5 Reasons a Small Business Needs a Mobile App

Since the App Store and the Android Market (now Google Play) launched back in 2008, the market for mobile app development has seen an exponential surge. As of 2022, there are about 5 million apps available for download on these two platforms alone (buildfire). This demand for quality app development has been especially high in the eCommerce industry, so much so that it saw the emergence of a brand new subset  - mobile commerce, commonly called mCommerce.

The truth is that mobile applications open up multiple avenues for retailers to reach and connect with their clients, and reach an even wider set of audiences. Today, small businesses regularly hire the services of mobile app development companies in order to boost their growth, and it has been proven to work.  Here are 5 reasons why every small business should consider a mobile app.

Brand Recognition

According to a survey, Indians spent about 4.7 hours everyday on their smartphones (Economic Times). In the US, that number is over 5 hours (Statista). This is time that brands can use to build a stronger connection to customers through mobile apps. For example, integrating popular social media platforms in your app will let people easily share links to your products, and discuss their favorite products and services. This is a powerful tool in building a reputation for your brand, since most users willingly share links to their favorite sites, describe their own experiences, and request feedback in social network circles. It serves as a way to easily advertise your service, and garner the attention of potential customers.

Additionally, you can also use a mobile app to send push notifications to customers, regularly talking about special sales, discounts, offerings, and giveaways.  Such offers will naturally cause a customer to shift towards your shop, seeing as they might be able to save money.

Convenience

Although mobile apps generally provide the same utility as a website, it is highly optimized for mobile devices, well-designed, and brings significant improvements to customer experiences. Convenient apps not only help in retaining these customers, but simultaneously also bringing in new ones.

• Mobility - Customers will get more freedom to be using your app from any place and at any time. Using the full power of modern smart devices, your app can also provide basic offline functionalities, such as the ability to check and compare prices and features of products.
• Loading Time - Since apps are well optimized for smartphones, their pages will load faster. In the retail business, even seconds make a difference in whether a customer will choose you over your competitors. A fast loading app providing a quick and streamlined shopping experience means many more possible customers get reeled in.
• Personalization - Customers generally expect companies to remember recent transactions and orders, and make personalized marketing efforts based on their individual preferences. Mobile apps are the ideal platform for this. Not only do they efficiently store customer shopping data, but they can also easily gather more critical customer data from the smartphone's own data collection that the customers have to approve of.

Better Customer Experience and Service

Mobile apps promote a two-way interaction between small business and customers. As mentioned earlier, the apps can get permission from the users to push notifications directly into their devices, informing them about sales events, promos, or new products. Interactive chat options, similarly, can help your customers connect with you anytime, from anywhere.

Loyalty programs such as reward points or discounts meted out through the app can truly boost the image as well as the sales of your brand. It will keep customers coming back, and it will also encourage them to speak positively about your business to friends and family, which means further growth in your customer base.

Individual mobile phones can now also be used as a replacement for cash and credit/debit cards, and can be used as a means of contactless payment. Payment apps are easy to use, fast, and secure. They can be integrated easily into any eCommerce business app.

Boost Revenues

An increase in customer satisfaction typically means an increase in sales as well. In fact, upto 70% of customers’ buying experiences will primarily be influenced by how they feel they are being treated (SalesForce). The more interested people are in your business and the way you manage it, the greater the consumer demand you will see. And if you manage to offer a product that most customers cannot wait to purchase, then the returns are going to be truly something to behold. And this is where an app can prove most handy.

Black Friday of 2020 saw eCommerce app installations in the US rise by about 43%, while consumer spending rose by 143% (as compared to the previous 3 Fridays) (AppsFlyer). When Domino’s Pizza released a mobile app back in 2012, they saw a surge of 28% in half-yearly pre-tax profits in the United Kingdom alone (Financial Times). All of this points to a trend that makes it evidently clear that mobile apps that make it easy and exciting for customers to click on the “Buy” button will provide a huge boost in revenue, even if your business already owns a mobile-optimized website.

Detailed Analytics

It is relatively easy to gather and track information from an app. Mobile analytics will allow you to monitor every user’s interaction levels, and provide valuable feedback about them such as average session length, individual responsiveness to specific content, etc. This information will be valuable in creating updates and improvements, and also in creating personalized content, advanced marketing strategies, and well-made promotional campaigns.

Conclusion

Worldwide mobile commerce sales registered around $3.56 trillion in 2021 - a growth of over 22.3% from the $2.91 trillion it saw in 2021. These sales account for nearly 73% of all global eCommerce (Oberlo). These numbers are not only staggering, but a true eye-opener as to the profits an app can bring for a business.

What is App User Lifetime Value and How to Increase It?

Developing a mobile app is only the first (indeed crucial) step to boosting your business. But have you strategized what happens after people install your app? Increasing customer lifetime value (LTV) is equally, or perhaps more, important than driving installations. You sure don’t want people to uninstall the app after using it once? Then it’s time to focus on boosting user lifetime value.

