Feb 29, 2016

In recent times, many Finnish corporations have entered the world of mobile apps. For example, the retail chain Kesko published its K-ruoka (K Food) mobile app that makes it easy to create and share shopping lists within a household. The department store Stockmann published its loyal customer app in fall. The national airline Finnair has actively developed its loyal customer apps during the year. In summer, even The Finnish Taxi Owners’ Federation published its Valopilkku app that makes it easier to order a cab. All of these are genuine mobile apps published at least for iPhones and Android phones.

In this article, I will discuss the reasons for implementing mobile apps, particularly from the business application point of view. At North Patrol, we do not consult games manufacturers or startups, so I will exclude them from this review. I will focus on our core business, that is, online services and web applications that support the business of large corporations.

It has generally been said about mobile apps that you should have one if you need functionalities built into smartphones, such as camera, storage capacity, GPS, the capability to remember user credentials, or a notification system. Another big issue besides these functionalities is performance. It is possible to make mobile apps simply quicker for the end user when all of the different views need not be downloaded from the web.

All these reasons are valid today, although web apps have been able to somewhat catch up in the past couple of years. For example, you can request location services temporarily, and JavaScript frameworks (such as Angular) have made web apps faster. For example, the R-Kioski website requests the location of the user to be able to inform about the nearest kiosk quickly. Facebook and Google services are good examples of how a very app-like user experience is possible today if that is what is desired.

Sometimes, mobile apps are worth creating even if you didn’t actually need any smartphone functionality. Big media corporations are probably a prime example of this special category. The Finnish Broadcasting Company YLE’s Uutisvahti, as well as the Economist’s Espresso are good examples of how becoming present on the user’s main screen and notifications may be sufficient reason to invest in a high-quality mobile app.

On the other hand, this practice has elicited the first well-grounded criticisms. The maintenance and development of genuine mobile apps is not particularly easy or cheap. Probably not all media houses will have separate mobile apps in future. For most of them, a high-quality website is still the top priority.

Many consumer businesses, such as Kesko, however, have good reasons to place their bets on mobile apps. You could say there are two major reasons that encourage businesses to create mobile apps.

#1 Mobile app strengthens the customer relationship

The first criterion is the frequency of consumer touchpoints. For example, people visit grocery stores really often, which is why loyalty and the customer relationship are important. That’s why they have those bonus cards. The more bonus cards and other loyalty programs move into the mobile, the more Kesko and other high-frequency consumer businesses should focus on mobile.

This, of course, is not a totally watertight criterion, but covers most of the bases. Another more in-depth point might be the significance of loyal customers. The more the business is dependent on frequently returning loyal customers who buy a lot, the more you should think about supporting the customer relationship through mobile apps. For example, the majority of users for the Taxi Owners’ Federation’s Valopilkku probably are those who use taxis a lot.

#2 Mobile app makes buying additional services easier

Another main criterion are the additional services available when signed in, that is, a kind of transactional depth. If you wish your customers to identify themselves and thereby gain access to more personal and personalized service, the capability of mobile apps to remember sign-in data is emphasized. For example, you sign in to Kesko’s app using the bonus card number, which enables the sharing of shopping lists between all the people who use the same card. Finnair’s mobile app uses the same model where sign-in credentials are based on the loyalty program number.

Of course, just signing in does not require a mobile app. The essential point is that the customer should sign into the services as frequently as possible, or that you want to offer additional services to the customer if she signs in. Finnair surely wishes that the mobile app encourages people to buy additional services more often. When the mobile app remembers the customer’s sign-in credentials, this lowers the threshold to making additional orders or changing order information.

For banks, mobile apps are already beginning to be the most important customer service channel in certain customer segments. The future will be similar to many other businesses that want their customers to interact with the company often and use self-services as much as possible.

Not everybody needs a mobile app

For most Finnish companies and public service agencies, however, investment in mobile apps will not pay back. Realistically speaking, fairly few companies need to communicate with their customers every week, or even every month. In such cases, however good your mobile app is, it will probably just get buried under the users’ other games and utility apps.

Not even organizations whose work is highly one-on-one will need genuine mobile apps very soon. Organizations such as Kela (the Social Insurance Institution of Finland) or the Tax Administration could, in principle, offer mobile apps for their services to their wide scope of customers. In both cases, however, people need to use the services infrequently, in which case a high-quality web application is far more reliable and stable than a genuine mobile app.

If, for example, a person signs in to check and edit her income tax return once a year, a mobile app potentially running an outdated version would probably just create a crisis at the customer service instead of being useful for the customer.

Some of the Tax Administration’s customers might enjoy a Tax Card mobile app, but hardly most of the country’s salaried employees. Most people interact with Kela so sporadically that a reliably functioning web-based application will be a far better solution than a mobile app.

Summary: Mobile apps may create a competitive advantage, particularly if you’re aiming at selling additional services to loyal customers

Significant changes are needed in the Android and Apple ecosystems before genuine mobile apps become essential for all customer-facing organizations. Nevertheless, for some organizations, mobile apps can provide a competitive advantage already. Especially if the business is highly dependent on customer loyalty and loyalty is a special development focus, and even more so if the business wants to actively offer additional services to existing customers, mobile apps may provide an efficient channel for customer service and upselling.

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