Apps improve engagement when they offer value
November 4, 2013

Mobile devices are the new gateway to commerce. At least, that appears to be the case based on the past few years of smartphone and mobile adoption, as well as the technology's increasing role as a shopping tool. They are the constant companions to many people, both as a personal item and business equipment thanks the recent bring-your-own-device (BYOD) trend. Those organizations that integrate  mobile into their operation may see improvements in customer loyalty, total sales or any other pertinent measures of success. 

Emmie Fukuchi, associate vice president of digital and new media at marketing firm LoyaltyOne spoke with eMarketer about her company's app, AIR MILES. She stated that since its latest update, the organization's transactions have risen by 5 to 20 percent. She attributed this to the app's "check-in" feature, which allows users to check into the app at LoyaltyOne's 10,000 sponsored locations and receive discounts and promotions. This strategy seems to be working for the marketing company, as the application has been downloaded 950,000 times and 25 percent of LoyaltyOne's web traffic originates on mobile devices, eMarketer reported.

Apps should offer value
One thing that consumer-focused apps should emphasize is value, and GPS enables the delivery of location-relevant content. AIR MILES ties into a rewards program, and because it links this with check ins, it encourages people to opt-into location tracking. Fukuchi remarked that only 18 percent of smartphone owners typically use check in services. Users have little reason to do so without an incentive, and while Foursquare offers titles and other achievements for the activity, other organizations' apps may need to provide something more concrete, particularly because they lack the social element associated with Foursquare. 

Regardless of the sector, apps may play an important part in organizational success. In Canada alone, Fukuchi stated that smartphone penetration is at 60 percent of the population. For consumer markets, an easily accessed portal to a business may be key to driving sales and increasing engagement. For public institutions, allowing people to access services through an app can streamline the process. 

Financial institutions can also increase member engagement through similar means. A recent study from Maxymiser found that 83 percent of people will likely click on personalized online or mobile banking offers. Another 13 percent rarely do so and only 5 percent said they would never click one. 

A few considerations before developing an app
There are some factors that decision-makers should keep in mind, though. Tracking customers unknowingly can create some privacy issues, so informing them about how certain features or apps work can avoid potential problems. Location-sensitive rewards or content encourages this behavior, rather than making it intrusive. 

Security will be another issue – even if customers are comfortable with location-based marketing, they may be worried about how their personal data is used. Financial institutions must take particular care with their members data, but companies offering consumer apps should also address concerns about login credentials. 

As with so many other things in life, convenience is also a notable issue. Maxymiser's study revealed that 58 percent of visitors to banking website and mobile sites are most concerned about how easy-to-use either channel will be. If checking in or accepting an offer is overly complicated, no one will use the app – and they might even go to a competitor. As technology advances, mobile penetration increases and more people expect to be able to receive services, promotions and other benefits through their devices, companies and institutions will need to adapt to this new environment.