How to Measure Application Value: The Application Value Matrix
On a regular basis, it’s important to take a look at the application user experience and truly try to understand the value delivered to users. When this topic comes up, some questions arise:
- Since this is so subjective, how does one accurately measure value?
- How can you be sure your marketing is properly conveying value to end users?
- How can one quickly and easily measure value?
There are a variety of ways to determine value; listening to your users is a big one, revenue generation can give some insight, but when asserting the value that an app communicates and subsequently provides, there must be a quick and easy way to measure value. For this reason, we’ve created a tool called the Application Value Matrix. Two performance indicators are used to determine the value that is communicated and delivered to users: attrition, which is the rate users uninstall an application, and acceptance, which is the rate users decide to download/install an application. By plotting these two performance indicators, you can easily gauge how well you are communicating and delivering value, understand how these two metrics are related, and subsequently take action to improve.
The Application Value Matrix is divided into four quadrants:
- Valued: High Acceptance, Low Attrition
- Misinterpreted Value: High Acceptance, High Attrition
- Unrepresented Value or Niche: Low Acceptance, Low Attrition
- No Value: Low Acceptance, High Attrition
I challenge you to plot your apps onto this matrix. By doing so, you can determine certain action items necessary to improve the value communicated and/or delivered to users.
So, what does each quadrant mean?
Valued
This quadrant embodies effective value communication and delivery to users. Users understand the value that the app provides up-front, thus there is high acceptance of the application. Users value the application as they use it, thus there is low attrition. Even if your application falls into this quadrant, it’s important not to stand still. Continue to deliver value to end users through consistent improvements and by being the best of your breed. Also, remember that delivering value does not mean piling on new features or adding unnecessary complexities.
Misinterpreted Value
Apps that fall into this quadrant have high acceptance and high attrition. So what does this mean? One of two things: first, it could mean your marketing campaigns communicate value that fails to be delivered to users, thus causing high attrition. If this is the case, look at your marketing assets and adjust the communication so it properly conveys the true value your app provides. Second, this could mean (and this is probably rare) that your app is a victim of the “hype machine”. Perhaps you have a lot of positive press about your app, causing a lot of people to download your application. However, upon using it, a large percentage of users find that it’s just not for them. Maybe it does deliver value to a subset of users, great; but seek to understand why the majority did not find value in your app.
Unrepresented Value or Niche
Apps that find themselves in this category have both low acceptance and low attrition. Again, this can mean one of two things. First, it could mean that value is not effectively communicated to users. Look at your marketing campaign and enhance the messaging so it truly communicates the problems your app solves for users. Second, this could mean your app is niche. A certain subset of users wants your application and this subset truly values your application. If this is the case, formulate a plan to enhance your application to improve acceptance for new personas or markets.
No Value
The meaning of this quadrant is fairly intuitive. Very few users download your application and of those who do download it, have high attrition. The good news is that in this quadrant, you have nowhere to go but up. Ultimately, you need to focus on the value your app provides first before you look at enhancing your marketing assets. This is not a “chicken or egg” scenario. There is only one thing that can come first and that is delivering value. Once you have achieved this, you can quickly follow up by improving value communication for a one-two punch. To improve value delivery, ask yourself some questions: Are you properly engaging users? Are you truly solving a problem that exists in the market? Is your app easy to understand and use? Did you design it with yourself in mind and not your users?
I hope you find this tool useful as it is important to effectively create and communicate value. This tool is not meant to substitute other important ways to measure the value your app provides, such as user feedback and other various performance indicators. The Application Value Matrix is intended as a supplement, used to quickly and easily identify areas for improvement.
Eric Montag, Product Manager, W3i, LLC
Eric is a Pragmatic Marketing Certified Product Manager and uses his experience in internet marketing to lead the charge in product research, planning, and execution from both a consumer and business standpoint.
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January 13th, 2010 at 8:09 am
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July 18th, 2010 at 3:23 am
Wow ! Amazing post ! I liked the Application Value Matrix method about the Value of an app, especially a Business and Utility app, for eg. I was fed up of those pesky winmail.dat files which I received via email from Windows Outlook users. And there was no way for me to open them up on my iPhone OS 4.0. That was until I came upon this extremely useful app called “Winmail File Viewer” on the iTunes store! It’s priced at just $0.99, but it is very helpful.
Plus it’s support is great too! Amazing value product to have !
Here’s the iTunes link: http://itunes.apple.com/us/app/winmail-file-viewer/id379500151?mt=8#