Is It Worth It To Build A Mobile App For Your Business? [A Data Driven Answer]
As a business owner, it’s essential that you’re always making strides to take your company to the next level.
I can relate.
You wake up in the middle and think to yourself, “how can I make improvements?”
Whether it’s been on your mind for a while, or the thought just popped into your head recently, I’m assuming that you’re contemplating a mobile application – and that’s what brought you here.
Well, you’ve come to the right place.
As an expert in this industry who has experience building successful apps, I can help you make an informed decision.
For example, cloud apps are on the rise.
It’s estimated that by 2019, 90% of mobile data traffic will come from cloud apps.
If you’ve done some preliminary research about mobile apps, you might have found the information a little bit intimidating.
It’s natural to have some reservations about something you’ve never done before.
Development takes time, effort, and money.
Depending on which route you decide to take in order to build your app, it can be very pricey, which may not be reasonable for every business.
However, there are some less expensive alternative methods for development for you to explore that will keep you within a reasonable budget.
But we’ll discuss those options in greater detail later.
So back to the question at hand here.
Is it worth it for you to build a mobile app for your business?
With apps growing in popularity, even in the small business world, I would lean towards yes.
But there’s no definitive black and white answer to this question.
You’ll have to make that decision for yourself.
Here’s what I can do.
I’ll provide you with everything you need to know before you start building a mobile app.
You’ll get to learn new statistics and trends about the industry.
I’ll also provide you with real life examples of companies who had success from building an app for their business.
After reading this informative guide, you’ll be able to make an educated decision on whether or not it’s worth it for you to create a new app.
Fundamentally, what goal are you trying to achieve for your mobile app?
Before proceeding, make sure you have a legitimate reason to build a mobile app.
So take a moment to think about your primary goal.
I’ll give you a few examples of why people want to create an app.
- To save money
- To make money
- Because they are cool and everyone else has an app
If you want to build an app just because you think it’s cool and you’re trying to keep up with the latest trends, I suggest you reevaluate this decision.
Yes, it’s important to be trendy, but not without a realistic and attainable goal.
You can’t measure “how cool” your company is.
However, you can definitely measure how much money you’ll save or make as a result of building an app.
So those are the areas you should focus on the most.
Here are survey results that show why most businesses want to build an app.
Let’s focus on the top 3 results.
- Increase sales
- Improve the customer experience
- Stay competitive
These are all great reasons.
Mobile apps can help you make things more efficient, which will ultimately save you time and money in the long run.
Building an app can enhance the communication between customers and employees as well if you include the necessary customer service features.
These apps can also directly generate profits.
Let’s say you have an ecommerce site.
If your customers are browsing products on their mobile devices (which they are) you could have much more success generating revenue by launching a mobile app.
Look at the impact an app has on user buying habits.
Making improvements to your company based on the habits of your customer is typically a recipe for success.
Examples of companies who successfully used mobile apps
I’ll show you some data from different businesses that had a successful mobile app launch.
These companies built an app for one or more of the reasons that we previously discussed.
If your business has a similar reason, these examples can help you determine if you think that your app would be successful as well.
The Freeman Company
The Freeman Company provides services for events and trade shows to various businesses.
They determined that the current system for navigating one of these events was difficult for both the exhibitors and attendees.
So they built an app called Concierge Elite in an attempt to improve customer service.
The app provides general information about each trade show.
Customers can also avoid lines, order equipment for their booth, and get shipping notifications for their freight.
The app also streamlined the checkout process.
In terms of customer service, the results were undeniable.
Concierge Elite boosted The Freeman Company’s positive customer service feedback by 300%.
Toyota Financial Services
Toyota Financial Services wanted to build an app that improved customer experience and dealer experience as well.
The brand launched different versions of the same app, based on the different subdivisions in their lineup of cars.
- Toyota – myTFS
- Lexus – myLFS
- Scion – Scion Solutions
These apps were basically an extension of the services offered on each respective website.
Customers now have the ability to set up mobile payments for their vehicles.
When a billing statement came in the mail, they could scan a barcode using their smartphone to make a digital payment instead of writing a check.
The positive response from their customers was massive.
In the first five months, the app had nearly 350,000 downloads between iPhone and Android devices.
As a game developer, Ustwo Games launched the Monument Valley app in April of 2014.
They aimed to create something that was free for users but also profitable for their business.
90% of users don’t spend any money while playing.
However, of the 10% that buy upgrades turned out to be extremely profitable.
Here’s a look at Monument Valley’s revenue during the first year.
It cost them about $1.4 million to develop the first two versions of the app.
But after the first year, it brought in just under $6 million in revenue.
Fast forward to today.
This app has over 30 million downloads.
I included this example for a very specific reason.
When you’re looking at averages and numbers for the mobile app industry as a whole, the numbers can be skewed.
Just because certain apps have success, it doesn’t mean that those numbers will translate to your industry or your company.
Games dominate the mobile app space in terms of daily revenue.
Let’s look at some numbers.
