As mobile marketers well know, the app-centric world continues to evolve as new innovations and new benchmarks for success change the game. Navigating this landscape can be daunting, but like anything, you can learn from your peers. Consider what Branch executives have experienced working with some of the leading brands in mobile apps — and how you can apply these insights to your strategy.
Recently, Reed Kuhn, Branch’s Head of Business Strategy, sat down with the “Business of Apps” podcast to share some of the sharp lessons and best practices he’s gleaned being at the forefront of this rapidly evolving industry. Here’s an excerpt from that interview, which has been edited for clarity and brevity.
Q: You’ve seen a lot of different apps and approaches. Have you developed a guiding principle for what actually delivers value to users?
A: Yes, over the years, most of our customers’ apps fall into two buckets based on what they’re trying to achieve in terms of value:
- Commerce apps. These are your retailers, fast food chains, big box retailers like Best Buy, and even department stores like Nordstrom. Users are going there to shop, and we know that conversion rates are much higher in these apps than on mobile web or even desktop. The app makes it easier for the user to shop and in some cases get support. If you want to manage a delivery or send something back, you can do that in the app rather than having to call someone.
- Companion apps. On the flip side, you have apps that don’t really sell anything, but they still serve a very important purpose to the user. Whereas commerce apps are conversion focused, companion apps are more feature focused. “Am I able to access information?” For example, almost everybody has a banking app on their phone, so you’re able to access your balance, manage your account, etc., and those would count as conversions. But mainly you’re there to interact, and the app plays a role of self-service.
I think entertainment apps fall into the companion category because you’re not subscribing or upgrading every month. For example, I’m on Spotify and I upgraded once probably a decade ago, so I’m a very high lifetime value (LTV) customer for them. If I didn’t have the app and I wasn’t able to play music through my smart speakers, I might not see that brand as worth the monthly subscription. I might eventually churn. Spotify’s app is a churn prevention tool for them.
It’s weird to consider a bank app and a streaming app as functionally similar, but they are. Their mission is to drive 100% app adoption among their paying customers. And where I might only have one or two financial institutions that I interact with, or one streaming music platform, I might shop at 10 different brands throughout the year, so it’s harder to justify downloading another commerce app, registering, and onboarding. That’s why I think companion apps have the real value. The cost to serve the average customer is just so much less when the user can self-service in the app.
Q: When mobile growth goes wrong, what actually trips people up? Are there common mistakes you keep seeing?
A: One situation sticks out early in my career. A mobile team on the app product side was running a campaign to migrate users from mobile web to the app via banners. We saw very positive results. Thousands of people were installing the app, but our mobile web team was raising hell. They were mad that the app was stealing all these customers from the web. I was dumbfounded. I’m like, “You guys have the same stock price. Why are you arguing over where these users convert?” It’s okay to see the web side go down as long as the app goes up.
When you have siloed teams, that is fundamentally the problem; they don’t have a single North Star key performance indicator (KPI), which should be just total revenue growth or customer experience. So, I think that’s the big trip up that prevents certain teams from keeping up with their competitors who, conversely, may have one product team for all mobile that includes app and web. They have a singular objective measured on one KPI, not two. And that’s where I see those brands really hustling and getting ahead.
Q: Now, if someone wanted a quick win, something simple that actually works, where would you direct them?
A: Here again, I would divide brands into two groups:
- Brands that already have a critical mass of app adoption.
- Brands that are playing catch-up with less than 10% of mobile traffic in the app.
Just compare app monthly active users (MAU) to mobile web MAU and you can quickly assess where a company is on this curve. So, if you have very low app adoption and you suddenly start deep linking all of your email, which is a big effort, nothing much happens. Only a few users are now deep linked in. And yes, that’s a benefit. But if you want to move the needle, you need to do the early work of driving app adoption.
That’s where smart banners come in and QR (quick response) codes. How do you get people on your owned channels to download your app? You already have traffic. You have in-store traffic. You have web traffic, desktop and mobile. Those are all sources where you can migrate users into the app effectively for free. And then you have all your paid channels. You have ad campaigns to try to get people to install the app, even Apple search ads. So that’s where the work needs to be done early on. Get a critical mass of app adoption. And leverage owned channels because it’s so efficient and so cheap. That’s where the quickest win is.
Q: Now, on the flip side, what are some of the smartest strategies you’ve seen lately that really impressed you?
A: For me, it’s all about efficiency. I had a webinar years ago titled “Your Next Source of Growth Is Already Your Customer.” How do you turn customers into your own marketer? So, going back to Spotify, they effectively have made their app viral. Trying to find a song or a playlist is actually quite difficult. They have such a vast library. But by adding a share link, they allow users to text a friend with a song or playlist. Same goes for a retail site where you want to share a particular product. These are one-to-one sharing links where the user initiates the action. Hopefully these sites are deep linking that, so the brand gets the attribution. They get viral growth. That is a great use case.
I’ve got some great screenshots of LeBron James sharing a Pandora playlist that he plays before games and one of former President Obama sharing a podcast that he did. And they’re sharing it on social media with millions of followers. If people click on that, it opens the app, takes them directly to that content. That is free growth, free MAU for the brand because they enabled that feature.
Q: Shifting gears, what’s been coming up more often in conversations with clients lately? Maybe something that wasn’t on the radar a few years back?
A: Yeah, I do think there’s been an evolution. I talked about companion apps and how they’re very much about self-service and just allowing users to engage. What it really translates into in terms of value is reduced cost to serve. And we have worked with brands that really have this down to a particular number. They know that the users who use the app and engage with the app make fewer phone calls on average per year. And this call center deflection is hugely important right now.
First of all, saving costs is more important than raising revenues. As much as we love to report growth, margin is way more important just from a management perspective. And it was not really being affected by mobile apps until recently. But now brands are getting that, and we have all these different channels to play with that will bring costs down. And when you do that at scale for a massive company, even a 1% savings off of an annual call center could add up to tens, hundreds of millions of dollars.
Q: Any gut predictions about what might shift in the next couple of years? Anything farther out that feels big, even if it feels a bit sci-fi?
A: In the future I think we’ll see two things:
- We all know that ads in AI search results are coming. You’re going to start seeing more promoted results or listings within the AI result. And so, there’s going to be a bit of a land grab as brands try to get into that game. It’s going to get monetized very quickly.
- Also, you’re going to see how we allow AI agents to interact with brands. I ran an experiment through AI asking, “Does this fast-food chain deliver?” I clicked on the link and it took me to a 404 webpage on the brand’s website. So, not only did I not get what I was looking for, I was put in a dead end. But had that link opened the app, which I have, and dropped me on the order flow, I would have gotten exactly what I was looking for. Do they deliver? Yes. Do you want to order right now? Boom, I’m ready to go. I think brands need to optimize their own search results to feed these AI agents so that they link to the right place.
The really forward-looking step is enabling AI agents to actually interact with the apps themselves. So, you’re going to probably have user approval, set credentials, etc., and then say, “Next time I want to order from this brand, just go ahead and do it. I want you to order this item and have it delivered.” And AI will open the app and effectively do it for you.
You can listen to the full podcast here, and download the Do’s and Don’ts to Supercharge Your Mobile Growth Strategy checklist. Consider this handy checklist when looking to boost
conversions, optimize campaigns, and increase revenue.
