5 Mobile App Value Propositions that Help You Secure More Budget (Sans Revenue)

Source: Apptentive’s 2016 mobile product management survey

What are you supposed to do when your customers go mobile, but revenue does not?

If you have a mobile app, chances are you’ve spent a great deal of time making the case for a bigger budget for further development and maintenance. Usually, the easiest way for teams’ to justify the budget required for mobile apps is to tie it to revenue, but that’s easier said than done. If mobile is where customers interact with your brand the most, it’s imperative to show your executive team the value in investing in mobile — even if they don’t see the direct revenue coming from the channel.

In this post, I share data from a recent survey Apptentive conducted of mobile industry professionals about how they tackle mobile revenue, cover five of the most important value propositions of mobile apps (beyond direct revenue), and give examples of how some of the world’s leading companies use mobile to indirectly impact their bottom line.

[The full survey findings can be found here.]

The Challenge of Securing More Mobile Budget

Are you having trouble convincing your boss to increase your mobile budget? You’re not alone. Our survey of 65 mobile industry professionals found 39 percent of respondents think it’s challenging to get more budget for their mobile app, while 33 percent say it’s not. The remaining 24 percent said it’s “sort of” challenging, and 4 percent said “other”.

To gain a deeper understanding, we asked why securing budget for mobile apps is so challenging. What we discovered is that it’s not a one-size-fits-all problem; the answers were split.

Here’s the breakdown:

  • 34% — 0ur app doesn’t drive enough revenue
  • 29% — our executive team doesn’t see the value
  • 24% — our customers prefer other channels (mobile web, online, in-store, etc.)
  • 24% — other
  • 10% — we don’t have enough MAU to justify more budget

(These results can also be seen in the graph at the top of the post.)

What’s interesting about these responses is that most of the issues could be solved by driving more revenue. Still, revenue isn’t the only value proposition of mobile apps. If your team hasn’t nailed down your app’s revenue strategy yet, consider focusing on the other (often overlooked) value propositions apps provide when you’re trying to convince your leadership team to approve a bigger budget.

Five Value Propositions that (Indirectly) Impact the Bottom Line

Consider factoring in these value propositions:

1. Customer Loyalty

Mobile apps can be a huge driver of customer loyalty. Since you control the channel, you have the ability to connect with and interact with your customers in a personal way.

Source: IHG’s app listing in the Apple App Store

Take InterContinental Hotels Group for example: One of their customers had an unpleasant experience during their stay, but didn’t have success fixing the unsatisfactory issue when they spoke to the hotel’s concierge before leaving in frustration. Instead of throwing their hands up in defeat, the customer turned to IHG’s mobile app (where they booked the reservation). The customer was able to reach out to IHG directly in-app, and IHG was able to quickly remedy the situation. Because their app has an easy and direct line of communication, they were able to turn a customer on the verge of churning into a happy customer.

Walgreens is another example worth examining: According to SurveyMonkey Intelligence, the Walgreens app is one of the fastest growing apps in terms of MAU (gaining over 1 million MAU from July 22 — August 22, 2016).

While Walgreens does allow customers to make purchases through the app, the success of their app doesn’t rely upon in-app revenue. What’s important to note is that their app drives foot-traffic and loyalty.

Source: Walgreen’s app listing in the Apple App Store

How do they do this? By frequently updating coupons and making it easy for customers to request prescription refills directly in the app. Their app may not drive a ton of direct revenue (it’s not listed on SurveyMonkey Intelligence’s Top Weekly Revenue app list), but the customer loyalty it fosters is equally as valuable.

By making their customers’ lives easier, Walgreens is minimizing the risk that their customers will turn to competitors. No matter how much revenue their app does or doesn’t drive, they’re fueling in-store traffic while increasing loyalty.

IHG and Walgreens both use their mobile app to make their customers’ lives easier and positively impact customer loyalty in the process. There are several different in-app strategies companies can employ to foster customer loyalty, but regardless of the strategy, the ability to measure and prove your apps effectiveness at increasing loyalty is imperative.

When you’re making the case for more budget, it can be helpful to know how other product managers measure customer loyalty in-app.

We asked our survey respondents to tell us how they measure in-app loyalty by choosing all of the options that apply. Here’s what they had to say:

Source: Apptentive’s 2016 mobile product management survey

2. Brand Value

If your app has negative ratings and reviews, your customers’ perception of your entire brand will take a blow. A recent consumer study we conducted found that 1-star or 2-star app ratings of a well known brand’s app negatively impact their view of the brand as a whole. The silver lining? The reverse is true as well; 71 percent of consumers said a 4-star or 5-star app store rating positively impacts their view of the entire brand.

The moral of the story: If you’re going to take the time to create a mobile app, it’s important to maintain it. Otherwise, you risk damaging your company’s brand (which can result in a loss of revenue) and throwing away the money it took to create the app in the first place. A team that decides to ignore investing in their mobile app because it’s not generating revenue can actually cannibalize themselves without even realizing it.

3. Built-in Consumer Insights

Mobile apps are a direct line to your customers. They provide a channel to talk to and ask your customers for insights that can help guide and validate your product roadmap, or identify who your most loyal customers are and why. The opportunities are endless and the feedback you’re able to collect is highly relevant and applicable.

You can utilize mobile apps to quickly get consumer insights on important problems, and keep your team on track. Are customers mysteriously spending less time in your app, but you don’t know why? Ask them directly! Use your mobile app customers to understand how to improve your customer experience.

For example, at Apptentive we work with one of the most successful coffee retailers in the world who used their mobile app to test and gather feedback on a new feature. Utilizing their app audience allowed them to gather a large volume of feedback (from the people who will actually use the feature) in a short amount of time. This approach allowed them to quickly iterate on the product, which put them an entire quarter ahead of the scheduled launch date!

4. Promotion for Other Brand Channels

If your app isn’t driving revenue other channels must be, so get creative with your app audience by driving them to the channels you know result in dollars.

An international media company tested this strategy by promoting their live television content to their app customers. They sent an in-app message to their customers that an important broadcast was happening in real-time in an effort to encourage app users to tune in. It was a huge success — 70 percent of viewers clicked “Watch Now”.

5. Customer Engagement

You’ve probably heard by now that it’s important for customers to be engaged with your brand, especially on mobile. We like to say at Apptentive that engaged customers are the secret sauce to your mobile app’s’ success. Why? Because not only are engaged customers likely to be evangelists for your company (thereby driving word of mouth), they’re likely to be more loyal and more profitable over time. Measuring and tracking the engagement of your mobile customers is a better indicator of how healthy your app is than many of the metrics app publishers tend to focus on, like open rates or downloads.

Your mobile app impacts your bottom line — regardless of the direct revenue it generates — and the upkeep of your app is essential to key metrics (MAU, DAU, etc.) and your brand’s reputation. Choosing to keep an app on the market with a withering mobile budget to support it puts the entire company at risk.

Whether you’re still working on your app monetization strategy, or already have it locked down, tying the five value propositions back to metrics that matter to your business such as customer loyalty, in-store traffic, brand management, feedback, and free cross-promotion to other channels will help you secure the support you need from leadership to increase, or maintain your mobile app budget.

How do you secure budget for your mobile app? I’d love to hear your strategies in the comments below!

Want to learn more? Check out Apptentive’s Guidebook to Mobile Product Management Success here: http://info.apptentive.com/guidebook-to-mobile-product-management-success

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