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App Marketing Conversations

Predictions for Loyalty & Mobile Apps in 2015

Check out the latest installment of our App Marketing Conversations series to hear Robi Ganguly of Apptentive, Ian Sefferman of MobileDevHQ by TUNE, and Ryan Morel of GameHouse discuss a few predictions on where loyalty, retention, and mobile apps are headed in 2015.

If 2014 was the year re-engagement started to become possible, 2015 will be the year it becomes a commonplace strategy for mobile apps.

Loyalty and retention are only getting more important as differentiators and revenue drivers in a crowded app store marketplace, and in 2015, we can expect to see some clear winners emerge from those brands taking an early lead on prioritizing their customers.

Interested in seeing our last year’s predictions as well? Check out what we had to say one year ago. In our next installment, we’ll revisit our 2014 predictions and report back on how accurate we were.

Transcript:

Robi Ganguly: Good morning. Happy 2015. Welcome to another App Marketing Conversations. As always, I’m joined by Ryan Morel from GameHouse and Ian Sefferman from MobileDevHQ. I’m Robi Ganguly from Apptentive. We made some predictions a little over a year ago, and we’ll have some recap episodes for you to link to where we can talk about how those predictions went. This year, we’re going to do the same thing, and we’ll break it up into a few categories. This category of predictions is going to be about loyalty and mobile apps and what that looks like in 2015.

Let’s kick this off. Do you think that loyalty continues to be important, Ian?

Ian Sefferman: Yes.

Robi: Okay. Why is it important?

Ian: Well, you know, I think… As we’ve seen before… First of all, at the high end of the market, a lot of those apps have saturation, and now they have to build loyalty or retain loyalty in order for them to actually be successful. At the low end, I think proving your unit economics first and foremost is really important before you get scale.

Robi: Would you care to make a prediction? You know what? We’ll come back to you. He says loyalty is still important. Do you agree with that?

Ryan Morel: Yeah, yeah, of course.

Robi: Do you think that the importance has shifted? Has it changed over time.

Ryan: No. I think it’s getting more important, partially because of what he said at the high end, at least on the high end of the market from an app perspective and number of users. You either have to have a lot of users who are loyal and pay a lot, or you have to have a smaller amount of users who are extremely loyal and pay you even more. If you look at the charts how we ended 2014, they look very similar to how we ended 2013 and 2012. That’s about loyalty. If you can’t break into those charts, which it’s unlikely that you’re going to be able to, even breaking into them at the bottom end will be important.

Robi: Right, right. I think what I would add is I absolutely think loyalty is super important, and I think that last year’s prediction around retention started to actually be proven true in 2014.

The thing that is also interesting is that the growth is still massive in mobile, but it’s stating to slow. Instead of seeing a steepening of the curve, we’re starting to slow because we see mainstream penetration of mobile devices. What that tends to mean is that acquisition efforts are not enough. When it’s growing exponentially, everybody can continue to acquire, because there are new groups of customers coming online. Now, we’re starting to see that slowing, and it’s more and more important than ever to start thinking about how you can get your customer base to help you with that acquisition effort. Because you’re now competing against more and more people in a market that’s growing more slowly.

When you think about loyalty and you think about retention, that aspect of word of mouth that comes from your loyal customers becomes more and more important to your acquisition efforts, and it becomes more and more important to everything that you do from a marketing and monetization perspective.

So, we let you think about this for a minute. Now, I’m putting you on the spot.

Ian: Yeah.

Robi: Prediction.

Ian: I think my prediction will actually be around how loyalty comes into play. I think that it’s going to be continued importance or increased importance on re-engagement. We sort of saw 2014 as the year where re-engagement almost became possible. Like, re-engagement campaigns really sort of took foot. I now see them as a primary driver and use case for an app and for part of an organization within the app.

Robi: That makes sense, that makes sense. How about you, Ryan?

Ryan: I will give two predictions. One, I think re-engagement, but mainly to the next level like dynamic re-engagement, being able to match an individual user to an individual ad impression, being able to deliver a content experience that matches that person. For example, you were playing Clash of Clans and you have a thousand coins left. There’s no technical reason why you can’t show an ad saying hey, Ian, you have a thousand coins left on Clash of Clans, come buy this. I think that’s one thing.

Two, I think we’re going to see the cost – everyone’s talking about the cost of building startups is this – dropping dramatically, and I think we’re going to start to see a reversal of that, specifically for apps. Because people need to build loyal users immediately, and you can’t build a loyal user without a really high quality app experience. So, I think we’re going to see that cost come up in order to meet the growing demand of consumers wanting fantastic experiences.

Robi: Yeah, that makes sense. My prediction around this is that… You talked a lot about the advertising aspects and some of the games, the quality aspects there. I think that loyalty has long been bread and butter for consumer brands, and they’ve had disparate programs. In fact, if you look at the largest companies in the world with consumer presences, they often will have things like a credit card with loyalty points. They might have their own shopper card. They might have a third party that actually helps them participate in other ecosystems of loyalty.

