@andrewchen

Get the newsletter · Featured · Recent

New data shows up to 60% of users opt-out of push notifications (Guest Post)

[Andrew: There’s a real shortage of information about push notifications, CTRs, response rates, etc. Partly this is due to the immaturity of mobile as a marketing platform, but it’s also because of the opacity of the iOS platform. I recently ran into Kahuna, a Sequoia-backed startup led by Adam Marchick that’s compiled a treasure trove of data about push notifications. Today, in an article authored by Shannon and Alli of the Kahuna team, they share some of what they know about why people turn off push notifications.  You can also hear me talk about this data and how to combat it in the video below.]

Why 60% of your users opt-out of push notifications, and what to do about it

In some product categories, over 60% of their users turn off push notifications. In others, a mere 20% do. That’s a huge difference when we’re talking about the primary method of retaining and engaging your mobile users. Recent data from Kahuna reveals that push opt-in rates vary widely across industries – ride sharing being the best performing, and social being the worst. Here’s a comprehensive look at the state of iOS push opt-in rates, as well as a roadmap for getting back on track if your app is trailing behind.

Here’s the data:

image

This data shows push enablement rates for iOS devices alone, because Android devices don’t ask users for push permissions. You can see that Ride Sharing’s average opt-in rate (79%) is twice the opt-in rate of Social (39%). This can translate to twice the engagement, revenue and retention, whereas low-performing apps are missing out.

People have an intuitive bias about push. They only want to receive push notifications that are relevant, time-sensitive, and valuable. Our data shows that consumers have innate assumptions about what an app will offer based on the app’s industry. As a result, an app’s ability to bridge the trust gap greatly impacts push enablement rates.

Attractive Industries
Clearly, some apps have an easier time getting push opt-ins than others. The industries with the highest average opt-in rates, specifically Ride Sharing, Food & Beverage (60%) and Financial Services (55%), are those with inherently time sensitive value propositions; users intuitively understand that push notifications will play an important role in the functionality of the app. For example, hearing about the arrival of your ride via push is very important, as is knowing the exact moment your take-out is ready for pickup. These industries benefit from the positive biases around push notifications, because people can see the value of push without much guidance.

uber push

uber-notification_cut

Uber’s push notifications convey information that is integral to the functionality of the app and is supposed to be acted upon immediately. Users are able to understand this functionality without much explanation, which contributes to the much higher push enablement rates for Ride Sharing apps.

But What If You’re An Underdog?
If you are in an industry that suffers from low push opt-in rates, can you overcome this inherent user bias? There is a preconceived notion that these kinds of apps only send self-promotional push notifications, and users have a hard time seeing their value upfront. The good news: research shows that you can influence user opt-in rates with comprehensive onboarding strategies. Here are two different techniques to improve the user experience when you ask for push notifications to dramatically increase opt-in rates.

1) Make a Great First Impression
Start off the user’s app experience with a clear and informative splash page, an extra screen that pops up the first time a user opens your app. Use this prime real estate to showcase your app’s top features, and to demonstrate the value of opting into push notifications. When new users fully understand the value of your app and how push messages will add to their experience, they are much more likely to opt-in to push notifications. For example, the Crossfader DJ app launches an interactive tutorial upon first opening the app, explaining the core functionality and the role of push. This educational approach helps Crossfader achieve a 55% push enablement rate, significantly higher than the 44% industry average for News & Media apps.

Screen Shot 2014-08-03 at 9.55.13 PM
When Crossfader educates new users about what the app does in a visual and structured way, users feel more compelled to have a dialogue with apps via push. After the core functionality is explained and users know how to use the app, Crossfader outlines exactly how push will add value to the app, and then prompts them to accept push permissions. This strategic approach to asking for push leads to a significantly higher opt-in rate than the industry average.

2) Pop the Question
You have one shot to ask for push permissions; ensure it isn’t wasted by first asking in a pre-ask splash page or in-app message, rather than the official iOS page. By diverting the initial question and gauging the user’s interest, you can save your one opportunity for when the time is right. If the user clicks “YES” in the pre-ask page, prompt them to the official permission page; if the user clicks “NO,” wait until they are more familiar with your app and ask them again later. Cluster utilizes this tactic to achieve a 60% push enablement rate in the social category, with 100% of users opting into push after tapping “Notify Me” in their pre-ask page. By following these best practices, you should be able to improve the user experience and dramatically increase push enablement rates from the industry average.

