Mobile apps cost a lot of money to build—and I mean a lot. The figures can range from £20,000 for something basic to well over £500,000 for more complex products. With that kind of investment, you'd better make sure you're getting something back! That's why measuring return on investment (ROI) for your mobile app isn't just nice to have; it's absolutely necessary for understanding whether your app is making money or burning through it.
I've worked with dozens of companies who launched apps without any clear idea of how they'd measure success. Let me tell you—that approach leads to disappointment and wasted budgets. Whether you're building your first app or your fifteenth, understanding the metrics that matter will help you make informed decisions about your development strategy. This guide will walk you through exactly how to measure ROI on mobile apps, from the initial costs to tracking revenue and user engagement.
If you can't measure it, you can't improve it—this holds especially true for mobile apps where small optimisations can lead to massive financial gains
The beauty of mobile apps is that almost everything can be measured; downloads, user behaviour, retention rates, conversion points—they all contribute to your bottom line in different ways. Throughout this guide, we'll break down the specific metrics you should track, how to interpret them, and what actions to take based on your findings. So let's get practical about turning your mobile app from a cost centre into a profitable part of your business strategy.
Understanding Mobile App Development Costs
Let's not beat around the bush—app development costs money. Sometimes quite a lot of it! Having worked with businesses of all sizes at Glance, I've seen budgets ranging from £5,000 to £500,000+. The variation is enormous because each project has different requirements. A simple app with basic functionality might cost £10,000-30,000, while complex platforms with custom features, admin systems and third-party integrations can easily exceed £100,000.
What drives the cost up?
The biggest factors affecting your budget are complexity, platforms (iOS/Android/both), design requirements, backend systems, and ongoing maintenance. Don't forget that development is just the start—you'll need to factor in updates, server costs, and potential marketing expenses too. These ongoing costs can add up to 15-20% of your initial investment annually; they're not optional extras but essential parts of keeping your app relevant and functioning.
Hidden expenses to watch for
Many clients I've worked with were caught off guard by unexpected costs—things like Apple Developer accounts (£99/year), Google Play accounts (one-time £25), backend server costs, third-party API fees, and analytics tools. Then there's the maintenance I mentioned earlier. Apps aren't "set and forget" products—they need regular updates to stay compatible with new operating systems and security requirements. Being realistic about these costs from the beginning will help you calculate a more accurate ROI and avoid nasty surprises down the line. If you're considering whether app development can be financially rewarding, understanding these hidden expenses is crucial for setting realistic expectations.
Quantifiable App ROI Metrics That Matter
Let's talk about measuring the success of your app—which isn't always straightforward! When I look at mobile applications with clients, they often focus solely on downloads, but there's so much more to consider. What we need are concrete numbers that tell us if the app is actually working for your business.
Key Performance Indicators
App ROI isn't a single number; it's a collection of metrics that together paint a picture of performance. I've found these measurements give the best indication of whether your app is earning its keep:
- User Acquisition Cost (UAC) - How much you spend to get each new user
- Average Revenue Per User (ARPU) - What each user is worth to you
- Customer Lifetime Value (CLV) - The total revenue from a user over time
- Retention Rate - What percentage of users come back
- Daily/Monthly Active Users (DAU/MAU) - How many people regularly use your app
- Conversion Rate - Users who complete desired actions (purchases, sign-ups, etc.)
- Session Length & Frequency - How long and how often users engage
Calculating Basic ROI
At its simplest, your app ROI calculation looks like this: (Revenue Generated - Cost of Development and Maintenance) ÷ Cost of Development and Maintenance × 100%. But don't stop there—breaking down performance by specific features can show which parts of your app deliver the most value. This helps prioritise future updates and allocate resources where they'll have the biggest impact.
Track your metrics from day one—not just after launch. Establishing baselines early gives you meaningful comparisons as your app grows and evolves.
User Acquisition & Retention Measurement
Getting users to download your app is just the beginning—keeping them engaged is where the real challenge lies! After years of tracking what works (and what doesn't), I can tell you that measuring both acquisition and retention gives you the full picture of your app's performance. The cost of bringing in new users is typically 5-7 times higher than keeping existing ones, so both metrics deserve your attention.
Key Acquisition Metrics Worth Tracking
When evaluating how effectively you're gaining users, look beyond simple download numbers. Cost Per Acquisition (CPA) tells you how much you're spending to get each new user—this figure should decrease over time as your marketing becomes more efficient. Acquisition Source Analysis helps identify which channels bring your most valuable users; sometimes the most expensive channels deliver users who spend more or stay longer.