I think what we’re going to see is the companies that have been doing loyalty offline or on other channels are going to start trying to take those practices to mobile and see if they can translate them or at least connect them and bring that data into their mobile experiences. I think this year you’re going to see a bunch of first steps in that direction with a lot of missteps along the way. I suspect that there are going to be probably at least half a dozen to a couple dozen companies that as they try to go do this seek press around it, talk about it, and then you don’t hear about it except for months later because it’s kind of died. Because it’s relatively complex to make that transition, especially with the speed that mobile is growing with.

What we’ll see by the end of the year is that some of the people who are winners actually start with their mobile customers first and then work backwards for their loyalty programs. That’s my long winded prediction. All right.

Ryan: How do you think Apple Pay impacts that?

Robi: I think Apple Pay this year will not really be incorporated into loyalty programs. Because this year for Apple Pay, and we’ve talked about this a number of times, is the year where what they’re trying to do is get coverage at enough places to purchase and then enough apps are using it also to power their commerce. The work to actually connect it with loyalty activity and the work to actually get the hardest thing, get Apple on board with you and connecting the data so that you can get access to their data and then power your loyalty systems, I think that’s too far off. I don’t think that’s going to this year.

Ryan: Okay.

Robi: Would you…

Ryan: I have no idea. It was a curious question. I just know that the more that I use it, the more valuable it is to me. I think from a non-app perspective, you’re loyal to a few places, and not having that loyalty connection is a problem for some folks.

Robi: Yeah, absolutely. Anything else we should be chatting about with these predictions? I think it’s pretty straightforward.

Ian: Yeah.

Robi: So, stay tuned for the next two sets of predictions from these very intelligent gentlemen, and then we will also link to last year’s predictions so you can see how we did. Thanks.

Want more App Marketing Conversations? Check out the next segment on the GameHouse blog.

loyalty-not-guaranteed

The Cost of Customer Loyalty For Your Mobile App

Many companies believe that a successful customer loyalty campaign lies in new advertisements or new customer loyalty projects quarter after quarter. There are loyalty programs galore focused on incentivizing customers to frequently return. However, these constant and insistent attempts to gain our loyalty are not working, in fact, they are failing as customer loyalty is in decline.

Customer loyalty is in decline because consumers have more information than ever before and that information only takes 5 seconds to get. It’s incredibly easy to find the cheapest alternative, a special coupon, or a new product that may do what customers want just a bit better. For mobile apps, the cost for loyal mobile app customers is at an all time high. According to a report from mobile marketing firm, Fiksu, it costs $1.90 to acquire a loyal customer for a mobile app and all signs point to a continued rise through the holidays. Marketing budgets are being strained to continue to bring in new customers, and more importantly to keep them. As defined by Fiksu, a loyal mobile app customer is someone who opens the app three or more times in a thirty day period.

Mobile Customer Acquisition Cost

With costs increasing and customer loyalty in decline, improving or even maintaining customer loyalty can seem fairly bleak. What most companies are forgetting are the basics of what drives loyalty (it’s always about going back to fundamentals). A company that treats it’s customers well will always be more successful than the company that doesn’t care about the customer experience.

When there is a problem, customers expect to receive excellent and proper treatment. This above all else drives loyalty. For mobile apps, this concept is unfortunately lacking to the point where hearing that customers are surprised to even receive a support response is a common story. To create customer loyalty it’s time to move away from marketing tricks and move back to what’s important.

  • Treat your customers with respect – This can be more difficult than you might think. Sometimes a rude customer or a customer who can not follow or understand the simplest of tasks can push you over the edge. Your instinct can make you react quickly, but take a step back and wait a few minutes before responding. No matter what the problem might be, apologize and move on to trying to help them. Many customers who may seem angry, frustrated, or dissatisfied can easily be turned into loyal customers by being treated with respect.
  • Listen to your customers – Nobody knows what customers want better than the customer. Actively listen to your customers on all channels (mobile, social, email, and web). The more places where customers can talk to you and feel listened to, the more likely they will actually reach out with something to say.
  • Respond to your customers (be human) – Start every message that you can with their name and sign it with your own. Be a real person and have a real conversation. This is essential to developing a relationship and is often the foundation of why customers are loyal. Customers are loyal to the people behind the product who provide great support and are reliable in times of crisis.
  • Rise to the expectations – Customers expect to be well taken care of and have no qualms about taking their business elsewhere if the support is not up to par. Not every company can provide quite the same service as an Amazon or Nordstrom, but every effort should be made to provide an exceptional experience for your customers. Be honest and open about what you can and cannot do. Don’t make promises you can’t keep, but make efforts to rise and go beyond expectations of your customers when you can. When a customer feels that you are making every effort to help them out it is appreciated.

Do you have loyal mobile app customers?

You may not consider a customer who opens your app three times in a month to be loyal. Every app is different, therefore expectations of how customers will use it differ as well. What’s important is how you are measuring customer loyalty. Common methods for measuring loyalty is the Net Promotor Score or using voice of the customer metrics across all departments to set benchmarks over time. While both of these can help give you an understanding of what customers think about your app, it falls short of actually measuring loyalty.

