Ultimate Guide to App User Engagement

THE ULTIMATE GUIDE TO
APP USER
ENGAGEMENT

Contents
Introduction ..............................................................................................
Chapter 1
Chapter 2
Chapter 3
Chapter 4
Chapter 5
Exploring Mobile Engagement Techniques .............................................................
Leveraging Personalization to Better Engage Users ...................................................
Engagement Campaigns – Use Cases for Every Vertical .............................................
5 Tips For Measuring Your Mobile Campaigns ..........................................................
An App Marketing Game Plan for Your Brand ...........................................................
01
03
07
12
20
26
References ............................................................................................... 28

Introduction
More than 50 percent of Americans own a smartphone1
. 800 apps are downloaded
every second from the Apple App Store2
. Despite these remarkable numbers, which are
testimony to the popularity of mobile and its prominence in consumers’ daily lives, Localytics
data reveals that many apps — nearly 22 percent — are never used more than once3
.
Having a great product with compelling, useful, entertaining & informative features & content
is no doubt the number one way brands can do in order to get people to use their app.
Introduction01
However, data from Nielsen reports that US smartphones have an average of 41 apps
installed — a 32% jump from last year4
.
With so much competition, many brands have found they still need to go one extra step to
stay top of mind for users who are faced with an abundance of choices.
With such bleak retention rates, it’s not enough for brands just to “have an app” Brands also
need to enable customers to engage with their app in meaningful ways towards
monetization.
Whether a brand’s business model is driven by in-app purchases, paid subscriptions or
in-app advertising, the key to unlocking app monetization lies in engagement and
personalization. To make this happen, you need deep insights about your users, including
how you acquire them, how they interact with your content, and every step they take

Introduction02
through the conversion funnel. For digital marketers, this isn’t rocket science - it’s Marketing
101. When it comes to mobile, things aren’t as easy. Fortunately, during the past five years, the
industry has made huge strides in gaining a deep understanding of mobile users. There are
app user engagement techniques like in-app messaging and push messaging that can help
brands cultivate relationships with their users so they will use their app more frequently and
spend more time engaging with the app. When done properly, in-app messaging and push
messaging will
drive users to the most compelling app features and help them establish optimal user habits
within the app – ultimately leading to higher lifetime value (LTV).
Top-notch mobile analytics are the foundation for brands to achieve this. The discovery of an
app’s best features is accomplished through user behavior analysis, tracking in-app actions
completed and correlating those actions to users with the highest customer lifetime value.
Additionally, analysis of behavior leads to the identification of segments of users who are
interested in particular app screens and features – like particular news content – and lays
the groundwork for personalized and more impactful marketing campaigns.
In this eBook, you will learn
best practices for in app
messaging and push
messaging including
cross-industry and some
vertical specific use cases
and how to measure the
effectiveness of your mobile
marketing campaigns

Chapter 1
EXPLORING MOBILE ENGAGEMENT TECHNIQUES

Chapter 1: Exploring Mobile Engagement Techniques04
Chapter 1
EXPLORING MOBILE ENGAGEMENT TECHNIQUES
Let’s take a look at the mobile user engagement options we’re focusing on in this eBook:
Push messaging and in-app messaging.
In-app messages, on the other
hand, are contextually-relevant
messages sent to users while
they are in the app and are a
great way to communicate with
users as part of the app
experience.
You are probably familiar with push messages, which are also commonly referred to as push
notiﬁcations. An important function of push messages is to drive users back into your app if
they are not actively engaged with it.

