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The app advantage

Does your small business need an app to stay competitive?

By Robyn A. Friedman

Brian Young leads a double life. By day, he’s a periodontist with a thriving practice in Jacksonville. By night, he’s a developer of apps for the iPhone.

Young

In December, Young, 36, launched Tracknburn, a health and fitness application that allows users to track the number of calories they consume and burn on a daily basis. This is the fifth app Young developed—and his most successful. Over 24,000 people have downloaded Tracknburn to date, at a cost of $2.99. But Young hasn’t made a profit—yet.

“There are two primary reasons why a company might have an app,” Young says. “It would either be to support their ongoing business or to use it as a business model where they’re generating revenues from the application itself.”

Tracknburn is an example of the latter. Young developed the app as a hobby, he said, albeit an expensive one: he’s plunked down about $50,000 on the project so far.

It’s in the numbers

Apps—custom application software that runs on mobile devices—are all the rage these days. And it’s easy to see why. Just consider the numbers:

The use of mobile devices is exploding—the smart phone market alone is projected to grow 24.5% in 2011, according to International Data Corp. (IDC).

Application developers have churned out over 300,000 mobile apps in the past three years.

Worldwide mobile app revenue will exceed $35 billion in 2014, IDC projects.

In January, Apple announced that more than 10 billion apps have been downloaded from its App Store by 160 million iPhone, iPod touch, and iPad users worldwide.

As a small business owner, it’s tough to ignore these statistics.

Design and development

But developing an app is time-consuming and costly. You need a professional programmer who has experience designing apps—often more complicated than a typical website. Separate apps need to be written for each smart phone platform; Android apps don’t run on iPhones, for example. And even once you develop an app, if it’s for the iPhone, you need to get it past Apple’s tough reviewers, who reportedly evaluate some 10,000 new apps each week.

Is it really worth the time and effort to develop an app? Does your business really need one?

Ennen

“A lot depends on what the small business is,” said Steve Ennen, president of Social Strategy1, a media intelligence firm in Ponte Vedra Beach. “I think it’s a stretch to say they are mission critical at this point, but they offer a set of advantages that are relevant to the digital ecosystem right now—that you can capitalize on if you know how to employ them smartly.”

Better benefits

Some advantages and benefits of having your own app include:

•Mobile apps get you to your customers. Today’s consumer is tech-savvy, better informed, and with high expectations of receiving timely and relevant information. “Today, businesses must reach customers where they are—not just wait for customers to come to them,” said Bernie Brennan, the Ponte Vedra Beach co-author of Branded! How Retailers Engage Consumers with Social Media and Mobility.

•Mobile apps give you visibility and drive traffic to your business. The more people who see your app and use it, the more potential customers you will have.

Gresham

•Mobile apps help you compete. “They level the playing field for small businesses,” said George Gresham, PhD, an assistant professor of marketing at Jacksonville University. It used to be that only large businesses could afford to have their own apps. Not anymore.

•Mobile apps cost less than some other forms of advertising. An app allows a business owner to reach millions of potential customers. Even though it can cost up to $50,000 to develop an app, depending on its technical sophistication, they still can be quite cost-effective when compared to other forms of advertising. Plus, some apps can generate revenues on their own.

Weigh your options

But experts say that apps are not a necessity for every business. “Don’t get blinded by the latest shiny object,” said Ennen. “Just because it’s available doesn’t mean your business is right for it.”

Indeed, there might be other digital creations that serve your company better. A well-designed mobile website, for example, is easily accessible to customers on their mobile devices and provides the information they’re likely to need on the go: address, phone number, directions, and basic information about the products and services you offer.

Plus, a presence on sites like Foursquare, Yelp, and Google Maps can lead mobile customers to your door without the expense of your own app.

Factors to consider

Still interested in developing an app for your business? Here are some factors to consider before taking the plunge:

•Is your app sustainable? In other words, is it something that users will keep coming back to frequently—you know, like Angry Birds—or will usage decline after the initial buzz fades?

“There are lots of stories of people with a gold rush mentality who started building apps thinking they would make a million dollars,” said Ennen. “But usage peaked, and then the app went away because there was no sustained usefulness behind it.”

The best apps are relevant, useful, and encourage users to come back repeatedly.

Do your customers really access your product or service via their mobile device? If you’re a professional and the bulk of your clients find you on Twitter or LinkedIn, for example, it may not make sense to develop an app. Focus on what works for your particular business—market to your specific customers or clients—and resist the temptation to jump on the app bandwagon.

•What is the ROI? If the app won’t generate business, it isn’t worth the investment.

Do your research

“Find out who your competitors are, and determine what they’re doing right—and wrong,” said Angel Ayala Torres, a computer engineer at CloudYellow in Jacksonville, who is about to release GoTaxiCab, his first iPhone application, which

Torres

allows users to hail a taxi and pay for it via PayPal. “We tried other taxi apps on all platforms—even Blackberry and Android—to make sure we were bringing something to the market that is different and better.”

“Don’t have an app just to say you have one,” said Young, the periodontist. “If you’re going to spend time, money, and effort to not only develop but also manage and maintain an app, it needs to be functional. It needs to serve a purpose. If it doesn’t, then it’s just a waste of time.”

Robyn A. Friedman is a contributing writer to Advantage. She can be reached at robyn@everythingwrite.com.


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