Tax Day, the deadline for filing 2018 taxes with the U.S. IRS, may have passed, but new data suggest April is a red-letter month for mobile finance app acquisition and use, marking the global start of a productive period when financial institutions and fintech companies can acquire valuable customers at bargain prices. The real payoff, however, comes later in the year…but only for marketers who succeed in engaging users at every stage with customized communications that are highly relevant and hyper-personalized.
A review of costs and conversions across the calendar year—highlighted in the 2019 Mobile Finance Apps Report from mobile app marketing and retargeting platform Liftoff which draws from internal data from January 1, 2018 through December 31, 2018—shows user acquisition costs hit a low in April ($5.20) before climbing to reach their highest point in August ($8.24). The report connects the dots in the data to conclude that the uptick in acquisition costs is linked with a shift in what is top of mind for customers. Put simply, users who start the year with a strong reliance on finance apps to budget, invest or otherwise plan for a rainy day shift their attention to planning, spending and enjoying the lazy, hazy days of summer.
But the report, which analyzes a data set spanning 10.3 billion impressions across 2.7 million app installs, 168 million clicks and 1.7 million activations and registrations, doesn’t just identify standout months when user acquisition is cost effective. It reveals key periods when users are primed to act. For example, May is cited in the report as the month in which “the cost to acquire a user who completes a registration is low, and the conversion rate of nearly 29.7% is a bonus.”
Mobile money never sleeps
Seasonal trends are clearly handy guides for evaluating app acquisition costs and engagement metrics. It’s also useful to note that, per the Liftoff report, the highs and lows are “less extreme” compared to the previous year, indicating that user engagement has become more routine.
Finance apps have matured to the point that they shape how people manage their personal finances throughout the year. This dovetails with data from the British Bankers’ Association that shows user activity on finance apps has rocketed nearly 4x in the U.K. alone. Couple this with the observation by app market intelligence provider App Annie that app sessions are also surging (with users in some markets using their finance apps 10x a day or more) and it’s clear that finance apps have crossed the chasm to enter a new phase of growth.
Messaging data to drive results
This is where data-informed approaches to messaging personalization can pay dividends. To equip app marketers with insights and educate them on the impact of effective communications activity on app engagement (and ultimately use), the Liftoff report features app retention data and analysis from mobile engagement platform Leanplum.
Data supplied by Leanplum shows that it takes more than a week (7.62 days) for finance app users to come back to the app after the install. Significantly, the report says, it’s a slippery slope from there—with users who have had the app longer taking longer to return. Happily, there are ways to break the pattern. Marketers can harness communications, specifically push notifications, to boost engagement and motivate more frequent app use, according to Leanplum. Given that finance app users are engaged from the get-go, with an average push open rate of 15.8%, they are likely to be open to additional relevant messaging.
High engagement rates spell opportunity for marketers to send messages provided they are customized based on understanding users’ particular interests. Messages that inform (or remind) customers about offers, such as upgrading to a higher reward card, are on the mark—as long as they play by the rules, Leanplum says. “Make sure there’s a careful balance between promotional, transactional and scheduled messages that help users get the most from the app.” It’s also a plus to put users in the driver’s seat when it comes to choosing their ideal message frequency.
Winning against the Super Apps
Clearly, appropriate messaging—particularly notifications customers genuinely appreciate and consider helpful—is a huge boost to customer loyalty. But personalization efforts can also increase the bottom line. Global management consulting firm Boston Consulting Group estimates that “for every $100 billion in assets a bank has, it can achieve as much as $300 million in revenue growth by personalizing its customer interactions.” BCG defines personalization as “delivering the right individual experience through the right channel at the right time.” Unfortunately, many organizations are structured (and teams motivated) around driving sales rather than building deep and lasting customer relationships. Against the backdrop of this strategic misalignment, the meaning and potential of personalization can be lost.
This is a dangerous disconnect in an industry where the rewards—and the pressure—have never been higher.
