What Kind of Return on Investment Can I Expect From My App?

July 23rd, 2010

Wow….talk about a loaded question that I get grilled about almost every week.  Usually I get this question from an individual entrepeneur who is financing the app, but increasingly even corporate clients who use an app as a value added tool are interested in attaching some sort of return on investment (ROI).

Like everything in life you only get out what you put into it, and so it goes with the wild, fast changing world of mobile applications. I categorize mobile apps into two main categories; Value Added and Direct Return On Investment (DROI).  The Value Added app is normally free, and is sponsored by a larger entity who is using the app to round out it’s marketing platform.  Corporate retail chains, restaurants, hotels, resorts, airlines, real estate agencies and travel destinations are good examples of a Value Added application.

The DROI model typically benefits games, botiuqe operations (special interests like hunting, boating, flying), high technology, music, specialized business information and productivity tools.  Value Added apps can still bring in a DROI model if they are e-commerce enabled, Best Buy and other retail chains now have made it possible to shop via a smart phone, although consumer acceptance on that end is still gaining traction.  Most retail operations are content with push notifications containing coupons and advertising sales.

The main ingredient to a healthy ROI is a solid marketing plan.  Too many individuals and businesses alike race head long into application development without even thinking about a  follow up marketing plan, budget and a will to execute the plan.  The old addage “build it and they will come” worked great for Field of Dreams, but for an app world that is fast approaching 300,000 + on the iPhone alone, that just does not hold true anymore.

Only a common sense marketing approach for post launch of the application can ensure any measure of success.  That  does not mean that a hotshot idea can’t still go viral and make millions.  It most certainly can, however it’s much more difficult to cut through the clutter of other applications to become successful than it was two years ago when the mobile consumer market first took off.

To specifically answer the question that I posed at the beginning of this Blog…….it’s a case by case basis.  A good application development company will spend the necessary time with you to ask the right questions, seek technical solutions, build for your audience, and also develop a post marketing plan that fits your time, scope and budget.  Don’t get caught in the clutter, address your marketing requirements right from the beginning to maintain a reasonable set of expectations.

John Rainey

John Rainey brings almost 20 years of sales, marketing and business development experience in the custom multimedia-, Internet- and mobile programming industry. He has worked with Fortune 500 corporate executives and small- to mid-sized business owners alike. His experience spans projects with such companies as Northrop Grumman, Booz Allen, SAIC, Beazer Homes, Homebuilders Association of Maryland, Volvo Rents, Rodale Publishing and Draeger Medical Devices.

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