Mobile apps have become an indispensable part of how we live, work, shop, and play. For businesses, mobile apps represent a huge opportunity to engage with customers in new and powerful ways.
A well-designed mobile app serves as a personalized, always-available connection to your brand. It provides a direct marketing channel through push notifications, enables transactions through mobile payment systems, and opens the door to rich analytics on customer behavior. Apps allow businesses to be where their customers are – in their pockets, in the moment when they want to make a purchase or access a service.
With over 5 billion smartphone users worldwide, consumers increasingly expect to be able to interact with businesses through mobile apps alongside websites. A survey by Clutch and 2024 app statistics found that 68% of users prefer apps over mobile websites. The question facing companies now is not whether to have a mobile app, but how to build one that delivers real value.
This article examines the key factors businesses should consider when deciding whether to invest in a custom mobile app. We’ll look at the potential benefits, costs, and alternatives to weigh in determining if an app makes strategic sense. The goal is to provide an objective guide to inform your decision and set your app development in the right direction, if pursued.
Benefits of Mobile Apps
Mobile apps provide a number of advantages that can help grow and engage your customer base. Some key benefits include:
- Reach New Audiences – Mobile apps provide exposure to new demographics and audiences. People spend significant time on their smartphones each day, so a well-designed app can frequently engage users and remind them about your business. This increased visibility helps acquire new customers.
- Increase Engagement – Mobile apps allow for more interactive engagement with current customers. Push notifications can alert users to new products/services or promotions. Apps also facilitate two-way communication via messaging and comments. This fosters brand loyalty through better customer relationships.
- Enhanced Customer Service – Apps enable faster and more convenient customer service. Customers can access self-service support or easily contact your business directly from the app. Apps can also provide helpful information like store locators, user guides and live chat.
- Improved Branding – A custom mobile app strengthens brand identity and recognition. Users perceive brands with quality apps as more modern, convenient and customer-centric. Apps also provide branding real estate through their icon, interface design and digital content.
Drawbacks of Mobile Apps
Developing and launching a mobile app can be a major investment for a business. Here are some of the key drawbacks to consider:
Development Costs
The upfront development costs for a custom mobile app can be substantial. Simple apps may cost anywhere from $10,000 to $50,000 to develop, while complex enterprise apps with extensive functionality can cost over $100,000. These costs cover the design, coding, testing, and launch of the app. Businesses should carefully evaluate if the expected benefits justify these development expenses.
Ongoing maintenance and support costs should also be factored in. After launch, apps require regular updates to fix bugs, upgrade features, and keep pace with new OS releases. If additional capabilities are added, more development work is needed. Resources for app monitoring, troubleshooting issues, and managing releases add to long-term overhead costs.
Ongoing Maintenance
Apps require regular upgrades and maintenance which incur additional ongoing costs. As the underlying mobile OS is upgraded, apps may need to be tested and updated to ensure compatibility. New OS versions often deprecate existing features or introduce security issues that require app updates.
Businesses must also continuously monitor their app’s performance, watch for bugs or crashes, and release fixes and improvements. Dedicated mobile developers are often needed to provide ongoing support and maintenance.
Server costs may also be required to support apps that rely on real-time data backends and cloud integration. These recurring expenses should be built into the cost analysis of an app.
Neglecting ongoing maintenance will result in a poor user experience over time. But these continuous costs can add up and cut into the app’s return on investment.
Types of Businesses that Benefit Most
Some types of businesses can benefit more from having a mobile app than others. Businesses that provide on-demand services are prime candidates for mobile apps, as the app provides a fast and convenient way for customers to access their services and place orders. Ridesharing services like Uber and Lyft have hugely successful mobile apps that transformed their industries. Food delivery services also thrive with mobile apps, like DoorDash and GrubHub.
Location-based businesses can also gain a significant advantage from building a mobile app. Apps that leverage GPS and maps provide contextual benefits based on the user’s location. Retail stores can offer location-based coupons, restaurant apps can surface nearby outlets, and travel apps can recommend attractions close by. Apps for real estate, hotels, and museums are all enhanced by incorporating location-based features. Essentially, any business that has a brick-and-mortar presence can improve customer convenience and engagement through location-aware mobile apps.
