We live in a fast-paced society that puts a great deal of emphasis on technology and innovation. These technologies are constantly evolving and quickly becoming more accepted by the vast majority of people. One such tool that has exploded in popularity is the cell phone. In fact, “over 70% of the world’s population now [has] a mobile phone, that’s over 5 billion mobile subscribers, and in places like the US, it’s 9 in 10 people.”
These statistics present businesses with a huge opportunity to increase their customer loyalty base through mobile applications. Mobile applications are “add-ons or bits of data added to a cell phone so it can perform functions usually unrelated to making a phone call.” A mobile app can have many functions, but often times, the main purpose is to improve the display of a company’s website when it is accessed via a mobile phone. There is a distinct difference between a cell phone and a “smart phone.” Cell phones typically are used only for phone calls and cannot install new software such as apps; they are limited to the pre-installed apps and web browsers. Smart phones have the ability to make phone calls, but also have the capability to install third party applications.
Before deciding to make an application, businesses must understand the potential reward is high, but so is the risk. In fact, 95 percent of a recent survey’s respondents did not generate any revenue on their cell phone application. However, 12 percent of respondents made at least $50,000 in revenue. So, what is the key to the second group’s financial success? Almost every app that made $50,000 or more in revenue had at least 500,000 downloads. The real question is: How can businesses encourage their target market to download these applications?
A recent study confirmed that the application’s success is based on the time and money businesses spend on marketing. Successful companies spend $30,000 and 14 percent of their total time on marketing. It’s also important that businesses increase awareness for not only the app but also the brand itself. Companies must gain the loyalty of customers before they can try to market a mobile application. Users are encouraged through cross promotion in social media, and traditional marketing avenues to install the company’s app to their phone.
Customers are always looking for ways to save time, and money. A well-designed app has clear benefits to the consumer that encourages installation and usage. As technology and behaviors change, businesses must adapt or risk losing valuable sales.
—–A guest post by BPM intern Steve Vanevenhoven