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To app or not to app

Many businesses fire out smartphone apps that are completely useless and actually cause more damage than good they fall victim to the fallacy that apps are necessary to make them look current. A good app is a great promotional tool whereas a bad app is the sibling of bad publicity. Does the business need an app? Will the app:

  • Boost efficiency: reducing execution time by automating processes currently handled manually?
  • Increase turnover: capturing a larger slice of the target audience (or opening up an entirely new market segment) in combination with a marketing campaign adding a marketing weapon to the business’ arsenal?
  • Capture insights: trackingcustomer behavior and serving as a market research tool?

If the projection is that the app will boost efficiency, increase turnover, or capture insights it should be designed to optimize these capabilities. The app’s effect on a business should also be considered. If the app is an efficiency-boosting tool, it most likely affects frontline operations such as ordering, booking, and inquiries and may in some instances cut down overhead arising from these services significantly. It also boosts capacity as more customers can be serviced simultaneously and basically has a similar effect as homepages did two decades ago. The cost of developing an app of this type is measured against current service time and load on frontline personnel, and as such goes into the realm of activities-based costing (the stopwatch scenario)

Businesses measure apps based on payback time verses market penetration and all too often believe that lower app development costs result in faster payback. I prefer to use app effectiveness verses investment required since an effective app will end up paying for itself with interest. An app is a sunk cost, but its purpose is to recover the investment through other channels. It therefore has no direct – or measurable – payback period as such.

As a marketing weapon, the app is expected to create additional revenue which means that the investment is linked to a projected increase in sales volume and turnover. In order for this to happen, the app must have that ‘coolness’ effect that makes the market snatch it up like free candy at Halloween. Saving money on look, feel and appearance is not a good idea as that may cause the app to become inefficient and therefore a loss. Apps are wonderful marketing weapons as they offer plenty of cross-marketing possibilities. A store may develop an app that also offers mobile payment. Instead of the store, the telecom, and the financial transaction entity (bank or credit-card company) placing individual ads, the bundled solution means that they can double the campaign budget, but end up spending less each on the campaign. They can then piggy-back off each other for months once the initial blast is complete and reminder ads are run, tripling the exposure at no additional cost. Cross-marketing campaigns pack tremendous power and apps are ideal for such scenarios.

As a market research tool, apps offer a dimension homepages don’t – GPS positioning. Apps can be made to not only track customer travel but also direct the customer to specific destinations. A range of apps exist that track runners and bikers as they train, map their pulse, speed and distance and map it out for instant posting on Facebook. Advertisers can use apps for the exact same purpose except in their case; they can track campaign effectiveness using a combination of radio psychoacoustic signals (NielsenArbitron) and GPS proximity triggers. I was involved with such a project last year and the possibilities in that realm are virtually limitless. WCC  is doing some very interesting work in that area and so are others leaders in the market research field.

Well truly what the project requires is a marketing budget,” says Lisa Steinmann, Director of Developer Relations at Mobilewalla. “App discovery is the biggest challenge app publishers face. If you don’t have a marketing budget for your app, then don’t bother, unless you have a built-in marketing machine in place or a hot commodity. Justin Bieber can sell anything immediately as millions are hanging on his every move; an average app of any kind, will not succeed without a marketing effort.When selecting a developer ask them if they have a marketing team, or a standard marketing plan. Most developers leave the marketing up to you, but there are some very specific marketing issues regarding app title, description and keywords (which must be chosen prior to publication) that are vital to launching a successful app.”

A business desiring to develop an app in order to boost efficiency, increase market share or gain greater insight into its customer base should keep in mind that:

  • The app itself is not a sales item. It either saves or generates money directly or indirectly.
  • The app has to be easy to use. It is not a web page with tons of content; it has to be focused on a specific task and execute that task perfectly. Also, limiting text content makes the app much easier to translate into other languages.
  • The front and back intelligence behind the app has to be clearly defined before any programming takes place. This may call for a server that is configured to intercept, process, and redistribute the data relayed to the app (as is the case with our Jupiter platform). This is vital for market research apps and highly recommended for other types as well.

There are exceptions to this, but an app intended to increase profitability while also generating direct revenue can cause confusion and sidetrack the project. In my opinion, it’s better to focus on the app as a profitability boosting tool or a sales item, not both.

When the purpose of the app has been defined, a business is faced with the challenge of selecting the right development firm to actually build it. Here we run into price verses. track record. Is a cheap development firm with a limited track record worse than an expensive firm with a massive record? Then again, a company with limited experience will have less pre-made stuff on the shelf to help you make your app cheaply, which can easily lead to a cheap deal ending up costing more. I urge businesses to select their app project leader with great care. An experienced project manager will be able to communicate clearly to the developers what is to be built as he or she has fine-tuned the company’s app framework, leaving no room for error or misunderstanding on either side. The project manager will also know what technological components already exist and can accurately estimate their price. Finally, the platform that best matches the target audience has to be selected. The iPhone is marketed very aggressively, but for a while it appeared that Android would win that war. The tables seem to have turned again (click on image to read the related article):

Android Market Share Declines In US, Apple iOS Gains Ground As iPhone 5 Expected To Strengthen Growth

App developers are great and are here to stay. What apps offer for market research, it tracking mobility; for advertising, influencing customer behavior live by guiding them to specific destinations. Apps is a new technology and there is no doubt that we will see more and more spectacular uses for it as it matures.


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