When your CEO says “we need an app”

By Tobin Harris, June 20, 2021

Managing Director at Pocketworks, app development specialists.

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Photo by Diana Polekhina on Unsplash

Directors often groan when their CEO says “we need an app”. I hear of this happening almost weekly, and it makes me chuckle because it’s a real cliche in the mobile app development business. The question is, are they right?

In 2010, everyone needed an app

In 2010 it was more acceptable to explore apps because businesses needed to learn about the new technology and ideally claim the first-movers’ advantage.

There was no hind-sight to learn from. Apps were an important experiment to try.

Furthermore, consumers were much more likely to download apps out of interest, which slightly (1) reduced the chance of the app failing.

I recall approaching the senior leadership at ASDA back in 2009 and they were already thinking “we need an app”, it was a powerful medium to explore. They learned a lot and the exploration proved so successful they went on to build an internal team dedicated to their apps. “We need an app” was ok back then.

1: I say slightly because a lot of apps failed to bring real customer convenience and were therefore doomed anyway! The amount of people using an app once before abandoning it hasn't changed much - 20%-25%. My interpretation is that some of us are making poor apps or marketing good apps to the wrong audience, and that has always been the case.

Why do you need to be cautious now?

Fast forward to 2021 and the story has changed. 

Consumers have app fatigue and only download one app a month. App retention is often low; people abandon them in minutes or days if they don’t provide enough value nor do it quickly enough (see instant gratification). For example, banking and news apps only have a 13% average 30 day retention. Travel, health and productivy are closer to 4% (source).

So you have to take a more considered approach to building an app. You need to make sure people will use it. There is no “build it and they will come” in 2021.

Leaders know that apps are risky

Most directors that call us to chat about apps know that caution is needed. They know apps can fail. They know they are not right for every situation.

So when they hear the CEO say “we need an app”, it isn’t always the most useful starting position. But, of course, they need to explore their options.

So who’s right? The CEO who wants an app. Or their leadership team who want to avoid putting the cart before the horse?

They are both right.

Why is the CEO right to want an app?

The CEO is right because she’s probably used apps that demonstrate just how great a customer experience can be.

For example, Amazon nails finding and ordering products instantly. Deliveroo nails getting a quality meal to your doorstep. Barclays nail business banking.

The CEO sees mobile apps as a symbol of customer convenience. It’s about getting things done easily and super-fast customer communication.

This is what the CEO really wants when she says “we need an app”.

So, you could say that “we need an app” is really about the CEOs vision for the quality of customer experience she wants to create.

This vision should be welcomed and embraced, because it demonstrates a desire to use digital technology to advance the business. This is essential for any digital transformation.

Why leaders should question their CEO

The directors in marketing, digital product or customer experience folks supporting the CEO are right too.

They know apps can fail and become no more than an embarrassing, budget burning waste of time.

They also know that you don’t start with an app; you start with a vision and customer pain points. Then you pick the tools to solve it.

Apps are just a means to an end; a way to help customers get their jobs done whilst interacting with the organisation. They know you need to look at the whole customer journey and deliver the right technologies in the right places.

An app is usually the tip of a very big iceberg. It is the simple facade that customers see. Under that cool surface there is a submarine-load of internal digital transformation where work has been digitised, data has been cleaned and systems have been integrated.

“We need an app” really means “we need to digitally transform to enable a faster, more seamless employee and customer experience”.

So it looks like the CEO and their supporting management are both right. If everyone is right, the real trick is to protect everyones interests whilst moving toward the vision.

Recognising that apps can be transformative

Hopefully everyone agrees that, when done right, a mobile app can be transformative. It doesn’t make it the right solution yet, but it’s important to recognise this.

I work with leaders reporting up to 5x customers lifetime value with their mobile apps compared to telephone or in-store. Those customers who order more often, are more loyal and engaged with the brand.

One of our clients receives 80% of their bookings through the app. Before the app launch, only 12% were through digital channels such as SMS and IVR (telephone voice menus). 

If you're in retail, expect to see a 3x improvement in basket conversion rate when launching a half-decent app.

All this goodness comes from providing a better customer experience. Giving people instant gratification and allowing information to flow in real time. It comes from using smart use of marketing tech to retain customers and give them a personalised experience.