See the table below to learn some of the differences – and similarities – between the two.
Sent
Uses
Features
Format
Function
Value
Set up
IN APP MESSAGING PUSH MESSAGING
In the app Outside of the app.
Great for deriving more value out
of users who already use the app.
Great for re-engaging latent
users.
In-app messages can be rolled out
more subtly and tested without
compromising the overall mobile
user experience.
Supports more complex
messages with more room for
longer copy and images.
You can only get this message to
people if they have the app
open. So if the message you
want to send is time sensitive
(like literally a timer going off)
push is better.
Your brand is top-of-mind when
the user is in the app. Therefore
in-app messaging is a great way
to ask for user feedback about
your app in real-time as the user is
actually using it.
Requires extra time to implement
in-app messages effectively and
make them look like they are a
seamless part of your app. More
design work.
Pushes are louder – show up
outside of the app and when
people are using other apps and
websites.
Only room for a few lines of text.
Standard format, so no images.
Simpler messages.
Push is great for time-sensitive
messages - a sale ending today,
ﬂash sale, geo-targeted
messages, breaking news,
emergency alerts.
Push messaging is a great way to
gently poke users back to your
app and keeping top of mind.
Can be used to convey time and
location speciﬁc information.
Push messages are meant to stand
out and are in a standardized
format. Requires just a few lines of
text and the standard design for
the app’s operating system.

“The key to
successful customer
engagement is to
think about
personalization and
context.”
How to Use In-App Messaging and Push Messaging Together
For the best results in your app marketing efforts, in app messaging
and push messaging should be used together to engage with users
based on where they are and what they are doing.
There are two reasons why you should do this. First, in-app messaging is
great for communicating with users who are in the app, while push
messaging helps you stay in contact with users who aren’t in the app.
Second, context matters for your messages. Certain messages are better
sent as in-app messages whereas others are better as push messages. For
example, an app store rating request is probably best sent to your most
engaged users in the app while your brand is top of mind. An in-app
message would work great for that. If you sent that as a push message to
people who haven’t used your app in months, it would probably come
across as intrusive, random and out-of-context. To use another example, a
ﬂash sale is a time-sensitive message. You don’t want to wait for your users
to open the app to see that message. Instead, in that case, use push
messaging to get users attention.
The key to successful customer engagement is to think about
personalization and context. In the next chapter we’ll learn more about the
data that drives better personalization and in turn, greater ROI.

Chapter 2
LEVERAGING PERSONALIZATION TO BETTER
ENGAGE USERS

Chapter 2
LEVERAGING PERSONALIZATION TO BETTER ENGAGE USERS
With so much discussion in the industry about the value of personalization in marketing, it’s
worth taking a moment to elaborate on what we mean when we use that term.
Context is important. An in-app message or push message should be relevant to the user
because it is related to what the user is doing now or has done in the recent past.
When we talk about personalization, while every marketer’s dream, we don’t mean down to
the individual person level. In other words, we are not talking about the ability to market
speciﬁcally to Emily, a 24-year old Bills fan in Buffalo NY. Rather, we are describing the ability
to scale contextual messaging to thousands or millions of people like Emily – Bills fans,
women ages 18-24, app users located in Buffalo, NY - based on interests proven through
their in-app actions.
M A R K E T T O
Chapter 2: Leveraging Personalization to Better Engage Users08

Segments
A segment is a group of users with
distinguishing characteristics who can be
categorized into marketable, contextual
groupings, through analysis of their
common in-app actions, acquisition
sources, devices and operating systems.
With segments you can:
Identify speciﬁc relationships of usage between different parts of an app
Analyze conversion rates of various funnels – registration screens,
check out process, and more
Identify groups of users interested in certain kinds of content or features
See how certain features or campaigns impact likelihood to purchase,
upgrade, register and lifetime vvalue
Trigger in-app messaging and push messaging campaigns to segments
Create more contextual and personalized app marketing. Your
messages will be relevant to the segment’s proven interest, as
evidenced by an analysis of their current and historical actions
While segmentation is an easy concept to understand, in practice creating
and using data-driven segmentation is difficult given it entails shifting
through thousands, if not millions, of data points, to be accurate. Solutions
such as Localytics offer simple yet powerful segmentation tools to
automatically enroll users into segments and workﬂows based on their
in-app actions and on events completed or not completed.

