This year will go on record as the year that smartphone penetration in the U.S. passed the 50% mark, cementing the importance of mobile apps as a new channel to the customer. For the first time, smartphones and tablets have superseded the browser as the new mainstream platform where content is developed and deployed.
According to "Future Business Models & Ecosystem Analysis 2012-2016," a recent report from research firm Juniper Research Ltd., the mobile app market is in a boom phase. The report predicts that consumers will download more than 66 billion mobile applications per year by 2016, more than double the 31 billion apps installed in 2011. That's a massive increase! Smartphones will continue to drive the majority of mobile downloads, although tablets, such as Apple's iPad, will yield 1 in every 4 app installs by 2016.
But don't break out the champagne just yet. The business models are unclear, the market is fragmented, and real success is linked inextricably to strategies aimed at doing much more than driving downloads. In fact, a raft of recent research questions whether this performance indicator might not be fatally flawed. The jury is out, but the evidence shows it's high time for app makers to shift their focus-and marketing-to drive repeated use of their apps.
Consider the eye-opening findings of "iPhone AppStore Secrets," a study from Pinch Media that analyzed more than 30 million downloads from the Apple App Store. It reports that just 30% of people who buy an iPhone application actually use it the day after it was purchased. And the numbers plunge from there: After 20 days, less than 5% of those who downloaded an application are actively using it.
Mobilewalla, an app analytic firm, argues outright that that the number of downloads is a very poor measure of how popular an app is. It estimates that a whopping 80%-90% of apps are eventually deleted.
Connect the dots, and it's not enough to chalk up an app download or sale. You have to engage your customers and encourage ongoing interaction. This is critical if you have chosen a freemium model to monetize your app. Your app business-making money via in-app purchases-rests and falls on how well you can keep customers coming back to purchase more features, functionality, and content they appreciate.
What you make out of your business depends on the choices you make. A good Appreneur will map out a comprehensive strategy that includes a revenue model and a toolbox of tactics to engage with customers every step of the journey-from discovery to long-lasting loyalty.
Fortunately, the tools and technology to reach and connect with your customers are literally at your fingertips. Text messaging, which celebrated its 20th anniversary in 2012, can reach more than 5.4 billion people around the world-more than 77% of the world's population. Veteran mobile author and analyst Tomi Ahonen estimates people sent a whopping 6.1 trillion text messages in 2011, up from 1.8 trillion in 2007.
Text messaging is ubiquitous, universal, and widely regarded as the truly native language of mobile. It's the simplicity, pervasiveness, and sheer dominance of text messaging that has made it the world's leading data communication tool.
Messaging is also the most powerful direct marketing channel ever created. Companies across all verticals are harnessing it to reach and engage their customers. The results are impressive-particularly if the messages are opt-in. In this scenario, customers give their permission to receive push notifications about your app, allowing them to stay up-to-date with breaking news, location-based opportunities, and other content.
A recent study by Urban Airship, Inc., a leading provider of push notifications, documents how companies including ABC News, USA TODAY, FOX, and Warner Bros. are using push to drive engagement and encourage loyalty.
In fact, the new Urban Airship Push Messaging Index, an analysis of the impact that push notifications have on mobile app users based on real-time data collected from the top push notification senders, found that using push notifications more than doubled customer retention over a 6-month period after downloading an app. User engagement more than doubled for users receiving push notifications during the first month of download.
What will separate successful app makers and content companies from the also-rans? The ability to increase user engagement and build stronger relationships with the mobile app audience is key. Winning is all about making the right choices to delight your target audience again and again.