The App Analysis: Worth the Investment or Over-Hyped?

App_Analysis_1400x370
Xavier Legrand
Author: Xavier Legrand
As Head of Product, Xavier spearheads the strategy for Engage Hub to ensure it not only meets the needs of the market, but also remains the leading innovator of customer engagement solutions. Prior to joining Engage Hub, Xavier was responsible for leading product strategies and marketing projects for multi-national enterprises such as a major automotive alliance and mid size retailers across Europe. Holding an MBA from the London Business School, Xavier is perfectly placed to consult on loyalty marketing using emerging communication technologies to Engage Hub's corporate customer base.

Share this on:

There’s no getting away from the snowballing force that is the app market.

According to Gartner, the estimated global mobile app revenue was $35 billion in 2014, $45 billion in 2015, $58 billion in 2016 and a predicted $77 billion in 2017. What’s more, the Apple App Store has almost 2 million apps and Google Play has over 2.2 million.

Apps are increasingly used by enterprises as a direct marketing and engagement channel with the aim of boosting brand recognition and providing more value to customers. And, according to research from eMarketer, this trend is set to continue with a steady increase of in-app use over mobile web searching.

But do apps actually deliver ROI in their own right for enterprises? Do they work for your business or would you be simply wasting money by buying into the hype?

Our app analysis has the answers.


In general, app retention rates are astoundingly low

The first point to bear in mind relates to retention rates.

Once upon a time in app land, the focus was on acquisition. App success was determined by the number of new users you could attract. However, research by Localytics shows that 25% of users only ever use an app once. Meaning it’s clear that your new user figures don’t dictate the success (or otherwise) of your app.

Instead, you need to turn your attention to retention rates. And here Localytics’ research becomes even more revealing: a whopping 80% of all app users churn within 90 days.

Of course, there are a number of apps – mobile messaging apps such as WeChat –  the most advanced mobile messaging app worldwide, mobile banking, news, for example – that are stalwarts on users’ phones.

For Mobile Banking, The Guardian’s article highlights how Mobile apps are becoming financial services’ biggest asset. With banking consumers using their phones to manage finances on a daily basis, ‘apps enable consumers to interact with their banks more easily than ever’, serving a great purpose. In this instance app retention rates are much higher.

This goes to highlight, while businesses across the spectrum are increasingly pushing out new apps with the intention of keeping customers happy, you need to analyse your app’s retention rates to gain a true picture of its success.

Questions to consider include whether your app has a long shelf life, whether it cultivates customer loyalty and whether it adds real value. If the answer to any or all of the above is a ‘no’, it’s time to reassess your strategy.


Base your app strategy on your customers’ preferences

As with every strand of your customer engagement strategy, having a comprehensive understanding of your customers – what they’re looking for, how they like to communicate, what drives them to make decisions – is crucial to your success.

One effective way of optimising your app strategy is through A/B testing. It’s worth testing everything from in-app offers to CTAs to discover which of your app strategies are working well.

Another is personalisation. As with every other marketing tactic, the more personal you can make it, the better. Tailoring app interactions to your customers’ preferences will boost performance.

Leveraging a weak point in the customer experience may be effective. Airlines for example have been able to foster app usage by enabling the check-in process to be more efficient by using the app therefore pushing high download and retention rates.

It’s also worth looking at demographics such as the age and gender of your target customers. Statistics demonstrate that 18 to 24 year olds use more apps than any other group, followed by 25 to 34 year olds, and so on. What’s more, women spend more time on mobile apps than men. So before investing heavily, consider whether your ideal customers are likely to enjoy app-based communications.


Don’t neglect your other communication channels

While your app may be an effective route to quick customer acquisition, you need to look at the bigger picture to find ways to retain those customers. To do so, you’ll need to deliver a seamless experience and understand your customers’ preferences across multiple touch points.

Remember, if the focus of your energy – and budget – is apps alone, you’re targeting a far smaller audience, which is often limiting. Your customers want their lives to be as easy as possible, which means you need to contact them through their channel of choice. If app communication isn’t convenient for them then you’re wasting your time and money by persisting.

If you’re looking for ways to capture and retain the highest possible number of customers – taking into account differences in age, location and preference – you need to integrate your app strategy into your other channels, delivering a cohesive brand experience for the user.


Optimise the user experience with effective cross-channel communication

Overall, the message is clear. Apps can add huge value to the customer experience, but it’s crucial that enterprises analyse firstly whether this works for their business, and secondly, understanding the importance of integrated this amongst other channels. In fact, used in collaboration with other channels, they can be both satisfying for your users and cost effective for your business. Just don’t be tempted to focus on them at the expense of other lines of communication. And remember: whatever channel you’re using, it’s important to harness data to have a clear view of your customer, track the effectiveness of your investment and refine your approach.

Ultimately, if you’re looking for ways to optimise the customer experience, you need to monitor interactions across multiple touch points. Striking the right balance – and ensuring all your communications are optimised for mobile devices – is vital if you want to outsmart the competition and boost the power of your brand.

Get in touch to find out more about how you can deliver effective cross-channel communications for your customers.

 

Leave a Reply

Your email address will not be published. Required fields are marked *