And because it’s all measurable, you can measure and optimise your app to keep increasing the ROI. Tools like Segment, MixPanel, Branch and Amplitude will help here.

This is where product-led marketing comes in, using how people behave in your digital product to push them into a funnel. This is an emerging technology that’s going to be very popular.

Not forgetting advancements in low-code and no-code that can accelerate the development of apps and internal systems. This makes it quicker to prototype ideas or take a step up from your error-prone spreadsheets. It’s like Microsoft Access all over again, but embracing the modern world of cloud, apps and accessible data.

All cool stuff that offers tons of opportunity for businesses.

How to move forward from “we need an app”?

So, we know apps have huge potential, and the CEO is seeing this potential. But apps are also a risky investment, much like any digital product development. So how do you turn the situation around and make the CEO happy and the leadership team happy?

You dig under the surface and find out what the CEOs vision is. Why have an app? What does she want for the business, its customers, and the people in it? What are the goals, can you quantify them?

Then you can start mapping out a strategy to achieve that vision. This needs the right design & tech people, customer advocates, marketing folk and operational people.

Then you move into a solution design phase where you discover what technologies will fit what you need to achieve.

The strategy piece isn’t a particularly hard job, it just needs the right people around the table. You don’t have to have all the answers, just roughly know the direction and what your tech options are. All this can be communicated on a single page of A4. No need to make a meal of it.

At this point, you’ve taken the CEOs “we need an app” and extracted a vision, underpinned it with the business goals, and formulated a high-level bullet-point list of how to get there. A roadmap.

Until you do your design exercise, you haven’t decided if you need an app yet, but you might have shortlisted some technologies that can help you get where you need to be. An app could very well be a good candidate.

So what’s next? Ideally, you can add the business case for this, strategy, what kind of investment and return are you expecting? This will enable you to put a budget on things, which will be useful when you get into the next stage - solution design.

Designing a new customer journey

With a clear vision, strategy and ROI case, you might want to pick the most important piece and start the design process. Run some design sprints or a design thinking loop.

This usually involves conducting customer research and collecting insight. Customers don’t know what they want but they know what annoys them.

You clearly state the customer problems to solve and then figure out the broad-brush pieces needed to get there.

You map out your current and future states and the customer journey.

Your design sprint might suggest developing an app, or it might suggest using SMS, chatbots, voice assistants, progressive web apps or social media. Or a mix of all this lot.

Most importantly, you build capability to move forward. Agile budgets and continuous development will trump waterfall chunks of delivery tied up in red tape and stage gates.

In the end, you’ll have validated and justified the investment of “we need an app”. But more importantly, figured out exactly what value that app will bring to the business and its customers.

A blueprint to this process

It will be quite easy to wrap this up into a strategy canvas or strategy template, so bear with me and I’ll do that soon.

In the meantime, here’s a summary:

  • When the CEO says “we need an app”, openly welcome this idea and look to understand the vision behind it.
  • Write down this vision as a bullet point list of 1-5 items.
  • Write down a list of measurable 3-7 KPIs that would show this vision is achieved. What does the company look like when this has happened?
  • Form an internal cross-functional team to create a digital strategy, pull in outside technical help if needed
  • Make a bullet list of 5-20 strategy headlines that could move you towards these goals in the next 3 years. E.g. “Automate after-sales customer support”
  • As implementation ideas emerge, make a note of them separately. These are things like “customers can renew subscription via an app”. But don’t get too caught up in solving problems. Focus on the direction.
  • With a clear direction, run a design sprint or design thinking loop to find and test solutions for the most important item on your strategy headline list.
  • At this point, you’ll know if an app is going to work for your customers and the business. You’ve qualified “we should have an app”.
  • With a proven idea, the next step would be to move into a continuous cycle of digital product development that involves research, design, development, user testing and releasing small product increments.

I appreciate seeing some examples could be useful, so I’ll look to add those shortly. Follow me on LinkedIn for an update.

Hope you found this useful. Have fun!

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About Pocketworks

Pocketworks is a mobile-first software company that helps organisations improve their customer experience with mobile technology. We enable our clients use research and data to find the right solution and deliver apps and digital products that increase customer satisfaction and retention.
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