Mobile Apps
Marketing Strategy

Mobile Opportunities and Cost vs. Mobile Opportunity Cost: Getting in on the mobile action…

By Gretel Going

March 23, 2011

There’s no need to make an insulting blanket statement about the marketing and revenue potential of mobile apps and sites, or to launch into endless exposition about these new platforms’ expansive reach. These things are a given, and marketers and non-marketers alike know they need to get in on the action. It’s the what, the how and the why that are less clearly-defined.

The mobile world is a different place for different business types—from b-to-b service providers to direct-to-consumer vendors, from customer service-based operations to brick and mortar retailers— there’s no one foolproof approach or strategy for using mobile platforms. And there’s no strict format for the sites and apps one can create. There is, however, a quickly-evolving list of best practices, not to mention, a few guidelines for deciding which property-type makes the most sense.

The What.

To build a mobile app or a mobile site—that is (or should be) the question. As a quick and somewhat black and white rule of thumb, a mobile site is a good option for those companies and brands that can support and/or achieve their business objectives using a condensed, mobile-optimized version of their website. A mobile app, on the other hand, is a great way for a brand or business to demonstrate its key value through technology that simplifies its customers’ lives while simultaneously supporting its overall brand platform (thus getting customers to use their services more and become more loyal to their brand). Apps and mobiles sites, however, are not mutually exclusive. An app is a more abstract and targeted concept, whereas a mobile site is more straightforward and can afford to be a bit broader.

The Why.

Depending on the nature and objectives of the business or brand, mobile initiatives should serve at least one of three purposes: as a brand extension (i.e., increased visibility and reach), as a brand enhancer (i.e., a new and exciting way to talk about or present the offering at hand), or as its number one home base and commerce center (i.e., the business is mobile-based, both in terms of its commerce center and overall brand).

The How.

The key to a good mobile site is that it places the core offerings of the business’s online site front and center, so that on-the-go users have quick access to key features and services. The key to a good app is that it simplifies the user’s life somehow—so if a company/brand can do that while promoting their own business platform (thus getting customers to use their services more and become more loyal to their brand), they’ve essentially won.

Many big box retailers, restaurants, and brick-and-mortar shops, as well as the crowd-sourcing services that cater to them, are paving the way for burgeoning mobile marketers, and are therefore a good group to learn from when mapping out a savvy approach.

The two primary ways these businesses are getting in on the mobile app action are:

  1. by creating their own apps to reward customers for proximity, frequency, or otherwise; or
  2. by jumping on the bandwagon with crowd-centric service apps like Groupon, foursquare, shopkick, yelp, Bizzy, and others that reward customers with significant discounts for the same. (Groupon’s iPhone and Android apps were downloaded 5 million times alone in their first nine months of existence, and the benefits of this were passed on directly to the businesses partnering with them.)

According to Mobile Marketer, Chipotle’s ordering app was downloaded almost 750,000 within its first few months. That certainly had to equate to some extra business, and it easily offset the investment necessary to develop the app in the first place. Carl’s Junior’s app, on the other hand, doesn’t accept orders but it offers users a branded foursquare-like experience, great graphics, and a chance to spin their “Wheel of Awesome” with every fourth check-in (where a spin lands the user a different reward…and rewards no doubt land Carl’s Junior loyal return customers). Of course, for smaller businesses, this illuminates a key concern: the companies developing great apps are often those with bigger budgets.

Because budget constraints are top of mind to many smaller retailers, restaurants and shops, piggybacking off of the group apps like Groupon and foursquare is a very cost- and strategy-effective option, and therefore what a lot of them are doing.

This means two things as far as opportunity and cost go:

  1. There is a ton of opportunity for non-big box retailers, restaurants, shops, or service provider to make a splash with a great mobile app…because at this point, there are so few that have their own apps. And of the ones that do, the quality is often questionable.
  2. Many of the big group sites make their API (or software specifications, services and resources) available to the public so that developers can develop with their technology and integrate their features into their own apps and sites. This is an easy way to piggy back onto the trends that consumers are attracted to, but in a way that’s branded (by the issuing company) with additional functionality (such as shopping opportunities or the like), and at a price potentially a lot lower than trying to reproduce a similar experience from scratch.

In terms of the opportunity cost of not getting in on the mobile action, well, considering the numbers already presented, as well as the fact that foursquare alone had 381 million store, restaurant, and other venue check-ins in 2010, it seems suffice to say that ignoring the various cost-effective options out there may be the most expensive option of all.

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