Investing_in_mobile_first_dev_01
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Mobile commerce is growing rapidly as consumers spend more time on their mobile devices and shift their preferences and purchasing habits to mobile-first businesses. Nearly all growth in digital commerce now comes from mobile, so businesses that do not invest in a mobile-first strategy risk losing customers and market share. The document provides tips and data for developers to help their clients understand the case for investing in mobile development, including native apps, responsive websites, return on investment calculations, and addressing common objections around customers' preferences, budget concerns, and unclear ROI.
![The general process of calculating the quantitative ROI of a mobile channel involves the below steps:
1 · Define the goal of each mobile channel
Some of the common goals for a mobile channel are: user
acquisition, lead acquisition, mobile influence, and customer
retention rate.
2 · Assess development costs
Then add up all the development costs: implementation,
hardware, integration, and maintenance.
3 · Develop measurable KPIs
Give each goal above a measurable KPI. Let’s walk through some
helpful formulae to calculate this.
Acquisition cost per user = Total Cost of Ownership (TCO) /
Total number of users
Acquisition Rate = [Leads through mobile / Total leads] x 100
Influence rate = [Mobile order or influenced revenue / Total
revenue] x 100
Retention Rate = [Repeated customer / Total users] x 100
4 · Weigh KPI measurement vs. costs
Once you have all the figures, weigh the total quantitative benefit
against the Total Cost of Ownership (TCO) to calculate the ROI.
ROI = [Average revenue per month x 12 months] - [TCO for the
first year] / [TCO for the first year] x 100
Besides qualitative ROI, your client should also keep in mind that
some benefits from a mobile-first strategy are actually soft
benefits, meaning that your client should also measure the
qualitative ROI of a mobile channel.
Some of the elements that contribute towards qualitative ROI are:
• Customer satisfaction level
• Customer loyalty
• Access to customer data
• Brand recognition and position
• Learning how to win in a new channel](https://image.slidesharecdn.com/1b341bfd-3b87-4ce1-b708-30c099f38145-150302094104-conversion-gate02/85/Investing_in_mobile_first_dev_01-13-320.jpg)
Investing_in_mobile_first_dev_01
- 1. judo 2014 © · Registered number 7959933 INVESTING IN MOBILE FIRST DEVELOPMENT: HELPING YOUR CUSTOMERS UNDERSTAND THE CASE FOR CHANGE
- 2. Mobile is changing the way consumers engage in commerce at an unprecedented speed. Sectors are being disrupted by innovative business models and consumers are switching their preferences to mobile first businesses overnight. As an app or web developer, you know the importance of building for mobile is higher than ever. You are an expert at building products to capitalise on the rapid shift to mobile. You know the benefit of using a mobile first approach. But the case for change is often hard to communicate. Many of your current and prospect clients are confused by mobile and unsure whether they should invest in this ‘new’ channel. Judo has put together this report packed with useful data and information to help you pitch for increased investment in a mobile first approach to your clients. Starting with the most frequently asked questions and objections, we’ll arm you with some data to communicate the case for change. Introduction
- 3. Customers’ rapid shift to mobile Client says: ‘I think my customers would prefer to browse and purchase our products on a bigger screen. I read that not that many people actually buy on mobile’ — We are past the tipping point in the shift to mobile with smartphone ownership nearing full penetration and phones actually being used for their ‘smart’ features. In the UK, mobile adoption is rapidly growing, driven by the introduction of increasingly affordable mobile devices (e.g. Tesco’s Hudl tablets, Samsung’s Galaxy Ace smartphones). 72% of the UK population now own a smartphone and 59% of households own at least one tablet. Consumers are rapidly taking advantage of the ‘smart’ features afforded by smartphones. Up from the low single digits in 2012, today nearly ⅓ of all page views in the UK occur on mobile devices. Downloading apps, browsing websites, the smartphone is finally more than a glorified feature phone and the collective consumer expectation on mobile is being set high by mobile first innovators. 30% Q1 2011 51% Q1 2012 62% Q1 2013 75% Q1 2014 UK smartphone penetration
- 4. Growth in time spent on mobile Smartphone and tablet users are spending a hefty amount of time on their mobile devices. On average, smartphone users spend 3.3 hours a day on their phones. While online search is the most popular activity among global internet users, 77% of searches take place on mobile even when a PC is nearby. Why get off the sofa to log on to your PC when you can just do a quick search on your phone/tablet? The graph above illustrates the average consumer mobile behaviour throughout the day. Smartphones are reported to be the preferred device for ‘life/task’ purposes (e.g. tapping away your to-do list on the go) and tablet for ‘leisure/entertainment’ purposes. Mobile devices usage has deeply ingrained into our lives – we hardly put them down, let alone turn them off. 80 % 60 40 50 70 20 30 10 0 Wake up Meal time Work After work Shopping Waiting Commuting Break time TV time Bed time Tablets Smartphones Consumers’ mobile usage throughout the day
