Six steps to guarantee a successful Google Play launch White paper by Fortumo

Introduction

This white paper outlines steps needed to maximize revenue from app stores. The topics covered in this white paper are:

This white paper gives an overview of how to increase payment revenue through carrier billing for Google Play. Due to limitations of traditional payment methods (reach, checkout experience, chargebacks etc.) app stores are dependent on mobile operators to sustain revenue growth. As of January 2016, Google Play supports carrier billing in 35 markets, Windows Phone Store in 52 markets and Apple in 2 markets.

Preparing your subscribers for the launchPreparing your billing platform for the launchAnalyzing payments data and maximizing revenueGenerating additional revenue beyond app storesHow Fortumo is helping carriers in increasing revenue from app stores

Gerri KodresCHIEF BUSINESS OFFICERFortumo

Mattias LiivakHEAD OF MARKETING & PRFortumo

Six steps to guarantee a successful Google Play launch

Step #1: Promote Google Play carrier billing to your customers

Six steps to guarantee a successful Google Play launch

Adding carrier billing to app stores does not guarantee success. Some users find the way to enable carrier billing on the app store on their own but most will not. It is crucial for you to communicate the launch and drive users to make the all-important first purchase. Those users who are already paying with other payment methods need to be provided an incentive to pay via carrier billing as well.

Here are the ways to attract more users to enable carrier billing for their Google Play account:Create an online landing page explaining advantages of carrier billing and how to enable it;

Train your support and retail staff to educate consumers on carrier billing. If a user purchases a new device from a retail location, the staff should offer to help them enable carrier billing for the app store;

Use marketing channels to promote the launch of carrier billing on Google Play: Send text messages to all users or selected user groups at launch

Remind users of the opportunity with recurring campaigns

Promote carrier billing in your social media channels

Use online and offline paid advertising to promote carrier billing

Display promotional materials about carrier billing on your monthly invoices and in retail locations

Discount or refund the first carrier billing purchase to get the users signed up and spending;

Six steps to guarantee a successful Google Play launch

Step #2: Set initially high spending limits prior to launchSpending limits play an important role in maximizing revenue from app stores. If you set them too low, you may lose a large part of revenue; if too high, it can have negative impact on refunds and customer satisfaction.

A significant majority of app store revenues comes from a small number of users. On average, 10% of the top-spending users generate 50% of revenue from an app store. You do not want to lose revenue from these users. Configure your spending limits to take this into account.

To find the optimal limits, we recommend you start with spending limits as high as possible during the launch month. This allows you to detect and follow user spending patterns. After that, it is possible to adjust the spending limits based on the actual results.

For example, the starting point at launch could be $200 monthly limit and a $50 daily limit (or lower in low-ARPU countries). High spending limits allow you to understand end-user behavior and identify high spenders without capping them off too early. In some markets, many users own several SIM cards. If you are operating in such a market, we recommend tying up the spending limits to the user’s app store identity instead of their MSISDN. After the first month, you can adjust the limits.

Fortumo provides carriers with help in revenue analysis and user segmentation to detect the optimal limits.

Six steps to guarantee a successful Google Play launch

Step #3: Provide users with call-to-action if transaction failsThere are several reasons why a user might fail to make a payment on an app store. The most common reasons are:

A prepaid user does not have enough money left on their balance

A postpaid user has reached the spending limit for carrier billing

The user’s mobile plan is barred from making payments (e.g. company phones)

Google Play enables carriers to show different texts to the user based on type of payment failure. We strongly recommend customizing this text and providing clear instructions not only why the payment failed but also what they can do to resolve the problem. For example:

Users whose payments fail are unlikely to try carrier billing for purchasing on the app store again if the reason for the payment failure is unclear to them. Informing the customer on how to resolve a failed payment increases the chances of them retrying the purchase.

For prepaid users who have failed to make a payment due to a low SIM card balance, inform them in the error message about how they can top up to their account. If possible, add a mobile web link through which they can top up immediately.

For postpaid users who have reached the spending limit, inform them in the error message about how they can increase their spend limits (if you have this feature in place, for example through your customer support portal). Notify users with a text message once the duration of the spending limit is over (e.g. when the next day starts and the limit is reset).

