Essential Guide to Becoming A Mobile App Rock Star - part II - Consumer-facing Apps
- 1. The Essential Guide to Becoming A MOBILE app rock star Part 2: Creating a mobile application business case
- 2. Introduction Mobile devices and technologies are driving the most sweeping changes in marketing and customer engagement since the Internet. Mobile apps make it possible to reach customers and prospects like never before – reaching key demographics, building un-dreamed of levels of intimacy, driving personalized offers that increase loyalty and generate revenue, and dramatically cutting costs, as compared with old media and paper based solutions. Mobile makes marketing more exciting – and effective – than ever before. But before you can leverage mobile apps to connect with your key audiences, you need to build an effective business case to unlock funding and garner the support you need to make it happen. Knowing how to create and evaluate mobile app business cases will also help you to evaluate multiple mobile opportunities and pursue the ones with the most promise. This 3 part “Rock Star” series will guide you through: 1 Developing an actionable mobile application strategy 2 Creating a mobile application business case 3 Choosing the right Mobile Enterprise Application Platform (MEAP) partner 80% of tablet and smartphone users time is spent in mobile apps Source: Flurry Five-Year Report: It’s an App World. The Web Just Lives in It The essential guide to becoming a mobile app rock star (Part 2) 1
- 3. Creating a strong mobile app business case It’s tempting to dive head-first into mobile app development especially when you read, daily, about other organizations that use them to reach key demographics, increase sales and loyalty, transform business operations, enhance productivity, and improve customer satisfaction. But it’s important to take the time to define a proper business case to prioritize projects, get buy in, and measure success. But building your business case is no easy task! Some cost and revenue models for application development are well-understood for web apps, but the development and operational costs for mobile apps can be very different. “Instead of buying tiny banner advertisements, marketers should create apps that add value to consumers’ lives and enhance long-term engagement with their brands.” Source: Sunil Gupta - Head of the marketing unit at Harvard Business School Reasons that Mobile Device Users Worldwide Use Branded Mobile Apps % of respondents Keep informed about the brand, product, store or company Get discounts and coupons 43% 41% Easier and quicker than going to their site or social media page 38% They have tools that help me 35% They have fun, interesting and cool content 27% Participate in their contests 20% Offer opinion and suggestions 18% They make me feel connected to the brand, product, store or company 17% None of these 9% Source: Ipsos OTX and Ipsos Global @dvisor, “Socialogue,” July 23, 2013 The essential guide to becoming a mobile app rock star (Part 2) 2
- 4. Inspired by the ancient Project Management proverb - “How do you eat an elephant? One bite at a time” – this paper offers a discussion of how to create a strong mobile app business case by breaking down the work into 3 bite-sized pieces: Determine Development Costs 1 After completing this process at your business, you’ll will have a better idea of how to set appropriate budgets, know where best to direct investment, and you’ll understand how to assess the potential revenue, cost savings and intangible benefits derived from mobile applications. Determine Operational Costs 2 Calculate Benefits, Cost Savings and ROI 3 operational Costs Promotion Licensing Infrastructure Cloud Support & Training Updates Development Costs Staffing Testing Integration The essential guide to becoming a mobile app rock star (Part 2) benefits Improve Customer Loyalty Tap New Revenue Streams Reach Key Demographics Enhance Customer Service Increase Efficiency & Effectiveness 3
- 5. 1 Development Costs Staffing The staff and skills you’ll need include: App development for each platform User experience design Visual design Backend/middleware development Project management If you have some or all of these resources internally and would prefer to run the project in-house, we recommend that you consult with mobile development specialists to assist in designing the service concept. This will help minimize the overall risk of the project. This is likely to raise the cost in the short-term, but with the rapid evolution of mobile application development platforms, technology and capabilities, you’ll want to ensure that your team has the most up-to-date knowledge/recommendations/ideas from a team of professionals who live and breathe mobile. Testing Consider: Do you have the capabilities in-house to test all platforms or will you need to outsource? Estimate approximately 50% of the overall cost of development for QA What about devices? You’ll enhance the overall quality of the app by testing frequently on actual devices rather than emulators The essential guide to becoming a mobile app rock star (Part 2) Development Costs Staffing Testing Integration 4