- 5. Nearly all growth in digital commerce now comes from mobile While the growth of e-commerce has plateaued, mobile commerce growth is rocketing. In 2012, Amazon was already reporting 87% audience growth on mobile (vs. flat on desktop), and Apple had nearly as many unique visitors on mobile than PC. Consumers are getting more and more willing to spend on their mobile devices. In the UK this year, mobile will account for an estimated 24% of online retail sales, and will rise to 35% by 2017. The graph below shows that almost all growth in e-commerce now comes from mobile, with 100% of growth coming from mobile in Q1 of 2014. Can your customers afford to under-invest in this channel? Q1 2011/12 Q2 2011/12 Q3 2011/12 Q4 2011/12 Q1 2012/13 Q2 2012/13 Q1 2013/14 Q2 2013/14 Q3 2012/13 Q4 2012/13 16 18 20 % 12 8 10 14 4 6 2 0 Total online retail excluding mobile Total online retail Year on year comparison · Total online retail vs. Online retail excluding mbile
- 6. Not having a mobile first strategy to take advantage of this channel means your client is essentially leaving money on the table. Research revealed that 75% of mobile users would spend more through their mobile devices if more websites were optimised, while 80% of business still don’t have a mobile responsive site. Consumers are eager to purchase on mobile, but businesses are slow to deliver the seamless mobile shopping experience that will boost conversion. If your customer invests in mobile today, they will stay ahead of the curve and capture additional market share. 69%Mobile optimised sites run faster 58% Spend more time on mobile optimised sites 37% Leave for another site if not mobile optimised Consumers’ opinions on mobile optimised sites 75%More likely to purchase on mobile optimised sites
- 7. Client says: ‘I don’t know enough about mobile to make the switch. What if I invest a large amount into mobile and it doesn’t work out?’ — Below are high level comparisons of pros and cons of each mobile channel to help tease out your customer’s needs… Not investing in mobile today will lead to spending a lot more in the future to win back lost customers. There’s no reason why a mobile first strategy can’t be developed in stages. But how exactly should your clients prioritise investment? Native app(s), mobile optimised website, a separate website for mobile; tablet vs. smartphone? Let’s take a look: Determine what you need for your target audience To overly simplify, native apps are for customer loyalty while mobile web is for customer acquisition. Tablets are similar to desktop devices (large-ish screens, on WiFi) while smartphones are used differently. Before your client starts thinking about what to develop, first ask them what their business goals are. What do their current customers want? How could they better serve their customers? How do prospective customers find them? How does/can mobile improve the value proposition? NICE TO MEET YOU… …GOOD TO SEE YOU AGAIN!
- 8. Mobile website and mobile responsive website Consider the type of services or products that they are providing. If they are a consulting firm that is hoping to get more visitors onto their site to read their content on any device, a mobile optimised site is perhaps enough for that goal. + PROS - CONS • Single URL to manage and promote (only applicable to mobile responsive website) • Cheaper to develop • Easier to make changes or update • Wider audience reach – good for customer acquisition • Have to manage more than one URL (only applicable to mobile website) • Rely on WiFi or data connection • One size fits most, but not all – not tailored specifically for mobile • Doesn’t use features on user’s smartphone or tablet
- 9. Native mobile app When businesses already have a strong customer base, native mobile apps will help boost brand loyalty and conversion. A successful native mobile app will become a habit in their customers’ lives, providing customers the easiest way to repeat their purchase from your clients. + PROS - CONS • Works even when user is offline • Best possible user experience • Incorporate device’s features in user’s journey • Remain on user’s device after installation • Higher cost of development • App store approval needed for each update • Developed specifically to user’s device operating system • Additional marketing strategy needed
