Meet Michael Hall, a Shopify Partner and co-manager of Helium, an app development agency based in Gig Harbor, Washington. Since joining Helium in 2019, he has played a key role in the company’s shift from client projects to a dedicated focus on app development. Along the way, he’s learned valuable lessons about growth and effective marketing, including how to achieve over a 14x return on ad spend (ROAS). By leveraging targeted advertising, Helium has expanded its reach, attracted new merchants, and boosted downloads for their flagship app, Customer Fields.
As a startup agency, Helium got off the ground creating custom projects for clients. While building new stores, they recognized a growing need for innovative apps in the Shopify market. This insight led them to broaden their scope and launch their first app in 2015—Bacon Mega Menu.
With a self-proclaimed bad name and plenty of enthusiasm, they continued to develop other Shopify apps. Over time, Bacon Mega Menu was rebranded to Meteor Mega Menu, and they introduced Customer Fields, an app that empowers merchants to design unique customer signup forms tailored to their brand.
As a result of using ads in the Shopify App Store, Helium has experienced benefits such as:
- 10,000 app installs
- over 14x return on ad spend (ROAS)
- 764% growth in revenue
The challenge: Scaling the smart way
Helium launched both apps back in 2015 when there were 1000 apps or less on the Shopify App Store. The team attended Unite, hosted local Shopify Meetups, and, of course, used their own apps for client projects.
Initially, Helium promoted their apps through social media, newsletters for existing clients, and other top-of-funnel strategies. However, it soon became clear that these efforts were insufficient to drive significant growth. To achieve their scaling goals, they needed to expand their reach and grow installs.
When the Shopify App Store launched ads, Michael understood the importance of meeting merchants where they already were—right in the Shopify App Store.
“You can try to chase down customers, but every single merchant has to go to the Shopify App Store—so you’re making a mistake if you’re not advertising there,” he notes.
Learning on the fly
Michael took a hands-on approach when he first started experimenting with Shopify App Store ads. With no existing metrics to guide him, he decided to take a calculated risk, beginning with a $500 investment.
Initially, he managed things closely, measuring their performance and optimizing them as needed on a weekly basis. Fast forward to today, and Michael has over 50 unique ad campaigns in his dashboard. These didn’t materialize overnight—it took extensive experimentation to identify what works and what was sustainable for the long haul.
The solution: Experiment and optimize
To drive ad performance, Michael knows which levers to pull:
- Keywords: These can be either exact or broad matches.
- Geolocation: Identify the countries or regions you want to target.
- Ad Placement: Determine where you want your ads to appear: search results, homepage, or category pages.
- Plans: Decide which merchant plan types you want to target (available for Built for Shopify apps only).
By honing in on these levers, Helium not only creates targeted ads but also gains valuable insights that inform their advertising tactics, leading to significant momentum in their growth journey.
Power in numbers
After experimenting with ads, they identified their average lifetime value (LTV) for their merchants—this is the average duration a merchant typically uses their app. The data provided by Shopify App Store ads has proven invaluable, allowing them to compare their spend versus revenue performance over time and calculate how many days it takes to recoup their ad spend based on merchant subscription revenue.
“Know (or estimate) what a customer is worth to you over time. If you know a customer will pay $200 on average, you can safely spend $100, $150, or really even $200 to acquire that merchant,” Michael advises.
His message is clear: Do what’s right for you. Even if you break even initially, you’re still building momentum that can propel your business forward in the long run.
Equipped with data, they can now pinpoint which keywords drive the most installs, assess the value of an install, and estimate how long it will take to break even on a customer.
Understand the costs
A crucial metric for Helium’s advertising strategy is the customer acquisition cost (CAC), which helps them understand how much they’re spending to acquire each merchant. By using the Shopify ads UI, they can approximate their payback period, which is the time it takes for their ad spend to be recouped through merchant subscription revenue.
Michael emphasizes the importance of tracking this metric. “Compare your spend versus revenue performance over time. Count the days it takes for the lines to intersect. The payback period indicates, on average, how many days it takes to make back your ad spend based on merchant subscription revenue.”
When it comes to running a bootstrapped app like Helium’s, developers must employ a CAC payback period that they can handle in terms of cash flow. Getting this data not only informs their current advertising tactics but also guides future budgeting and strategy adjustments.
