Skip to content

Customer lifecycle: Quick-Churn vs. Late-Churn

Optimove defined customers who churned while they were still “New”as “Quick-Churn” and those customers who churned later, after they had already become “Active” customers as “Late-Churn”.  They built a model around the churn and reactivation data from 30 websites in a variety of verticals over a two-year period. Their mission was to see if there were any significant differences between the 2 groups:

1. Reactivation Rate

Customer Reactivation Rate from Churn

Late-Churn customers were reactivated far more often than Quick-Churn customers (83% more)

2. Churn Duration

Customer Churn Duration

Reengaged customers from both groups spent the same amount of time, on average, in Churn.

3. Survival Rate

Back from Churn Customer Survivability

Late-Churn customers were much more likely to continue to perform transactions beyond the initial reactivation period than Quick-Churn customers (51% more).

4. One-month Reactivation Revenue

There was no statistically significant difference in the average spending levels of the two groups during their first month following reactivation.

Insights and Conclusions

Firstly, our study confirmed that there are significant differences in the Quick-Churn and Late-Churn sub-segments.

Secondly, the results clearly show that Late-Churn customers are much more valuable than Quick-Churn customers. This is both because they are more likely to return and because they tend to remain active customers longer after they return.

Savvy marketers should focus on providing greater incentives to, and invest more resources in, those Late-Churn customers who were once the more active ones. On the other hand, to win back the Quick-Churn customers, creativity and experimentation are the name of the game.

Grand Theft Auto V best-selling game of 2013

NPD reported sales in 2013 were down 2 percent to $12.97 billion. New platforms like the Xbox One, PlayStation 4, and 2DS helped push hardware sales up 5 percent to $4.26 billion, while software sales slipped 9 percent to $6.12 billion. Accessories (which include Skylanders and Disney Infinity toys, as well as cards loaded with currency for online storefronts), were up 3 percent to $2.6 billion.

As for hardware Nintendo 3DS was the top selling system both in December and 2013 overall, while the Wii U managed to have its best month on the market yet.

Screenshot - 2014-01-19 , 9_09_29 PM

3 Million Teens Leave Facebook In 3 Years

iStrategyLabs breaks down just how many teens have abandoned the monster social network since 2011

FB 2014

 Over the same period of time, 55+ has exploded with +80.4% growth in the last 3 years.

Twitch Doubles Its Audience In 2013

Twitch, a live streaming service and community for gamers, announced that it more than doubled its audience in 2013, reaching 45 million unique viewers per month in the year, up from 20 million the year prior. It delivered viewing-minutes doubled in 2013 to 12 billion per month

Riding the rising popularity of eSports titles like League of Legends, Twitch has become the defacto streaming platform online for both casual, and professional gamers. Twitch found a new home inside of the PlayStation 4 console, and will soon land in the Xbox One, perhaps helping the service continue to grow in the current year period.

US digital games market grew 11% in 2013

F2P Top10 2013 (1)

The US digital games market grew 11% in 2013, reaching $11,766 million in sales across all segments, up from $10,582 million a year earlier

SuperData _ 2013 Digital sales graph

Mobile gaming could drive game industry to $100B by 2017

Mobile could drive total games software industry revenue to $100B by 2017

  • Mobile/online games could grow to ~$60B revenue (23.6% CAGR 11-17F)
  • Mobile/online games could take 60% games software market share by 2017

Mobile and Asia drove games M&A to $5.6B in 2013 ($7.9B including Activision-Blizzard)

  • M&A value grew by 29% from 2012 to a record $5.6B
  • Average M&A deal size grew 23% from 2012 to $63.8M
  • Mobile dominated M&A by transaction value (67%) and volume (36%)

Asia the biggest growth driver of economic value in mobile/online games

  • Asia and Europe could take >80% combined revenue share for mobile and online games
  • 9 of the top 10 games M&As of 2013 had Asian buyers, up from 8 out of 10 in 2012
  • Global and pan-regional M&A deals significant in 2013 – pan-regional relationships remain critical for trade exits
  • 13 out of 15 games IPOs in 2011-2013 were by Chinese, Japanese or South Korean companies

Investment recovers slightly, returning to 2010 levels

  • Investment value grew 16% from 2012 to $1B, but early stage investment gap remains
  • Average investment deal size grew 14.8% from 2012 to $6M
  • Mobile games and tech/gamification dominated investment in 2013

