Things to check before you microacquire a Shopify App

Shopify APP Ranking

If you are even looking to acquire a Shopify app and scale them. Here are few tips from me to check before acquiring an app.

1. Check for AppStore rank changes

SASI is a great tool to check an App’s Ranking history. Is the app ranking constant, improving or on decline?

Constant at a higher ranking is a sign that the App is well established and able to maintain its ranking. Constant at lower ranking would mean that the app is not able to grow beyond that point, which means it’s unable to improve upon install rate and reviews.

App with improving ranking would mean that its growing consistently with review and has increasing install rates (which could be because its offered for free or cheap?).

App with declining App Ranking is a sign that it’s not able to maintain the same install and review rate it used to have probably because of new better apps in competition or increase in it’s prices.

A constant rank is a safe bet, improving rank would have expensive valuation but would need less work from you. Declining rank should be available for cheaper multiples, but would require more work to be done for turn around.

2. Check for keywords bringing organic installs

You can find this in Google Analytics but AppstoreAnalytics simplifies this view. It helps you understand which are the primary keywords that brings the most installs.

Here you can spot any potential keywords that the current developer has been missing out on. Just optimizing the App Listing for those keywords can improve your app ranking for that keyword and increase the install & revenue considerably.

If a major chunk of installs come from certain categories or sections on homepage like What’s New, it could be risky because if the section or app is removed from the homepage it would drop the install from that source to 0.

3. Check for competition

If for a primary keyword the app ranks 2nd, check for the ranking changes for the neighbouring apps. If the top ranking app isn’t way ahead, you can catch up with it and increase your install rate by at least 20%.

Similarly if the 3rd And 4th ranked apps are growing consistently and catching up with you, it would soon surpass you and reduce your new install rate by 10-20%.

4. Check Lifetime Value & Churn Rate

Partnermetrics is a good tool to check for these stats. Shopify Apps churn rate are usually high, even up to 30% is common. But it’s important to check the churn because if your flow of new installs dries up your MRR won’t be constant and will see a consistent drop till it plateaus at certain amount.

Partnermetrics is a good tool to check for these stats. Shopify Apps churn rate are usually high, even up to 30% is common. But it’s important to check the churn because if your flow of new installs dries up your MRR won’t be constant and will see a consistent drop till it plateaus at certain amount.
You need to understand the churn rate to see if you buy at a multiple of 3x ARR and if things don’t improve it doesn’t mean you would at least recover the initial investment in 3 years, based on churn rate it could probably even take up to 5 years to recover your investment.

Partnermetrics is a good tool to check for these stats. Shopify Apps churn rate are usually high, even up to 30% is common. But it’s important to check the churn because if your flow of new installs dries up your MRR won’t be constant and will see a consistent drop till it plateaus at certain amount.
You need to understand the churn rate to see if you buy at a multiple of 3x ARR and if things don’t improve it doesn’t mean you would at least recover the initial investment in 3 years, based on churn rate it could probably even take up to 5 years to recover your investment.

5. Run it through me 😅

If you are evaluating any app, I would love to provide you a feedback and also partner with you for marketing, at times some tweaking of AppStore listing can improve its ranking for certain keywords and bring in more installs and revenue. You can reach out to me on twitter or email [email protected]

I love to spot potential app that can improve considerably through AppStore Optimization. Here is a store I partnered with in November, which grew its revenue from 528$ to 972$ in January 2022, just by tweaking App Listing for certain keywords and improving the pricing strategy.

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