- Cost Per Acquisition (CPA): The total marketing spend divided by new users gained
- Conversion Rate: Percentage of visitors who download your app
- Acquisition Source: Which marketing channels bring the most valuable users
- Customer Lifetime Value (CLV): Projected revenue from a user throughout their relationship with your app
- Organic vs Paid Ratio: Balance between users who find you naturally versus through paid campaigns
Retention Measurements That Matter
Retention is where many apps fail—and it's the clearest indicator of whether people actually find value in what you've built. Day 1, Day 7, and Day 30 retention rates show how quickly users drop off. A healthy app might see 40-60% Day 1 retention, dropping to 10-30% by Day 30. If your numbers fall significantly below these benchmarks, you've got work to do on your user experience or value proposition. For specific strategies to improve these numbers, check out our guide on effective app engagement and retention techniques.
App Monetisation Impact Assessment
Let's get real about making money from your app—it's probably why you're building one in the first place! When assessing your ROI, understanding how your monetisation model affects your bottom line is non-negotiable. I've seen too many apps with fantastic user experiences but terrible revenue streams. The way you decide to make money—be it through subscriptions, in-app purchases, advertising or a freemium model—will dramatically influence your overall financial success.
Each monetisation method comes with its own set of metrics. For subscription-based apps, you'll want to track monthly recurring revenue (MRR) and customer lifetime value. For ad-supported apps, look at effective cost per mille (eCPM) and fill rates. In-app purchases? Average revenue per paying user becomes your north star. These aren't just numbers on a spreadsheet; they're the financial heartbeat of your app. And don't forget to subtract platform fees—Apple and Google take their cut!
The most successful apps aren't those that extract the most money from users on day one, but those that create sustainable value exchanges that users are happy to pay for repeatedly.
Balancing User Experience and Monetisation
Finding the sweet spot between making money and keeping users happy is tricky. I've watched countless apps go overboard with monetisation—cramming in too many ads or paywalls—only to see their user retention plummet. Your monetisation strategy should feel fair and transparent to users; otherwise, they'll simply delete your app and find an alternative. When assessing ROI, consider how your monetisation choices affect key engagement metrics—a slight dip in revenue might be worth it if it means significantly improved retention rates and word-of-mouth growth. Remember that customer-focused app development should always be at the heart of your monetisation decisions.
Setting Realistic ROI Timeframes
When it comes to app development, patience isn't just a virtue—it's a necessity. I've worked with countless clients who expected their apps to turn profits within weeks of launch, and I've had to break the news that mobile app returns rarely work that way. Most apps need at least 6-12 months to start showing meaningful ROI. This isn't because they're failing; it's because building user traction takes time.
Your ROI timeline will vary based on your app type. E-commerce apps might see faster returns than subscription-based services. The key is understanding that user acquisition costs are front-loaded while revenue often builds gradually. Don't panic if your first quarter looks grim—that's normal! What you want to see is a consistent upward trend in user metrics that will eventually translate to financial returns. Learning from successful app development strategies can help you understand realistic timelines and milestones.
Typical ROI Timelines by App Type
| App Type |
Expected ROI Timeline |
Early Indicators of Success |
| E-commerce |
6-9 months |
Increasing basket size, return purchases |
| Subscription |
12-18 months |
Low churn rate, growing subscription base |
| Freemium |
9-15 months |
Growing conversion rate to paid features |
| Enterprise |
12-24 months |
Improved efficiency metrics, user adoption |
One strategy I always recommend is setting milestone metrics rather than focusing solely on financial returns. Track active users, engagement time, and retention rates—these are the foundations upon which your ROI will eventually build. And remember, even the most successful apps faced slow starts. Instagram didn't turn a profit for years—yet I doubt anyone would question its eventual ROI! If you're still in the planning phase, consider how app development can improve your company's customer service, as this can provide additional ROI beyond direct revenue.
Conclusion
Measuring ROI on your mobile app development strategy isn't just about calculating a single number—it's about building a complete picture of value. Throughout this guide, we've worked through the key metrics that tell you if your app is actually earning its keep: from acquisition costs and user retention to monetisation approaches and realistic timeframes for returns.
What I've found after years of helping businesses with their mobile apps is that success doesn't happen overnight. Your ROI measurement approach needs to be as dynamic as the app market itself. Start with clear goals, track the right metrics for your particular business model, and be prepared to adjust course when the data points that way. Apps that seem unprofitable in their first few months can become goldmines with the right tweaks—and supposedly successful apps can drain resources if you're not watching the right numbers.
The most valuable thing you can do? Set up proper tracking from day one and check in regularly. Too many businesses I've worked with spend thousands on development but skimp on measurement tools. Don't make that mistake! Your analytics are what transform your app from a cost centre to a strategic asset. With the framework we've outlined, you'll be well-equipped to make informed decisions about your mobile app investment—and finally answer the question of whether your app is truly delivering returns.