TechCrunch shows that Cluster has 60% push enablement rate, and during user testing, they saw 100% success rate in iOS push notification permission after tapping “Notify Me.”

TechCrunch shows that Cluster has 60% push enablement rate, and during user testing, they saw 100% success rate in iOS push notification permission after tapping “Notify Me.”

If you take a tactful approach to push notifications, you can turn push into a communication channel that users embrace. Make sure you ask for push permissions very carefully to increase your app’s push enablement rate so you can take advantage of push’s full potential.

3) Maintain the Relationship
Once your users begin receiving push notifications, it is critical that you respect this incredibly personal communication channel. By only sending hyper-targeted, personalized push messages that actually add value, you can ensure that your users don’t later opt-out of push, or worse yet, uninstall your app.

There’s no reason your app can’t overcome bias about push notifications. Whether you’re in a high-performing industry like Ride Sharing or Food & Beverage or a low-performing one like News & Media or Social, there is always room for improvement. With a thoughtful, educational and transparent onboarding strategy, you can optimize the user experience and significantly increase your app’s push opt-in rate. Focus on creating and nurturing these important mobile relationships with push notifications to come out on top in the exciting future of mobile. Stay tuned for more data from Kahuna on how users are really responding to push.

PS. Get new updates/analysis on tech and startups

I write a high-quality, weekly newsletter covering what's happening in Silicon Valley, focused on startups, marketing, and mobile.

Why aren’t App Constellations working? (Guest Post)

[Recently, I read this roundup of perspectives on “App Constellations” on the new social/professional news app Quibb. This is an emerging product strategy in mobile embraced by Facebook, Linkedin, Foursquare, Twitter, and others, and found it fascinating. Thanks to the authors below for sharing their opinions on this new approach. -Andrew]

Screen_Shot_2014-07-15_at_11.51.42_AM

Fred Wilson recently coined the term ‘App Constellations‘ to describe what he was seeing in the mobile app ecosystem with respect to distribution. Over the past few months, mobile companies have continued with this strategy, the idea being that standalone apps are better for mobile, versus the all encompassing platforms that dominate desktop experiences – and it’s a better position to own and control several of these key apps on any person’s device.

It has been interesting to watch as Dropbox, Facebook, and Foursquare experiment with this approach – but it doesn’t seem to be working, at least not yet. CB Insights shared some discouraging data last month, and things have only gotten worse over the past few weeks for the most recent apps to be put out by these big players:

Screen Shot 2014-07-11 at 2.12.32 PM

Screen Shot 2014-07-11 at 2.13.47 PM

Screen Shot 2014-07-11 at 2.19.31 PM

Screen Shot 2014-07-11 at 5.01.00 PM

It’s important to note that none of the companies using this strategy have promoted their unbundled apps aggressively – beyond Facebook Messenger, which is seemingly the only app where this App Constellation approach is paying off:

Screen Shot 2014-07-11 at 2.16.50 PM

Toufeeq Hussain (Senior Product Manager at Storm8)

The App Constellation strategy works when you have a core resource which can be shared across multiple apps. Slingshot and Poke are attempting to create a new resource (reply-to-view-images for Slingshot and disappearing images for Poke) and hence isn’t really leveraging whats core to Facebook (social graph and shared photos). In the case of Slingshot, even the social graph had to recreated from scratch. So even though these apps get huge media attention when they launch, they slowly slide down the charts as there is nothing holding them up.

One company that has done a great job of using core resources and creating a “basket of apps” is Evernote. It currently has Evernote Hello, Evernote Food, Skitch and Penultimate. Each of these are focused around helping users create more notes and thereby getting more usage of the core Evernote product. Of course, not all of Evernote’s apps are in the top-50 lists but they are targeted mainly at new users who are looking for more specific solutions to note taking. Carousel is on the same lines but my feeling is that Dropbox needs more apps that read data stored in Dropbox than contributing to it. If the goal is to contribute to the Dropbox then it needs to be something more than just syncing photo/videos as the default Dropbox app already performs that.