Not sure what LTV is? No worry. Today, we will discuss the concept of user lifetime value and explore how to maximize it.

What is User Lifetime Value in a Mobile App?

App user lifetime value denotes the total value of a user for a business. From paid subscription to referring to other users - everything is included in it. LTV offers a holistic view comprising monetization, shareability, and retention rate. Let us take a quick look at these:

•  Sharability - It takes the shareability or virality of the app into account. You can identify how many users are brought by each user over a specific period of time.

•  Retention Rate - It denotes the percentage of people who continue to use your app over a specific period of time. It also considers how much time users spend on your app or user engagement.

•  Monetization - It refers to the amount of money the users spend on an app over their lifetime or Average Revenue per User (ARPU). For an eCommerce app, it takes order values into account. Other monetization methods include PPC campaigns (where the business owner earns money from the ad owner as the users click on it), paid subscriptions, in-app purchases, etc.

How to Calculate User Lifetime Value

Here, you have to multiply the average amount of revenue brought by each user by the time they use your app. Then add the extra value brought in from referrals. Here is a quick formula:

Average LTV = ARPU x 1/Churn rate + Referral rate

(Churn = 1 - retention rate)

Your aim should be to increase user lifetime value. Below, you will find some handpicked tips recommended by a renowned app development agency to boost user lifetime value.

How to Increase User Lifetime Value in a Mobile App

Here, we will elaborate on three components of lifetime value.

1. Sharability

Today, with numerous apps around, people prefer to listen to their peers’ recommendations. Here’re a few ways you can drive more shares.

• Incentivizing the users to share your app is a great trick. They will do something to get something in return. For instance, you may offer in-app bonuses or credits when a user refers a friend through social media.

• Offering something unique on the app will automatically compel people to share your app. Therefore, pay attention to that.

• You can also create an illusion of celebrating the users’ activities on your app. For instance, you may encourage them to share your gaming app when they cross a hurdle or win a puzzle.

• It’s also important to optimize your brand presence on social media. You can engage digital marketing services to spread brand awareness, manage brand reputation on different forums, and so on. All these will lead to evoking a positive impression in people’s minds and drive more installs. And the more installations your app gets the chances of virality through the existing user base increase. 

Before jumping to the next pointer, let’s quickly mention that you must enable people to directly share the app from inside the app. For that, it’s important to integrate popular social media APIs into your app.

2. Retention

The first step to increase retention is to analyze why people delete an app. Precisely for two reasons:

1. They got a better app to meet their purpose
2. They find the app to be confusing or boring

Focus on these two issues and you can significantly reduce the chunk rate. So, how to do that? We will explore below.

• Improve app onboarding experience. Introduce people to the features of your app and encourage them to perform some activities to get started. These may include dragging a feature, swiping through something, and so on.

• Make sure your app is intuitive enough so that people can easily understand which button or feature functions in which manner. The sign-up process should not be long or tedious. Encourage one-tap login with email/social media account or phone number.

• The sign-up process should not be long or tedious. Encourage one-tap login with email/social media account or phone number. 

• Keep data fields to the minimum. Make sure that the users need not fill a lengthy form. If yours is an eCommerce app, ensure that the checkout process is fast. Also, let the users save their card/connect with their UPI app as their preferred payment model for future shopping. It will save time and effort.

• Equip your app with all the essential features required to execute an activity in your specific niche. If required, check your competitors’ apps.

• It’s better to provide some more features in your app than your competitors. That way, it will stand out among the rest. For instance, if yours is a chatting app, consider why people will use it instead of WhatsApp or Telegram? What extra features can you provide?

• A/B testing is a great way to find out which elements are preferred to the users. Optimize your app accordingly.

• Engage maintenance services in a consistent manner so as to keep your app glitch-free and high-functioning at all times.

3. Monetization

Some of the proven ways to monetize your app include:

• Leverage push notification to encourage people to interact with your app and convert. For that, you need to send personalized push notifications to the users. You can track geo-locations of the users, their browsing/purchase history, and wishlist to customize the notification message.

• No matter how alluring it seems, always feature native ads on your mobile app. For instance, if yours is a food delivery app, featuring an ad of a bakery is a smart step. Native ads will not irritate people and these may even encourage them to click. That way, you can earn from the ad owner.

• Instead of encouraging people to purchase the app while installing it from the app store, it’s better to rely on in-app purchases. With so many apps available in the market, people may not be interested to purchase an app. On the contrary, as they get addicted to the app, they may want to unlock other features (say, earning virtual coins or lives, or unlocking some tracks) via in-app purchase. This is closely connected with purchasing the premium version of the app that offers more features.

By adopting these strategies you can significantly increase user lifetime value in your mobile app. Try these and share your thoughts with us.