Harnessing Mobile-Led Growth: The Case for Mobile App Performance

As mobile apps continue to play an increasingly integral role in our personal and professional day-to-day, consumers expect to access services and make purchasing decisions right from the palms of their hands.

This presents a unique opportunity for businesses to engage with their customers in new ways, understand their behavior and preferences, and ultimately drive growth and profit. But in today’s world of instant gratification and shrinking attention spans, mobile user expectations have soared and the tolerance for poor mobile app stability and performance has practically vanished.

Delivering a delightful mobile app performance is not just a nice-to-have, but a critical business imperative to realize the full potential of mobile-led growth.

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Succeeding in the mobile app battleground is a matter of survival for many businesses. We now spend a third of our waking hours on mobile phones, with only 8% of that time on mobile browsers. Everything is available to us with just a few taps on our phones, leading to a dramatic shift in consumer behavior and preferences.

Unlocking sustained growth and cultivating customer loyalty requires adapting to this paradigm shift and making effective use of your mobile touchpoints. Mobile apps can achieve conversion rates that are 1.5 times higher than desktop and 3 times higher than mobile web, while simultaneously increasing average spending by 130% over desktop and 140% over mobile web. They also enable you to gain a deep understanding of your customer’s behavior and preferences through invaluable first-party data.

Even when mobile apps do not create a direct revenue stream, they still create a lot of value for businesses. Merely releasing a well-designed mobile experience can boost a company’s value. In fact, studies have shown that branded apps encourage stronger identification with the brand, foster loyalty, and improve customer satisfaction, with non-commercial apps performing particularly well.

Consumers have been unequivocal; they want to interact with your brand through a mobile app and they expect you to deliver a seamless experience. More than 50% of mobile users say that a mobile app rated at one or two stars negatively impacts their view of the brand as a whole. Additionally, 68% of users find it disrespectful when a brand offers a poor mobile experience.

However, the unique requirements and challenges posed by the current mobile app development ecosystem can make it difficult for you to meet the lofty expectations of your mobile users.

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Mobile’s size and portability have tremendous implications for mobile apps. The impracticality of multitasking on mobile devices forces users to devote their attention to your app. This passive waiting time feels 36% longer for your users than the actual time your app takes. Additionally, mobile apps are often used on-the-go which also skews our time perception, compounding the effect.

As a result, even relatively small performance issues significantly impact the user experience and serious issues can be devastating. Ultimately, your mobile app’s performance plays an outsized role on your business growth and success.

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Your bottom line follows your app’s performance

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Acquisition

App store ratings and reviews are arguably the most important factor in determining how many people end up downloading your app after visiting its page on the app store. Whether they get there organically or through one of your ads, 90% of users will check your app’s ratings before hitting the download button and 79% will read its reviews.

Mobile apps with a crash-free rate below 99.9% are much more likely to be rated below three stars. This is a critical threshold because 50% of users will not even consider your app if it’s rated below three stars, and the number one reason behind all the one-star reviews dragging down your app’s rating is performance, accounting for 50% of them.

Moreover, 63% of users will actively discourage others from using your brand after a poor app experience and they don’t confine their efforts to your app store page. This makes it more difficult for you to acquire new users, driving up your cost per acquisition and lowering your acquisition rate.

On the other hand, apps that prioritize performance and improve their rating from three to four stars see an 89% boost in downloads and 89% of people will actively recommend your app after a positive mobile experience.

Alchemer (formerly Apptentive) highlights the effect of app ratings in a case study of one of their clients, where going from a two-star rating to a four-star rating not only boosted their acquisition but also delivered a 40% increase in in-app purchases.

As a result, your mobile app performance factors heavily in determining how many users you will be able to attract and how much you will pay for them.

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Conversion

After you acquire users, you want them to engage with your app and take actions that end up generating revenue and your app’s performance will undoubtedly have an influence. It’s well established that web and mobile web loading speeds directly affect conversion rates, an impact that applies to mobile apps too.

Poor performance is the biggest grievance for 55% of mobile app users and it often decides whether your users will give you their money or go to your competitors. With every 0.1-second delay in loading speed, conversion rates drop by up to 7% and a 1-second delay drops them by up to 20%. Mobile users expect a near-instant response from your app and you should not underestimate the impact of what seems to be tiny delays in performance.

Mobile users also reward brands that manage to meet their exacting expectations. With every 0.1-second improvement in loading speed, conversion rates jump by up to 10%, and with a 1-second improvement, they jump by up to 27%.

