In the last few years, a number of social networks have rewritten the rule books in the tech industry. Wind back to spring 2012, and only a year and a half after it first launched on the App Store, photo sharing app Instagram was bought by Facebook for $1 billion in stock and cash.
As is to be expected, developers and entrepreneurs were quick to challenge Facebook’s decision, with many taking to social media to voice their confusion and amazement. Below is a screenshot taken from Instagram’s acquisition announcement on TechCrunch.
However, this was just the start. Following Instagram, Facebook acquired WhatsApp in early 2014 for $19 billion, whilst in the last few months Snapchat has been valued at between $10 billion and $20 billion (depending on which article you read!).
For me, what is most impressive about both Whatsapp and Snapchat is the confidence these companies have in their business models, and ultimately their community. Before being bought by Facebook, it was reported Whatsapp rejected a bid of $10 billion from Google, with Snapchat rejecting an acquisition offer from Facebook worth $3 billion.
What is evident is that these companies are not being valued by their revenue alone. What is of greater importance is the size and quality of the audience using the product itself. It’s clear Facebook understand this better than anybody else, with Instagram probably being worth 10 times what they bought it for.
With this said, it’s important to remember that you don’t need to be building the next billion dollar social network in order to gain value from a social community. Whilst many of us dream about creating a billion dollar social network, I think many developers underestimate the value that social features could add to their own applications.
At Sport.com, our network of health and fitness applications have generated over 45M downloads, and see 2 million monthly active users. Early in 2014, we took the decision to start developing a social layer into our applications. We called the network ‘fitNshare’, with the aim of making it a community where users could gain motivation and inspire each other through progress photos of their fitness journey.
In this post I am going to share what we have learnt over the last 12 months, and talk through how you can start leveraging social within your own application.
First and foremost, the main reason we started to explore social features was to increase user retention within our products. In June 2014, just before we launched ‘fitNshare’, Localytics published that 23% of users open a sports app only once after installing it. This is a fairly scary figure, and I think it emphasises just how tough the retention challenge is for developers in the health and fitness category.
There are 2 main factors which make the stats read as they do. Firstly, there’s now a good number of talented developers who are building some really great products, and this makes our category very competitive. Ultimately, if you fail to deliver immediate value to a user, then it is easy for them to find and download a high quality alternative. Secondly, keeping fit and following exercise programmes requires willpower from the user themselves. As you might expect, not every user completes their fitness plan, and this has an effect on user retention rates.
Since adding a social layer to our applications, we have seen day 30 retention increase by an average of 35% across our portfolio. The driving factor behind this is that users now return to our apps for reasons other than just to work out. Users are now logging on to follow their friends’ progress, and to be inspired by others who are striving for similar goals.
Understand your users
Data helps make decisions, which is why many developers (ourselves included) strive to capture as much relevant user information as possible. Understanding your users is so important as it enables you to develop a more engaging application, with better targeted content and features.
As an example, since integrating our social community we have learnt that male members are more interested in outdoor activities such as cycling and running, whereas women prefer indoor exercises like yoga. When we put this data alongside basic user information which we receive on sign up, we are able to ensure that we only recommend the most relevant exercises to our users.
Beyond product optimisation, understanding how different demographics of users behave within your app provides invaluable information for your marketing and user acquisition teams. Fundamentally, you want to learn which cohorts are most valuable to your product, whether that be in terms of engagement or actual monetary value.
At Sport.com, since deploying fitNshare across our portfolio we’ve discovered women make 43% more in-app-purchases than men, even though men complete 18% more actions per session. Data on in-app purchases is obviously of interest too, as knowing which demographic monetises best within our apps means we can now adjust user acquisition budgets accordingly in order to get optimal results.
Differentiate your offering
The number of applications available on both Google Play and iOS has never been higher. Within the the health and fitness category alone, be it GPS activity trackers or 7 minute workout apps, users have a fantastic choice of high quality products to choose from.
With the content on our network being unique to our community, we have found our social layer is actually acting as a differentiator between our application and other products on the market. Sure, a lot of applications have features and interfaces which are similar to one another, but one element which you can not replicate is a community.
Build your own community
In the last 12 months, the team here at Sport.com have learnt a huge amount about the impact of a social community on mobile applications. However, these 3 key points in particular have stood out for me:
It’s vitally important to know what assumptions you are making when building your social community, and to test these assumptions as much as you can. There are several cases from the last 12 months where the actual data from our community has contradicted what we assumed, resulting in us having to adapt our product strategy.
One of the best examples of this came when deciding on a sign up process for the community. The question many developers ask themselves is, do you support social sign on, email, or both? We ended up giving our users the choice between Facebook, email, or no details at all (this only gives access to limited features).
Our assumption was for Facebook to be the clear favourite. However, from the 1.3 million sign ups we’ve had since summer 2014, only 20% have actually been via Facebook. In fact, email sign up turned out to be much more popular than expected, with 50% of users opting for this method, while only 30% choose to enter no details at all. I think what’s important to bear in mind is that every community is unique, so be sure to do your own testing on which sign up method works best for your application.
Secondly, we have been surprised by how quickly the community has grown on fitNshare. To date, we haven’t spent a single dollar on promoting the community itself, so the adoption rates are purely organic. For us, this has not caused any scalability issues as we already have existing resource in place, but if you are just starting out in mobile then this is certainly something you need to plan for.
Finally, I think it’s vitally important to identify and track the right data points from as early on as possible. Constantly ask questions about your community, for example: How often are users sharing content? How many interactions do they make with other members of the community? What key actions enhance retention? Decide what your KPIs are as soon as you can, and make sure that you are measuring these accurately.
Also, always check to see if there is a correlation between user engagement within your community and engagement throughout the rest of your product. If the objective of your social layer is to improve retention, then look to see if the most engaged users within your community then go on to become more engaged with your core product too.
This article was originally published on Tapdaq’s blog, read it here.
About the author
Itamar Benedy is the VP Marketing at Sport.com & Yoga.com, leading the User Acquisition, Monetization, and Analytics teams. In addition, he is involved in M&A and due-diligence activities of the parent group. He’s been active in the high tech scene for almost a decade, and serves as a mentor in several incubators. He holds a BSc in Computer Science, Magna Cum Laude from IDC.