Setting Up Analytics to Provide Better Engagement
In the app analytics and marketing world, the actions that trigger your marketing campaigns
are called events. Events are used to describe interesting actions that happen within your
app, such as a news article read or action posted to a social network. Additionally, events are
used in funnels to determine drop off and conversion rates toward specific goals. Events are
also used to define user segments that help identify different usage patterns such as users
who did or did not do certain events, or a pair of events in sequence. In turn, events can help
answer questions like “Which app users have looked at a product page this week but never
purchased an item?”
EVENT NAME ATTRIBUTES (EXAMPLE VALUES)
App Start: To describe how an app was
opened
Registered/Login: This describes how
users are registering/logging into the app.
Push Messaging Choice: This describes if
the user has opted into push messaging
or not.
Social Media/Content Share: This
describes the different social
interactions available within your app.
App Exit: To describe various high-level
actions of your users in summary form.
Source (Push, Campaign, Organic)
Type (Facebook, email, Twitter)
Choice (Yes, No)
Platform (Twitter, Facebook)
Content ID (Article 123, Article 456,
Article XYZ)
Action (Share, Like, Follow, Friend)
News Articles Reads, Videos Watched,
Items Viewed
Events also have details that describe the action taking place, called attributes. While event
names should be kept broad, attributes describe the specifics about the event. Attributes are
essentially more details about your events that help you track the popularity of specific
content at a more granular level. For example, if you have a magazine app and your event is
“article read,” the title of the article would be the attribute.
Here are some basic events and attributes every app should have set up for fundamental
tracking of their users. These will set the foundation for analytics-driven marketing.

Additionally, depending on your app category, various app features will lend themselves to
different events to be tracked. Here are some vertical-specific event ideas:
No matter what kind of app you have, event-tracking should help you achieve two things:
First, events should build upon each other in a sequence to create the conversion
funnels you envision for your users – such as a product screen view, adding a
product to a shopping cart, and a checkout.
App users who repeat this event most consistently over time provide the highest lifetime value
(LTV). The nature of the app will also help determine what is its ultimate conversion event. For
many apps, like games (which are often free), that would likely be an ad click. For a health and
fitness app, total pounds lost would be a measure of engagement with the tool that indicates
customer lifetime value better than other metrics. Using an analytics solution like Localytics, you
can set a dollar value for your event and track it over time – no matter what that event is or how
you define lifetime value for your brand.
VERTICAL
EVENTS TO TRIGGER PERSONALIZED
ENGAGEMENT
News apps
eCommerce apps
Social apps
Article viewed, Article shared, Ad
clicked, Subscribed
Browse item, Share item, Add to cart,
Begin checkout, Complete checkout,
Error encountered by app
Friends added, Interact with friends,
View content, Post content, Subscribe
1
2
Second, tracking events should help you identify what you would qualify as your
ultimate conversion event such as an in-app purchase.

Chapter 3
ENGAGEMENT CAMPAIGNS – IDEAS FOR EVERY
VERTICAL

Chapter 3: Engagement Campaigns – Ideas for Every Vertical13
Chapter 3
ENGAGEMENT CAMPAIGNS – IDEAS FOR EVERY VERTICAL
You now have a good understanding of what in-app messages and push messages are, as
well as how to personalize these messages with context, events, attributes and segments.
TOP 5 ENGAGEMENT CAMPAIGNS FOR EVERY APP CATEGORY
1 NPS Survey
The Net Promoter Score survey has
become a standard business metric for
customer happiness. The 1-question
survey asks customers to rate on a scale
of 1 to 10 how likely they are to
recommend your company. Use an
in-app message to send an NPS survey
to app users. App and brand “Promoters”
can be pursued with follow up in-app
message campaigns requesting an app
store rating. Detractors can be sent to an
internal feedback channel.
We are now ready to create campaigns to engage with customers. We have collected nine
tried and tested engagement campaigns; ﬁve that work across every app category and four
industry-speciﬁc engagement campaigns for push messaging and in-app messaging.

