What Are the Top 7 KPIs Metrics of a Mobile Financial Planning App Business?

As the mobile financial planning app market continues to evolve, it's becoming increasingly essential for artisans and small business owners to stay on top of their performance metrics. Key Performance Indicators (KPIs) serve as the compass, guiding decision-making and strategic planning in the ever-changing digital marketplace. In this blog post, we will dive into 7 industry-specific KPIs that are crucial for mobile financial planning apps catering to artisan marketplaces. From customer acquisition cost to user retention rate, we'll provide unique insights that will help you optimize your app's performance and drive growth in your business. Whether you're a seasoned entrepreneur or just starting out, understanding these KPIs is essential for staying ahead in the competitive world of mobile financial planning apps.

Monthly Active Users (MAU)

Definition

Monthly Active Users (MAU) is a key performance indicator that measures the number of unique users who actively engage with the WealthRover mobile financial planning app in a given month. It is critical to measure MAU as it provides insight into the app's user retention, engagement, and overall popularity. In the business context, MAU is important as it directly correlates to the app's growth and success. The higher the MAU, the more users are utilizing the app, which can lead to increased revenue opportunities through partnerships and referrals. It is critical to measure MAU as it demonstrates the app's value and relevance to the target market.

How To Calculate

The formula to calculate MAU is straightforward. Simply count the number of unique users who engage with the mobile app within a particular calendar month. This includes users who access the app, participate in budgeting, receive financial advice, or utilize any other feature available on WealthRover. The total count of these unique users within the specified timeframe represents the app's Monthly Active Users.

Example

For example, if WealthRover has 25,000 unique users engaging with the app in the month of June, the Monthly Active Users (MAU) for June would be 25,000.

Benefits and Limitations

The advantage of using MAU as a KPI is that it provides a clear measurement of user engagement and the app's popularity. However, a potential limitation is that MAU does not provide detailed insights into user behavior within the app. It is important to complement MAU with other user engagement metrics to gain a more comprehensive understanding of app performance.

Industry Benchmarks

Industry benchmarks for MAU in the US context can vary depending on the specific nature of the mobile app and its market. However, in the financial planning app industry, a typical MAU benchmark could range from 20,000 to 50,000. Above-average performance may be considered at 50,000 to 100,000 MAU, while exceptional performance could be 100,000 and above.

Tips and Tricks

• Invest in targeted marketing and user acquisition strategies to increase MAU.
• Regularly update the app with new features and improvements to encourage continued user engagement.
• Understand user feedback and behavior to tailor the app's offerings and enhance user retention.

User Retention Rate

Definition

User retention rate is a key performance indicator that measures the percentage of customers or users who continue to use a product or service over a specific period of time. This ratio is critical to measure as it provides valuable insight into the app's ability to retain and engage users. In the business context, a high user retention rate indicates customer satisfaction, loyalty, and the app's ability to meet the needs of its target market. It also directly impacts business performance by reducing customer acquisition costs, increasing customer lifetime value, and fostering a positive brand reputation. Monitoring user retention rate is essential for understanding user behavior, improving the app's features, and retaining a loyal customer base.

How To Calculate

The formula for calculating user retention rate is:

Where: - E = Number of users at the end of the period - N = Number of new users acquired during the period - S = Number of users at the start of the period

Example

For example, if a financial planning app like WealthRover started the period with 10,000 users, acquired 2,000 new users during the period, and ended the period with 11,500 users, the user retention rate would be calculated as follows: User Retention Rate = ((11,500 - 2,000) - 10,000) / 10,000)) x 100 = 15%

Benefits and Limitations

The main advantage of measuring user retention rate is that it provides insight into customer satisfaction, loyalty, and the app's ability to retain users. However, a limitation of this KPI is that it does not provide insight into the reasons behind user churn, which may require further analysis to address.

Industry Benchmarks

In the US context, the typical user retention rate for mobile financial planning apps ranges from 15% to 30%, with above-average performance falling between 30% to 50%. Exceptional performance in user retention rate for similar apps can reach 50% or higher.

Tips and Tricks

• Offer personalized onboarding experiences to new users
• Regularly update and enhance the app's features based on user feedback
• Implement loyalty programs to reward and retain active users

Key Performance Indicators for Mobile Financial Planning App

Average Session Duration

For a mobile financial planning app like WealthRover, the average session duration KPI measures the average amount of time users spend actively engaging with the app during each session. This ratio is critical to measure as it indicates how effectively the app is engaging users and providing value. In the business context, a longer average session duration suggests that users are finding the app useful, engaging, and are likely to explore the various features and resources available. On the other hand, a low average session duration could indicate that users are not finding the app helpful or engaging, which can impact user retention and overall business performance.

