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To App or Not to App- Tips for the Small Business


There is a lot of excitement around mobile phone applications (apps) these days and with good reason. Today’s phones have more powerful processors and faster data connections than ever before. People are buying and downloading apps for their smart phones at a dizzying pace and so it becomes inevitable that we get asked this question: Should I jump into the land rush and build an app for my website for the Iphone?
We need to make you aware that we build for mobile as part of our services, but our answers to this question, as they pertain to small business, may surprise you!

If you’re a small business and your intention is to drive more clients to your site and eventually through your front door, the answer is probably going to be a resounding NO! Why? To answer that, we need to look at how an app extends your market presence, how it can and can’t drive traffic where you want it and the costs vs. returns of building apps for mobile devices.

The first thing that you need to know is that when we are talking about apps, we are not talking solely about Apple. The Iphone, while very cool and certainly expertly marketed, is not the number 1 smartphone. Android far outpaces their sales worldwide with a plethora of manufacturers providing equipment for the operating system (OS).Add new competitors from Blackberry, Microsoft and other rumored platforms and you get a whole wide range of potential users.

Why is that important to know?

It’s important that you understand that an application built for one, doesn’t automatically work for the others. So to truly serve the mobile market, you are likely looking at 2 fully separate builds, possibly more and we’ll cover the impacts of that further below.

The second part of this equation is the misconception that your site cannot be visible to a smart phone if there isn’t an app. That simply isn’t true. All of these smart phone systems have an integrated browser. Those browsers can navigate your site just fine with the exception of Apple meets Flash driven sites(still…and this is a licensing issue, not a technology issue). Regardless of what Apple says about Flash being outdated technology unworthy of support, the truth is that it’s about competing technology licensing. Apple has a competing platform, just like Bluray vs. HDDVD, VHS vs. Beta, etc. and not only wants to trump their competitor, but they don’t want to be paying that competitor (Adobe) licensing fees.

The problem lies in the fact that Flash has already been used for years in millions of sites and isn’t going anywhere. In fact, more machines still run the nasty Internet Explorer 6, the default browser for Windows XP on more than 25 million corporate machines aone, which supports Flash but not html 5/H.264/CSS3 modern browser builds, than any of the mobile platforms.

Just like the other format battles, look for an eventual winner, or possibly one that usurps both and renders them both moot. That brings us to the next point.

Technology is always, thankfully, changing. What that means to you, as a small business owner, is that if you are to invest in building to a specific platform, in a rapidly changing area like mobile, can you get a return during the time that it’s a working part of the community or are you better sticking to generic web platforms that can be viewed on a wider variety of machines?

The answer lies in two places. Are you building a specific widget that you can sell in that market, that fills a niche and can expect to pay for itself? Or do you have enough traffic to justify the percentage of users to your site that are using that particular platform.

For instance, let’s say that (and this is a common number to most sites) the percentage of people that visit your site using an Iphone is 2%. Let’s assume that you have cool Flash elements that are not visible to them and so you are considering building a second version of your site as an app. If you have 1000 unique viewers per month, 2% equals 20 people. Let’s say the cost of your app build is $1000 and will be worthless in 18 months(due to platform changes, features, etc.). Knowing that those 20 people will also have the ability to revisit from another machine (like their mac) if they are truly interested in buying, how many sales do you believe you’ll lose based on those 20 people per month, minus those who will revisit on their other machines, matched to the percentage of people you currently convert from visitors to customers (1-3% is common) and the 18 month expiration. That math works out like this, as an example: 20 x18 (20 Iphone users per month x 18 months) = 360 users over the course of the app. If you were converting 3% of those to sales, we’re talking 11 people (assuming that they wouldn’t come to you another way). Does your average sale make up for the cost of building the app with just 11 people (in this scenario)?

Because most serious shoppers will also, or even solely buy from their primary machines (desktops or laptops), those numbers can become even more skewed against an app build for a small business.

So when DOES an app make sense?

Certainly if you have something that is currently in demand and you can sell in the app marketplace, recouping your costs. But that sounds a whole lot like the business of a software development firm and if that’s not the line of work you’re in, do you believe you’re as efficient at providing that service as those who are in that line of business? Are you taking away time from building your business to venture out into that? Those are questions that you have to answer in that scenario.

The next is about volume. If you have 20 thousand visitors per month, or 100, 200, 500 thousand or a million or more, then you can take the same costs and percentages, as we exampled above and plug in your new numbers. In that scenario, the number of viewers can tip the scales rapidly in favor of using those tools.

Thirdly, what about tools as an advertising or straight marketing piece? Say we have a stock brokerage firm or a mortgage lender. Instead of turning our site into an app, say instead we made a live rate or stock price checker, with specific information to our geographic area or expertise. Perhaps we’re the only one in the segment and we brand the heck out of it and use it to drive brand awareness and traffic to our primary website. In that scenario, the app has to be viewed as more of a brand awareness opportunity than a straight sales opportunity. This works for some marketing plans with larger budgets and time for results but may not for tighter budgets that require more immediate action to their efforts.

However you decide to use or not use these tools, it’s important to weigh costs vs. returns in a realistic manner, understand the alternate paths for users to get your information and incorporate everything into a clear marketing and sales plan, that spans ALL of your efforts, online and off, instead of rushing to new tech over excitement and/or the fear of being left behind.

Thank you for your time reading this tip, we hope you found it helpful in deciding whether a platform specific app is right for you or not. We invite you to comment here or through one of our social media pages if you have further questions and/or comments.

Posted by DDA Media | in Small Business Tips | Comments Off

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