Other types of businesses that benefit include: membership services that offer exclusive app-only features for members, digital content and entertainment providers that enable mobile access to their content, businesses with high repeat customer usage that reward loyalty through their apps, and apps that connect service providers with consumers like home services and childcare.
The bottom line is mobile apps allow businesses to remain connected with their customers, provide personalized and contextual recommendations, and offer frictionless transactions – ultimately boosting engagement and sales. Certain types of businesses are naturally primed to take advantage of these opportunities based on their offerings and customer needs.
Key Features to Include
Your mobile app is an extension of your business and brand. It should offer features that are useful, relevant, and enhance the user experience. When building your app, consider including the following key features:
Push Notifications
One of the major advantages of a mobile app is the ability to send push notifications to users. These are messages that pop up on a user’s screen even when they aren’t actively using the app. Push notifications are useful for:
- Announcing sales, special offers or new products
- Sending reminders, updates or newsletters
- Driving engagement and bringing users back to the app regularly
Loyalty Programs
Integrate your existing loyalty program into the app, or introduce a new app-exclusive loyalty program. This encourages repeat usage and purchases. Allow customers to:
- Earn and track loyalty points through app actions and purchases
- Get special rewards, personalized offers and discounts
- Redeem points for products, gifts or experiences
- Access their loyalty account profile from the app
Discounts and Promotions
Make sure your app highlights any special discounts, sales promotions or deals you are running. Allow users to:
- Browse current offers, deals and coupons
- Clip coupons or exclusive promo codes to use in-store or online
- Get notified about upcoming sales and new promotions
The app gives you an opportunity to provide personalized offers and incentives tailored to each user. Use data analytics to target high-value customers with special deals.
Development Costs
The cost to develop a mobile app can vary greatly depending on the complexity of the app and the features included. Here are some general estimates:
- Basic Apps: For simple apps with basic functionality like informing users about your business, linking to your website or social media, or providing contact information, development costs often range from $5,000 to $50,000+.
- Complex Apps: For apps with more advanced features like ecommerce, user logins, push notifications, integrations with other systems, etc., development costs typically start at $50,000 and can exceed $250,000.
Factors that influence cost include:
- The number of screens/pages and overall scope.
- Whether it’s developed for iOS, Android, or both.
- Integrations with other systems like your website, payment processors, etc.
- Advanced functionality like augmented reality.
- The amount of content that needs created like images, videos, audio files.
- How many iterations and rounds of testing are needed.
The best way to get an accurate estimate is to create a comprehensive plan outlining all desired features and functionality, then get quotes from a few development firms. Many provide free consultations to analyze your needs and provide ballpark figures. It’s important to get multiple quotes to compare and ensure the firms understand your full vision.
With careful planning and realistic expectations on features, many small businesses can build a useful app for under $100,000. However, budgeting for ongoing maintenance and enhancements is crucial in the long run. It is worth noting that online app builder tools can be used to cut the cost of development by at least 88%.
Promoting Your Mobile App
Once your app is built and launched in the app stores, the work isn’t over. You need to actively promote your app to get it discovered by users. Here are some of the main promotion channels to focus on:
App Store Optimization
- Optimize your app’s title, description, keywords, screenshots, etc. to rank higher in app store searches. Research popular search keywords and work those into your metadata.
- Write a compelling app description that convinces users to download. Focus on communicating the key benefits and value proposition.
- Include high-quality screenshots and videos showcasing the app experience. This gives users a preview before downloading.
- Encourage users to rate and review your app in the store, as higher ratings can improve visibility. Consider contests or promotions to incentivize reviews.
Social Media
- Promote your app launch across your brand’s social media channels. Create teaser posts building up to the release date.
- Run targeted social media ads to drive installs. These can be effective at reaching your target demographic.
- Leverage influencer marketing by having bloggers/influencers review your app or participate in launch giveaways.
