The app store is a wildly competitive place. In 2014, Gartner estimated that less than 0.01% of consumer mobile apps would be considered a financial success by their developers by 2018. There are literally millions of apps on Google Play, and when you consider the fact that smartphone users only use an average of nine apps per day (30 per month) the competition for screen time is fierce. If entrepreneurs and brands aren’t building apps that their users will find useful, they’ll be rejected.
Speaking at the eCommerce Innovation Summit this May 24-25 in San Francisco, Jonathan Pelosi, Head of Industry, Mobile Apps at Google, presented on what Google believes makes a successful app and how companies can best engage an audience. He likens the smartphone to a shopping mall, although the shopping mall is tailored to each individual visitor, with only the stores that the visitor cares about. On top of this, visitors are not only there to buy clothes or food; they can book a trip or a car, do meditation or work out. The stores, they’re mobile apps.
‘If you don’t have a space in this mall you’re not even in the customers’ consideration set,’ Jonathan says, ‘And this is a huge part of the value apps can drive for your business if they’re done thoughtfully, and developed thoughtfully, and deployed thoughtfully.’ Getting into the space is the first step. Following this, brands have to understand that, just like in any business, not each customer is of equal value to the business. ‘Where 80% of your customers drive 20% of your value, that doesn’t change with apps.’ What this means is that considering the fact that not all customers are going to spend the same amount of money is a key part of any marketing strategy.
In order to get these customers, first and foremost, is to build a worthwhile product. This is such a simple but unavoidable point that far too many app developers fail to take proper note of. ‘Don’t promote or market a mobile app that’s not worthwhile, I’ve seen a lot of terrible ones,’ Jonathan says. ‘How often have you downloaded an app that you’re never really used?’
What this comes down to is ensuring that your development is customer-centric. All too often, brands will add features or develop entire apps because they are cool or impressive and not because they provide any real value to the customer. For example, a retail giant building an app cannot simply offer another sales portal; the app should have special offers, some sort of loyalty program, or in-store purchases that makes the shopping experience easier. Only by doing these things can brands expect customers to maintain any engagement with their app.
Secondly, Jonathan stresses the importance of only measuring what is worthwhile. Of course, it’s possible to measure almost every action or piece of retention info related to your app, but this can be overwhelming. Previously, developers were obsessed with cost per install (CPI), with almost no regard for what the users then did after the initial install. This is a lot like measuring cost per click, with all the same pitfalls. Return on ad spend is a slightly better metric to fixate on, but it’s still incredibly short-sighted.
‘What you want to get to [measuring] is lifetime value, which basically says: after I pay to acquire that customer, how much business value do they drive? Whether it be revenue, profit, cost-savings etc. over the course of that customer’s lifetime. You can use a year, two years, whatever makes sense.’ Lifetime value can be difficult to establish, but beginning to think this way is key to creating a successful app both for the user and your bottom line. The app should positively impact this lifetime value. Jonathan uses Walmart’s app as an example. In terms of lifetime value, Walmart’s app using customers spend 40% more than non-app users, they also visit stores twice as often, and their decreased interaction with customer service staff lowers costs for the company more widely. Apps can and should enhance both the digital and brick-and-mortar shopping experiences.
And, finally, get the app out there on any channel you can. Jonathan admits it’s ‘remarkable’ how many brands will pay to boost an app before they’re advertising it on the footer of their emails, for example. Have call center staff mention the promotions that are available on the app at the end of a call, have a prompt to download the app whenever a customer visits your mobile site. These techniques, coupled with effective app store optimization, are what Jonathan calls ‘free real estate.’
All of these tips are straight from the horses mouth - Google have precise and insightful information on why certain apps perform better than others. The above steps should be obvious to developers and brands but it’s amazing how many make apps for themselves, or because they think they should, rather than with their customer in mind. App development is as competitive as it is lucrative, it’s worth taking the time to get it right.