and boosted profits.

To see how the app score correlates with this important metric and the likelihood of sales success for any app, we did a small investigation ourselves. What are the average ratings of the apps in the top charts (all the top charts - top 3, top grossing, and the featured apps) on Google Play and the App Store?

Turns out, the fewer stars you have for your app the lesser the chance you’ll ever get featured. There are almost no featured apps with less than 4 stars rating. If you really want to make it to the real spotlight in any app store, you have to aim for at least a 4-star rating.

Average Revenue Per User

This metric has always been difficult to measure due to many factors that influence it. It relies on how well your app is made and how much your users like it (thus, the likelihood of purchase). Oftentimes you are left guessing on these two. There’s just no real way for you to guess that yourself - only your user base can help you with that - through reviews.

The best thing about reviews is that they are public. A large number of users may have similar questions or concerns they would like to voice. If one of the users did that in a review that you gave an exhaustive answer to, that means you have an answer for all of them in a space where that really matters.

However, you have to know what to look for. Which reviews are worthwhile to answer to?

In short, every review - be it 1 star or 5 stars - may contain useful information or a valid concern that is worth your while.

  • Average rating reviews (3 and 4-star) usually have the best pieces of information. Psychologically, the users that leave reviews like these tend to rationalize their feedback based on both positive and negative details. To put in perspective, it’s reviews that go “I like this app, but this little thing doesn’t work” or “this app does what I really want but the interface is baaad”. There is satisfaction, but it’s not entirely fulfilled.
  • The real goldmine, though, is the updated reviews. If a user takes their time not only to leave a review but also continues the conversation with you AND modifies the app rating in the process, this can only mean this user is really invested in seeing your app become better. You should always keep a close eye on power users like that. Keep in mind the silent majority that may be of the same mind, but simply would not write a review about it.
  • Whenever you see a long review, it is yet another sign of a user that is invested in seeing your app become better. Even if it’s a negative review, long reviews provide a lot of detail that you should look into. Don’t forget to give the user a DETAILED answer to their long review - this is extremely important - you want to match the enthusiasm of the user on this issue. If you win them over, they won’t be a user - they’ll be your fan.

These are just broad categories of reviews that are worthwhile for you to search for and answer in order to improve your ARPU.

To be even more effective at finding the right stuff, you must be able to narrow certain topics down with semantic analysis and filter reviews by topics. To do that, the reviews must be processed and assigned specific tags, such as Feature request or App update, for instance, for you to be able to find them quickly enough and get back to them once you make an update or fix the bug.

From a user perspective (and my own) it is a warm feeling to see that the devs fixed something I told them about and reached out to me PERSONALLY just to say that it’s done now and I should take a look at it again. It’s another level of personal involvement that builds stronger connections with your user base. Besides, why would you not, if it’s super easy to do?

Retention rate

This is a tricky metric to control since so many different parts of your app and overall strategy depend on its increase or decrease.

At AppFollow, we did an experiment to see how we can improve it. We measured the retention rate of users who filed a support request and got it and the retention rate of users who didn’t.

The answer may seem obvious: attention to user problems does increase the odds they’ll stay with you. But the numbers...that’s what was surprising for us. The users that got the response have shown a whopping 30% increase in retention rate. Naturally, that doesn’t mean that answering to reviews means a flat out 30% increase in retention for everyone. Your customer lifecycle, the type of the app or the game in question, and many other factors will affect it, so your mileage may vary. One thing remains true, however: when customers know that their concerns are at the very least being heard, their retention rate is greatly improved.

How to build a review strategy?

And now the big question: where do you get started?

First, you start by coming up with a reply strategy. There are a few broad areas you need to define before moving forward: how to systemize your reply strategy, what you can automate and what you shouldn’t, and finally, how to measure the success of your strategy.

Let’s explore each one of these areas and check out a few cool cases along the way.

Introduce a system to your reply strategy

Sounds intimidating, but all you have to do at this stage is to simply start answering reviews. Select the reviews that are the most valuable to you and focus on these first (if you lack the resources to tackle them all). Try to keep the reply speed fast - at least the same day the review has been posted. Do not forget to tag the reviews that require an update from you later on (such as bug fixes). Start small, and iterate on your progress moving forward. There are always things to improve.

Here’s a case of how it was done in the Tinkoff banking app.

What worked for Tinkoff is a systematic approach to answering reviews and focused their app stores support on a single platform. As a result, their app reached a 4.82 app rating (which is a lot for the banking industry). The cost per ticket has been reduced by 3 times. As you may guess, banking questions aren’t exactly quick or easy to solve, so it is not an exaggeration to say that these are fantastic results.

Automate what can be automated

This is an important step to take in order to scale your review strategy up. Here’s what you should look for to consider for automation:

  • International support and translated resources. While it's very nice to have a person that will specifically cover a geographical area with certain foreign languages, a chatbot template with translated answers can cover basic topics and FAQs just fine. Make sure to use a really good translation, otherwise, this approach will shoot you in the leg.
  • Responses to common issues. A question that has been asked a thousand times deserves to be on a chatbot’s menu - there is literally no reason why a real person should do this over and over again when other means are available. Keep a list of common topics and FAQs; expand it from time to time. The most common topics can be answered automatically if you use a platform that allows for that.
  • Responses to short positive reviews that do not need a detailed answer or feedback. Come up with at least a few dozen ways to say “thank you for using our app, you rock!” and reply automatically. It’s a nice touch for the user, even if it is automated.
  • Reporting irrelevant and offensive 1-star ratings if these are common and reviews with swearing words in them. Flag automatically and report to the app stores for removal. These reviews do not represent a real opinion on your product and shouldn’t be in your reviews section at all.
BitMango used auto-replies for reviews and improved their reply rate by 2.3 times in just three days. The average rating has increased gradually and continued to grow because of the updated reviews from their users. Read the full case study here.

Leave the important stuff to humans

  • Emotional and complex situations that require a more diplomatic and nuanced input. Some reviews must have a human touch to them, especially the reviews that concern payments. Tread carefully and treat the users in question with the utmost respect.
  • Cases that are not present in your knowledge base. No template? Don’t ignore the question and do the legwork yourself, at least for the time being.
Innovative Connecting moved from the standard Consoles to a third-party solution that does the job for both of these consoles, but better. The moment they did it, their answer rate grew by 50% immediately. This alone affects everything for their support team - their speed of response, cost per ticket, and moreover their own happiness because they can be more efficient at less the cost.
Read here more.

Track every relevant metric

There aren’t many of them, at least at the beginning of your way.

  • The average rating change. This metric is indicative of how well your efforts influence the ratings - through the updated reviews of your users. If you do well, the users will update ratings to a higher position.
  • Total reply rate.
  • Cost per ticket.
  • Average reply time.
  • Average first reply time.

Conclusion

There is no skeleton key to success; only hard work. Thankfully, you can cut a lot of corners simply by understanding a very simple principle: communication is everything. On the mobile market, communication is in the reviews section. Answering to reviews helps you to raise the rating of your app, which in turn improves sales and trust for your app. Not to mention that active communication with active users has a chance to turn them into your fans.

Start with a systematic approach, answer to important reviews, and find gaps that you can close with automation. Then, track your progress and move on forward to a brighter future and higher profits.

demo_automate_support

This was a recap of a presentation from the White Nights Conference, Summer 2020. Watch it below, find the presentation here

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