Should Your Business Create an App?

As mobile use continues to outpace desktops, small-business owners are figuring out how to create an app to help reach their business goals.
March 25, 2016

Remember "There's an app for that?" It was an early tech refrain, a cheeky way of responding to the then relatively new abundance of mobile applications for everything from entertainment, news, dating, food, travel, health, you name it.

Now, in 2016, that response feels even more appropriate as many businesses now have created an app. I'm starting to see my own area mom-and-pop shops in Apple's app store: If I want to go to my local gym, I have to sign in for a class using an app called MemberMe. If my fiance wants a haircut from the barber up the street, he has to open his Booksy app to schedule his appointment instead of walking in and waiting for the next available seat. 

All these business-centered apps may be a natural response to the mobile and app booms. Mobile use grew over 58 percent in 2015—a drop from 2014's 76 percent, but impressive nonetheless "as rates like these are rare in mature industries," reports Flurry, a mobile experience and analytics firm.

A Gallup poll found that most Americans check their phone "a few times an hour." They're probably checking in on a mobile app: The average American spends 2+ hours on smartphone apps, according to comScore. (Millennials spend 3+ hours.) With mobile search surpassing desktop, these numbers make sense: Sixty-two percent of digital time is spent on mobile, 54 percent on mobile apps and 38 percent on desktop, according to comScore's 2015 U.S. Mobile App report.

Why Mobile Apps for Business Are So Attractive

The mobile app trend may explain why small-business owners are building their own apps in-house or with the help of app development companies.

"Small businesses today are hurting," says Ido Mart, chief operating officer at Flok, a company that creates mobile apps for businesses. "The traditional methods of marketing a local business have lost effectiveness, and competition with national chains is fiercer than ever. The only way for small businesses to fight back is by using their one major advantage: their size. When you are small, you can adopt technologies faster and change more effectively to match emerging needs and expectations of your target audience. This is where mobile comes in. Mobile isn't another 'advertising real estate'—it's a communication device. And while retail and food giants strive to recreate their desktop experience on mobile, small businesses can actually talk to their customers [using] mobile interfaces, real-time cloud access and automation.

"These ingredients might sound daunting to the average small-business owner," Mart continues, "but the beauty of the matter is that it is exactly these complex domains that present the largest opportunity for a busy merchant—the opportunity of doing very little to achieve very much."

What was once considered a nice-to-have addition is now an indispensable tool for the small-business owners I spoke to. For these entrepreneurs, their apps are an effective way to engage customers, track data and market their business.

We saw that the big [companies] were offering this service, so we decided to do the same. For the low investment we made into getting an app created, it has paid for itself over and over.

"We saw a lot of our competitors doing it, and we were just very curmudgeonly," admits Mike Catania, co-founder and CTO of PromotionCode.org, a site that provides coupons to tens of millions of users annually. "[We thought], 'Our site is so good, we have a lot of great mobile versions of the site. Why is it that we would even bother to develop this?'"

They followed the tide, though, and launched a mobile coupon app. "Within a month of us putting it out, we [thought], 'Oh, we should’ve done this years ago,'" Catania says. "The response was just overwhelmingly positive and the number of things we could do with the app far outpaced anything we could do on the site."

TJ Lee, owner of Village Cafe of Hampton Cove, a coffee shop in Huntsville, Alabama, was more open to following his competitors into the app world. "We saw that the big [companies] were offering this service, so we decided to do the same," Lee says. "For the low investment we made into getting an app created, it has paid for itself over and over." 

"On top of how effective an intelligently automated relationship platform is for today's small business, the biggest 'aha moment' business owners experience is when they suddenly realize they have, for the first time, a comprehensive list of their customers, chock full of super relevant information on each customer and meaningful insights on their client-base at large," Mart says of Flok's customers. "Not only that, but that list is actionable, meaning they can initiate any type of communication with one, a group or all of their customers at a click of a button. The ability to send push messages or emails at a click of a button from your phone or laptop is already exciting to them, but making those engagement initiatives personalized, contextual and automatic—that's mind blowing. [But] the real value, of course, is in seeing foot traffic soar, revenues grow, online reputation improve and having the ability to positively influence thousands of customers at a click of a button or automatically."

