Page 92 - MYM 2016

Engaging Customers in the App World
fig. 6: app customer engagement Matrix for content-Driven apps
low Purchase frequency Segment (iaP with ads + Marketing e orts)
Bargain Hunters (high usage, low pro tabil- ity): We term these customers bargain hunters because even though they remain loyal, they are not pro table to be with and respond only when o ered a deal. ey are with the app provider for the long term, yet they don’t generate a satisfactory return on investment because they don’t spend enough nor o en. In the mobile game scenario, it makes sense to incentivize them to use lower price point features more o en and o er an ad-free experience through subscription. Having a community-based approach, as mentioned previously, might spur their competi- tive spirit. For example, a leader board with options for customers to post their levels or achievements on the social media. Encouraging referrals might also boost their pro t (Customer Referral Value). A part of the Bargain Hunters will move to the Honey Bees cell once their pro tability increases through CLV and CRV.
O -Season Tourists (low usage, low pro t- ability): We term these customers the o -season
tourists because they are not regular yet they are looking for the cheapest options whenever they visit. ese customers are not loyal, have very little t with the company’s products and services and don’t generate pro ts. e company should limit the marketing spend on these customers with a view to extract the maximum whenever possible. O ering a basic subscription to move them towards Bargain Hunters may be the plausible option. If the customers do not choose a basic subscription, they can stay in the IAP model. However, the app devel- opers can combine IAP with IAA to gain additional revenue. On the other hand, they may start using the app and making in-app purchases if su cient network externalities are created to compete with their peers. In such a case, they will move up to the High Rollers cell.
no Purchases Segment (iaP with ads - Marketing e orts)
Window Shoppers (high usage, negative prof- itability): We term these users window shoppers because even though they regularly visit the stores
92 | MINd YOUr MarkETING OCTOBEr 2016