2 “Upgrade Your App!”
To drive engagement, you want users on the
latest and best version of your app. Prompt
users to upgrade to the latest version a push
message campaign.
3 “We’ve Missed You!”
(So Try This Feature)
On it’s own, “We’ve Missed You!” isn’t a very
interesting push campaign. But as you
become more sophisticated in your analysis
of your users, you will see connections
between particular features and repeat app
use. Once you discover these signature
features, you will know what the most
compelling features are that you’ll want to draw
attention to in order to bring latent users back
into the app.
Localytics customer Swagg uses in-app
messaging to prompt users to upgrade their
app. They make the call to action that much
more enticing by drawing attention to a
feature the user can take advantage of in the
new version.

4 Sales and Coupons
Mobile users love great deals. In fact,
according to Juniper Research, consumers
are 10x more likely to redeem mobile
coupons than print coupons!5
5 Earn Rewards
In the same vein as the previous suggestion,
mobile users love ways to use their apps to
save money and earn rewards. To do this,
users may need to complete a user proﬁle or
add membership credentials. However, this
requires the completion of several steps in
the app that the user may forget, or decline,
to complete, no matter how much they want
to earn those rewards. Track users who
drop-off from registration funnels, segment
them and roll them into re-engagement push
campaigns that remind them of the value that
awaits them once they complete registration.
Time-sensitive offers like ﬂash sales work
particularly well for push message campaigns,
while in-app messages are especially great at
driving in-app purchases.

1 News Apps
For news apps, your monetization goal is two-fold. First, you want to drive ad revenue. To do
this, you need to increase time users spend in the app. With targeted push messages, you
can pull users back into the app toward content they have previously shown interest in. Sec-
ondly, you may offer paid subscriptions. Nudge users down the purchase funnel toward a
paid subscription upgrade with in-app messaging.
4 INDUSTRY-SPECIFIC CAMPAIGNS
Push Campaign
Say you have identiﬁed a segment of users who have shown interest
in sports news through an “articles read” event. Alert those users of
today’s top sports news stories with a push message campaign.
In-App Messaging Campaign
The readers who click through that push message are clearly
an engaged and prime audience for a paid subscription
upgrade. Offer them a free trial.

2
In addition to all other channels, mobile is yet another valuable customer touch point that will
help you drive more lifetime value out of that relationship. As a retail company your objective
is to drive in-store purchases, and you can help users do just that with the help of the app.
Retail Apps
Push Campaign
A retail store can send a “one-day-only 50% off all new
merchandise” offer to frequent shopper club members. For those
who aren’t in the frequent shopper club, the store can in parallel
target non-members with a campaign that encourages them to
login to the app and join the frequent shoppers club in order to
take advantage of the discount.
Retail apps can unify the in-store and mobile experience
through app features like in-store barcode scanners that reveal
in-app product reviews that help customers make more
informed in-store purchases..

3 eCommerce Apps
As an eCommerce company, your primary goal is to drive in-app purchases. Highly
personalized messages based on real in-app behavior can drive the user further down the
funnel toward conversion. For brands with retail stores, geo-targeted messages can drive
in-store traffic by promoting new brick and mortar locations.
Push Campaign
Whether it’s a ﬁshing pole or a pair of high heels, abandoned
items left in the cart is pressing issue for eCommerce companies.
Push messaging truly shines in this use case because of its ability
to communicate with these users outside of the app.
Nudge forgetful, but high value, users out of limbo with a push
message campaign offering free shipping or a discount
Registered users are more frequent buyers. Stored credit card
credentials facilitate easier repeat purchases and email
subscribers have your brand top-of-mind with daily updates on
sales and other special offers. Encourage users to register
during onboarding with a series of in-app messages.