The Asian messenger apps use the contact list as the core resource across any apps integrated into LINE or WeChat. Invitations are sent through the core messaging app but specific functions are performed in the corresponding apps. Games, photo sharing, stickers all have specific apps but use the core LINE or Wechat identity and social graph to seamlessly work across multiple apps.

In conclusion, though its very valuable for a Facebook or Dropbox to shoot for “stars” and build constellations, what we have seen from companies like Evernote and the asian messenger apps (LINE, WeChat) is that a “basket of apps” approach that leverages a common core resource between other apps might actually be a more scalable strategy. Its very hard engineering “stars” – a lot of things need to fall in place to be a top-50 free app, a better strategy for Facebook might be to play to its strengths than alienating new apps from core FB resources.

Bubba Murarka (Managing Director at Draper Fisher Jurvetson)
App constellations are being deployed because the problem of distribution on mobile is “solved” in the sense that large incumbent app owner, and mobile marketers with sufficient resources, can predictably drive installs of their other apps via well known set of steps that includes cross promotion, cross linking, merchandising on mobile web & of course paid distribution. One of the best examples of this is how Facebook has managed to drive massive number of installs of the standalone Messenger app via the main Facebook integration. I would go so far as to say that if an unbundled app from a large incumbent does not to have a massive install base it is intentional to enable the app to mature before investing in driving distribution. FWIW, I am not saying distribution for younger companies without existing massive install bases, well known brand names or meaningful financial resources is “solved” yet…because, well it is not.

As for the value of this strategy it is easy to say it doesn’t work but that is not nuanced enough analysis of why companies pursue this approach. The multi app strategy allows more experimentation, different release cycles and tailored experiences to drive deeper engagement. This allows faster iterations for nascent product lines which is critical for finding product market fit (traditionally the key advantage startups have over large incumbents). Using Facebook Messenger, as an example again, FB only focused on driving installs 3 years after they had initially released the standalone app. I’d hypothesize that once Dropbox wants to drive installations of their app constellation they will have no problems – “Install Carousel and get 500 free MBs of storage” or “To sync your photos to Dropbox you need to install Carousel”. In summary, I’d suggest the best way to assess the value of this strategy is not to look at installs as the only measure of success.

Casey Winters (Growth Marketing Manager at Pinterest)
App unbundling or constellations are a nuanced strategy that I think needs a few, rare conditions to be effective. One is that your main app needs to be a top app already, with little room to improve. Then, it is advantageous to create a new app to see if you can take another top spot on the App Store/Google Play, and another icon on a user’s phone (see my blog post for more details on that strategy).

When you have this scenario, it’s little risk to create a new app, but it means that a very successful company needs to launch a new app and have it be an immediate success. You don’t have the advantage of iterating and starting small and working your way up to popularity like most apps do. It’s very tough to launch new apps this way and be successful because a ton of people try the app the moment it’s launched before you have any market feedback. Typically, people try it, discard it, and you don’t get another shot. So what ends up happening is that popular apps buy newly popular apps instead.

The only way I have seen the constellation strategy work is if the new app was already a core feature of the main app and is then unbundled. Facebook Messenger is an example of this. Since the feature is already popular inside Facebook, and the new app is now where that functionality lives (and that functionality hasn’t meaningfully changed), the new app is successful. Where foursquare erred is the the check-in was declining in popularity in their app, and when they unbundled it they changed the functionality meaningfully to upset those core users.

Alex Schiff (CEO and Co-Founder of Fetchnotes)
Unbundling into “app constellations” is understandably a compelling strategy. More real estate, more targeted products, and more mind share — hooray!

The thing is, outside the tech community most people just don’t download that many apps. Statista put out a report late last year that on average, US smartphone holders have installed 26 apps. To put that in perspective, that’s just over a page of apps on an iPhone 5 screen. Not only are most people not reading about or searching for apps, but when they do hear about one from a company they know, the default behavior is not, “Wowee! I already have Facebook – I should start using their new app!”

