Industry Exposed #15: Apptentive "Customer Acquisition Is Only Half the Battle; The Real Challenge is Retention"

By Johana Leeflang | May 21st, 2015

customer-acquisition-apptentiveWelcome back to our Industry Exposed series where we speak with professionals from the mobile marketing landcape to get first hand in-depth knowledge. This time we spoke with Robi Ganguly, co-founder and CEO of Apptentive, about the misconception of focusing on customer acquisition versus retention, the value in ratings and reviews and demand for data-driven mobile marketing.

robi-apptentiveRobi Ganguly co-founded Seattle-based Apptentive, Inc. in 2011 and serves as its Chief Executive Officer. He is a frequent writer and speaker on topics related to mobile customer retention, relationship management, and lifetime value. He has spoken at Salesforce’s annual Dreamforce Conference, presented an online seminar on “Measuring Mobile Customer Lifetime Value” with the  Application Developers Alliance, and delivered keynote talks at the 360iDev and Mobile Commerce World conferences. Please visit the Apptentive site “Press & Events” page for examples of his speaking and trade press coverage.

Q: Can you briefly present Apptentive and its business model?

At Apptentive, we’re all about listening. We understand that no one has all the answers when it comes to building the perfect app. Except, that is, your customer.

All you have to do is listen, and we can help. We’re the mobile customer communication leader chosen by the likes of Nordstrom, AllRecipes, and Intercontinental Hotels to help any company with a mobile app reach a better understanding of their customers. Our in-app surveys, intelligent prompts, and contextually relevant messages do just that, creating a scalable solution to personalized marketing. We’re working with thousands of apps to pioneer a new standard of customer engagement – one that builds advocacy, boosts retention, drives downloads, and extends the customer experience.

Q: Which problems in the mobile industry are you trying to solve?

Every company has a common objective: To stay more connected with their customer base in order to drive higher customer retention and engagement. The core belief behind Apptentive is that companies must communicate with their customers, and that the optimal approach requires sophisticated personalization and the measurement tools to evaluate long-term customer behavior impacts.

Customer conversation volumes are increasing at an accelerating rate and the requirements for personalization continue to escalate, based upon increasing use of digital channels and the widespread adoption of the smartphone. In addition, as the Fortune 500 have moved into digital, they have become the creators and maintainers of their own applications (web and native), creating a need to establish direct relationships with consumers. 

For over 3000 mobile app publishers, Apptentive is now providing the tools for direct relationships with end consumers of software. Powering several core scenarios for communications inside mobile apps, Apptentive is starting, enabling, and measuring customer conversations. Apptentive customers typically see increases in retention, shortened product management cycle times, increased marketing and customer insight collection and more personal support interactions.

Q: What do you count as the biggest challenges right now for mobile developers and publishers?

Discovery and monetization. They’re two sides of the same coin, and both products of an increasingly competitive app marketplace. With over 1.3M apps in both the App Store and Google Play, it’s no small task to break through the clutter. At the same time, acquiring customers is only half the battle. The real challenge is in retaining them. The burden is on you, the publisher, to convince customers that your app is worth their time and money when they, no doubt, have several decent alternatives to check out at the first sign of a negative experience. At the end of the day, mobile marketing remains, all too often, a guessing game. Customer acquisition costs can easily exceed the lifetime value of a customer, app store ranking algorithms remain opaque, and many publishers still see marketing as an discretionary cost, if and only if they have excess budget after development.

There are definitely ways apps can win big in both their marketing and monetization, but it ultimately comes down to seeing your app not as an app but as a business. Which area of mobile marketing should developers focus on first? Is there a recommended CRM cycle?

Most marketers and developers approach the cycle as a funnel:Mobile Growth customer-acquisition-mobile-growth

I commonly hear: “If I can just drive 10% more awareness, I can expect 10% more installs, 10% more revenue, and 10% more referrals.”

Right? Perhaps not.

Counterintuitive though it may be, I’d recommend taking a bottom-up approach to your marketing. Focus the bulk of your energy on driving referrals and boosting retention, and you’ll see a “trickle- up” effect on awareness and acquisition.

Downloads and installs should not be seen as the end-all-be-all. You can have astonishing month-over-month new install ‘growth’ of 60% and still not be growing at all if your customer churn looks like that of the average app. My advice, instead, is to focus first and foremost on fostering meaningful relationships with the customers you already have. In doing so, you’ll earn loyalty, boost retention, and realize huge cost savings as it costs much less to retain a customer than it does to acquire one.

After widening the funnel at the bottom, you’ll also see huge improvements at the top. Better ratings and reviews mean higher conversion and acquisition. Better referrals, revenue, and retention, subsequently, all factor into the app store ranking algorithms, thereby increasing your app’s rank, awareness, discoverability.

Q: Are there any cheap, underrated, levers developers can act on to improve their app marketing?

I think a lot of apps are missing the mark when it comes to mobilizing their customers to leave ratings or reviews in the app store. It may sound straightforward, but an overwhelming two-thirds of apps don’t have a single rating.

At Apptentive, we just wrapped up a new report linking star ratings to app store conversion rates. In the process, we identified several seemingly simple ‘growth hacks’ that developers and marketers can employ to better manage their ratings and reviews. These include using customer insights and data to direct your messaging and rating prompts and providing alternative support channels to intercept customer complaints, bug reports, or suggestions and deal with them one-on-one rather than in the public app store setting.

Q: Which major developments do you see for the mobile industry and the app economy over the next two years?

One of the most exciting trends I’m seeing is a blurring of the line between great apps and great businesses. We’re seeing companies like Uber, Airbnb, and TaskRabbit experiencing hyper-growth largely because of how they have redefined the modern marketplace and leveraged mobile.

At the same time, we’re seeing more traditional companies making mobile a more integral part of their business. Mobile poses significant opportunities for all brands, and those that fall behind are getting uprooted by their more agile competitors. Companies across the Fortune 500 are using mobile throughout the customer journey for more data-driven marketing. We’re seeing this with mobile beacons, location-based analytics, personalized messaging, and so much more.

Two years ago you’d think targeting a specific location to trigger sending out a customer satisfaction survey as soon as a customer leaves a store to be a thing of a bad sci-fi novel. But today, it’s not only possible, but something hundreds several retailers are already employing.

Q: Which new products can we expect to see on the Apptentive platform in the coming months?

While we’re heads down at the moment, we are working on some exciting updates that we plan to unveil soon. These all go back to how we understand, listen to, and connect with our mobile customers in a meaningful and scalable way. Check back in a month or two, and we’ll be able to share more on a few of the projects we’re currently running through the beta test gauntlet.

Johana Leeflang
Johana Leeflang is Leading EMEA Events and Community at AppLift. Johana writes about mobile marketing trends and in-depth market analysis. When she is not digging deep into mobile marketing, Johana enjoys dancing salsa, listening to old-school R&B and hip-hop and traveling; her favorite holiday destination is Milos, Greece for its beautiful beaches and lovely people. Connect with her on LinkedIn here