To measure your app’s “success”, its viability and profitability as a business, it’s enough to track two indicators: Customer Lifetime Value (CLTV) and Customer Acquisition Cost (CAC). CLTV, customer lifetime value, is the profit user generates over the time of using the app. CAC is a user involvement cost. The difference between these two indicators lies in the project net profit. For a successful and profitable product, CLVT should be higher than CAC. Otherwise, the project is considered to be unprofitable, as expenses related to customer involvement exceed revenues. These two indicators depend on numerous variables controlling which makes it possible to control and augment the project income. To increase the difference between CLVT and CAC, it’s necessary to regularly improve applications, change them and experiment. App changes’ impact on users and their behavior is unpredictable. Someone may like these changes, someone may remove the app. The number of conversions may remain the same, increase or decrease. To test new functions and changes, the so-called A/B testing is applied.
A/B testing is a marketing tool that makes it possible to determine how app changes may impact users and key indicators (for instance, income). Testing helps prove or disprove certain hypotheses, e.g., “after changing a button color from blue to red, the number of conversions will increase twice”.
A/B testing implies the development of different variants of app elements or event entire sections, that may differ dramatically; the identification of the number of users involved with the experiment (e.g., 50% of all users), and the traffic is equally distributed among these users.
A/B testing helps implement new functions for users. The tool makes it possible to try innovations on a small number of users who can evaluate their efficiency, fix first bugs and remarks. Only then, innovations will be implemented for everyone.
We suggest using Firebase for A/B testing. It independently determines the best option, provides detailed analytics for the main indicators and makes the very experiment creation simple and convenient. Incorporating Remote Config or Cloud Messaging is a “must” for A/B tests development. Remote Config helps set parameters to be changed for the experiment, while Cloud Messaging helps test how wording and push-notifications text affect test results. Firebase makes it possible to flexibly set the user target audience for testing: choose an app version or country, choose Analytics audiences or audiences automatically created via Forecasting, and a lot more.
Main Firebase A/B testing facilities:
1. Running testing and experiments.
2. Step-by-step implementation of the app’s new functions.
3. Testing push-notifications.
4. Choosing the audience for the experiment.
5. Test results tracking and analytics.