- 6. Testing is often under prioritized in development projects, but the reality is that mobile testing remains a complex, multifaceted activity. Take it seriously because users will not adopt a buggy app! That being said, we recommend limiting deployment to certain approved devices to reduce the scale of testing required. Integration What is the cost of integrating with your existing IT Systems if there are no web services available today? Would it be worth investing in middleware that exposes your legacy services to mobile? This way you can build a future-proof solution that scales and is cheaper to maintain. Do you have costs associated with opening and securing back-end systems? These could be amortized as part of a general move to multichannel delivery. Is there a need for containerization or virtual private network solutions for private connectivity? The lack of suitable integration points is one of the most common issues encountered in mobile development. Don’t take it lightly. Allow sufficient lead time or budget to consult with mobile API specialist to help you design the best architecture for your applications. The essential guide to becoming a mobile app rock star (Part 2) 5
- 7. 2 Operational Costs In the excitement to develop a compelling mobile app, it’s easy to overlook the ongoing operational costs of running, maintaining and improving your app over time, and supporting the customers who will use the app and the personnel who will support it. As you create your business case, don’t forget to do as complete a job as you can considering the costs of operation, not just development. Promotion One necessary investment that’s often overlooked is the cost of promoting your new app. If you’re going to invest in building a great app, make sure you do what it takes to get your customers to use the app. Certainly, you can leverage existing communication channels to reach existing customers, but you’ll still need to develop content, offers, and promotions to drive awareness and adoption. You may also want to consider additional programs and media channels to drive adoption among your customers and prospects. We’ve seen some really exciting, cutting edge apps languish because clients failed to consider the importance of promotion. Assuming that “If you build it, they will come.” Is a big mistake. Licensing If your app makes use of third-party software apps, or integrates with back-end systems, you’ll need to find out whether there are licensing costs to factor into your plan. While you’re at it, see if there any volume-based licensing fees to consider (CRM, Document Repository, MDM, MAM, etc.)? Infrastructure How many users do you expect to support? If your app ties in with back-end systems – for customer support, or m-commerce, for example – will back-end systems need to be upgraded to handle the increased load? Make sure to consider these and any other potential impacts that deploying an app can have on your existing infrastructure. Consider the costs of upgrading bandwidth and equipment if you want to ensure quality service for your users. The essential guide to becoming a mobile app rock star (Part 2) operational Costs Promotion Licensing Infrastructure Cloud Support & Training Updates 6
- 8. Cloud Will you be using cloud services for your app middleware? You’ll need to estimate use and associated costs. Support & Training Will you need to pay for training courses on new systems for your internal support staff? By how much will you have to increase the head count? What about end-user support? Do you need to have helpdesk personnel standing by to field user questions about the app or about the products and services your app will be promoting? Will you offer support 24 x 7? As the range of supported systems and devices expands, so does the need for support staff and training. There are companies that you can outsource this to, but at the very least you must consider the cost associated with growing your team’s size and knowledge. Updates No matter what, if it’s an app, it will need to be updated. In development, you’ll probably decide some features will have to wait till Version 1.1, or Version 2.0. How frequently will you update your app? Point releases? Major upgrades? You’ll want to provide users with a way to ask for enhancements. How will you support enhancement requests and bug reports? What about security updates? Don’t pretend it’s not going to happen. How much will each update cost to develop, test and deploy? The essential guide to becoming a mobile app rock star (Part 2) 7
- 9. 3 Calculating Benefits, Cost Savings & ROI 42% Improve Customer Loyalty The intimacy of mobile devices and apps makes them ideal vehicles for enhancing customer engagement and building loyalty. According to one recent study, 75% of consumers said they would switch brands if offered real-time promotions delivered to their smartphones. 1 And the Aberdeen Group has estimated that retailers that are able to personalize online marketing messages have seen 16% increase in retention rates, and a 15% increase in response rates2 of US consumers said using a company’s mobile app made them more interested in buying from that company Source: Ipsos OTX and Ipsos Global @dvisor Look into relevant research for your industry, and any internal data that might enable you to construct a realistic estimate of the impact of your app on loyalty. Tap New Revenue Streams According to the Yankee Group, adding location-targeted promotions to your mobile app can drive incremental revenue by more than 4%3 Look carefully at how you’ll be using your app to engage customers. Will you be using it primarily to drive traffic to retail locations? How do you expect this will impact revenue and sales? What about m-commerce? How much incremental revenue can you realistically expect to generate through mobile sales? Mobile Shopping Survey Series, Part 2: CPG Shopping Behavior Aberdeen Group’s Omnichannel Experience Report 3 Yankee Group, Mobile Loyalty Conundrum: The Battle for the Mobile Shopper 1 2 The essential guide to becoming a mobile app rock star (Part 2) benefits Improve Customer Loyalty Tap New Revenue Streams Reach Key Demographics Enhance Customer Service Increase Efficiency & Effectiveness 8
