Why a Mediocre App Can Cost You More than $50,000 in Lost Revenue

Broken car for sale.

In a recently released study more than 70% of users say that if an app freezes or crashes on them they’ll write a bad review. 44% will delete an app immediately if it doesn’t meet their performance expectations.

While the study is new, this shouldn’t come as a surprise to any experienced mobile developer today. With 700,000+ apps in the App Store, there’s just too much competition to expect users to accept an inferior app.

So why do developers still release apps that crash?

When apps crash it’s typically an issue with sloppy code, like a null pointer error or a problem with thread management. These are bugs that can be largely avoided if a developer knows what they’re doing and takes the time to properly test their app as it’s being developed.

Unfortunately, many developers assume that it’s less expensive to develop bad apps with insufficient QA processes than it is to develop properly architected apps that are tested at every stage. In the short term they’re right. Great design and development takes more time, and often requires hiring people who are more expensive upfront. But in the long run, skimping on application design and QA is a strategy that ends up costing money rather than saving it.

To prove this, let’s look at some actual average revenue numbers:

The average iOS app in the bottom 95% of the App Store (which eliminates the ultra-higher earners who would skew the numbers) earns $3,693 per month according to a June 2012 study by Vision Mobile.

Let’s assume first that our average app is not particularly well designed or vetted for quality, and that 50% of users end up having a performance issue with it at some point. We’ve already said that 44% of users will delete an app immediately for performance problems. Let’s assume that a conservative 60% of users will eventually delete an app if it has problems. To keep things simple, let’s also assume that all of those users contribute the same amount of revenue, whether through ad views or in-app purchases.

When those users defect, that’s a 30% hit to average monthly income (50% of your users who have problems multiplied by 60% of them delete the app), or a loss of $1,107 per month. If we assume a 24 month life for an app, that totals more than $25,000 in lost income.

And that’s just for an average app. If your app is in the top 5% (and you wouldn’t be reading this if you weren’t shooting for that) the losses can be dramatically higher.

Let’s look next at lost revenue from the people who will never download an app because it gets too many bad reviews to begin with.

If we assume that bad reviews lower an app’s download numbers by just 30% (which is very conservative), that chops another $26,589 off our revenue totals.

Together with deletions, we’re looking at a total of more than $50,000 in lost revenue. Building better design and quality review into an app is more expensive, but not on that order of magnitude.

Finally, for many commercial developers, building a single app isn’t their end game. They’re looking to build a successful roster of apps and hopefully a franchise. To do that, quality becomes more important than ever. Keeping current customers happy and converting them to loyal users of your next app should be much less expensive than acquiring new customers. But if 60% of users are deleting your first app and a high percentage are writing bad reviews, you’re going to struggle when it comes time to build your next project.

The bottom line is that in the long run it actually pays to invest in quality.

________________________________________________________________________________________________________ Mark Chatow is Executive Director, Global Marketing at Sourcebits. Follow Mark on Twitter: @markchatow