4 Games
Since mobile games are generally free, your goal is to drive ad revenue by increasing
session length and time spent playing the game in your app. You can achieve this by
creating an engaging app experience with the game and by pointing out the most interesting
aspects of the game to users whose in-app behavior suggests they are missing out.
Push Campaign
A push campaign is a great way to encourage users who have
not played in a while to come back and play again or to remind
them when it is their turn. It is also an effective way to introduce
your new games to your audience.
Trigger an in-app message if the user has been lingering for a
while without making a next move in the game. Offer the user
the option of skipping a turn or offer help. For example, for a
game like Scrabble, use an in-app message to offer a link to an
in-app thesaurus to help get users to play their next move. This
provides helpful content and prevents the user from getting
frustrated and losing interest in the game.

Chapter 4
5 TIPS FOR MEASURING YOUR MOBILE
CAMPAIGNS

Chapter 4
5 TIPS FOR MEASURING YOUR MOBILE CAMPAIGNS
As we saw through practical examples in Chapter 3, both in-app messages and push
messages can be a valuable tool for both customers and businesses. By measuring your
campaign efforts, you will be able to better understand and optimize your customer
engagement. Here are five best practices to follow for measuring your mobile campaigns.
Think Beyond App Opens1
Let’s say a department store with an iPhone app is launching a push messaging campaign to
promote a highly sought-after new line of handbags. For this promotion, the retailer will send
push messages to users who have previously shown interest in handbags to pique their
interest in a 20% off coupon off their first in-app purchase of the new line. The goal is to drive
in-app purchases of the handbags.
A B
Chapter 4: 5 Tips For Measuring Your Mobile Campaigns23
The retailer runs an A/B test, sending at least two versions of the campaign to significant
samples of its target audience to see which message yields more conversions:

20% of those customers who received Message A took the first step and opened the app
while 15% of those who received Message B took the same action.
At first glance, it seems that Message A wins the contest, because of its higher open rate.
But the contest is not over yet; the retailer wants users to make an in-app purchase. If you
were only tracking app opens from this campaign, you would continue to invest in Message
A – which may actually have a lower conversion rate to in-app purchase than Message B.
Because of this unknown, it’s critical to look at the full picture.
Define Conversions for Your Brand2
Have a clear goal in mind with your campaign. Like all good marketing, app marketing should
start with your short and long-term goals in mind, and the metrics you pay the most attention
to will be dependent on those prioritized goals. Are you looking to drive in-app purchases, or
are you looking to increase time spent in the app?
Improve Impressions and Clicks3
We now know it’s important to think beyond app opens and to track conversions. But
between the point of app open and the point of conversion lies a great deal of opportunity
for optimization.
A B

23
Low Impressions
If your metrics indicate low impressions, you need to broaden
the reach of your campaign. In particular:
If your in-app message campaign is triggered by app opens,
think about driving more app opens through a push
messaging campaign.
If your push message campaign is seeing low impressions, it
is likely a case of low monthly active users (MAUs) and you
may want to crank up your user acquisition efforts.
If your campaign is triggered by an in-app event, you need to
evaluate whether or not the audience, which could be
relatively small, is achieving a sufficient conversion rate and
LTV to validate the campaign. If not, you may want to redirect
your efforts to larger segments.
Low Click Through Rate (CTR)
If your metrics indicate a low click through rate, consider the
following:
Design performance: Does the ad creative on your in-app
message show up blurry or warped on certain devices or
operating systems? Investigate further.
Ad copy: The text, and even the translation to other
languages, could potentially use improvement to more
clearly nudge users towards a call to action.
Once you have your campaign up and running, A/B test your
copy and creative to drive more clicks and conversions. Similar
to other marketing channels like banner ads, landing pages and
email, simple ad copy tests like comparing the effectiveness of
“Buy Now” and “Checkout” on conversion buttons can deliver
major results.
Chapter 4: 5 Tips For Measuring Your Mobile Campaigns

