The User Journey to In-App Purchases: How to Optimize Your Sales Funnel

While there’s plenty of information about the conventional buyer’s journey online, app developers already know that the journey users take to make in-app purchases is very different from a standard customer cycle for B2B goods.

It’s essential to understand what the user journey looks like so you can properly optimize and troubleshoot your sales funnel to maximize revenue.

In this post, we’re going to discuss exactly that, looking at each stage of the user journey to in-app purchases and what metrics you should be focusing on along the way.

Installs

At this stage of the user journey, your audience is going to discover and install the mobile app.

While installing the app is the primary action here, there’s another crucial step that needs to be taken: They need to open the app, too, and believe it or not, just because someone downloads the app doesn’t mean that they’ll ever even open it. This may happen if they see another competing app they opt for instead.

In order to keep an eye on how effective the Install stage is for app users (and for your own profit), you’ll want to track the following:

  • Day 1 Retention Rate. This metric shows the number of users who return to the app within the first day. If people are installing your app but not opening it again, that’s a sign that there could be a technical issue preventing launch or an issue like a third-party competitor they’re launching instead.
  • Cost per action/install. Plenty of app installs are driven by PPC marketing, like Google Ads or Facebook Ads. It’s imperative to understand how much you’re spending for each install so you can keep a close eye on your ROI.

Our Activity by Events and Retention Rate reports can give you a solid understanding of how users behave within your app soon after the install.

Activity by events
Activity by Events report in MyTracker

Initial Engagement

Did you know that 25% of people will abandon a mobile app after a single use? That’s an insanely high churn rate, especially if you paid to acquire each user and if it takes several uses in order to drive in-app purchases.

This makes the initial engagement stage of the app user’s journey essential if you want to eventually see an ROI on advertising and acquisition costs.

The initial engagement is all about capturing user interest and getting them to reopen the app and to keep them using it. It’s not about driving purchases just yet, but instead showing the value of the app (whether that’s entertainment, like in a game, or practical like in a solutions-based app).

To keep users engaged and to get them re-opening the app, you can try the following strategies:

  • Have strong onboarding tutorials that show users how to get the most out of the app
  • Send push notifications to users who have opted-in, reminding them to use the app regularly
  • Use in-app notifications to encourage users to complete certain steps (like a “next level” in the game or to enter in certain information before they go)
  • Offer initial rewards or benefits right away to get users hooked

At this stage, you’ll want to track the following metrics:

  • Registrations. Plenty of apps allow people to use the app without signing in or registering for an account, so registrations can count as part of the initial engagement stage. This shows they’re engaged enough to log in or create an account, and it means they’re more likely to stick around.
  • Authorization. This step involves the user confirming their account, often through email or social media. It’s another sign that they’re engaged and moving through the user journey.
  • Sessions count. This tells you how many times users have opened and used your app, and you want to see this number staying steady or increase. The more they use it, the closer they may be to conversion.
  • Actions taken. This can be difficult to track, but solutions like MyTracker allow you to set up custom tracking events that can help you assess when certain in-app actions are taken like certain forms are completed, pages are viewed, or milestones are reached.
  • Ad engagements. If a user converts on a banner ad in any way, you can track this. This shows that they’re engaged enough with the app to have converted and are helping drive profit through advertising.
sessions report
Sessions report in MyTracker


In-App Purchase

After regular engagement has taken place, you will start to hopefully see in-app purchases from those customers.

In-app purchases often require several steps.

First, they may add items to their cart. Users then need to set up the payment process (often through instant-pay options like PayPal, credit cards, or mobile-based options like Apple funds). Only then can they purchase and complete the transaction.

In order to increase in-app purchases, you can do the following:

  • Use in-app notifications to remind users about purchasing opportunities after they’ve engaged x number of sessions, like reminding users of a paid upgrade that can offer additional value
  • Letting users know when they’ve reached the extent of the free version of the app as they navigate, and explain what they get with upgrading
  • Offer discounts for in-app purchases, including discounted in-app currency at high-engaging peaks

You should watch the following metrics at this stage to ensure that users are still moving through the funnel:

  • Number of total payments. This tells you how many purchases are made within a specific time period, allowing you to see whether the number of transactions is increasing or decreasing.
  • Cart abandonment rates. MyTracker allows you to track this if you’re receiving custom payments, so you can see how close customers came to purchasing before deciding not to.
  • Revenue. It’s always a good idea to keep a close eye not just on how many purchases users are making, but what your revenue is. Our Revenue report can show you both revenue earned and the number of transactions made within specific time periods.
revenue report MyTracker
Revenue report in MyTracker

Retention

While some think that the user journey to in-app purchases ends with the initial purchase, that’s not technically true. Most apps would prefer to have continual, ongoing purchases from steady customers instead of trying to get a new stream of first-time customers every time a purchase is made.

Keeping users engaged is an important part of retention for paying customers. This means that whatever they’re purchasing needs to offer real value, and that the app itself still needs to be engaging to keep them interested.

At this stage, using well-timed sales and both push notifications and in-app notifications to remind users about purchase options can go a long way to increase purchase frequency.

The core metric to track at this stage is:

  • How often users purchase. This tells you the frequency of how often your customers, on average, make in-app purchases. In MyTracker, it’s a payment funnel, giving you an in-depth look at how your customers are making repeat purchases in-app.

You can also use MyTracker’s Retention report to see how long, on average, new devices retain day-to-day after the initial install. This can help you better understand where you may be losing users, potentially adding push notifications or email campaigns where they drop off to re-engage them before they uninstall the app.

retention report MyTracker
Retention report in MyTracker

How to Build a Tracking Funnel with MyTracker

Interested in tracking your user’s journey to in-app purchase? With the right analytics, you can.

Our analytics software here at MyTracker is currently beta testing an easy-to-set-up funnel, which is available upon request. We strongly recommend setting up a funnel that tracks the following:

  • First launches
  • Launches
  • Registrations
  • Authorizations
  • Payments
  • Custom event
Conversion Funnels in MyTracker
Conversion Funnels in MyTracker

Final Thoughts

Understanding the user journey to in-app purchases is essential for all developers and app-based businesses if you want to optimize for higher engagement and revenue moving forward. Make sure that you’ve considered each of the four stages above and have strategies in place to keep users moving through the funnel so that they can reach conversion & retention.

Keep a close eye on your analytics, too, to ensure that they’re actually progressing through each stage as you expect. Any number of issues (including technical issues!) could be stopping users in their tracks, and finding them fast can prevent lost revenue over time.

Ready to optimize your user journey to maximize in-app purchases?

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