- 10. Reach Key Demographics Smartphone users between the ages of 35 and 44 were the most likely to download a mobile app, followed by the 18 to 24 age group. Out of the 35 to 44 age group, 86% of smartphone owners have downloaded a mobile app. 85% of the 18 to 24 age group have downloaded an app.4 Are you reaching the key audience you want to engage with? This could have significant impact on your business, depending on the content, convenience, social integration and value your app is providing. Enhance Customer Service Will you be using your app to provide enhanced customer service to your users? How will this impact retention and sales? Increase Efficiency & Effectiveness Now, think about some of the other benefits of your mobile app. Eliminating paper handling & printing If your mobile app will replace paper- or plastic-based coupons, gift cards, and catalogs, how much will you reduce costs by switching to digital? Think about the full range of design, production and shipping costs. Process Transformation What is the long-term impact of using mobile to engage customers directly with business processes? Enhanced customer communication Will you use your app to gather feedback from your customers on your product design and features? How will this direct feedback impact product marketing and development? Will it enable you to deliver more frequent/better enhancements? How will this enhance your competitive position? 4 Source: E-Marketer The essential guide to becoming a mobile app rock star (Part 2) 9
- 11. Conclusion National Range Officers Institute metrics for mobile app development are not black and white. The metrics described in this report are a combination of industry research and 8 years of application development experience. Take this model and work with both the business and end users to uncover more opportunities to engage customers, drive incremental revenue and improve business processes. Identify the ones that work best for your company and your app. It’s a big task, but the reality is that mobile has the power to move from a cost center to a driver of business innovation—so getting a benefit template in place for each of the typical mobile apps you plan to deploy will be an essential planning exercise. Break it down: 1 Identify a small number of tools and vendors to estimate costs 2 Use the metrics derived from the model above to assemble a case based on specific benefits and values For more information on how to become an enterprise app rockstar read the other parts of our series. Part 1: Developing an actionable mobile application strategy Coming Soon! Part 3: Choosing the right Mobile Enterprise Application Platform (MEAP) partner The essential guide to becoming a mobile app rock star (Part 2) 10
- 12. DMI About DMI DMI Sales Team One Rock Spring Plaza 6550 Rock Spring Dr Bethesda, MD 20817 U.S. Sales: 855.963.2099 Int’l Sales: 240.200.5848 [email protected] DMInc.com DMI is the world’s leading provider of enterprise mobility services and solutions. We build enterprise class mobile solutions that generate results for the world’s top brands and businesses. Our mobile solutions combine the award-winning user experience design that has made us one of the top creators of consumer apps, with the deep middleware and engineering expertise that we’ve used to build and manage enterprise applications for the most demanding IT departments in the world. DMI mobility solutions improve business processes, tap new revenue streams, build customer loyalty, and increase employee productivity. And we offer a full range of Managed Services to securely set up, configure, and manage your mobile devices. The proof: We’ve built more than 400 mobile apps—in the past 12 months alone—for more than 150 leading organizations— like Disney, Coca Cola, Toyota, Vodafone, P&G, The National Guard, and Universal Studios. We offer a full range of security options that include Federal-grade hardware-based security, two-factor authentication, secure container, and sophisticated encryption solutions. We offer brilliant creative and user experience: Our mobile app development group was named the Best Branded App Developer at the 2012 Mobile Entertainment Awards. With our expertise and economies of scale, we can provide mobility management at a higher service level and on average 20% lower cost than most companies can do on their own. We have 500,000 devices under management for more that 100+ clients, including many Fortune 500 companies—like BP, Johnson & Johnson, Sears, The Associated Press, Allergan, and more. At BP, we’re deploying 1,000 managed mobile devices each day. We provide 24 x 7 x 365 mobile service support for more than 500,000 users. DMI is the one call our customers need to make to resolve any issue—devices, apps, infrastructure, even carriers. Pervasive excellence is our commitment to quality service. DMI is one of only a handful of companies that is CMMI L3 appraised for both application development and services, as well as ISO 9001:2008, ISO 27001:2005, and ISO 200001:2011 certified. Our average D&B Open Ratings performance score from our clients is 94/100. The essential guide to becoming a mobile app rock star (Part 2) ©2013 Digital Management, Inc. All right reserved. 11