How To Calculate

The average session duration KPI is calculated by dividing the total time spent in the app by the number of total sessions. The total time spent in the app includes all active engagement time by users, such as interacting with budgeting tools, investment resources, or personalized financial advice. The number of total sessions refers to the total number of times users open the app and engage with its features. By dividing these two components, the average session duration ratio is obtained, providing a measure of user engagement and app effectiveness.

Example

For example, if the total time spent in the app over the course of a month is 50,000 seconds and there were 1,000 total sessions, the average session duration would be 50 seconds. This means that, on average, users are spending 50 seconds actively engaging with the app during each session.

Benefits and Limitations

A longer average session duration indicates that users are finding the app valuable, leading to higher user retention, increased likelihood of using app features, and potentially higher conversion rates for financial products and partnerships. However, a potential limitation is that a longer average session duration does not necessarily guarantee overall user satisfaction or app effectiveness, as some users may have longer sessions but still not achieve their financial goals.

Industry Benchmarks

According to industry benchmarks, the average session duration for financial planning apps in the US typically ranges from 40 to 60 seconds for typical performance, 60 to 80 seconds for above-average performance, and 80+ seconds for exceptional performance.

Tips and Tricks

• Conduct user surveys and feedback to understand what aspects of the app are most engaging for users.
• Offer personalized financial insights and recommendations to increase user engagement during sessions.
• Continuously update and improve app features to keep users engaged and invested in their financial journey.

Conversion Rate from Free to Premium Users

Definition

The Conversion Rate from Free to Premium Users is a key performance indicator that measures the percentage of users who transition from the free version of the WealthRover app to the premium, paid version. This ratio is critical to measure because it directly impacts the revenue generation and business growth of the company. By understanding the proportion of users who convert to paid subscribers, WealthRover can gauge the effectiveness of its freemium model in attracting and retaining customers. This KPI is critical to measure as it provides insights into the app's ability to convert users into paying customers, which is essential for sustainable business performance.

How To Calculate

The formula for calculating the Conversion Rate from Free to Premium Users is the number of free users converted to premium users divided by the total number of free users, multiplied by 100 to express it as a percentage. The number of free users converted to premium users represents the successful transitions, while the total number of free users reflects the entire base of potential premium subscribers.

Example

For example, if WealthRover has 10,000 free users and 500 of them upgrade to the premium version, the Conversion Rate from Free to Premium Users would be calculated as follows: Conversion Rate from Free to Premium Users = (500 / 10,000) * 100 = 5% This means that 5% of the free users have converted to premium subscribers.

Benefits and Limitations

The main advantage of measuring the Conversion Rate from Free to Premium Users is that it provides a direct insight into the effectiveness of the freemium model in driving revenue growth. However, a potential limitation is that this KPI does not consider the lifetime value of premium users, which means that it may not fully capture the overall impact of conversion on business performance.

Industry Benchmarks

In the US financial technology industry, the typical Conversion Rate from Free to Premium Users ranges from 2% to 10%, with the above-average performance level considered to be around 8%. Exceptional performance in this KPI may exceed 10%, reflecting a strong ability to convert free users into premium subscribers.

Tips and Tricks

• Offer exclusive features or content to free users as a way to entice them to upgrade to the premium version.
• Implement targeted marketing campaigns to educate free users about the benefits of the premium version and encourage conversion.
• Regularly analyze user behavior and feedback to identify pain points that may be hindering conversion, and make necessary adjustments to improve the overall user experience.

Customer Acquisition Cost (CAC)

Definition

Customer Acquisition Cost (CAC) is a key performance indicator that measures the cost incurred by a company in acquiring a new customer. This ratio is critical to measure as it helps businesses understand the efficiency of their marketing and sales efforts in generating new customers. It is essential to the business context as it directly impacts the profitability and scalability of a company, as well as its ability to generate sustainable revenue over time. Tracking CAC is crucial for assessing the effectiveness of marketing strategies, identifying potential areas for cost reduction, and optimizing overall business performance.

How To Calculate

The formula for calculating Customer Acquisition Cost (CAC) involves dividing the total costs associated with customer acquisition (such as marketing and sales expenses) by the number of new customers acquired within a specific period. This provides a clear and concise measurement of how much it costs to bring in each new customer and how these costs contribute to the overall acquisition process.

Example

For example, if a company spent $10,000 on marketing and sales activities and acquired 100 new customers within a month, the calculation of CAC would be as follows: CAC = $10,000 / 100 = $100. This means that the company spent an average of $100 to acquire each new customer during that specific period.

Benefits and Limitations

The benefits of effectively measuring CAC include the ability to identify the most cost-effective marketing channels, optimize customer acquisition strategies, and make informed decisions about resource allocation. However, one limitation of CAC is that it does not account for the lifetime value of a customer, which could impact the overall assessment of acquisition costs.