How to Create an App

Before jumping into creating an app, there are a few things to consider. There's of course the ever-present concerns of cost and who will do the job for you. PromotionCode.org's app was developed in-house, and cost about $15,000 total for both the Android and iOS apps. Lee paid $500 for the app and has a monthly maintenance fee of $19; he used PopNet Media, a local SEO and online marketing company to develop the app.

While outsourcing the work to a company outside of the country may be an attractive option, consider what type of app you're creating. If it relies on using your customers' personal data, you have to make sure you're working with trustworthy people, according to Catania. "All the signed documents of confidentiality are great in theory, but when the database is open, you want to have 100 percent trust in the people who have access to your customers' data," he says. 

Then there's determining what your app will actually do for your customers. "The advice I would give business owners who are looking into an app for their business is to know what you want before going into it," Lee says. "To find this out, ask your current customers ‘what if’ type of questions like, ‘What if you were able to do [blank] on your cell phone; would that be useful?' For us the number-one request was, 'Can I order online?' By knowing what you want going [into] it, it will make the development process go smoother."

You may also have to decide whether you want to create a standalone app or "join an existing mobile ecosystem," that is, a mobile app where customers have access to not just your app, but several other businesses who use the same provider, according to Mart.

"Do your research," he says. "Think about what would actually work for your business, not what the latest trend is. If you think you and your customers can derive value from a standalone app, go ahead and make it happen. It is well researched that customers are looking to consolidate apps, and aren't inclined to download an app for every business they interact with. If you'd like those doubts removed and to benefit from thousands of lessons already learned, choose a platform that will become the main driver for your business. Choose to focus on your ideas and your strategy, and let the machine do all the heavy lifting."

If You Build It, Will They Come?

Both Catania and Lee have been pleased with the way their apps have worked. 

"Since introducing the mobile app, our overall sales have increased 10 percent," says Lee. "We have been getting online orders daily and the customers love the convenience of being able to walk in, bypass the waiting line and just pick up their orders. We can also send ‘push’ notifications to nearby customers. We usually save these types of notifications for slower days of the week, and offer a 20 percent off discount for the next two hours. After we send one of these messages, we usually get a quick burst of traffic taking advantage of the limited time offer."

Catania's app has increased user engagement with the company. Thanks to location information users are more willing to provide in an app, PromotionCode.org can send them coupons right as they enter a store. If a customer searches online for a promotion code and landed on their website, "they will usually look at three different pages and stay on the site for about a minute and a half," he says. "[Now] if that same user opens up our app to look for it, they're usually looking at seven to eight pages for 3.5 minutes. So we're getting a much larger swath of their time, and they’re looking at other competitive offers."

However, Catania points out, it's one thing to have an app and another to have active users: Of his 7,500 subscribers, only 1,500 are regular users. "A lot of the battle is getting them to open that app," he says. "If they land on your site and they have the app, you can pop up a reminder, but people don't want to do that. Everyone wants that information right that second."

"Loyalty is a tough beast to master," Mart agrees. "It is a result of a multitude of things, rather than a single marketing effort. We believe that it is all about powering meaningful, mutually rewarding relationships between businesses and their customers. When a customer gets their repeat patronage acknowledged and rewarded, when they have a channel to connect with merchants directly, ask questions, leave reviews, share photos and get treated like a human being—loyalty will ensue."

And that loyalty is valuable. "It may be more challenging to build a large audience on apps," comScore's report states, "but those app users are a very loyal bunch. They spend more than three hours per month on the Top 1,000 apps on average—about 18x greater than what mobile Web visitors spend on their Top 1,000 properties."

Despite those concerns of loyalty and reach, Catania claims he doesn't have any regrets about incorporating an app into his business. He encourages small-business owners to consider developing a mobile app for their business as well.

"It’s an absolutely terrifying proposition because it costs money [and] if you’re a little bit older, [you’re] not your target audience," Catania admits. "The public has spoken, and they want apps and they want them now. It doesn't matter if you have a tow-truck company or you're a plumber—it is absolutely worth it. You don’t need a fancy app; it just needs to say how far away the plumber is to [the customer's] house right now. That is now the name of the game—trying to make your existence in line with what your customers already expect, even if it was completely unreasonable five years ago."

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