Putting the apathy of mainstream consumers aside, there’s a much deeper problem with the whole unbundling strategy. It only works if it’s a fundamentally distinct behavior being segmented into a stand-alone application. I think Facebook Messenger is a great example of unbundling that worked — messaging is very different from browsing stories and stalking people. Separating the two made both my messaging and social voyeurism (let’s be real, that’s what Facebook is for) experience better. Moreover, Facebook wanted to be your go-to messaging utility. That couldn’t happen, I believe, unless it was its own application.

Today, over 200M people use Messenger.

Now compare that with the launch of Paper. Paper, for all intents and purposes, has the same core features as Facebook proper – you browse stories, accept friend requests, view notifications, etc. More recently, they even added back in some of the features they left out, like birthdays and events. The major difference is UI (it’s beautiful) and a philosophical focus on stories over people.

In other words, it’s just a different approach to Facebook. Most users I’ve talked to use Paper instead of Facebook, not alongside it. Since Paper offers pretty much the same functionality as Facebook proper, most people just aren’t that motivated to try it out. As of June 11, Paper has only 119,000 MAUs. Frankly, I wouldn’t be surprised if Paper was just a test for a new approach they’ll be bringing to the core Facebook app. Unless Facebook strips Paper down to be stories and stories alone, I don’t see it surviving long-term as a stand-alone app.

There are certainly more granular product reasons Slingshot, Paper, Carousel, etc. haven’t taken off. However, across any app constellation effort, the products need to compliment — not cannibalize — each other.

Messenger does exactly that. Paper doesn’t.

Adam Sigel (Product Manager at Aereo)
App constellations, unbundling, whatever you want to call it, will ultimately yield a better experience for mobile users and better business practice for the companies making apps, but we’re going to have to work through some pain in the short-term. The trouble for now is that app constellations are ahead of the rest of the mobile experience.

It starts with app discovery. The App Store (for iOS especially) is largely leaderboard driven, and it’s hard to crack into the top ranks, especially for non-gaming apps. One “north star” app in a constellation makes it much easier to build satellites around, and we’re seeing that with Facebook, Dropbox, Google, LinkedIn, and Amazon. As Fred Wilson wrote, this creates a “rich get richer” scenario and creates enormous challenges for newcomers.

Having different apps optimized for different use cases is great, but managing all those apps is a pain. As I mentioned in a blog post about invisible apps, the mobile OSes need a way to have apps that exist outside the homescreen. “Winning the homescreen” just doesn’t make sense for lots of apps (finance and travel, to name a few). iOS is the worst offender here compared to Android and Windows Phone, but this could be addressed a number of ways including design changes, gesture controls, or anticipatory computing.

Even though more apps are building in deep linking capabilities—a very good thing for the mobile experience overall—app switching still stinks. It’s visually jarring to a lot of users, and app management is still a power user skill. To go with the typical early majority example, my parents don’t double-tap the home button to switch apps, nor do they put very much thought into which apps go on which screen or in which folders.

These are temporary imbalances, and recent announcements from Google and Apple suggest directional improvement. As app discovery improves, mobile OSes continue to evolve, and the market matures, we’ll get new, more sophisticated and seamless mobile experiences.

More:
There’s even more discussion in the comments, on Quibb.

PS. Get new updates/analysis on tech and startups

I write a high-quality, weekly newsletter covering what's happening in Silicon Valley, focused on startups, marketing, and mobile.

There’s only a few ways to scale user growth, and here’s the list

MP900433069

Scaling growth is hard – there’s only a few ways to do it
When you study the most successful mobile/web products, you start to see a pattern on how they grow. Turns out, there’s not too many ways to reach 100s of millions of users or revenue. Instead, products mostly have one or two major growth channels, which they optimize into perfection. These methods are commonplace and predictable.

Here are the major channels that successful products use to drive traction – think of them as the moonshots.

