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Three reasons why focusing too much on user acquisition is a costly mistake

Appsaholic's Zach Redler says look wider
Three reasons why focusing too much on user acquisition is a costly mistake
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Zach Redler is a Senior Director at Appsaholic, a free loyalty and engagement platform powered by Perk, the #1 mobile rewards program.

User acquisition tricks are all the rage.

Sure, everyone needs to grow their user base, and the stakes are high as costs steadily rise.

The opportunity to capitalize on the mobile audience is huge:

Growing a large user base is an important part of meeting mobile goals, but there are many other priorities that are just as, if not more, important. Because of higher costs and uninstall rates, user retention has become more important than ever.

Here are three reasons why focusing too much of your time and resources on user acquisition is a mistake.

1. It's expensive

Competition in the mobile marketplace is fierce, with millions of apps fighting for users' time and attention. CPI costs are exploding.

According to Bain & Company, it costs 6 to 7 times more to acquire a new app customer than to retain an existing one.

It costs 6 to 7 times more to acquire a new app customer than to retain an existing one.

All of these are reasons why new apps risk getting squashed by more established apps with large budgets. Don't try to match their resources and investment on the user acquisition front, focus on retention and re-engagement to grow more cost effectively.

2. It doesn't increase conversion rates

New users driven from mass acquisition campaigns are unlikely to engage with ads or make in-app purchases, and many will uninstall if they don't get value from their experience.

Retention tactics can build a base of loyal, active users that are more valuable over time. According to a user study by Localytics, of those who made an in-app purchase, 44% did not do so until they had interacted with the app at least 10 times.

3. It focuses only on the short term

To be sustainable over the long term, apps need to offer benefits to users that differentiate them as more valuable than other options available in app stores.

Rather than obsessing over short-term user numbers, focus more on what happens after the install. Again, it is much cheaper to keep an existing user than to acquire a new user.

So try another approach

There is a new breed of solutions in the mobile space that leverage loyalty and rewards to keep users right where you want them – in your app – to help you acquire more users, retain and engage them, and generate more revenue.

The flow through Perk
The flow through Perk

Offering a better ad experience and rewards of real value drives increased user satisfaction, referrals, and better ratings and reviews – all of which will help you secure stable, organic growth by building lasting relationships that stand the test of time.

Also, loyalty and rewards can help you better monetize your user base, whether you depend on ad revenue, in-app purchases or both. Rewards give users purchase power and build habits that lead to higher conversion rates.

So next time you are planning growth activities for your mobile apps, don't forget to include retention as a key part of your strategy, and consider a mobile rewards program as a way to meet your goals.

You can visit Appsaholic.com to learn how you can acquire more users, retain and engage them, and generate more revenue.

You can also meet up with the company at Pocket Gamer Connects San Francisco 2015 on 7-8 July.