How Mobile Apps Drive Business Value (6 Concrete Ways)
May 25, 2023
TL;DR
Mobile apps create business value in specific, measurable ways. It's not just about "having an app" — it's about what the app enables.
- Direct revenue channel — Sell without intermediaries
- Customer engagement — Push notifications, loyalty programs
- Operational efficiency — Automation and self-service
- Customer data — Understanding behavior and preferences
- Brand presence — Icon on home screen = constant visibility
- Competitive positioning — Meet customer expectations
Why Apps Matter for Business
Having an app isn't the goal — creating business value is. An app is worth building when it does one or more of:
- Generates revenue you couldn't get otherwise
- Reduces costs through efficiency
- Increases customer lifetime value
- Provides competitive differentiation
- Generates valuable data
If your app doesn't do any of these, you don't need an app. You need a better website.
Value 1: Direct Revenue Channel
Apps create a direct path from customer to purchase without intermediaries taking a cut (aside from app store fees).
How it works
E-commerce: Mobile commerce accounts for 60%+ of online transactions. An app provides a faster, more convenient purchase experience than mobile web.
Example: Amazon's app drives significantly higher conversion rates than their mobile website. The saved payment methods, one-click purchasing, and push notifications for deals create frictionless buying.
Subscriptions: Apps enable recurring revenue models with automatic billing and easy access to content.
Example: Spotify's app-first experience makes subscribing natural. The app IS the product.
What to measure
- Revenue per user (app vs. other channels)
- Conversion rate
- Average order value
- Purchase frequency
Value 2: Customer Engagement
Apps maintain ongoing relationships with customers in ways websites can't.
Push notifications
Direct communication channel you own. Unlike email (spam filters) or social (algorithm changes), push notifications reach users reliably.
Example: Starbucks uses push notifications for:
- Order ready alerts
- Personalized drink suggestions
- Rewards program updates
- Limited-time offers
Best practices:
- Earn permission through value
- Personalize based on behavior
- Time based on user patterns
- Allow easy customization
Loyalty programs
Apps are the natural home for loyalty programs — always accessible, automatically updated, easy to use.
Example: Starbucks Rewards drives 50%+ of their US revenue. The app makes earning and redeeming points effortless.
What makes loyalty apps work:
- Easy point tracking
- Clear reward tiers
- Exclusive app-only benefits
- Gamification elements
What to measure
- App open rate
- Notification engagement rate
- Loyalty program participation
- Repeat purchase rate (app users vs. non-users)
Value 3: Operational Efficiency
Apps reduce costs by automating tasks and enabling self-service.
Self-service
Customers prefer handling simple tasks themselves. Apps enable this 24/7 without staff involvement.
Examples:
- Banking apps: Check balance, transfer money, pay bills
- Airline apps: Check in, get boarding pass, change seats
- Restaurant apps: Order ahead, customize order, pay without waiting
Cost savings:
- Fewer support calls
- Reduced staff requirements
- Faster service delivery
- Fewer errors (customer enters data directly)
Internal operations
Apps aren't just for customers. Internal apps improve business operations.
Examples:
- Inventory management
- Field service coordination
- Employee communication
- Data collection and reporting
What to measure
- Cost per transaction (app vs. alternatives)
- Support ticket reduction
- Task completion time
- Error rates
Value 4: Customer Data
Apps generate rich data about customer behavior that informs business decisions.
What apps reveal
- Usage patterns: When do customers engage? How long? How often?
- Preferences: What do they view, skip, purchase?
- Journey data: How do they navigate? Where do they drop off?
- Location data: Where are they when they use the app?
How businesses use this data
Product decisions: What features do users actually use? Marketing: What messages resonate with which segments? Operations: When is demand highest? Pricing: What's the price sensitivity?
Example: Netflix uses viewing data to decide which shows to produce, how to thumbnail content, and when to recommend specific titles.
What to measure
- Data points collected per user
- Insights acted upon
- Decisions informed by app data
- Prediction accuracy from app-sourced data
Value 5: Brand Presence
Your app icon on a customer's home screen is a form of advertising you don't pay for.
The visibility factor
Average smartphone users check their phones 96 times daily. Each time, they see your icon — if you've earned a spot on their home screen.
What this requires:
- Enough value that users keep the app installed
- Regular use so the icon stays visible
- Quality that earns a home screen position (not buried in folders)
Brand reinforcement
Every app interaction reinforces brand associations. A smooth, helpful experience builds positive associations.
Example: Apple's retail app reinforces their brand values — clean design, premium experience, seamless integration. Using the app feels like using Apple products.
What to measure
- Installation retention rate
- Home screen placement
- Brand recall metrics
- Net promoter score (app users vs. non-users)
Value 6: Competitive Positioning
In many industries, customers expect an app. Not having one is a competitive disadvantage.
Table stakes categories
Banking: Customers expect mobile banking. Banks without good apps lose customers.
Retail: Major retailers have apps. Smaller ones without apps seem behind.
Restaurants: Mobile ordering is expected, especially after 2020.
Airlines/Hotels: Booking and managing travel without an app is friction.
Differentiation opportunities
In categories where apps are common, quality differentiates.
Example: Chick-fil-A's app is consistently rated higher than competitors. The app experience becomes part of why customers choose them.
What to measure
- Feature parity with competitors
- App store ratings vs. competitors
- Customer feedback mentioning app
- Market share changes after app improvements
Is an App Right for Your Business?
Not every business needs an app. Apps make sense when:
App probably makes sense
- Frequent customer interaction (daily/weekly)
- Transaction-based business
- Benefit from real-time notifications
- Complex loyalty or subscription model
- Significant mobile traffic to website
- Competitors have apps customers use
App might not make sense
- Infrequent customer interaction (yearly/rare)
- Simple, one-time transactions
- Limited digital audience
- Small customer base
- Resources better spent elsewhere
- Mobile web handles needs adequately
Key Takeaways
- Apps create value in specific ways — Revenue, engagement, efficiency, data, presence, positioning
- Measure what matters — Each value type has specific metrics
- Not every business needs an app — Website might be enough
- Quality matters more than existence — A bad app is worse than no app
- Customer value drives business value — Useful apps get used
Next Steps
Considering an app for your business?
- Identify the primary value — Which of these six matters most?
- Quantify the opportunity — What's the potential ROI?
- Assess current mobile experience — Is mobile web sufficient?
- Evaluate competition — Do competitors have apps? How good?
- Monitor user feedback — Use AppReviewBot to track competitor app reviews
An app is a significant investment. Make sure it solves a real business problem before building one.