Stay profitable
Another key metric in Helium’s advertising strategy is LTV, which represents the average total revenue a merchant generates over their entire relationship with Helium. Understanding LTV is crucial for determining how much Helium can afford to spend on customer acquisition while still maintaining profitability.
To quickly gauge LTV, Michael recommends a couple tools:
- partnermetrics.io: A free tool by FORSBERG+two that provides insights into app performance, including LTV metrics.
- heymantle.com: Developed by Mantle, this tool offers comprehensive analytics to help agencies understand their app’s financial metrics better.
For those just starting out, A simple method to estimate LTV is to multiply the price of the most popular plan by six months. This approximation can help developers get a rough idea of the revenue they can expect from a new customer.
“Six months is a bit arbitrary,” Michael explains, “But if you can’t keep a customer for 6 months, you have other problems. I can tell you our average customer sticks around for about 24 months.”
Knowing the LTV is essential for making informed decisions about ad spend. When developers understand how much a merchant is worth over their lifetime, they can strategically allocate their advertising budget to maximize returns.
Armed with data
Once developers have a solid grasp of their keywords, LTV, and CAC, Michael believes they are equipped with valuable insights that can significantly enhance their advertising strategy. With this data, they can determine:
- Which keywords are driving the most installs: By analyzing performance, you can identify which keywords are not only attracting attention but also converting into actual app installs. This allows you to refine your keyword strategy for better results.
- On average, how much an install is worth to you: Understanding the value of each install helps you assess the effectiveness of your ad spend and informs future budget allocations.
- On average, how long it will take for you to break even on a customer: By calculating the break-even point, you can make strategic decisions about how much to invest in advertising, ensuring that your campaigns remain profitable over time.
“Having this intel allows you to make data-driven decisions that optimize your ad performance and drive sustainable growth,” Michael emphasizes.
Exploring the five oceans
A fan of BBC documentaries, Michael draws parallels between aquatic life and his marketing strategies. “Ads aren’t the whole picture,” he notes. They’re actually just one of the five oceans you need to explore to successfully promote your app. These five oceans include:
- Shopify App Store listing: Optimize your listing.
- Shopify App store ads: Experiment with ads.
- Shopify Community Forums: Start at the bottom of the funnel.
- Content: Focus on SEO and social media, like your YouTube channel.
Honing in on the jellyfish strategy
Building on these insights, Michael developed the “jellyfish strategy” to continuously enhance Helium’s advertising efforts in and beyond the Shopify App Store. Inspired by the prolific nature of jellyfish, which thrive in diverse environments, Michael believes you must do the same when it comes to promoting your app. The jellyfish strategy focuses on three key principles:
- Exposure: Just as jellyfish inhabit oceans worldwide, Helium aims to maximize their visibility across various channels, not just the Shopify App Store. This means consistently optimizing their app listings and leveraging ads to ensure they appear in front of potential merchants.
- Opportunity: Jellyfish populations can explode under favorable conditions, mirroring Helium’s approach to capitalize on trends within the Shopify ecosystem. By closely monitoring market dynamics and adjusting their ad campaigns accordingly, they can seize opportunities that drive installs and revenue.
- Sustainability: Jellyfish can shrink back to their polyp phase when food is scarce, reminding Helium of the importance of adaptability in their advertising strategy. When certain keywords or ad placements underperform, they’re quick to pivot and refine their approach to maintain a steady flow of installs.
“Obsess over your app listing, app tagline, and demo store. This is what’s going to convert people after seeing your ads,” Michael emphasizes. By focusing on these elements, Helium ensures their advertising efforts remain compelling and effective, attracting new users even as market conditions evolve.
The results: Exponential growth
Since launching their advertising efforts on the Shopify App Store, Helium has achieved over 10,000 app installs with a return on ad spend (ROAS) that’s reached over 14x. This boost in installs has resulted in roughly 700% growth in recurring revenue.
Ready to create your first ad? Follow Michael’s advice: keep it simple. Start small with a low bid, create a variety of ads for comparison, and monitor closely while pivoting weekly. Experiment, learn, and optimize. It’s a rinse-and-repeat process that will drive installs and increase your recurring revenue.