If a user has a mobile plan that is barred making payments, show them the guidance on how to upgrade their plan or enable payments on the existing plan.

Six steps to guarantee a successful Google Play launch

Step #4:Segment your users based on spending behavior

For this mobile operator, just 8% of users generate 50% of the revenue. As mobile operators can identify users by their MSISDN, the carrier in this example can optimize their Google Play spending limits as follows:

For new users enabling carrier billing, you can adjust spending limits based on which category they end up in at the end of the month. You can also increase the spending limit for medium users who reach the limit at the end of the month as well.

Using custom spending limits for different user categories ensures that your users who want to purchase content in large quantities can do so. At the same time it allows you to avoid potential problems with users in lower-spending segments, for example when their device is stolen or an underage person is making payments on someone else’s phone.

A small percentage of users generate the majority of carrier billing revenue in app stores. To illustrate this, we have categorized users of one European mobile operator into four segments. Each segment contributes 25% of Google Play revenue:

WHALES

2%

Percentageof all users

$190Monthly ARPPU

HEAVY USERS

6%

Percentageof all users

$62Monthly ARPPU

MEDIUM USERS

17%

Percentageof all users

Monthly ARPPU

$20

LIGHT USERS

75%

Percentageof all users

Monthly ARPPU

$4

Whales and heavy users: increase monthly spending limit to $250 and keep daily spending limit at $50Medium and light users: reduce monthly spending limit to $50 and keep daily spending limit at $50New users enabling carrier billing: set monthly spending limit to $250 and keep daily spending limit at $50

Six steps to guarantee a successful Google Play launch

Step #5: Work together with top-performing developersAs with end-users, a small amount of developers bring in a majority of app store revenue. Based on Fortumo’s aggregated data, the 20 biggest app developers generate 60-70% of Google Play revenue.

We recommend you work directly with top developers in your market. The two most common ways to increase spending in popular apps are:

You can also use marketing activities focused on specific developers to increase end-user awareness of carrier billing and encourage them to purchase more content.

Localize end-user pricing. If the developer has not modified their price points to suit the local end-user behavior, you can propose more suitable price points to the developer. For example, if the lowest costing item sold in the app is $0.99 but the average transaction size for Google Play payments on your network is $0.8, you should recommend the develop-er to lower the price of the item.

Analyze end-user behavior. If there is a significant difference between users of a top-performing app and the average user, you can change spending limits for users of the specific app. For example, you can enable a monthly spending limit of $400 for users who install a popular game if the data shows that a large amount of “whales” are reaching the $200 spending limit inside this game.

Six steps to guarantee a successful Google Play launch

Step #6: Continue promoting carrier billing on Google Play to sustain revenue growthAfter launching payments, marketing activities can be used to further promote carrier billing to end-users. Some of the most impactful ideas to consider after launch are:

Engage with local top developers. Data from App Annie shows that in most markets there is at least one local de-veloper who ranks among the top 5 grossing apps. You can work together with these developers to promote carrier billing as a payment method for their audience. These apps often feature localized content with a broad audience. For example, one of the most popular apps on Google Play in India is Octro’s Teen Patti, a popular local poker game variant. In return, you can offer developers promotion opportunities in your own channels, such as social media.

Promote top grossing apps. You can promote apps that generate the biggest amount of revenue on app stores on your own. Driving more users to install and engage with these apps results in revenue uplift in the long run.

Organize promotional campaigns and holiday sales. Periodic discounts during holidays and festivities are a good way to encourage end-users to spend more through carrier billing. For example, in India carriers could give a 5% discount on all purchases made on app stores during Diwali. In order to get more users to activate carrier billing for app stores, you can also refund the first purchase made on an app store.

Highlight your app store carrier billing capability in marketing materials. Users who are switching their mobile plan or considering signing up with your network might not be aware that you provide carrier billing for app stores. Highlight information about easy and secure payments on app stores as one of the benefits of subscribing to your network.