For instance, PureFormulas, a specialty retailer, realized a 14% increase in conversion and a 23% increase in revenue per visit by optimizing their page load speed.

Neglecting to optimize your mobile app’s performance makes your users less likely to take the actions you want them to take, leading you to lose out on a significant amount of potential revenue. 

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Average Revenue Per User (ARPU)

Significantly, the influence of app performance extends to the amount of revenue users ultimately generate per conversion.

30% of mobile users will spend more money with an organization if it offers a good mobile experience and 66% if it offers a great one. This is why studies show that a 0.1-second improvement in loading speeds can yield an increase in average order of up to 10%. When it comes to mobile app performance, milliseconds can mean the difference between a frustrating experience and a delightful one.

ALDO is a great example of just how big of a difference this can make. They found that mobile app users who experience quick rendering time bring 75% more revenue than the average and 327% more revenue than users who experience slow rendering. Naturally, they focused on improving their app’s performance, leading to an increase of around 10% in their app revenue in a matter of only four months.

Wayfair illustrates another example of app performance having a potent impact on revenue generation. After carrying out a highly detailed analysis of their app users, they found that users who experienced a crash generated 89% lower revenue on average.

Apps with high performance simply deliver a delightful experience that earns the loyalty of their customers and makes them want to spend more. Delivering a sub-optimal performance means you’re leaving money on the table and risking your customer’s loyalty.

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Retention

Retention has an even greater impact on revenue than acquisition and cost-cutting. Increasing retention rates by 5% can lead to a 25%-95% increase in profits and increasing them by 2% has the same effect on profits as a 10% cut in spending.

First, you have a 60-70% chance to sell to your existing users compared to 5-20% for new users, and the average spend per transaction grows by up to 45% the longer your customer has been doing business with you. Secondly, acquiring new customers is 6-7 times more expensive than retaining existing ones, and that doesn’t even take into account the 222% increase in average customer acquisition costs over the last 10 years. This makes maintaining a healthy retention rate of the utmost importance for a successful business.

Unsurprisingly, a mobile app’s stability and performance have a huge effect on whether users will continue to use your app. 93% of mobile app users consider performance to be an important factor when they’re evaluating an app. This is why 53% of mobile users who face an app crash will uninstall it, and 48% of users who face sluggish performance will do the same. 

Mobile apps that don’t maintain high standards for performance will typically see low user retention rates and possibly even lower revenue retention.

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The stress of poor mobile app performance

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While the magnitude of the impact we covered might seem surprising, it is not without good reason. Human-Computer Interaction (HCI) studies from the 1960s to the present day have repeatedly demonstrated that response times greatly impact users. Load times of more than two seconds significantly increase cognitive load, forcing users to exert 50% more effort to concentrate on the task at hand.

Furthermore, it doesn’t just affect their ability to achieve their goals, it also incites a powerful emotional response. Neurological studies performed on people experiencing slow loading speeds observed a stressful response in their brains that closely resembles the response to watching a horror movie. This explains why 68% of mobile shoppers feel like throwing their phones at the wall when an app crashes on them.

Emotions have a demonstrably potent influence over your users’ decisions. Mobile apps that offer poor performance cause very real stress to their users and end up being associated with negative emotions. Naturally, this has a negative impact across the board, making users less likely to give you their money and much more likely to leave.

Of course, the opposite is also true. Apps that prioritize performance make it easier for users to achieve their goals and become associated with positive emotions, leading users to stick around and give the app even more of their money.

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In today’s world, business success is inextricably linked to success on the mobile frontier, and mobile app success hinges heavily on stability and performance. Businesses must develop a mobile-first mindset and prioritize the quality of their mobile experiences to avoid frustrating customers and tap into a more engaged, loyal, and valuable customer base that ultimately generates much more profit.

Mobile-led growth is not just a buzzword; it conveys real exponential growth for the leading mobile apps, unlocking lucrative revenue streams. As we move forward into an increasingly mobile-centric world, teams that tailor their development, processes, and tools to mobile’s needs will be the ones that manage to succeed and outperform the competition.

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Understanding the gravity of mobile app performance is one thing; executing a flawless mobile experience is another. Instabug empowers mobile teams to monitor, prioritize, and optimize the stability and performance of their mobile apps across their lifecycle.

Don't let performance pitfalls dictate your mobile app's destiny. Take the reins with Instabug and drive your app —and your business— toward a thriving future.

Ready to elevate your mobile app performance and drive growth? Explore Instabug today and discover how you can transform user experience into your strongest asset.