One of the quickest ways to acquire buzz these days is to make an announcement that hitches your wagon to the Apple iPhone. The immensely popular consumer electronics gadget has captured hearts and imaginations with the myriad applications (called "apps") available for download via the iPhone App Store; there's even a rumor that the iPhone enables you to make phone calls. Creating and distributing a popular app can have a tremendous effect on a company's branding efforts, but is it a foregone conclusion that every company needs to have one?
[Editors' Note: For additional coverage on this topic, see CRM magazine's March 2009 feature, "CRM and the iPhone."]
In a recent report, "Is an iPhone App Right for You?," Forrester Research analyst Neil Strother examines the ins and outs of iPhone app development, revealing an answer far more complex than many companies might expect. The popularity of some apps and the sheer number of smartphone users -- 17 million on the iPhone alone, according to the report, and another 50 million on Research in Motion's BlackBerry devices -- should not be taken as an invitation to flood the market. "Early success by some brands might lead marketers to mistakenly conclude that it's a no-brainer," Strother writes. "Before proceeding, interactive marketers should clearly weigh the advantages of driving brand affinity, customer engagement, and possible revenue versus costs in time and resources and the potential pitfalls of a poorly executed application."
Despite the fact that the iPhone App Store logged its one-billionth download in April, just nine months after its launch, a recent blogpost cited by technology blog TechCrunch cast some doubt on the nature of the App Store's supposed success. "The app store isn’t a sane marketplace at all, any more than the lottery is," wrote Rick Strom, chief executive officer and lead developer at Glowdot Productions, in a May 24 post. "When you submit an app, you are buying a ticket." While there's a rare chance for success, he added, far more likely is that your application -- by joining a pool of iPhone apps now numbering 36,000 and counting -- is being dropped "into the void where it will be ignored."
Even without the promise of a profit, there's a great deal of potential for brand building, especially as other mobile-device marketplaces emerge. Research In Motion (BlackBerry), Google, Microsoft, Nokia, and Palm all have devices or operating systems with platform-specific applications, and "either offer an application-distribution platform today or have announced plans to," according to Forrester's report. As a result, while some developers have deployed exclusively on the iPhone, others have targeted one or more of these newer, less-crowded application marketplaces -- and some companies have both iPhone and non-iPhone applications.
With the multiplicity of marketplaces, however, one of the key decisions for a potential mobile-application developer is whether to deploy on the iPhone at all. "If you're not a first-mover on the iPhone, you might want to be one on BlackBerry's App World or one of the other [application marketplaces]," Strother says in a follow-up interview. "Newer app stores will expand the picture. If you're a dedicated BlackBerry or Windows Mobile user, you're probably not going to jump to [the] iPhone."
Regardless of the platform you decide to play on, you must decide what purpose your app will serve. Some are practical and provide utility to users (Forrester cites Bank of America's ATM locator as an example), while others are merely entertaining (Zippo has an app for displaying an on-screen lighter during concerts). It's possible to combine multiple approaches, but any smartphone application you intend to deploy should be the result of a specific strategy.
Forrester has advice for how to develop that strategy, as well:
- What's your big idea? Brainstorm ways to leverage what your company can offer through a mobile application. Mobile consumers want to be delighted, and a clever application can deliver an element of fun as well as a branding message.
- Who will develop the application? Investigate whether your company has the internal resources to develop a mobile application. Most do not, so plan for sourcing external help.
- How much will a mobile app cost? Current pricing for a mobile app ranges from $20,000 for a very basic application up to $150,000 or more for a sophisticated one. (Other factors to consider are the potential costs of updating capabilities on future versions of the development platform, and the cost of marketing the app so it doesn't get lost in the noise.)
- Should it be a free or paid application? Forrester suggests that most brands will be better off with a free application, to reach the widest audience.
- What are the potential pitfalls and dangers? A poorly conceived application or one that is buggy could do more than merely spoil your best efforts -- the failure could even damage your brand. Also, Forrester estimates the typical development-and-deployment cycle at six to eight weeks, so be prepared with a realistic schedule in mind.
To date, the overwhelming majority of popular and successful apps have been consumer-oriented -- as has the bulk of Strother's research. As more B2B companies jump into the fray, they'll have to consider whether an app that doesn't provide direct value to a business customer is still capable of producing a positive effect. "If you're a B2B business, your app can have cachet, but in the fun, awareness-building way -- not [a] utilitarian [one]," Strother says. "There are ways of becoming cool [as a B2B company], but they must be clever."
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