When it comes to apps, there’s a key question we get asked all the time: what is the ROI (Return on Investment)? If you’re spending a chunk of money, you want to know what you’re getting back.
We’ve been working with Watertight Marketing for the last six months implementing their methodology for Calvium’s marketing push. While we’re talking marketing with their consultants, there are plenty of crossovers and insights relevant to app development, too. Watertight talks about ROI in simple terms: essentially it isn’t just about the bottom line, it’s about setting goals at the start of the project and measuring effectiveness against these goals.
This all links back to the marketing funnel.
Bedrock of many sales strategies, the marketing funnel sets out the stages customers will pass through in their relationship with a business. Watertight methodology goes one step further and identifies the 13 possible leaks that can occur in the funnel. These are the points at which – and reasons why – customers are lost on their way to making a purchase.
Apps fit neatly into the layers of the funnel: They can be used to build awareness of your brand, offer users a way to engage with you at the trial or evaluation stages, or as a tool to build loyalty.
As Chapter 10 of the book explains, the real ROI of an app is not the bottom line, but how effective it is in moving a user through to the next stage of the funnel.
Step forward the funnel
Let’s look at this in practice with some examples.
If you run an events business, your app may seek to generate media exposure, sitting firmly at the ‘awareness’ and ‘interest’ stage of the funnel. Your KPIs will likely include the amount of publicity your app has generated and event visitor numbers. As such, your software should provide contextual, easy-access information and not excessive detail. Aardman’s Sheep Spotter app for Bristol’s Shaun the Sheep trail is a case-in-point, providing an interactive map and loyalty functionality in a child-friendly design.
Meanwhile, the Domino’s Pizza app seeks to boost customer loyalty at the bottom of the funnel by mining market insight and customer behaviour data. ROI for the app is measured in customer re-engagement and repeat purchases generated.
Return on investment can also be understood in more esoteric terms. AAB Housing Association of Copenhagen sought to create social change in a fragmented neighbourhood with their Jeg er Norrebro app. Focusing on the history, people and communities of the target area, the app needed to move residents from awareness to interest. ROI, therefore, was to be understood in terms of social bonds and the number of residents learning new skills following interaction with the software.
Return on innovation
The app platform is especially well-suited for certain parts of the marketing funnel. Reading apps are a case-in point. Using AR technology, books come alive, delivering added value and driving users from the adoption stage of the funnel to loyalty.
For businesses built around an app, understanding and nurturing ROI through good design is essential. Meditation app Headspace draws users down the marketing funnel through a clever trial mechanism. By offering a free ten-day meditation course, new users experience the app’s potential without accessing all of its features. The user’s urge to pay for the app is stronger, having built a relationship with Headspace at the evaluation, trial and adoption stages of the funnel. Without pay-walling their app in this way, Headspace wouldn’t have a business.Understanding what your app must achieve and how to measure your return on investment is the first step in any successful app build. The marketing funnel makes it easy. What are you waiting for?
With thanks to Bryony Thomas at Watertight Marketing.