Six steps to guarantee a successful Google Play launch

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Additional revenue beyond app storesPayments for app stores bring in a significant amount of money to carriers but merchants beyond app stores should not be neglected. Fortumo’s experience shows that carrier revenues from standalone digital and gaming merchants (streaming music and video, security & antivirus. web gaming) can easily add 50+% of the revenues generated by app stores.

Fortumo is pre-integrated both with major app stores and thousands of standalone digital merchants. Integration with Fortumo enables carrier to enable both app stores and other segments without additional time investment or technical development needed. Fortumo will act as one-stop-shop, taking care of integration, on-boarding and support on behalf of the carrier.

Carrier revenue share: 15%carrier revenue: $36,015

Monthly end-user spend on app store: $240,103

Carrier revenue share: 25%carrier revenue: $18,792

End-user spend on games and digital content: $75,170

Six steps to guarantee a successful Google Play launch

How does Fortumo help you increase revenue from app stores?Fortumo provides you with a turnkey solution to launch app stores, digital content merchants and game developers in a scalable manner and without additional overhead:

Scalable, clustered and cloud-based infrastructure

Advanced carrier analytics dashboard

Risk, fraud and refund management

Constant platform development, carrier does not need to make any investments

One streamlined settlement flow for all segments

Merchant on-boarding and support

User churn & recurring event management

Access to the entire digital economy (app stores, gaming, social, music, VOD, software)

When partnering with Fortumo, you are also assigned a dedicated account manager. The account manager reviews spending limits, pricing and user experience on a daily basis and works together with our merchant account management team to identify growth opportunities for you.

Your account manager conducts a review of merchant performance (at minimum, more frequently during launch period) where you are provided with insights and suggestions on how to improve payment conversion and increase revenue. Fortumo’s account manager also identifies and facilitates communication with merchants for promotions and user acquisition campaigns.

Six steps to guarantee a successful Google Play launch

Fortumo Carrier Analytics DashboardIn addition to the account manager, you can view and analyze your own billing performance on Fortumo's Carrier Analytics Dashboard. This Dashboard gives you real-time updates helps track growth opportunities with both app stores and other merchants. Our Dashboard provides you with the following real-time metrics:

All of the data can be filtered easily (e.g. by date or specific merchant) and exported into formats compatible with your business insight tools. The Dashboard enables you to give restricted access to other functions inside your company, for example access to information on revenue to your finance team, access to refunds to your support team etc.

Payment volumesBilling performanceNew customer and merchant activationsRefundsTop-performing content and merchants

Six steps to guarantee a successful Google Play launch

Additional reading

Swisscom case study: how do mobile operators benefit from direct carrier billing?

White paper: how can carrier billing replace credit cards in emerging markets?

Carriers should not choose between app stores and digital content revenue

Read nowRead now Read now

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Fortumo is a mobile payments company that enables direct carrier billing with more than 350 mobile operators in 90+ countries to over 150,000 merchants. Fortumo's payment products work across a wide range of platforms including desktop devices, smartphones, feature phones, tablets and smart TV-s. These products give end-users a simple, 1-click payment method to charge online purchases to their phone bill. For carriers, connecting to Fortumo enables additional revenue from leading app stores, game developers and digital media companies while Fortumo takes care of the technical infrastructure, taxation, merchant on-boarding and support in post-launch activities. Founded in 2007, Fortumo has offices in Estonia, San Francisco, Beijing, Delhi, Mumbai, Singapore and London and is backed by Intel Capital and Greycroft Partners.

This document is for informational purposes only. Fortumo and the authors make no expressed or implied warranties in this document. Fortumo and the author(s) make no representation or warranty in relation to the accuracy, completeness or reliability of the information contained in this document. Any opinions expressed in this document are subject to change without notice. This document may be based on a number of assumptions and different assumptions could result in materially different results. This document should not be regarded by recipients as a substitute for obtaining independent advice and/or the exercise of their own judgement, and is not to be relied upon by recipients. Fortumo and the authors, and any of their members, directors, employees or agents do not accept any liability for any loss or damage arising out of the use of all or any part of this document. Copyright © 2015 Fortumo | All rights reserved.