It’s nearly impossible to live in the modern world without using or hearing about apps. Since the advent of the iPhone in 2007, mobile application software has dominated the conversation about technology in nearly every facet of life.
An Unbiased Guide To The Realities Of Mobile Apps
From dating to shopping, travel to business; if it exists, there’s an app for it! But what does that mean for your business? What factors should you consider when determining whether or not to jump on the app bandwagon?-
Consider this your unbiased and comprehensive primer on all things app!
This Is What They’ll Tell You…
When analyzing a trend, few things are more revelatory than cold hard stats. It’s no secret that app developers have found tremendous success over the last couple of years. We’ve listed some of the more popular stats relating to mobile use trends:
- Smartphone users spend an average 2 hours and 42 minutes on mobile devices with app usage accounting for 2 hours and 19 minutes of this time. That equates to 86% of the time that the average US mobile consumer spends on their smartphone.
- In May 2014, mobile devices accounted for 60% of all digital media time spent, with apps representing 51% of that time.
- Smartphone users spend 89% of media time in apps and just 11% using mobile web.
- Tapsense stated that data shows that apps are now a preferred channel for consumers and that 70% of retailers are focusing on apps.
But What About?…
Increasing mobile usage and time spent on mobile apps is a growing reality, but what many sources often don’t tell you are things like:
- Usage trends are often benchmarked by “big player” mobile apps like Facebook, Google Search, Pandora Radio, etc.
- Less than 0.01% of mobile apps will be considered financially successful by 2018.
- About 52% of all apps lose at least half of their peak users after three months.
- The average user spends 70% of app time in their three most-frequently-used apps.
- 74% of consumers state they should uninstall apps they don’t use.
“We could probably kill off about 95% of mobile apps out in the ecosystem and nobody would even think twice. This is because, in many cases, the mobile web can get the job done – for less money, and with more flexibility.” Aaron Strout, Marketing Land
So, What Makes A Good App?
One way to cut through all of the mobile app hype and assess whether developing an app is right for your organization is to determine what actually makes an app good. Your app’s potential will largely depend on whether it does one or both of the following:
Solves a real problem
Simplifies a complicated process
Here are a few examples of mobile apps that have found tremendous success because they adhered to these baseline parameters.
Evernote represents one of the most unique and effective productivity apps on the market for note-taking and improving everyday processes and planning.
- Problem Solved and Process Simplified:Evernote helps people organize, plan, and simplify their lives. It takes the complexity out of storing and keeping track of notes, web pages, photos, audio clips, and more.
Tailored specifically for bike-riding, the MapMyRide app connects directly with your phone’s GPS to glean route information.
- Process Simplified: MapMyRide allows bikers to stay informed about how many calories they are burning, how far they have travelled, and how fast they are going in addition to mapping out their biking experience.
An app created specifically for customer service, FastCustomer gives users direct access to customer service representatives from virtually any company.
- Problem Solved: Imagine ringing up a customer service line and being patched through to a representative without ever waiting on hold again?
Native vs. Mobile vs. Hybrid
There is an ongoing debate about whether you should develop your mobile app as a native, web, or hybrid. So, what’s the difference between the three?
- Native App: Installed on device. A version for each device type: iPhone, Android, Windows, etc. Has access to phones features and information. Doesn’t always require internet.
- Web App: Lives on the web. A mobile website made to function like an app. Limited access to phone features and information. Dependent on internet.
- Hybrid App: Installed on device with embedded web browser. Can access phone features and information. Cordova and Appcelerator are popular platforms for hybrid development. Heavily dependent on internet.
We’ve put together a comparison table to help illustrate some of the key strengths and weaknesses of all three types.
|Load Speed / Performance||Good||Poor||Moderate|
|Compatible w/Device Features||Yes||No||Somewhat|
|App Maintenance Expense||High||Low||Moderate|
|Restricted to App Stores||Yes||No||Depends|
|Browser Compatibility Expenses||None||High||Moderate|
|Tracking Users and Usage||Easy||Difficult||Moderate|
|Discoverability on App Stores||Good||N/A||Good|
The Bottom Line: Cost
The costs associated with developing a mobile app vary. We’ve created 5 main categories to consider when evaluating potential expenses and timelines: concept viability, functionality, quality, scalability, and maintenance.
Market research and persona development, concept refinement, planning phases, design mock-ups. It will actually solve a real problem.
User and admin features needed, API integrations, native/web/hybrid, devices supported (Android, Apple, Windows, etc.). How complex or extensive will it be for development.
Programming quality, design quality, user experience quality, performance quality. It meets or exceeds user and admin expectations in all facets.
Number of users it will support, volume of API requests and computing, server load. It can support all users with no errors or downtime.
