How to Improve the Profitability of Your Small Business Mobile App

If you have been following the latest marketing developments, you know everything is trending in a mobile direction.

Consumers are seemingly glued to their phones and tablets. In fact, 77% of adults in the United States own a smartphone. That number is up from 35% in 2011.

That’s why it’s so important for you to optimize your web design for mobile users. While this is a necessary approach, it’s not enough if you really want to enhance your mobile marketing strategy.

The way people use their phones has changed. People don’t consume information the way they did five or ten years ago.

With the rise in smartphone usage, it makes sense that there is also a growing popularity in mobile app usage.

In fact, 90% of mobile usage time is spent on applications.

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If you are one of the small business owners who recognized this trend and built a mobile app, congratulations.

Developing an app is no easy task, and it’s definitely not the least expensive investment you’ll make in your lifetime. But now that your app has launched, you might be having some concerns about your return on investment.

You expected to see massive profits right off the bat, and that’s not always the case.

Some of you may have had your small business mobile app out for a while now. At first, it was performing well, but over time sales have become stagnant or even declined.

Even if your mobile app is successful, there is always room for improvement. That’s the inspiration for this guide.

I’ll explain everything you need to know about optimizing your small business mobile app to maximize sales and increase profitability. Here’s what you need to know.

Don’t charge users to download your app

I know what you’re thinking. How can you make money with a free mobile app?

Charging an upfront fee for downloads may seem like an appealing way to get some fast cash. It could be the way you forecasted getting your initial investment back. But I advise against this strategy.

As a small business owner, you know how important it is to prioritize customer service. You also know how cost-sensitive your customers are.

The investment to download your app will turn people away. Even if you’re only charging a few bucks, it’s just not worth it to people.

Why?

Well, for starters, your customers are not used to paying for their apps. Research shows the vast majority of mobile app downloads are free.

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Is your app really that much more valuable to the user than all the other free apps on their device? I doubt it.

Removing the cost to download an app will ultimately result in more downloads. Now people won’t have a reason to hesitate when installing your app on their devices.

The more people download your mobile app to their smartphones and tablets, the greater the chances of them spending money.

Here’s another way to think of it. If you’re using this app as a platform to sell your products, what’s the cheapest item offered on your app?

Now, compare that to the cost you were considering charging for a one-time download. It’s just not worth it to collect an insignificant fee when you can cover these user acquisition costs with actual purchases instead.

Focus on app store optimization (ASO)

Since you’ve already developed a mobile app for your business, I’ll assume you’re somewhat tech-savvy.

Even if you didn’t build it yourself, you at least have your finger on the pulse when it comes to the latest technology. You probably have a website and understand the basic principles of search engine optimization (SEO).

Well, app store optimization is basically the same concept. But it’s in reference to the app store as opposed to an Internet search engine.

There are certain elements based on how you set your app up that will affect your ranking in the app store.

However, there’s a catch. These algorithms and factors will differ depending on where your app is available. The two biggest app stores are the Google Play Store for Android devices and the Apple App Store for iOS devices.

Those of you who have your app available on both platforms, which I definitely recommend, need to understand how these elements affect your ranking.

Here is a look at some of the main differences between these two app stores:

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As you can see, there are definitely some similarities between the two stores that have implications for your ASO strategy. The app title in both the Apple App Store and Google Play Store has the most significant impact on your search rankings.

The way user reviews and ratings impact your search ranking is also similar on both platforms.

However, some of the key differences here include:

  • description
  • keywords field
  • app listing links

You’ll need to make changes to your listing in each store so that it’s appropriately optimized for ASO.

If you have your app available only in one store, you’re missing out on a huge opportunity here. Alienating a large percentage of your customers is costing you money.

Once you have your app offered in both app stores and prioritize your ASO, you will see more downloads.

As I have previously stated, increased downloads will improve profitability.

Personalize the user experience

What happens when someone downloads your app?

Think about what everyone sees on your homepage and interface. Is it the same?

If the answer to that question is yes, you’re making a mistake. You should encourage app users to create a customer profile when they launch your app.

Often, people are turned off and discouraged by the time-consuming and tedious process of creating a profile. You can make it easier for your customers by integrating your app with their Facebook profile or Google accounts. This simplifies the login process.

Here’s an example from the Quora app that illustrates exatly what I’m referring to.

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This is much easier for your users than having to type in all of their information to set up a profile.

But now that they have an account with your app, every action they make can be tracked to enhance their personalized experience.

Based on things such as their search history and previous transactions, you’ll be able to recommend appropriate products and services to each customer.

You can also recommend items based on age, location, gender, etc. Tracking previous purchases makes it easy for customers to complete repeat orders.

All of these factors will help you drive sales and boost profits through your app.

Personalized offers encourage customers to spend more money. In fact, 39% of customers are willing to spend more after receiving personalized mobile promotions.

Use your app to enhance the in-store experience

I know that some small businesses operate exclusively online. So this tactic may not apply to you at the moment.

But I still encourage you to review this section in case you expand your company to physical locations in the future.

But if you have brick and mortar retail locations, your app can help complement the in-store buying process for your customers. How well have you been tracking your customers’ shopping habits?

If you watch them closely, you may have realized they are already using their smartphones while they are shopping in your store.

