Benchmark Your App With Fiksu’s December Indexes To Get Validation and Improve Margins

February 15, 2012

4:30 pm

Last week, Fiksu, one of our showcased startups in Boston last September, announced the results of their December indexes, which looked at app store competitiveness and the cost of mobile app marketing.  I was curious as to what this data meant for startups and mobile app developers.   As it turns out – a lot.

If you are developing a mobile app or already have one out there that is doing OK but not exactly setting sales records, below is some great advice from Craig Palli, VP of Business Development.

The indexes can help you figure out whether or not your idea sucks – always good information to have – unless failure is your idea of a good time.  “For a new startup that is developing a business that might have an app down the road, this index is a great tool to help you figure out if this is a great idea or a great opportunity.  A great idea will generate millions of users – but a great opportunity will generate millions of probable users.”

As any successful app developer will tell you, you need to make a decent margin on an app to keep the business going.  “You need to tweak your business model and app so the delta between the long-term value of a customer and the margin is optimized.  If your cost to acquire a customer is more than their long term value, you’re in trouble.  If it’s the other way around, you’re golden.”

So let’s say you already have an app out there that’s doing OK.  The index provides validation and helps you figure out how much better you could be doing.  “Let’s say your long-term user is valued at $2.25, but the cost to acquire that user is $2.  Compare those costs to the index, and you’ll see that you could be making another $0.50/customer.”  Palli then pointed that while there’s always room for improvement, if your experience is consistent with other companies, then you’re OK for now.

For all of you startups and app developers out there, go check out those indexes now and see how you stack up.  Fingers crossed the news is all good!

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Monika Jansen is a writer and editor who is happiest pounding out blog posts, newsletters, website content, and other materials. Follow her at: @monikacjansen

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