App Development Glossary
Key terms every app developer, founder, and product manager should know. From monetization metrics to growth frameworks.
16 terms
SWOT Analysis
A strategic planning framework that evaluates a product or business by identifying its Strengths, Weaknesses, Opportunities, and Threats. For mobile apps, SWOT analysis covers competitive advantages, technical limitations, market trends, and external risks like competitor moves or regulatory changes.
SWOT Analysis for Mobile AppsApp Store Optimization (ASO)
The process of improving an app's visibility in app store search results and increasing its conversion rate from page views to downloads. ASO involves optimizing the app title, subtitle, keywords, description, screenshots, and preview video, as well as building ratings and reviews.
ASO Basics GuideViral Coefficient
A metric (K-factor) that measures how many new users each existing user brings in through referrals and sharing. Calculated as K = invitations sent per user x conversion rate. A viral coefficient above 1.0 means the app grows exponentially without paid acquisition. Most apps have a K-factor between 0.3 and 0.7.
The Science Behind Viral AppseCPM
Effective Cost Per Mille (thousand impressions). The revenue an app earns per 1,000 ad impressions. eCPM varies by ad format (banner: $0.50-2, interstitial: $3-8, rewarded video: $10-30) and by app category, region, and user demographics. It is the standard metric for comparing ad monetization performance.
Ad Revenue CalculatorDAU (Daily Active Users)
The number of unique users who open and interact with an app on a given day. DAU is a key engagement metric that indicates how many people find the app valuable enough to use daily. DAU/MAU ratio (stickiness) above 20% is considered healthy for most app categories.
MAU (Monthly Active Users)
The number of unique users who open an app at least once within a 30-day period. MAU measures the total addressable audience of an active app. Investors and advertisers use MAU alongside DAU to assess an app's engagement depth and growth trajectory.
Freemium
A monetization model where the core app is free but premium features, content, or capabilities require payment. Typical free-to-paid conversion rates are 2-5% for consumer apps and 5-15% for B2B tools. Successful freemium apps provide enough free value to drive engagement while making premium features compelling enough to convert.
App Monetization StrategiesMVP (Minimum Viable Product)
The simplest version of a product that solves the core user problem and can be released to early adopters. An MVP includes only the essential features needed to test market demand and gather user feedback. For mobile apps, an MVP typically takes 3-6 months to build and should focus on one primary use case.
How to Validate Your App IdeaRetention Rate
The percentage of users who return to an app after their first use, measured at specific intervals (Day 1, Day 7, Day 30). Average Day-1 retention across all apps is about 25%, Day-7 is 13%, and Day-30 is 7%. High retention indicates product-market fit and is the strongest predictor of long-term app success.
Churn Rate
The percentage of users or subscribers who stop using an app over a given period. Monthly churn is the inverse of retention. For subscription apps, a monthly churn rate below 5% is strong. High churn signals a product-market fit problem or poor onboarding experience.
LTV (Lifetime Value)
The total revenue a single user generates over their entire time using the app. LTV is calculated as average revenue per user (ARPU) divided by churn rate. A healthy business model requires LTV to exceed customer acquisition cost (CAC) by at least 3x. LTV guides decisions on how much to spend on user acquisition.
CAC (Customer Acquisition Cost)
The average cost to acquire one new user or customer, including advertising spend, marketing costs, and attribution. For mobile apps, CAC varies from $1-3 for casual games to $20-50+ for fintech apps. The LTV/CAC ratio should be at least 3:1 for a sustainable business.
In-App Purchase (IAP)
A transaction made within an app to buy virtual goods, premium features, or content. IAP can be consumable (one-time use like game currency), non-consumable (permanent unlock like a pro feature), or subscription-based. Apple and Google take a 15-30% commission on all IAP transactions.
App Monetization StrategiesProduct-Market Fit
The stage where an app satisfies a strong market demand — users need it, use it regularly, and recommend it to others. Key indicators include high retention rates, organic growth, low churn, and users expressing they would be "very disappointed" if the product disappeared. Most apps need 2-3 iterations post-launch to achieve PMF.
How to Validate Your App IdeaNetwork Effect
A phenomenon where an app becomes more valuable as more people use it. Direct network effects occur when users directly benefit from other users (messaging apps). Indirect network effects occur when more users attract complementary participants (marketplace apps). Network effects create powerful competitive moats.
The Science Behind Viral AppsARPU (Average Revenue Per User)
The average revenue generated per active user over a specific period (usually monthly). ARPU is calculated by dividing total revenue by total active users. It combines all revenue streams (ads, subscriptions, IAP). Higher ARPU indicates more effective monetization but must be balanced against user experience.
Put These Terms Into Practice
Generate app ideas with built-in SWOT analysis, revenue projections, and viral scoring.
Try Strategia-X Free