Effective user acquisition strategy: 3 essential steps 

Contents hide
1. How do I develop an effective user acquisition strategy?
2. How can I acquire high-value users?
3. How do I A/B test my user acquisition campaigns?
Conclusion

With several marketing channels to choose from, it can be difficult to identify the marketing methods that will help you achieve your targets. This requires you to develop a mixed strategy that can be A/B tested and optimized for best results. In this guide, we share how you can create an effective user acquisition strategy that can be fine-tuned over time to reach your marketing goals.

1. How do I develop an effective user acquisition strategy?

User acquisition is the process of advertising to new users (real people) and encouraging them to install your app. This is essential for driving growth and creating a large customer base for your app – prolonging your user’s Lifetime Value (LTV) and generating ROI. The efficacy of your user acquisition strategy will be affected by your understanding of your audience and your ability to adapt to new insights.

Here are the key actions that should be covered by every marketer during the early stages of their user acquisition strategy.

  • Define your user acquisition goals: The first step towards developing your overall strategy is to define what you want to achieve. This can be fine-tuned as you gather data and market research relevant to your targets, but it is important to know what your acquisition expectations are because this will inform every aspect of your user acquisition strategy moving forward.
  • Conduct market research: When setting your user acquisition goals it is important to conduct market research that can be used to justify investments in each marketing channel. The more you understand your audience and what will attract them, the better your ad creative and overall strategy can become. Market research includes:
    • Your product’s unique selling point (USP)
    • Who your competitors are and how they are targeting users
    • Areas in which you outperform your competitors
    • Behavioral trends and preferences of your target audience
    • Which marketing channels are popular with your target audience
    • Influencers who are popular with your target audience

User Acquisition Strategy

  • Learn about different user acquisition channels: Marketers should learn about the user acquisition channels available to them in order to form a mixed strategy. This includes channels such as:
    • Paid display advertising
    • Email marketing
    • OEM marketing campaigns
    • Influencer marketing
    • Affiliate marketing
    • Social media marketing
    • Online and offline events
    • App Store Optimization (ASO)
    • SMS Marketing
    • Push notifications
    • Search Engine Optimization (SEO)
    • Content marketing

Marketers should analyze which channels are worth their investments and what they can expect to achieve with each channel. You will need to evaluate the cost of acquiring users through these channels compared to the value each user delivers to the profitability of your company. Return on Investment (ROI) and Return on Ad Spend (ROAS) are critical metrics that will inform which channels are worth scaling.

Metrics such as Installs and CTR are critical for user acquisition, informing you how many users were encouraged to convert as a result of your marketing effects and installed your app. However, it is also important to track events that show the value of each user once they have installed. Metrics such as LTV show you which channels are delivering high-value users.

2. How can I acquire high-value users?

An effective user acquisition strategy considers the overall value of users. This shifts the focus away from acquiring the most users. Instead, you can learn which channels are delivering high-value users and acquire more of them to optimize ROI.

LTV is a projected net profit for users who have downloaded your app. It is an estimate of how much revenue will be generated by the average user before they churn. This enables you to identify how valuable the users are from each user acquisition channel – with the aim of optimizing profitability by acquiring lookalike audiences and getting higher ROI per user.

For example, campaign A may deliver more installs so the assumption may be that it is a better investment than campaign B. However, after Day 7 you learn that users who installed as a result of campaign B are 50% more likely to make an in-app purchase. This shows the true value of each campaign and enables you to make better investments moving forward.

A simple way to calculate LTV is to multiply the average revenue per user over how long the average user keeps your app before they churn: LTV = Average Revenue per User (ARPU) / Revenue or Customer churn

3. How do I A/B test my user acquisition campaigns?

Data tracking and analysis are critical components of an effective user acquisition strategy. You can A/B test your campaigns to discover which creative generates the most installs. You can then make tactical changes to your user acquisition based on the results.

For example, Sony created different creative for their banner adverts (ads) and exposed similar audiences to both. They discovered that “Customize your VAIO” had a 6% increase in CTR when compared to “Make it personal”. Moreover, the brand also increased shopping cart adds by 21.3% with the former creative.

User Acquisition Strategy

A/B testing is a continuous process that can help you discover new ways to reach your audience and fine-tune your approach. There are four key stages to this cyclical process:

  1. Develop your hypothesis by outlining what you expect to happen and what you want to learn by performing this test. For example, you may expect a Creative A to deliver more installs than Creative B.
    Note that for A/B testing, a single variant will give you greater confidence in the outcome. If you have too many variables, it will be difficult or impossible to know which changes affected your KPIs.
  2. The next step is to segment your audience into groups. You should split a group that is defined by the same behavior. This ensures that your creative is the only variable that can be determined as affecting your campaign’s metrics.
  3. Once your test has been performed, you can analyze how each variant affected your KPIs. For best results you can track metrics such as churn and in-app purchases in order to learn the long-term value of these users. Based on your results you can now choose the variant that generates the most installs. Your analysis may also reveal unexpected results that should be concerned to find new ways to reach your audience.
  4. Based on the results of your A/B test you can make changes to your hypothesis and repeat the process to once again improve the impact of your campaign creative. This cycle can be performed continuously to ensure you have optimized your messaging.

Conclusion

Mobile marketers are required to know the many user acquisition channels available to them and how they can be used to generate installs. This is essential for driving growth, prolonging your user’s LTV and generating ROI. Marketers can develop an effective user acquisition strategy by defining their goals, conducting market research, learning which user acquisition channels are relevant to their audience and identifying which metrics are most important for their acquisition goals.

It is essential to track and analyze metrics such as installs, CTR, ROI, retention, churn and LTV. Mobile marketers should also implement A/B testing as a continuous process that optimizes their ad creative over time.

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