- 10. However, if they are a retail brand that has a brick-and-mortar presence, then they can benefit from investing in both a native mobile app to boost loyalty, and a mobile responsive site to enable lead acquisition on all devices. Therefore, when your clients say they are unsure about what to develop first, discuss their business goals and budget with them, determine which mobile channel they need, and work out a development plan that works for their goals and budget. PAST · RETAIL 2.0 – MULTICHANNEL NOW · RETAIL 3.0 – OMNICHANNEL • Each channel (e.g. store, e-commerce) is operated independently • Created higher rate of confusion within customer journey due to possible inconsistency • All channels are operating together to provide a seamless brand user experience • Customer interacts with physical elements and digital elements simultaneously • User journey spans across multiple devices
- 11. Which OS to develop for first Android devices are more common than iOS devices, but iOS takes a disproportionate amount of spend, app downloads, and investment. Research has shown that iOS users spend almost 5 times as much online as Android users. While Android has a lot of advantages, one disadvantage is the proliferation of device sizes and operating systems that can complicate Android app design. If your client is looking to build a native app, iOS is likely the better first step. But to truly be relevant and have a bigger reach, Android should not be overlooked. 80 % 60 40 50 70 20 30 10 0 Q2 2012 Tablet market share Q2 2013 Key: iOS devices Android devices 80 % 60 40 50 70 20 30 10 0 Q2 2012 Smartphone market share Q2 2013 $30,000 $15,000 $20,000 $25,000 $5,000 $10,000 $0 Q2 2012 Cumulative platform app revenue Q2 2013 Q1 2014
- 12. Client says: ‘Return on Investment (ROI) on mobile is rather unclear. I’m not sure if it’s worth it’ — Hold on. Your client should be considering the growth of mobile as a channel and the potential of lost customers if they lag competitive movements. The channel shift introduced by e-commerce in the early 2000’s is repeating itself. But this time, the shift is 3-4x faster leaving less time to ‘wait and see’. Understanding ROI helps focus investment and speaks to the bottom line of your decision maker. There are some tools available online to measure their quantitative ROI easily. Here are two that we would recommend… Google’s Full Value of Mobile Calculator http://www.fvm.withgoogle.com/fvm/en/d/ This handy tool from Google lets you put in concrete numbers for each mobile channel you have and return with ROI figures to you. You can either enter data manually, or upload your AdWords data. Tagman’s Conversion Loss Calculator http://www.tagman.com/conversion-loss-calculator/ This calculator actually measures how the increase in page load time impacts conversion rate. It’s a great tool if you want to convince your clients to invest in a mobile channel that loads faster than their current solution.
- 13. The general process of calculating the quantitative ROI of a mobile channel involves the below steps: 1 · Define the goal of each mobile channel Some of the common goals for a mobile channel are: user acquisition, lead acquisition, mobile influence, and customer retention rate. 2 · Assess development costs Then add up all the development costs: implementation, hardware, integration, and maintenance. 3 · Develop measurable KPIs Give each goal above a measurable KPI. Let’s walk through some helpful formulae to calculate this. Acquisition cost per user = Total Cost of Ownership (TCO) / Total number of users Acquisition Rate = [Leads through mobile / Total leads] x 100 Influence rate = [Mobile order or influenced revenue / Total revenue] x 100 Retention Rate = [Repeated customer / Total users] x 100 4 · Weigh KPI measurement vs. costs Once you have all the figures, weigh the total quantitative benefit against the Total Cost of Ownership (TCO) to calculate the ROI. ROI = [Average revenue per month x 12 months] - [TCO for the first year] / [TCO for the first year] x 100 Besides qualitative ROI, your client should also keep in mind that some benefits from a mobile-first strategy are actually soft benefits, meaning that your client should also measure the qualitative ROI of a mobile channel. Some of the elements that contribute towards qualitative ROI are: • Customer satisfaction level • Customer loyalty • Access to customer data • Brand recognition and position • Learning how to win in a new channel
- 14. Mobile is past the tipping point. Our changing behaviour and expectations as consumers requires every business to evaluate their business model and invest in mobile development. Helping your client understand the speed of change and sharing positive success examples will make convincing them to invest in a mobile first strategy easy. At judo, we work with businesses of all sizes to ensure that the critical piece of payments works beautifully across every device. But getting to payment starts with well designed products across all devices that are tailored to the needs of your clients. We hope you have found the material and data in this report helpful. We’ve also included all graphs in PowerPoint and PDF format. You can reach our mobile experts at any time by emailing us at help@judopay.com or calling us on +44 (0) 203 503 0600. Conclusion Sources: IAB Research · ExactTarget · comScore · Jumio · Deloitte · Forrester · Kissmetrics · The Guardian · Verdict · eMarketer · Econsultancy