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Study: More Investment, Better Metrics Make Good Mobile Apps Great

• By David Ramel
• November 10, 2015

A new study commissioned by IBM sheds light on the divide between good mobile apps and great mobile apps, finding the latter come from initial enterprise investments in development resources and follow-on measurement of indicators that lead to success.

That success, fostered by flawless apps that provide immediate and relevant "mobile moments," is manifested in increased revenue, reduced costs and improved customer engagement, said a new report ("Why Good Apps Are Not Good Enough") from Forrester Consulting. The study was commissioned this summer by IBM to probe the impact of app quality on a company's brand, revenue and cost structure. The research firm polled more than 1,000 consumers and 200 tech and business professionals with mobile app responsibilities -- and conducted interviews with leaders at large organizations -- to find the answers.

Those answers, unsurprisingly, have a lot to do with mobile app developers to begin with, along with the measurement of app performance, usage and other appropriate metrics that help point the way to mobile app greatness.

For one thing, the study found, while many organizations produce much hoopla about the importance of apps and their keen interest in capitalizing on enterprise mobility, their money spent doesn't match up to the words vocalized.

That creates a misalignment of mobile app consumers and enterprises, where organizations have big mobile ambitions but spend a relatively small amount of money to follow through on those plans -- something IBM discovered in a previous study whose results were confirmed in the new report.

"For the second year in a row, enterprises haven't quite synchronized with what consumers say they want," the report states. "This disconnect means that enterprises will not get their mobile app to answer their customers' needs and demands -- and that means another year of lagging behind competitors who reap the benefits of a great app."

Re-alignment with customer expectations might start by stopping the under-resourcing of development resources."Of the respondents surveyed, 58 percent plan to spend less than $2 million in total on mobile app development," the study said. While that may be enough for certain situations -- there are no hard-and-fast rules that cover all scenarios -- enterprises need to understand that mobility investments might require adjunct ecosystems investment as well, the study concluded.

"A common pattern: A customer-facing mobile app informed by real-time contextual data drives revenue via e-commerce services and activates operations via existing systems of record," the study said. "Such new digital business scenarios demand interconnections between domains, require unprecedented integration and can be complex and costly. Under-resourced development plans could doom the best "great app" intentions."

The report also found less-successful companies weren't using the correct app performance metrics after an app has been developed and deployed. Those organizations whose best apps were deemed to be "good" apps focused on three metrics: the number of downloads, monthly active users and daily active users. While meaningful, the report said, those metrics don't provide much deeper insight into user engagement.

"By contrast, companies that thought their best-performing app was great measured the number of completed transactions through the app along with the revenue and cost-savings it enabled -- better indications of the overall business performance of the app," the study said.

A quote from a respondent -- an e-commerce director at a discount retailer -- summed up the issue:

"Downloads are great, but if they're not opening, using, and engaging in the app, then I'm not satisfied. We need to know their comments, our ratings and enhance their in-store experience and drive them there. We have to report the mobile sales up to the C level, but really it's about engagement and customer satisfaction.

The report included five key recommendations for enterprises wanting their good mobile apps to be great:

• Find out what your customers want and align with that.
• Make measurement a religion.
• Invest well.
• Suppress the urge to try everything; center core app capabilities on improving the customer’s experience.
• Focus on the company’s core competency; partner on the rest.

"With a focused strategy and both qualitative and quantitative measurement, mobile apps will move from good to great and enterprises will reap the enormous benefits in revenue, cost, and customer engagement, experience, and loyalty," the report concluded.