The potential for cost savings can be the driving force behind investment, but your enterprise mobile application can provide real value in terms of revenue generation. Let’s explore some examples.
Personal Banking Apps
The big four banks utilise their customer channels to drive acquisition much more than they use mass-market advertising. This is because they have a captive audience of brand-aware, engaged and invested customers, who needs can be met by cross-selling products.
Current accounts have always been seen as the best way to create lifetime value from your base, as someone who has a personal current account for transactional purposes will utilise online banking and mobile apps to manage their finances potentially on a daily basis.
Pre-approval is a frictionless way that banks offer lending to their customers who have a suitable credit rating. They soft check an individual’s credit-worthy-ness and push a notification that says “You are pre-approved for a personal loan up to £5K, find out more.”. This breaks the inertia in a relationship and poses the question “Do you have a need right now?”, rather than waiting for the customer to decide they need additional cash for their home improvements, new car or honeymoon.
Bulb want to make energy simpler, cheaper and greener. Their mobile app is a one stop shop for understanding your energy usage, your accrual of account credit during the warmer summer months and your run rate of using that account credit in the winter.
By engaging with the mobile application as a consumer, you can get more accurate pricing and therefore save money by entering your meter readings regularly, which is great for the customer, but how does the business monetise the application?
Bulb monetise their application by encouraging engaged customers to ‘refer-a-friend’, which comes with the return of £50 for you and £50 for your friend. This acquisition model is clearly very fruitful, as not only are they getting customers to be advocates on their behalf but it has removed the need for costly mass-market advertising at scale, as the owned channels deliver the bulk of new acquisition.
Here at Waracle, we know people that have referred in excess of 20 friends based on 1) the financial benefit to them and 2) a genuine belief in the brand and service offering.
Insurance is a commoditised product that in some instances is merely a necessary expense. The insurance market has played very heavily into this cyclical cost-orientated market by offering exceptional introductory offers and then hiking up prices when people roll-off their initial term.
This has seen both consumer intent and price competitiveness driven mainly by the price comparison websites where some insurers get 80-90% of their customer acquisition.
The regulators want insurers to offer better customer outcomes by demanding these providers look at their automatic price rises and insurers consequently want to look at how they can utilise their owned channels to drive renewals to stop a prospect heading back out to the price comparison website.
This is where a mobile application can come in. By pushing early renewal price freezes, calling out money saved by renewing straight away and removing the friction by pre-populating online forms. You can play into people’s desire for simple, accessible outcomes that mean they don’t query a small price variance versus the wider market.
Fitness & Health Apps
Fitness and health applications, especially ones linked to wearable devices tend to have a range of up-sell and cross-sell opportunities baked into their platform, but one example of a social-fitness app that has generated quite a lot of noise from a monetisation point of view in recent months is Strava.
Strava has always had a free version and a premium version. But on May 18th 2020, Strava made the controversial move to shift some of its most engaging features (the ones that encourage participation through gamification) behind the paywall.
This came hot on the heels of news that only 2.2% of its 60 million accounts belonged to people who subscribed, which means roughly $79 million in annual income from 1.3 million subscriptions, which they clearly need to shift the dial on.
The news was met with some dissent and media backlash, however many people pointed out on social media and on blogs that “if you truly value a service and use it regularly, then you should be comfortable paying for it”, especially when it is only £4.00 per month.
This kind of app monetisation can only really be adopted if you have aced your product R&D, gamified the product and have a large base of die-hard fans. But it should work for Strava.
In a letter to free users, Mark Gainey & Michael Horvath were frank with their consumer base “We are not yet a profitable company and need to become one in order to serve you better”. It seems honesty is sometimes the best policy.
Regardless of which industry you are in Waracle can help you monetise your enterprise application. We have been delivering mobile solutions for 12 years and know what works. Get in touch with our team today to find out more.