To measure loyalty you must dig deeper and understand the entire journey that the customer has with your app. Loyalty should be measured through a series of touch points through your app and be able to extend further into web, email, and social. We are all glued to our phones, constantly sharing and interacting through our mobile devices, yet there is still very little contact through devices with companies. Being proactive to engage with your customers and be there ready to solve an issue at hand is the best loyalty strategy you can have.

The more touch points across the customer journey the better to not only accurately measure loyalty but to create it. Loyalty is about emotion, not logic. If you have customers that love your mobile app they will come back, it’s that simple. Creating customer loyalty doesn’t need to be about spending more money on campaigns and loyalty programs. It’s about creating an exceptional experience that customers can trust to receive every time.

How do you measure customer loyalty? Do you have any suggestions for increasing customer loyalty? Please share in the comments below.

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Love_Forgiveness

Love and forgiveness in Silicon Valley

Love_Forgiveness

(alternatively titled: Fear and Loathing in Las Appulous)

It’s Valentine’s Day, so it feels particularly appropriate to discuss the topic of love, as it applies to software. “Love and software?” you might ask, “What the F do those things have to do with one another?”

A lot, it turns out.

As our world becomes increasingly software-driven, we all are faced with dozens, if not hundreds, of software interactions every day. This reliance upon software necessarily leads to the act of discernment. We say to ourselves “this software is bad” a lot,  “this software is good” occasionally and, when presented with brilliance, “what software? I never noticed.”

From a technical standpoint, most software is replaceable, the functionality achievable in a number of ways, all leading to the same technical outcome. However, in practice, the interaction between software and the people who rely upon it is a huge determinant on whether software becomes Google or Alta Vista.

When humans interact with software, emotions become involved. Most of the time, the emotions are bland, minimal and fleeting. However, there are times when the emotions that are tapped are visceral and lasting.

Like when we feel like our privacy has been invaded.

Which brings us to Path and the “address book mess”

Over the past week, Path has gotten raked over the coals for not disclosing that they were uploading the entirety of your address book to their servers. The lack of disclosure was particularly alarming for many folks who saw in Path’s actions the echoes of the “ask for forgiveness, rather than permission” style of behavior that has propelled other companies, like Facebook, to the upper echelon of user engagement.

It all started with Arun’s post, where he shared his discovery. Path, to its credit, quickly responded by apologizing and deleting all of the data, but that wasn’t nearly enough for the press.

In short order, Nick Bilton weighed in on the recurring apologies of Silicon Valley, Michael Arrington and MG Siegler got into the mix and Dan Lyons dropped the bomb of an accusation that the shady research payouts of the early 2000’s have migrated to the tech blogs of today.

Now we’re finding out that many more apps have been guilty of this behavior and we’re sure that the list already uncovered isn’t close to comprehensive. To add even more complexity to the issue, we find that Apple has been allowing the sharing of address book and photo data, unprompted, despite previous statements indicating this would never happen.

We ask: What about the customers?

Lost in all of this mess has been the conversation about what really matters: what’s the impact on Path’s business of this mistake?

Arrington rightly pointed out that the unequivocal apology is the path of least resistance and the approach that seems to most often quell the mob mentality of bloggers etc.

Who cares if the bloggers have moved on however, if the people who were behind the downloads of Path have been forever scarred? If loyalty has been irrevocably damaged and won’t be restored?

In today’s fast-moving, “pushing-the-edge”, “maybe privacy is dead maybe it’s not” environment, the guiding principle seems to be “we have to do this because if we don’t we won’t grow fast enough”. That approach might have worked for Facebook, it might be fine for Path, but is it right for everyone? Can every app and startup afford to push the boundary and just apologize when they get caught being abusive?

We won’t know the extent of the lasting damage of this situation on Path’s brand and business for a while, but we have a good way of evaluating Path’s ability to weather the storm with the actual people using the app. Moreover, we find this benchmark to be true of every company designing for consumers in the modern day:

How many of your customers love you?

If Path has managed to earn a loyal group of app customers up until this point and a meaningful portion of them (let’s say  20%+) have really come to LOVE Path, we think the lasting impact of this snafu will be but a blip on the radar. The reason is this: customer loyalty is more emotional than logical. So, if Path has managed to strike an emotional chord with a meaningful portion of its customer base, then they’re good.

If they haven’t really resonated with their audience and connected on an emotional level however, the road forward will be a lot tougher going. The reputational damage and the impact of the noise in the media is more than enough for most casual app users to toss away their connection with the app. In a noisy world, why spend your time and risk your privacy for something that you weren’t that into to begin with?

Ignore the noise, focus on the LOVE.

Regardless of if sharing address books or personal data was the right thing to do, all innovators would be well-served by framing their decisions in the light of love:

  • Will this feature make my service so easy to use that they love me?
  • If I do this will it ever result in breaking their trust and weaken their love?
  • Would a company I loved do this to me?

We think there’s a lot more to building great companies than pushing features and getting numbers. We think great companies are great because their customers love them, often for life. We hope we’re building that kind of a company, are you?

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