Industry Benchmarks

Within the US financial planning industry, typical CAC figures can range from $100 to $500, with above-average performance levels falling below $100 and exceptional performance levels exceeding $500. These benchmarks provide an understanding of the relative cost of customer acquisition and can help companies gauge their performance against industry standards.

Tips and Tricks

• Identify and focus on high-performing marketing channels to reduce CAC
• Invest in customer retention strategies to increase the lifetime value of customers
• Continuously analyze and optimize the customer acquisition process to improve efficiency

Average Revenue Per User (ARPU)

Definition

The Average Revenue Per User (ARPU) is a key performance indicator that measures the average amount of revenue generated by each individual user over a specific period of time. This ratio is critical to measure as it provides insights into the revenue-generating capacity of the business and helps in understanding the spending behavior of the users. In the business context, ARPU is important because it directly impacts the financial health of the company. By tracking ARPU, businesses can assess the effectiveness of their pricing, marketing, and customer acquisition strategies, and make informed decisions to drive revenue growth and profitability.

How To Calculate

The formula for calculating ARPU is derived by dividing the total revenue generated by the business within a specific period by the total number of users. This provides a clear and concise picture of the average revenue generated per user. By understanding each component of the formula - total revenue and number of users - businesses can gain insights into how their customer base is contributing to overall revenue.

Example

For example, if WealthRover generates a total revenue of $100,000 over the course of a month and has 10,000 active users, the ARPU would be calculated as follows:

This means that, on average, each user contributes $10 in revenue to WealthRover's business for that month.

Benefits and Limitations

The advantage of using ARPU is that it helps in evaluating the effectiveness of various business strategies, such as pricing, marketing, and customer retention, in driving revenue from the existing customer base. However, one of the limitations of ARPU is that it provides an overall average and may not account for variations in user behavior or customer segments.

Industry Benchmarks

According to industry benchmarks, the average ARPU for financial planning apps in the US is approximately $15. This provides a benchmark for businesses to compare their performance and strive for above-average ARPU. Exceptional performance levels for ARPU can be seen in leading financial planning apps, with figures reaching upwards of $30 per user, reflecting effective monetization and user engagement strategies.

Tips and Tricks

• Focus on upselling and cross-selling to existing users to increase ARPU.
• Implement personalized pricing or tiered subscription models to cater to varying user segments and maximize ARPU.
• Enhance the value proposition to encourage higher user spending and engagement on the platform.

Net Promoter Score (NPS)

Definition

Net Promoter Score (NPS) is a key performance indicator used to measure the loyalty of a company's customer relationships. It provides insights into the likelihood of customers to recommend the company's products or services to others, which is indicative of customer satisfaction and brand advocacy. NPS is critical to measure as it directly impacts customer retention, word-of-mouth referrals, and overall business growth. By understanding the sentiment of customers, businesses can take proactive steps to improve their offerings and customer experience, leading to increased profitability and sustainability.

How To Calculate

The Net Promoter Score is calculated by subtracting the percentage of customers who are detractors (giving a score of 0-6) from the percentage of customers who are promoters (giving a score of 9-10). The result is a number between -100 and 100, which represents the overall sentiment of customers towards the company or brand. The formula provides a clear and concise overview of customer loyalty, advocacy, and satisfaction, making it a valuable metric for businesses to track.

Example

For example, if a company has 60% promoters, 20% passives, and 20% detractors among its customer base, the Net Promoter Score would be calculated as follows:

NPS = 60% (promoters) - 20% (detractors) = 40

Therefore, the company's NPS would be 40, indicating a positive sentiment among customers.

Benefits and Limitations

The Net Promoter Score provides a simple and actionable way to gauge customer loyalty and satisfaction, allowing businesses to identify areas for improvement and track improvements over time. However, it may not provide a comprehensive understanding of the root causes of customer sentiment and might oversimplify complex customer relationships. Additionally, cultural and industry-specific variations can impact the interpretation of NPS results.

Industry Benchmarks

According to industry benchmarks, a Net Promoter Score of 50 or higher is considered excellent, while a score below 0 is deemed to be an indication of significant issues with customer satisfaction and loyalty. In the financial services industry, an NPS of 59 is considered above-average, reflecting strong customer advocacy and satisfaction.

Tips and Tricks

• Regularly survey customers to gather NPS data and identify areas for improvement.
• Use NPS trends to track the effectiveness of customer experience initiatives.
• Segment NPS data by customer demographics to gain deeper insights into satisfaction drivers.
• Implement a robust follow-up process to address concerns raised by detractors and passives.