Games performance indicators: paying users

How to analyze paying users, why with increasing audience growth, the share of paying people can fall, and also how to increase their number? Vera Karpova, devtodev analyst told in her article. Here you can read it’s translation.

Favorite metric for all developers – is revenue. Everyone likes to observe how the graph of this metric grows up, and take urgent measures in case of its fall.

Where does the revenue come from and why does its graph jump up and down?

All this happens thanks to the users of the application, not all, but to those who pay. This article is devoted specifically to paying users.

paying users

Who is the Paying Users?

Paying users – a quantitative metric equal to the number of paying users for a certain period.

The more such users in the product, the better. And, as a rule, paying user metrics are higher than those of those who do not pay. For example, the retention of paying users often significantly exceeds the retention of non-paying (sometimes several times), and in the project they stay much longer. This is logical: having paid, users show their loyalty to the product, the motivation to return from them is stronger – you need to use what was paid for.

Traditionally, when analyzing paying users, they are divided into 3 groups depending on the amount of payments:

  • Whales – users who pay large amounts;
  • Dolphinі – those who pay the average amount;
  • Minnows are users who make payments for small amounts.

What’s the difference?

Usually whales in the project are the least, but their share in income often prevails over other segments, but minnows make up a large share of the paying audience, and the income from them is often so small that if they did not become in the project, it would not even affect the total revenue.

Users in the product are quite different, and each of the segments prefers a certain price range. To get representatives of all segments, you need to have the appropriate products for each group.

For example, to have whales in the product, you can create exclusive content for them, which would be useful and interesting for them, and at the same time would allow them to spend a good amount of money.

RFM analysis

Another way to analyze the paying audience is the RFM analysis, which shows the distribution of users by prescription (R – recency), frequency (F – frequency) and size (M – monetary) of their payments. This analysis allows to allocate certain segments of users and, having counted the number of users in each segment, to assess which segment prevails in the project and what is the biggest problem.

To select these segments, each user must assign a “score” for each of the 3 criteria, using quartiles or his own expert estimate of the size of the total payment, from which the user refers to dolphins or whales.

Then you can form them into groups. Here are some examples:

  • Those users who have the highest scores on all 3 parameters (recently paid, often and many) are the most loyal and profitable ones. Take care of them!
  • Those who paid a lot and often, but a long time – loyal to the brink of withdrawal, as recently their buying activity declined.
  • Those who made payments long ago and rarely, probably, from the very beginning were not interested in the product, they are unlikely to be returned.

paying users table

Depending on the segment, the marketing activity aimed at this group of users will also differ. For example, those who are in the leaving segment, you can try to return to the project by sending the targeted push notification; Those who, once upon a time, often paid good amounts, offer a bonus or a discount to return their interest; Loyal – to protect and maintain their activity in the product; But those who made only one payment, to stimulate the second, the third and so on.

Another important indicator that should be allocated additionally from the total number of paying users are users who made their first payment (new paying users), since after the first payment they usually happen repeated, which often bring the most part of the income. Therefore, as we said before, you need to carefully monitor that the first payments are converted to the next.

How to increase a paying share:

You can increase the number of paying people in the following ways:

  • Add new user-interesting content;
  • Experiment with the prices of existing goods;
  • Offer users a discount on any of the products.

But there is still one open question is how to evaluate the dynamics of change in the paying audience?

Paying audience is an absolute value, its growth or decline depends on various factors. Far from always increasing the number of paying users leads to an increase in revenue (for example, their number began to grow, but the amount of payments decreased). How to understand that their growth is not the result of our actions, but a consequence of the general growth of the audience?

Ok, so what’s the paying share?

As for revenue and other quantitative indicators, there is a relative metric that shows what percentage of users from the entire active audience make payments in the product. For paying users, this is the share from the entire audience (Paying share or Paying users rate).

It is calculated by the formula:

Paying Share = Paying Users / Active Users

This value depends on the type of application, but often it is rather small – about 1-2%. It is believed that the median of the rate of paying users in mobile f2p-games is 1%. That is, the vast majority of the audience usually prefers not to pay.

It should be noted that these are more auxiliary than independent metrics. When analyzing them, it is worth paying attention to related indicators, such as ARPPU, for example, because the number of paying people can grow, and the income will fall (if the average payee’s pay falls).

Revenue = ARPPU * Paying users

Or the share of those who pay will drop, but due to the growth of the average check on income this will have a positive effect.

Revenue = Active users * Share of paying * ARPPU

Compare the dynamics of changes in the number of paying users and the share of those paying better than other indicators. For example, if an active audience grows or the number of new users increases, and the share of the paying ones falls, this can mean non-targeted traffic.

paying users graph

Paying users are the most valuable in the project, but they behave differently, so that they continue to increase the income of the product and remain loyal to it, you should carefully study them and make them stay in the product and use it as convenient and useful as possible .

Articles in this series:

  1. Performance Indicators: ARPU
  2. Performance Indicators: ARPPU
  3. Performance Indicators: Cumulative ARPU
  4. Games performance indicators: paying users

Even more interesting info about the gamedev industry:

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