The graphic shows a glaring difference between how successful games are compared to other types of apps.
This isn’t to discourage you.
I just wanted to make you aware of the difference.
There’s lots of misleading information out there on the web.
So while the success of Monument Valley from Ustwo Games is worth sharing, the information should be taken with a grain of salt.
PitchBook helps people analyze businesses.
It’s a place for investors to research different industries and private companies before making a commitment.
Some services that they offer include:
- Business development
- Private market intelligence
- Due diligence
- Deal execution
- Sourcing investments
They recognized that there was a growing demand for their services on mobile platforms.
In fact, they saw an increase from 25% active monthly mobile users to to 54% active monthly mobile users in just one year.
Recognizing this trend, PitchBook needed to develop a mobile app.
It turned out to be a profitable decision.
In October of 2016, the company was acquired by Morningstar for $225 million.
So if you’re looking for an exit strategy for business, building a mobile app could significantly increase the value of your brand.
Figure out the cost to develop your app
OK. So we’ve established that companies have had success from launching an app.
But don’t throw your basic business principals out of the window when you’re going through this process.
If the cost of your app will be too much money to generate a return on your investment, it’s probably not worth it for you.
And you don’t want to cut corners and develop an app that’s too slow.
Speed is important for the user experience.
The cost to build your mobile app will depend on how you choose to develop it.
You’ve got a few options here, and I’ll explain how each one works.
- Custom development shops
- Learning how to code yourself
- Use an app building service
Based on your time frame, skills, and budget, you’ll have to come up with the best option for your business.
Here’s an overview of each choice.
Custom development shops
Essentially, you’re getting someone else to build the app for you.
On average, this route will cost an average of $270,000 to develop.
This process will usually take between 7 to 12 months.
With that said, the price will vary slightly based on what kind of development shop you’re using.
You can work with a freelancer or decide to go with an agency.
A freelance developer would be the most affordable option between the two choices.
That’s one of the benefits.
However, you’re working with just one person, so you’re at their mercy.
If they are taking on too many projects, this person could be overwhelmed and not fully committed to developing your app.
The project could take much longer than anticipated.
But if your design is pretty simple and the person you’re hiring has a great reputation, it’s not the worst option to consider.
If you’d prefer to work with an agency, it’s going to cost you more money.
You can find a small company with roughly 3-10 developers on the team or large agency with several teams of developers.
You’ll pay more for a large agency, but you’ll be backed by their quality and experience.
Building an app has multiple stages of development. Let’s take a look at the average cost of the design stage.
So if you’re planning to use a big agency, you can expect to pay something on the higher end of this scale.
Again, that’s just for one portion of the development.
Learn how to code
If you’re tech savvy and have lots of free time on your hands, learning to code could be an option.
Doing all of the work yourself will significantly cut the development costs.
But you’ll need to weigh that saved money against your time.
So ask yourself, “how much is my time worth?”
Everyone will have a different answer.
While learning to code may sound intimidating, it’s not rocket science.
It’s doable, but it won’t happen overnight.
There are options online that teach you how to code for free using interactive teaching tools.
Most business owners don’t have the time to do this.
They would rather spend a little bit more money and focus their free time and effort on improving other aspects of their business.
App building services
You can also build an app online without learning to code using services like BuildFire.
It’s a more cost effective solution than going through an agency.
Plus you have complete control of customization.
I know I’m biased (obviously) but it’s one of the easiest app building services I’ve ever seen.
You don’t need any experience or development skills to do this.
All you need to know is how to simply navigate on your Internet browser.
The BuildFire platform takes care of everything else.
We also have a team of experts that you can reach out to for help with any questions that arise during the process.
If you’re really short on time, our pro services team can build the app for you.
Just consult with our team and let us know exactly what you’re looking for.
It’s unrealistic for most businesses to pay for a big agency developer.
Using an app building service is much more reasonable.
Since the process is simplified, it will take less time to develop your app as well.
This is imperative.
Not having an app puts your company at risk for several different things.
App building services can help you avoid these pitfalls.
Just sign up for a BuildFire account when you’re ready to get started.
So is it worth it for you?
As I said earlier, there’s no right or wrong answer to this question.
Like the majority of your company’s executive decisions, this is something you’ll have to figure out for yourself.
With that said, I think that most of you would benefit from a mobile app.
Just make sure you have a clear goal before you get started.
“Apps are cool” isn’t a viable reason to start development.
But if you’re trying to save money, make money, improve the customer experience, or increase sales, launching an app can help you achieve your goal.
Look back to some of the success stories that we saw.
Just know that not all apps make millions of dollars overnight.
Once you determine that you’re ready to proceed, the next step is finding out how you’re going to develop your app.
You can outsource development to a freelancer, small shop, or large agency.
This will be your most expensive option.
You can also learn to code everything if you want to build it yourself from scratch.
An alternative option is finding an app building service.
You can still build the app yourself, but you don’t need to learn any coding skills.
This is most likely the best option for most businesses.
It will save you time and money.
How will your new app save your business money while improving the customer experience?