Performance monitoring, bug fixes, security updates, new releases, marketing improvements. It solves a real problem without complaints or becoming outdated.
Don’t be tempted to cut corners. Give all areas the attention they deserve and you’ll avoid paying for it later on.
Outsourcing To An Agency
The following are a few cost examples that represent what it takes to get a solid mobile app developed by an agency.
This is an initial breakdown provided by Ken Yarmosh, the Founder and CEO at Savvy Apps. He broke it down by agency tiers:
1. Largest App Companies: $500,000 – $1,000,000
2. Reputable Agencies (like Savvy Apps): $150,000 – $450,000
3. Smaller Shops: $50,000 – $100,000
Features Are Expensive
To illustrate how features affect development expense and also provide another price rage, we put together the following table from the cost calculator over at Kinvey:
|Kinvey (all features)||Kinvey (no features)|
|Platform||iOS and Android||iOS and Android|
|Size||9+ Screens||1-3 screens|
|User Management||Standard, Social, Enterprise||None|
|Data Storage||Data, Large Files||None|
|Data Source Integration||Advanced||None|
|3rd Party APIs||Advanced||None|
|User Engagement||Push, SMS, Email, Advanced Social||None|
|User Experience Quality||High||Moderate|
|Scale / Reliability||High||Limited|
|Admin Web Portal||Yes||No|
Agency Timeline Example
|Kinvey (all features)||Kinvey (no features)|
|Person Work Days
(8 hour day)
|Total Project Hours||2656||128|
|Min. Work Days
(8 hours per day)
|Min. Business Weeks
(5 days per week)
(≈3 ½ months)
Depending on feature requests, you may need highly skilled app developers. Here is a quick look at what to expect if you plan to hire in house programmers:
Please note: We do not recommend only hiring developers to build your app in house. Designers, UX specialists, marketing analysts, and project managers are also essential. Because most of the work hours will be spent by development, and also for simplicity, we have chosen to only include information on developers.
- Highly skilled: $90,000 – $160,000 annual salary
- Median: $107,000
- Skilled: $60,000 – $120,000 annual salary
- Median: $85,000
- Beginner: $45,000 – $95,000 annual salary
- Median: $66,000
In-House Timeline Example
We borrowed the work hours from the Kinvey estimate (above) for a feature rich app. In the table below, we’ve subtracted 656 hours for other personnel like design, UX, etc. This should give you a good idea on the time constraints for your in house developers.
|1 Developer||2 Developers||3 Developers|
|Total Developer Hours||2000||1000||666.67|
|Min. Business Days
(8 hours per day)
|Min. Business Weeks
(5 days per week)
Do-It-Yourself Sites / Subscriptions
Because do-it-yourself platforms are improving, we’ve decided to included them as a possible option, but we’ll touch on their limitations a little later. We looked at 5 popular companies that provide native app options for Android and Apple. Here is a quick breakdown of cost:
|Year 1 Total||Year 2 Total|
Even with all of the perceived convenience associated with developing an app through a DIY platform, this particular method has a large list of shortcomings. Here are some of the most significant:
- It’s On Your Time and Your Expertise: The quality of the finished product is highly dependent on your capabilities and time. When compared to an app development team, you’ll have a hard time competing on overall quality.
- No Value Added: DIY options struggle to solve real problems. They typically end up as a mini version of your website or social media feeds. Without a real value proposition, your users will feel no need to keep or use your app.
- Zero Customization: With DIY platforms you have no flexibility to change something you don’t like or build unique features and tools. Adding anything custom will push you back into an in house or agency development scenario.
- Just For Fun? As Brett Miller, President at Custom Software by Preston, noted in this blog post. The limitations of DIY platforms really make them more appropriate for hobbyists and user experimentation rather than serious development.
You Need Good Maintenance And Monitoring
In September of 2014, Facebook incurred hundreds of thousands of dollars in damages when it went down for a period of 20 minutes. No matter who you are, your software is going to have issues. Plan to dedicate resources to monitor and maintain your app.
Security Is A Must
If you plan to collect personal data from your users, ongoing security monitoring and updates are incredibly important. You should anticipate and prepare for security breaches and hacks.
New Releases: Don’t Lose Your Momentum
As with any good app, updates and new releases are part of keeping the ball rolling. This is especially true when you start tracking usage and collect feedback from your users. Work hard to avoid negative ratings and keep your audience happy.
“If you build it, they will come” right?…Wrong. Without marketing, your app doesn’t really exist. You should plan to invest and dedicate resources to get your app in-front of and into the hands of your target consumers.
It All Starts With Concept Viability
Research, market analysis, persona development, design, and user experience provide the foundation to make any app successful. Don’t be tempted to skip or limit marketing input. Your long-term success is largely dependent on it.