Games dominate mobile app usage and revenue – Over-the-Top messaging apps (“OTT”) a new disruption

  • Games took 32% of 2013 mobile app usage (blended iOS/Android tablet/smartphone) – 67% of tablet usage
  • Games took 72% of 2013 mobile app revenue and ~40% of mobile app downloads
  • Asian OTT platforms beginning to disrupt mobile games in domestic markets – Kakao Talk, WeChat and LINE taking significant share

8th generation console cycle beginning to address decline, but questions remain

  • 8th console generation (PS4, Xbox One, Wii U) beginning to address long term decline
  • Questions about potential new installed bases, transition from 7th generation and mobile cannibalization

1-15-2014 2-03-52 PM

 

1-15-2014 2-06-48 PM

 

 

Mobile is eating the world

Gartner Sees Just .01% of Consumer Apps Profitable by 2018

Gartner’s report “Predicts 2014: Mobile and Wireless” said free apps were 91 percent of the market in 2012, but their share will reach 95 percent by 2017. As the percentage of paid apps decreases, the number of paid downloads is expected to grow, increasing from 9.2 billion last year to 14.8 billion by 2017, while total downloads are projected to grow to 268 billion from 102 billion last year.  For developers, this means a smaller market slice of apps that consumers are willing to buy, and a more difficult time finding them.

By 2018, under 0.01 percent of consumer apps will be financial successes , which means that the best developers may choose to look to other markets. Additionally, 90 percent of paid apps will be downloaded fewer than 500 times daily, resulting in less than $1,250 per day in revenue.

Gartner suggested this may mean that many developers will create consumer mobile apps “to build brand recognition and product awareness,” or they may be developed “just for fun.”

With so many consumer apps, buyers are making choices based on recommendation engines, friends, social networks and advertising instead of, say, browsing or sorting through the products. This poses problems for developers hoping to market a new product idea.

Lessons on Mobile Gaming from a Whale

1) Whales never spend frivolously

Don’t assume that if you put a $200 item in the game that whales will just grab it up for no reason; or that if you added a speedup in X, all whales will just gobble it up. Each purchase had to make sense to the game. Give them something that’ll impact the game in the long term, like allowing them to research more than X slots, or changing the output of a resource by n%. Make the value of what they’re buying truly worthwhile and you’ll see them purchase again and again.

2) The true value ratio.

If a new item came out that cost $100 but was “worth” $200, whales would gladly buy it. Spenders have all created this association in game and the reward or ROI from what’s being purchased is very clear.

3) Leave it to chance

Whales drawn to the chance system, believing ”I know I’ll get the legendary in the next pack”. They are essentially “gambling” on what reward each time.

4) Whales are just like you and me

When we think of these “whales” we often imagine them as rich people. Research has showed that “whales” are way more average than that. There is not one defining characteristic or profile to specifically pre-determine who could be a whale or a specific demographic to target. We need to build great games for any and allplayers.

Take-away:

  • Know your players. Play the games and understand how and why they do things, so you know that you are giving them and spending the resources on content that people will actually want.
  • Players spend strategically. There is no success in throwing up expensive items and hoping people buy them – there has to be meaning in the content (which is why it is so important to know your players and know the game). Players aren’t looking to line your pockets, but to make their gaming experience better and they are thinking long-term about each move they make. Players are committing to your game. It’s your job to make sure you are equally committed to theirs.
  • Remember that there is no playbook on how to reach “whales.” The quality of the game and gameplay experience is what will draw in players – and specifically “whales” – so stay focused on making those great.

Google Play Services Update Gets Better Multiplayer Support For Games

Turn Based Multiplayer

Developers can build asynchronous games to play with friends and auto-matched players, supporting 2-8 players per game. When players take turns, their turn data is uploaded to Play Services and shared with other players automatically.   It also provides an optional new “Connecting to Play Games” transition animation during sign-in, before the permission dialog appears.

Google Drive

It now includes a developer preview of the new Google Drive API for Android. Developer can use it to easily read and write files in Google Drive so they’re available across devices and on the web.

Google Mobile Ads

Google Mobile Ads SDK now fully supports DoubleClick for Publishers, DoubleClick Ad Exchange, and Search Ads for Mobile Apps. Developers can also use a new publisher-provided location API to provide Google with the location when requesting ads.

Google+

An improved Google+ sharing experience makes it even easier for users to share with the right people from your app.