  1. Paid acquisition. If your users give you money, then you can buy users directly through ads. Usually companies try to maintain a 3:1 CLV:CAC ratio to keep their margins reasonable after other costs. (eBay, Match, Fab, etc.)
  2. Virality. If your users love your product, then you can get major “word of mouth” virality driven by a high Net Promoter Score. If you can get your product to spread as a result of users engaging with the product, you can further optimize the viral loops using A/B tests to generate even more virality. People often measure “viral factor” to see how effectively existing users attract new users, and of course, you want your viral factor to exceed 1.0. (Facebook, Instagram, Twitter)
  3. SEO. If your product creates a ton of unique content, in the form of Q&A, articles, long-form reviews, etc., you might end up with millions of unique pages that can in turn attract hundreds of millions of new users who are searching for content via search engines. (Yelp, Rap Genius, Stack Overflow, etc.)
  4. Sales. For startups targeting SMBs or the enterprise, you’ll end up fielding a large sales org to handle both inbound and outbound. This is especially true for companies targeting local SMBs, where telesales becomes the only option. Of course, to make this work, you’ll need to generate a multiple in revenue of what you pay them.
  5. Other. There’s the odd partnership, like Yahoo/Google, that can help make or break a startup – but these are rare and situational. But sometimes it happens!

These channels work and scale, because of two reasons:

  • They’re feedback loops. Each of these channels creates exponential growth because when you make money from customers, you can use that money to buy more customers, which give you more money. Or in the virality scenario, a cohort of new users will invite even more users, who then invite even more on top of that.
  • They have a high ceiling on saturation. Part of why paid acquisition will always be around is because people like free products, which cause these products to monetize using ads. As long as people will love free products (which they will, forever), there will be advertising to buy. The biggest ad networks reach a billion users or more. Similarly, SEO works because almost everyone uses Google, so as long as you’re dealing with a high-volume base of searches (like music lyrics, or products) then you’ll be able to reach hundreds of millions of users.

It might seem like it’s best to crack one of these channels right away, and then ride then into glory. But that almost never happens, and instead startups have to work towards them – but it takes time. To figure out if your CLV and CAC match up, you need to buy some users, then wait 6 months to see how well they monetize. If you want to see if your product is viral, you need to build your app, then wait to see if you have the retention and frequency to support a strong viral loop. SEO is hard because after the content is built, Google has to index it and you have to build PageRank. This can take months and years.

New products often only have months, or a year, to live, so these strategies are often not a real option.

High-risk, high-reward
Attacking one of these scalable channels is high risk but also high reward. Every startup has to make sure they are able to slot themselves into one of channels in order to scale their business, but in the meantime, how do you show enough traction to not run out of money?

This essay by Paul Graham gives us a clue, as he writes about Startups = Growth:

A good growth rate during YC is 5-7% a week. If you can hit 10% a week you’re doing exceptionally well. If you can only manage 1%, it’s a sign you haven’t yet figured out what you’re doing.

Another way to say this is, growth is measured through a percentage and so early on, small things can drive a high % growth when the base is small. When you’re starting, there’s a whole list of other tools you can use which don’t scale at all but are nevertheless low risk.

Here are some low-risk, unscalable ways to get users:

  1. Getting your friends+family to use the product
  2. Emailing/posting among your local community, whether that’s college or an alumni mailing list or whatever
  3. Guest writing on niche blogs – you often see this with mommy blogs, etc.
  4. Cold e-mailing potential users and influencers
  5. Engaging with potential users over Twitter, Reddit, forums, and other communities
  6. Contests and giveaways, partnering with a blogger/YouTuber or something
  7. Getting covered in niche press outlets, like the tech press
  8. … etc., etc.

All of the above require hustle, but are low-risk and fairly high-percentage. And when a contest can generate a few thousand signups, on a small base that’s not bad at all. The other added benefit is that these methods put you in direct/close contact with your users. So in the early phase, when you are still working on product/market fit, this can be an important way to learn if you have the right product.

However, none of these methods scale well, which is OK, if you know when you need to move on. Even getting covered in the mainstream press, like NYT level, maybe only garners a few hundred thousand signups max. Getting featured by Google or Apple is about the same thing. That’s better than nothing, of course, but it’s still far below what you need to get on a rocketship trajectory. For the rocketship, you’d need to perfect one of the 4 main channels I listed earlier.

So ultimately, how do you balance these? Let’s talk about the barbell strategy.

The barbell
To answer the question of how to balance these growth projects, let’s talk about the barbell strategy. The barbell strategy is a way that investors can split their holdings between some high-risk/high-return investments as well as low-risk/low-return conservative investments. Investopedia describes it:

Put your eggs in two baskets. One basket holds extremely safe investments, while the other holds nothing but leverage and speculation.