Big Exposure = Media Placements
To generate large national exposure, you need a media placement strategy. Start by compiling a list of top media sites or blogs relevant to your target audience. Then, develop relationships with journalists and refine your pitch. Remember these things:
- Top journalist, bloggers, and reviewers are busy and receive pitches all the time
- Your success is dependent on relationship building and crafting amazing pitches
- Make sure they can review your app for free
Marketing To Current Customers And Followers
Marketing to current customers will require fewer resources, but your reach is obviously limited. Look at all of your touch points with clients and develop a strategy to promote your app in each scenario. Here are a few places to consider:
- Company Website
- In-store Collateral
- Product Labels
- Email and SMS Campaigns
- Support Reps, Cashiers, and Salesman
Time Frame For Results
Time frame is largely dependent on the amount of resources you plan to allocate. For immediate results you need to invest in activities that will generate a lot of exposure (like media relations). Craft your value proposition and present it well because exposure isn’t cheap.
5 Things You Need To Consider:
1. Do You Know Your Persona?
Launching forward without this might possibly be your worst decision. Conduct the research and compile solid stats you can use when deciding on features, design, new releases, and everything in between.
2. User Privacy Concerns
Many people will not download an app if it requires access to personal information and device features for no apparent reason. Keep your permissions to a minimum and you’ll avoid turning customers away.
3. App Icon, Name, And App Store Optimization
Many apps are never seen or installed because these basics haven’t been optimized.
4. Don’t Neglect UX And Design
Some of the biggest brands have failed due to poor user experience, especially in markets with competition that users can easily move over to.
5. App Retention
This perhaps is the most difficult problem to overcome when marketing an app. Plan on dedicating marketing and development efforts to keep users once they’ve download your app.
A Chilling Payoff Curve
Gartner released a study last year that estimated, 1 in 10,000 apps will pay off by 2018. That’s only 0.01%! This is due to how many apps exist and that many are free.
Because the app market is so saturated, businesses will have to focus their efforts on app revenue streams like lead generation, in-app sales, etc.
Development Cost Breakeven
If you invest $50,000 into developing an app and want it to pay itself off in the next 2 years. You will need to generate an additional $2083.33 each month. This is assuming no expenses for maintenance, marketing, or new releases.
Per User Cost
Use this to gauge how expensive your mobile users are.
|Total Cost of App||Number of App Users||Per User Cost
(Total Cost / App Users = PUC)
% of New Leads
This will give you an idea of how viable your app is compared to other lead generating efforts.
|New Company Leads||New App Leads||% of New Leads
(NALs / NCLs = %NL)
% of New Customers
Just like the metric above, this will give you an idea of how much your app is contributing to your overall efforts.
|Total New Customers||New Customers from App||% of New Customers
(NCFA / TNC = %NC)
User Retention Rate
This is an important metric to your long-term success. A low retention rate is an early signal that something needs improved.
|Total App Downloads||Total App Users||User Retention Rate
(Downloads / Users = URR)
ROI Is Hard To Measure Perfectly
Brand awareness, exposure, sentiment, loyalty, and customer lifetime value aren’t easily projected. In some cases, brands don’t have profitability as a goal for their mobile apps. This strategy isn’t ideal, but it does illustrate some benefits people neglect to account for.
A Quick Look At Benefits Associated With Apps And Use Cases
Mobile Marketing And Brand Interaction
Because consumers are spending more time on mobile devices, companies are investing significant amounts of money to compete in the mobile app space. This is a quick look at the benefits associated with app marketing:
- Create a direct marketing channel
- Increase customer engagement
- Differentiate from competitors
- Cultivate customer loyalty
Mobile Marketing Trends For Apps
The more you look into the marketing benefits, you’ll start to see trends as to how they are achieved. These are a few:
• Push notifications
Push notifications are popular for increasing engagement and also improving app retention. Similar to a text message, they provide a direct line to your target audience.
• Location Based Targeting
Companies are attempting to utilize a user’s location to customize their experience with more relevant and appealing advertising or incentives. There are a myriad of strategies being developed like proximity alerts and in-store beacons.
• Data Collection
Most apps have access to user information that is very valuable for marketers. This information is often collected and used to customize marketing messages and form better target personas.
We haven’t talked much about this type of app, but companies are investing resources to develop apps solely for optimizing internal processes. This is where the idea “does it solve a real problem?” really comes to fruition.
App Store Sales And In-App Purchases
Companies like Electronic Arts (EA) and Supercell are built around an app store approach. Their livelihood is dependent on app store downloads and in-app purchases. In these scenarios the app is the product and generally isn’t used for other marketing purposes.
Limited Phone Storage Space
All mobile devices have limited storage space. With limited space, users have to pick and choose which apps they want to keep on their mobile device. This means that users are likely to uninstall some apps, and keep others.
