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.
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: 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.
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.
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.