The smartest move for B2B and B2C enterprises is nothing but a well-planned and effective customer-facing mobile application as it represents your brand. Whether you are aiming to improve complex work systems, fill the communication void between various departments, or ensure your clients and customers get the latest updates on your enterprise regularly, investing in a great mobile app can take processes to the next level.
Before starting the mobile app development process, it’s extremely important to measure the Return on Investment (ROI) and set the parameters as well as the success criteria that needs to be met for the perfect enterprise mobile app.
But, without measuring the ROI of your mobile strategy and blindly executing your plans, it can be a risky affair as there can be initial development costs, as well as stringent security and maintenance costs involved which would ultimately ensure that your app remains successful.
So do you really define your ROI parameters for your mobile app strategy?
ROI (or) Return on Investment is simply a measure of all the profit earned from each investment. The basic ROI formula on the gross profit of the selling product (in this case, mobile application) is:
(Gross Profit – Marketing Investment)/ Marketing Investment
Yes, this is a simple formula but ROI calculations are always complex due to various factors and this formula can cause errors.
So, whether the aim is to mobilize customers or employees, calculate enterprise mobility with the following points. Here are four key steps to measuring your mobile app ROI:
Step 1: Streamline your objectives
The very basic step is to determine the goal of your app. Every mobile app can be measured by two outcomes:
By evaluating your consumer interaction with the following pointers:
- User Acquisition
- Lead Acquisition
- Mobile Influence
- Retention Rate
And evaluating your workplace efficiency on the basis of:
- Sales and Marketing
- Supply Chain
- Field Service
- Asset Management
Make sure to determine these goals in as much detail as possible, because you’ll be coming back to them later.
Step 2: Add Up the development costs
The development costs need to be taken into consideration as well. During this process you or your team should be able to answer the following questions:
- How much does it cost to develop and implement the app?
- How much would the integration costs come up to?
- Would we be able to provide adequate support and how much would it cost?
Also consider the costs for factors such as:
- Resource training
- Application Upgrade
- App Distribution
- App Marketing
Step 3: Provide all with measurable KPI
To measure the ROI of your mobile app determine measurable key performance indicators (KPIs) or the actual financial benefits which can be seen from it. From the first step take the goals and calculate the financial benefits you can expect from each. Whatever your mobile app goals are, your KPIs should directly reflect them:
Here are a few KPI examples for business mobile apps:
- Increased sales among the sales and marketing teams.
- Less paperwork necessary to complete complex tasks.
- Faster response times for virtual field technicians.
- Reduced production costs for product companies.
- Number of app downloads and upgrades
- Number of times apps are opened in a week/ month/ quarter etc
- Number of app user reviews
- User retention
- Average time between opening of 2 or 3 sessions
- Application loading time
And many more. Measuring your KPI for your app can be done by the following:
User acquisition: To find out the cost you are spending per mobile customer.
Lead acquisition: It is vital to determine the leads which are directly resulted from the mobile campaign as it allows you to compare the cost of your leads from the mobile against the cost of the leads from any other channels as well.
Influence: Do you think your mobile apps are influencing customers? This has to be determined in order to know if the mobile app has any impact on the users behavior. A simple way to determine the influence rate is to divide the total number of leads with app users.
Retention Rate: The sole purpose of your app should be to retain users. Retention rate can be calculated by dividing the retained customers with the customers who downloaded the apps.
Step 4: Weigh your KPI measurement against costs
Ensure that you take the above measurements and weigh them against costs:
- Consumer Interaction
- Workplace efficiency
- Development costs
On the basis of the above, now that each app has a measurable KPI, the following questions must be asked:
- How much is the overall value of the app?
- How does the value rank against various other marketing initiatives?
- Does the value of the app exceed the basic development costs?
Assume your app has a lifespan for 6 years. It is easy to calculate the NPV (Net Present Value)
Business Benefits * Time (6 years) – Opportunity cost of capital = NPV (Benefits)
One time App Development cost + Annual maintenance costs * Time (6 Years) –
Opportunity cost of capital = NPV (Costs)
NPV (Benefits) / NPV (Costs) = ROI for your app
From the above formula, you can easily calculate the value and efficiency of any app thus taking out the risky procedure of simply guessing the mobile app ROI.