“…there may be an upper limit to how many apps people will interact with over the course of a month, and that number – just over a couple dozen – hasn’t grown much over the past few years.That’s good news for the everyday must-haves, like Facebook and Google or the default email, messaging, maps or weather applications, for example. But it’s bad news for the young companies trying to establish a foothold and core group of dedicated, engaged and loyal users within the ever-expanding app universe.” Sarah Perez, TechCrunch
Less Commitment When It’s Free
So, which apps tend to make the cut when users need to save some space? According to Bruce Upbin at Forbes, users are less likely to uninstall an app they paid for and more likely to uninstall a free app that they don’t use very frequently.
Poor User Experience Will Break You
According to a survey conducted by Perfecto Mobile, user experience is the number one reason for mobile app failures. Most consumers won’t respond well to apps with confusing interfaces, that are riddled with bugs, or send out too many push notifications.
In 2014, there were more than 317,000,000 apps available to users. Google Play accounted for 1,300,000 and the Apple App Store had 1,200,000. This presents a significant challenge for any business wanting to capture market share or provide something unique.
Examples Of App Failures
A fantastic mobile app used to sort, organize, and store a user’s photos. Everpix invested a lot of resources to make the user experience seamless. This is a quick highlight:
- As much as 55,000 users
- $2,300,000 in financial backing
- Awesome product and user experience
- Died in 2013
Reason for failure:
They didn’t focus on marketing until it was too late. They failed to allocate resources to exposure generating activities.
An app used to “hail” taxis. The product itself was well built and had a lot of success in London.
- $100,000,000 in funding
- Died in 2014
Reason for failure:
Failed to compete with their competition. They had a faulty business model built on poor market research.
You probably recall hearing about it, but aren’t sure what it was. Unfortunately, that’s exactly why it failed. Google Wave was supposed to be the “new” email, but users struggled to know what it actually was and how to use it.
- Forward thinking concepts and technology
- Unique value proposition
- A lot of exposure and early adopters
- Died after 6 months
Reason for failure:
It left users confused. The UI was complicated and poorly designed. They overlooked concept viability and the user experience. Google couldn’t describe their product simply.
Alternatives To Apps
SMS / Text Messaging
SMS is similar to push notifications and can be used to accomplish many of the same desired outcomes. If you need to send to a large list of subscribers be sure to choose a mass text messaging platform that is reliable and can send messages fast.
You will find that people treat text messages more like a conversation than an update and therefore are less likely to be ignored or put off for later. Here are some things to remember about SMS:
- People still use feature phones (AKA not smartphones)
- SMS has 90%+ open rates compared to push notifications at less than 40%
- Not limited by device compatibility (Apple, Android, Windows, etc.)
- Text messages are usually read within a couple minutes
- No WiFi required
- You don’t have to download an app
- Significantly better retention rates
- Substantially cheaper than developing an app
- Much simpler to manage and execute
- Several apps still use SMS to communicate with users (i.e. Facebook)
Referring back to the SAP and LoudHouse study, 81% of people prefer a text message over mobile app usage and 74% say that they should uninstall a number of apps on their smartphones that they don’t use.
Depending on what you intend to build an app for, a mobile responsive website may be all you need. Apps are good if you plan to provide a tool or unique functionality that a website would make difficult or tedious. That being said, here are some things to consider:
- If the app mimics your website, you haven’t solved a real problem (no value added to the user)
- Websites provide significantly more exposure and reach
- You don’t have to install a website
- Websites are cheaper to maintain (especially if your app is native to multiple devices)
- Websites reap search engine benefits that apps can’t
- Not limited to the space on a user’s phone
- Mobile web can function much like an app
- Websites aren’t subject to being deleted
So, as you can see, there is a lot to take into account when addressing whether or not building an app is right for you or your business. What’s your best option?
With the considerable time commitment and high cost associated with developing, marketing, and maintaining apps, turning to app development for marketing purposes may not be a viable option for most small businesses.
If you want to stay ahead in the world of marketing, you have to be aware of current and future trends in addition to utilizing every marketing channel currently available. The evidence is clear that apps are here to stay and, if properly developed, marketed, and maintained, they can be a huge boon to your business.
Everything In Between
While we highlighted the two extremes at each end of the spectrum, many businesses fall somewhere in-between. And the main takeaway here is this: if you’re going to build an app, you have to do it right. You can’t cut corners. Building, marketing, and maintaining an effective and useful app will cost a lot of money, take a lot of time, and, ultimately, require a lot of hard work.
About The Authors
Mack Perry brings a decade of journalism experience writing for newspapers, blogs, and websites to the table as the Marketing Writer for Txtwire.