Why Top Brands Are Moving To An App First Strategy

Leading brands are finding that existing digital marketing approaches are no longer adequate. Responding to a question about the biggest challenges marketers face, Matthew Taylor, Global Marketing Communications Leader for GE Transportation, says, "Personalizing for the individual customer and not blanketing the entire market segment. The marketing funnel has changed and we can no longer think about our markets as a collective; rather we need to think of individuals and find ways to understand their needs and values and connect directly with them." Taylor has accurately characterized the most important challenge facing brands of all sizes. This article digs into the details of how leading brands are moving to an app first marketing strategy, why they are doing it, the benefits of such a move, and the methods leading brands are using to make the move.

What is an 'app first' strategy?

An app first strategy is when a brand's mobile app becomes the key point of customer engagement. With a mobile app, a brand has direct access to the customer, providing multiple opportunities for engagement and targeted marketing. Precisely tuned content is delivered to the customer at optimal moments in the user experience, increasing customer engagement and driving brand loyalty. With this strategy, other elements of the marketing strategy serve to augment, support, and extend the brand's mobile app and its content. An app first strategy is not to be confused with an app only strategy. An app only strategy relies entirely upon the app for all advertising and customer engagement. An app only strategy comes with significant risks, rarely working successfully on its own. With an app only strategy, you are denied the benefits of a multi-channel marketing strategy that leverages multiple channels in a deeply coordinated fashion. An app first strategy, on the other hand, seamlessly integrates the brand's mobile app as the primary point of engagement with the customer, while continuing to use other marketing channels for the brand.

How leading brands are moving to an app first strategy

Major brands, like McDonald’s, are transitioning to an app first strategy. The common thread among them is that each app aims for a deeply personal experience in ways that conventional digital marketing cannot touch. This comes through a combination of increased spending in mobile advertising and the development of apps that deliver such an experience.In the fall of 2015, McDonald’s launched their mobile app and it was an overnight hit. At the end of the first three months, McDonald’s mobile app had been downloaded a staggering 7 million times. In a Biz Report article, VP of Digital, McDonald’s USA, Julia Vander Ploeg said, “Digital has become a really big focus at McDonald’s. The mobile app will transform how our customers engage with us by removing the physical boundaries so they can connect to McDonald’s any time or place.” Starbucks, also an early adopter of an app first strategy, launched its first app in January 2011, processing over 42 million orders worldwide during it first 15 months after launch, according to The Verge in this article published in April 2012. Drew Ianni, founder and chairman of the AppNation conference says that "Apps, and the billions of connected devices they power, represent an entirely new, interactive, dynamic, commerce-enabled consumer touchpoint and channel...Inevitably they will represent the 'uber touchpoint' for brands." Major brands recognize this and are producing apps that provide such a touchpoint.

Why they are doing it

Smartphones have evolved to become every bit as important as our clothing. Top brands know this and are finding ways to leverage smartphone usage. Creating an app first strategy connects brands directly with their customers in a way that nothing else can touch. For example, Kraft's iFood Assistant App offers recipes that include their products, along with How-Tos and built-in shopping lists. Through this direct communication with consumers, brands are able to deliver highly personalized user experiences that build trust and consumer loyalty, all while increasing customer lifetime value. Through mobile apps, brands have direct access to the consumer. Targeted content and push notifications are much more likely to be seen by a consumer inside the app. Even way back in 2013, 85 percent of consumers preferred apps over mobile websites. This still holds true today — consumers consistently engage mobile apps and perceive in-app marketing and advertising much more favorably than other kinds of marketing. Brands that embrace this and create apps that users love will gain a strong competitive edge over the companies who fail to embrace the app first strategy. In a mobile-first world, this is no small thing.

Mobile app benefit to brands

There are many benefits to providing your customers with a branded mobile app, but there are two that truly stand out in importance: Customer Retention and Customer Engagement. Together, these benefits translate to increased lifetime value of the customer.

  • Customer Retention — New customers are important, but the customers you already have are your real money makers. Not only that, but the longer you keep a customer, the greater his or her lifetime value. Customers that know and love your brand will spend far more than the customer that makes only one or two purchases. An app first strategy leverages the existing relationship between your brand and the loyal customer, providing additional opportunities for customer engagement and interaction.
  • Customer Engagement — Mobile apps consistently show higher user engagement than desktop or browser-based apps. An app first strategy taps directly into this by presenting perfectly timed opportunities for your customers to engage your brand while using your mobile app. Mobile apps can be designed with features that extend the functionality and value of an app first strategy. You can use a mobile app to send push notifications and SMS messages to your customers. If you're operating brick-and-mortar locations, the app can listen for your store's beacon, sending a push notification to any customer that is near that store location.

How brands funnel users from mobile websites into mobile apps

One of the challenges brands face is getting users to download and install their apps. Called 'Web to App', this is a funnel with the singular goal of motivating a user to download and install the brand's app. There are numerous ways to funnel your customer, but these stand out by being simple and easy to implement.

  • Direct link to your app for download — With this option, you send a targeted message to your user while they're on your mobile website. In that message, you provide a call-to-action (CTA) that links directly to your app's web page in the app store. From there, your user downloads and installs the app.
  • Use an SMS message to provide a direct link to your app — According Michael Essany in this report for Mobile Marketing Watch, SMS messages have an incredible 98% open rate and about a 1% spam rate. Comparatively, Smart Insight's article "Email marketing statistics 2017" shows marketing email open rates of between 17 and 27 percent, with variations depending on specific market/industry sector.
  • Social Media — Leading brands see the value of social media and are using it to the fullest. Part of a brand's social media strategy is to persuade followers to download and install their mobile app. This can be accomplished in a variety of ways. For example, Smirnoff Vodka's Mixhibit app turns a user's content into unique videos, pulling a user's personal content from social media feeds, photos, and check-ins at locations. The app even allows users to choose a soundtrack for their Mixhibit video.
  • Incentives — This is a tactic that proves to be very effective. Finding the right incentive for your customers can not only motivate thousands of customers to download and install your brand's app, you can augment the downloads with more incentives for those customers to share their downloads on social media. McDonald's is a prime example of just how effective incentives can be with mobile apps. A Retail Dive article from January 2016 reported that McDonald's had seen more than 7 million downloads of its app since its launch in the fall of 2015. Free sandwiches and McCafe's items made up the incentives, and customers went for both.

Whether you choose one method or all of them, each will help drive your app download numbers to meet your business goals.

In Conclusion

Brands of all sizes know that mobile is the future. App first marketing strategies put mobile apps front and center, with a focus on creating highly personalized experiences for customers that deliver value while seamlessly including targeted marketing that is precisely tuned to every part of the user's experience. Brands benefit from mobile apps by greatly improving customer retention through the cultivation of brand loyalty. Providing the customer with precisely timed opportunities for engagement helps cultivate a personal relationship that the customer values, increasing the lifetime value of that customer. An app first strategy also gives the brand opportunities to engage the customer when he/she isn't using the app. This can be accomplished through push notifications, SMS messages, and other channels. Leading brands use a variety of methods to encourage users to download and use their apps, with directly linking to the app being the most popular. Other methods, such as SMS messaging, are highly effective, too. Your brand's marketing strategy and the app itself will be key factors in determining which of these methods to use. Several leading brands have proven that an effective app first strategy increases the number of app downloads, improves customer engagement, and improves brand loyalty. As mobile continues to dominate, it will be critically important to develop an app first marketing strategy...and brands trying to compete without an app first strategy will get left behind.

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