In the context of these growth channels, the key is to balance a series of progressively more scalable growth projects, while keeping track of the big growth channels that will help you shoot the moon.

Do the methods that don’t scale
During the early days, by all means, sign up friends and family. And get those blog mentions, and do all the content marketing you can handle. That’ll help create a base of engaged users, while you hit product/market fit. At each point, as what works caps out, go after the next marketing channel that can drive incrementally more users. In the early days, perhaps a contest partnership with a niche blog would do, but after a while, maybe you’d hire a small team to author long-term content marketing pieces to circulate.

Invest in moonshots
The other end of the barbell, the high-risk/high-reward projects, should be taken with deliberate projects and analysis. If you need your userbase to generate a lot more unique content for SEO, start fiddling around with features that reward long-form content. And start tracking what % of users write great content. And start making the small changes needed for Google to index your site. After a few months of this, you can start to understand what it would take to create enough pieces of unique content to make an SEO strategy work. You can usually work this kind of thing out on a spreadsheet.

Balancing between the two
It’s important to balance these short-term and long-term efforts. If all you do is work on nonscalable marketing methods, then inevitably the channels will tap out and your growth will slow. When you see the startups that are highly dependent on press hits for their traction, but seem anemic otherwise, this is exactly what’s happening.

The barbell strategy helps products make progress on long-term goals while still creating short-term momentum – you’ll need momentum to attract investor interest, but you’ll need the long-term scalable growth channels to really build your business.

Good luck. And if you have a product that’s working well, has a nice base of traction, and now the only things that can move the needle are scalable methods, don’t hesitate to email me for advice: voodoo at gmail.

 

PS. Get new updates/analysis on tech and startups

I write a high-quality, weekly newsletter covering what's happening in Silicon Valley, focused on startups, marketing, and mobile.

Lessons learned adding messaging to a notes app (Guest Post)

Retention is King (Guest Post)

Why consumer product metrics are all terrible

How to solve the cold-start problem for social products

How to design successful social products with 3 habit-forming feedback loops

Congrats to my sis Ada Chen, who’s joining SurveyMonkey as VP Marketing

How to make content creation easy: Short-form, ephemeral, mobile, and now, anonymous

My 2013 essays on mobile, startups, and tech

When a great product hits the funding crunch

A clever way to buy Facebook ads based on what your users like (Guest post)

Use this spreadsheet for churn, MRR, and cohort analysis (Guest Post)

Zero to Product/Market Fit (Presentation)

The Rise of Fat Venture Capital

How Google and Zynga set & achieve meaningful OKRs (Guest Post)

Case studies from “Why you can’t find a technical co-founder”

Congrats to my friend Steve Chung of Frankly on their new $6M investment by SK Planet

Easter Egg Marketing: How Snapchat, Apple, and Google Hook You

How is Yahoo really doing? Here’s the Google Trends data (Guest Post)

Ignore PR and buzz, use Google Trends to assess traction instead

Books I’m reading (2013)

Constrained media: How disappearing photos, 6 second videos, and 140 characters are conquering the world

The highest ROI way to increase signups: Make a minimal homepage (Guest Post)

9 ways a billion dollar new mobile company might be created (Guest Post)

Mobile traction is getting harder, not easier. Here’s why.

Why you can’t find a technical co-founder (Guest Post)

How to grow your app revenue with DuPont analysis (Guest post)

New college grads: Don’t sell your time for a living

Does your product suck? Stop adding new features and “zoom in” instead

Linkedin, Facebook, Google, Twitter, eBay, YouTube, Wikipedia, Amazon, Hotmail, Blogger, Apple: How they used to look

The critical metrics for each stage of your SaaS business (Guest post by Lars Lofgren of KISSmetrics)

The death of RSS in a single graph

Featured essays from 2011-2013: Facebook, Growth Hacking, Mobile, and more.

Why developers are leaving the Facebook platform

Growth Hackers Conference, upcoming May 3rd, with 30% off discount code

RSS, I quit you. Please subscribe to email updates for this blog instead.

How this blog grows: Evergreen content, Social whales, and “Don’t get bored”

Why are we so bad at predicting startup success?