Tie Campaigns to LTV5
Evaluate How Your Campaign “Ages”4
Monitor how interest in your campaign trends over time. As per the example chart below, an
initial spark of interest and conversions may happen in the beginning of your campaign,
especially for in app messaging campaigns triggered by app opens. But once less frequent
app users begin to see the campaign, clicks may trail off after a few weeks, indicating it is
time for a refresh.
Finally, the most effective way to know if a campaign is successful is to compare the lifetime
value of app users who were impacted by the campaign against those who did not. In your
analytics, you can set a value for every subscription, product purchase, ad view, or time
spent in app. Next, create an event for “Seen In App Message” with an attribute for the
speciﬁc campaign. When reviewing your lifetime value report, ﬁlter the report with this
information to evaluate whether your app engagement strategy is translating into long-term
value for your brand.

If you’re a Localytics customer, once you have set up lifetime value tracking for your app you
can head on over to the Monetize tab to analyze your lifetime value report.
To see how your app marketing efforts impact your lifetime value, apply a ﬁlter to the report.
In this case, we created a segment for users who saw the in-app message.
Now you can see the impact of the in-app message - a 12% lift in lifetime value!
25 Chapter 4: 5 Tips For Measuring Your Mobile Campaigns

Chapter 5
PUTTING THESE LESSONS INTO PRACTICE

Chapter 5: Putting These Lessons Into Practice27
Chapter 5
PUTTING THESE LESSONS INTO PRACTICE
App user engagement strategies like in-app
messaging and push messaging can drive more
lifetime value for brands and more delightful,
informative and useful app engagement
experiences for consumers by increasing
awareness of an app’s best features.
Push messaging is particularly great for
re-engaging latent users, while in-app messaging
can pull engaged users further into your app
ultimately and towards conversion. Taking into
account the context users will encounter your
messages is a good starting point for more
effective marketing campaigns. Additionally, some
messages lend themselves to one format or the
other, such as time sensitive ones which are best
suited to push messaging. In-app and push
messaging fundamentally complement one another
and the best user engagement strategies are ones
that use them together.
In Chapter 4, we looked at effective techniques for measuring your campaigns. We learned
that while app opens from push messages are great, conversion is king. Your definition of
conversion needs to be aligned with your app monetization strategy and that is how marketing
campaign success should be judged. We talked about how to diagnose and remedy common
campaign issues such as low impressions and CTRs, and the potential to create long-term
brand value in linking the LTV of your customers to campaigns.
Ultimately, brands looking to monetize their apps will find that robust user engagement and
personalization can lead to increased conversions, revenue and lifetime value for your brand.
To achieve this level of engagement requires deep, actionable insights about your users.
Analytics solutions such as Localytics can help you achieve this quickly and effectively.
27
“Ultimately, brands
looking to monetize
their apps will find
that robust user
engagement and
personalization can
lead to increased
conversions, revenue
and lifetime value for
your brand. ”

References28
References
1 - http://pewinternet.org/Reports/2013/Smartphone-Ownership-2013/Findings.aspx (pg 1)
2 - http://www.apple.com/pr/library/2013/05/16Apples-App-Store-Marks-Historic-50-Billionth-
Download.html (pg 1)
3 - http://www.localytics.com/blog/2013/localytics-app-user-retention-data/ (pg 1)
4 - http://thenextweb.com/insider/2012/05/16/nielsen-us-smartphones-have-an-average-of-
41-apps-installed-up-from-32-last-year/ (pg 1)
5 - http://www.information-age.com/technology/mobile-and-networking/2162288/shoppers-
to-redeem-10-billion-mobile-coupons-this-year------research?goback=%2Egde_4862881_
member_215803984#%21 (pg 15)

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York Times, helping them create great experiences for their customers and maximizing proﬁtability,
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more than 1 billion devices across more than 20,000 apps.
Trusted by top brands to provide actionable insight.
Schedule a demo of Localytics today.
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Ultimate Guide to App User Engagement

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