Paid Ads
- Consider Google Ads, Facebook Ads, Apple Search Ads, or ads on other ad networks. Carefully target your audience based on demographics and interests.
- Retarget users who have visited your website to drive them back to download the app. Remarketing ads help remind users who already know your brand.
- Test different types of ad creative, offers, and calls-to-action to see what resonates best with your audience and promotes conversions.
- Track and optimize your ad campaigns for lower cost installs and focus spending on best-performing ads.
Measuring Success
Once your mobile app is live, it’s crucial to track key metrics to determine whether it’s achieving your goals. Here are some of the most important metrics to measure:
Downloads
- Total number of downloads from app stores
- Download rates over time to see growth trends
- Number of downloads by geography, device, referral source etc. to identify your strongest channels
Usage Metrics
- Daily/monthly active users – how many users open the app regularly
- Session length – how long users spend in-app per session
- Retention rates – what percentage of users return after the first session, week, month etc.
- Feature usage – which app features are used most/least
ROI
- User acquisition costs – how much you spend to acquire each user
- Revenue per user – how much revenue each user generates on average
- Customer lifetime value – projected revenue per user over lifetime
- Cost per install vs. LTV – comparing cost to acquire customers with their lifetime value
Tracking these metrics on an ongoing basis will provide vital insights into how well your app is performing. You can then use this data to identify opportunities to improve user engagement and retention over time.
Alternatives to Building an App
While a custom mobile app can provide a great user experience for your customers, it also requires a significant investment of time and money to develop and maintain. Before deciding to build a mobile app, consider some alternative options that can meet your business goals at a lower cost:
Mobile Website
Creating a mobile-optimized website may be all you need to reach customers on their phones. With a responsive web design that adapts to different screen sizes, your website can provide easy access to your content, products/services, and contact information. Important considerations for a mobile website include:
- Fast load times – Users expect sites to load quickly on their phones. Optimize images, minimize HTTP requests, and enable compression.
- Easy navigation – Menus, buttons, and calls-to-action should be large enough to tap easily on a small screen. Avoid crowded interfaces.
- Readability – Use a single-column layout and short paragraphs. Fonts should render cleanly at small sizes.
- Forms – Forms should display well on mobile and minimize typing.
With a quality mobile site, you can deliver core business functions without an app.
Progressive Web Apps
Progressive web apps (PWAs) bridge the gap between websites and mobile apps. PWAs load like web pages but can also send push notifications, work offline, and install on a user’s home screen like native apps. Key advantages:
- Lower development costs than a custom app.
- Easier discovery through search engines than app stores.
- Automatic updates unlike native apps.
- Use web development skills rather than platform-specific skills required for native apps.
- Available across operating systems unlike platform-specific apps.
PWAs provide an app-like experience tied to a URL. They can be a cost-effective alternative to launching a new app.
Before deciding to build a full native app, consider if a quality mobile website or progressive web app may fulfill your goals. A lighter-weight option could provide a better return on investment.
Conclusion
There is no one size fits all answer to whether launching a mobile app is worthwhile for your business. The decision depends on your business model, target audience, goals, and budget.
For companies that rely heavily on customer engagement and already have an established online presence, developing an app can provide a major competitive advantage. Retail stores, restaurants, banks, airlines and other service providers tend to benefit from the increased brand exposure, customer data collection, and sales opportunities that come with a well-designed app. The costs involved are justified by the boost in revenue over time.
Businesses focused on offline services, local markets or older demographics may not see enough ROI to warrant an app. The same applies to small businesses with limited marketing budgets. A mobile optimized website can deliver much of the functionality without the startup costs.
If your business does decide to build an app, dedicate sufficient resources for development, allow ample time for testing, and have a promotional plan to drive adoption. Measure success based on user engagement, conversion rates, and customer retention/loyalty. Adjust the features and marketing over time.
While apps provide advantages, they aren’t essential for every business. Weigh the costs versus expected benefits and consider your specific goals and target audience. With the right strategy, an app can take your brand to the next level.