That said, growth and opportunity are off the charts. According to the 2018 State of the Industry report on Mobile Money published by the GSMA, the trade body that represents the interests of mobile network operators worldwide, the mobile money sector, which includes banks, payment providers and third-party players, is now processing a massive $1.3 billion a day. What’s more, the number of digital transactions is growing at twice the rate of transactions made with cash.
Mobile-first tech companies are capitalizing on the boom, ushering in the era of so-called Super Apps. Finance and payment platform providers such as Ant Financial, Grab and WeChat combine their prowess in social, retail and financial services with troves of consumer insights and data to deliver mobile consumers a one-stop-shop of seamless, integrated, contextualized and efficient experience. Combine that with increased competition from Big Tech disruptors including Google, Amazon, Facebook and Apple, which have spoiled consumers with customized, relevant and valuable end-to-end experiences, and it’s clear that personalization at scale isn’t an option. It’s a business imperative.
How to wow your user
Personalization is also becoming a reality, with companies using analytics and insights to create and deliver customized communications that orchestrate all channels and marshal all data to manage an end-to-end user lifecycle. If done well, BCG writes, personalization at scale can provide a direct route to lower rates of customer churn and higher sales.
This dovetails with recent data from CleverTap, a mobile marketing platform company leveraging AI and machine learning to optimize customer experiences at scale. In its 2019 Industry Benchmarks For Mobile Payment Apps report, CleverTap draws from an analysis of 5 billion data points across 700+ million devices and 583 million users to divide the payment app user lifecycle into four stages, making data-informed recommendations at each stage to help companies drive revenue growth.
The journey starts with Onboarding, a stage when efforts to wow users with a great first-time user experience can improve user adoption out of the gate by 7x, according to the report. It’s here, CleverTap says, that a brief “app tour” covering some of the most popular features (or merchants) can make a huge difference, shortening the path to action and driving the customer deeper in the funnel.
The next stage is Engagement, but it’s not a direct journey.
CleverTap reports it takes an average of 12 days to turn a newly onboarded user into a deeply engaged one. Campaigns at this stage should focus on keeping users coming back to the app, and marketers will want to watch key metrics such as session length and abandonment (the number of users who dropped off after showing a high intent to transact). Understanding of the user will deepen in the next stage, Retention, when marketers should be singularly focused on the signs and signals that customers are becoming more loyal—or even brand advocates.
In the final stage, Reinstall, the report recommends marketers should be sensitive to early indicators of user churn, and double down on efforts to win back customers who have stopped seeing value in using the app. Significantly, churn among payment apps is the highest of all verticals, a number CleverTap links with the plethora of choices available to users who want to manage their money. It can reach a whopping 77% in the first two weeks if marketers fail to identify and proactively engage users who are likely to churn and uninstall the app altogether. (Overall, the average uninstall rate for payment apps after 30 days comes in at 35%, 4% of which will reinstall the app and give it another chance.)
With so many distractions and drop-off points on the all-important path to engagement, it’s a good idea to grab customer attention with messaging and marketing that spans all channels for maximum impact. Nudges should be frequent and relevant—and efforts are most effective when marketers employ emotional intelligence to understand customer usage patterns and preferences and intelligent tools to do the rest (sending, timing and targeting). This is also the recommendation of the World Retail Banking Report 2018, a report by global consulting firm Capgemini and the European Financial Management Association which charts the current perspectives and potential evolution of banks in the face of increased competition from fintech and BigTech disruptors.
In an industry marked by high-velocity change and soaring demand for superior customer experience across all channels at all times, the ability to deliver a “personalized and relevant customer experience is not merely about customer retention,” the authors state in the report. “It is a way for banks to distinguish their brand.”
Meet users where they are in their lifecycle journeys, and learn more about their preferences and behavior by listening closely through data analysis. Tomorrow’s mobile financial services winners will be the companies that build the capabilities mix to master sophisticated, personalized cross-channel marketing today.
This article first appeared on Forbes.