You might as well integrate your mobile app with your physical store to make shopping even easier for your customers. These are the top ways that customers use their phones while shopping in stores:

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Your app should be able to do all the things on this list.

Make it easy for customers to scan a barcode of an item in your store directly from your mobile app platform. Now they’ll have access to a detailed product description and be able to read user reviews.

Give them an option to save items in a list of their favorites so they can buy it later, even if they don’t want to buy it right now.

This will make it easier and more appealing for them to complete the transaction.

On the flip side, they can browse for an item on your app and save it in their favorites list before they get to your store. When they arrive, your app can tell them exactly where the product is located in the store.

Now they can check it out in person to make sure it’s exactly what they had expected before buying it. This really enhances the customer experience.

As we previously discussed, you want to personalize the customer experience.

Your mobile app can also act as a customer identification card for each user. This will be linked to their account and loyalty rewards program. We’ll discuss this concept in greater detail shortly.

Send push notifications

Your mobile website is a great asset to your small business. But one thing it can’t do is contact your customers at will.

Since you have a mobile app, you need to use push notifications to your advantage and reach out to your customers.

You just need to be cautious when it comes to the type of message you’re sending with each push notification.

We know that 48% of app users want to receive push notifications about special offers based on their preferences. This relates back to one of my earlier points about personalization.

Just don’t send push notifications too frequently. That’s because 52% of users believe that push notifications are an annoying distraction. You don’t want your company to be perceived as annoying. Sending too many notifications can cause damage beyond your brand’s tarnished reputation.

For example, 32% of app users will stop using an app altogether if they get too many notifications.

You should also consider the word count of your push notifications.

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If you have too many words, they may not fit on the screen. This will obviously have a negative impact on your open rates.

That’s why push notifications with ten or fewer words have the highest click rates.

When it comes to your push notification strategy, your best bet is to only send messages that add value to the recipient. I’d recommend discounts or promotions to get started.

Timely notifications are helpful as well. If your company is delivering something to the customer, such as food, a notification “your food has arrived” would definitely be appropriate.

Just don’t go overboard with these, or users can turn off notifications. If that happens, it won’t help you generate more profits.

Set up a loyalty program

You don’t always need to turn to new downloads and user acquisition to make more money. Instead, look at your most loyal customers as a way to increase profits.

As I mentioned earlier, your mobile app can act as a digital customer loyalty rewards card. We’ve all seen these before. Your small business may even have one of these systems already in place.

I’m talking about things such as a simple punch card. For example, if you have a sandwich shop, you may offer a free sandwich on the customer’s 10th visit.

The problem with this system is that cards get misplaced, and it’s not easy to track the purchases. But a mobile customer loyalty program is much more effective.

You can set it up based on the number of visits, but I’d recommend taking your strategy to the next level. If two customers each make ten purchases, does that mean they are equal?

Not if one spends $100 total and the other spends $1,000 total. Setting up your rewards program based on a spending threshold system rewards your top customers.

Here’s a look at how Sephora implemented this strategy based on a customer’s annual spending:

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Adding this feature to your mobile app will help increase the buying frequency and average purchase order for each user.

That’s because customers are encouraged to spend more money so that they can reach the next level. Once they get to a new threshold, their benefits will increase.

As a result, you’ll see higher profits and improve your customer retention strategy at the same time.

Encourage user referrals

As I just finished saying, you don’t always need new customers to improve your profits. That said, it certainly helps.

A great way to get new downloads is by leveraging your relationships with your current customers. Encourage them to refer their friends and family to your app.

However, this is easier said than done. Simply asking your existing users to refer others probably won’t be enough to get the job done.

Sure, your app may be great, but it’s not enough for someone to help you just out of the kindness of their heart. They’ll be expecting something in return.

Reward customers for their referrals. Give them an incentive, such as a discount off their next purchase.

You can reward the referred user as well. It may seem as if you’re giving away too much, but it’s worth it in the long run since you’ll be getting new customers.

Here’s a look at how this feature looks on the Airbnb app:

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Research shows that this referral tactic helped boost their app download rates by 300%.

It’s safe to say it’s a winning strategy. It can also create an exponential download effect.

That’s because each time a new user downloads the app, they’ll also be encouraged to invite their friends to join.

This is one of my favorite ways to get your customers to recommend your brand to others.

Optimize the checkout process

Let’s continue our discussion of customer profiles. You want to take full advantage of this feature.

Once the customer makes an initial purchase through the app, you can save all of their information to their account.

Now you have their shipping address and billing information. Unlike on a desktop or mobile site, they don’t have to enter this information each time they want to buy something.

All they have to do is click on what they want and finalize the transaction. The entire checkout process can be completed in a couple of clicks.

That’s why mobile apps have higher conversion rates than mobile websites:

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Do everything possible to make your app’s checkout as smooth as possible.

Fewer steps and less friction to complete a purchase will help drive sales. Plus, your app makes it easy to accept alternative payment options, such as Apple Pay.

Constantly monitor the performance

Nobody’s app is perfect.

Sure, you spent the time to make sure it was good enough before you released it, but there is always room for improvement.

Prioritize speed. Avoid glitches. Fix crashes and errors as soon as possible. It will help improve the user experience.

Research found 48% of app users are less likely to use an app if they have a poor experience. And 31% of people say they are less likely to buy something from a company based on a poor app experience. You can’t afford to overlook that.

Read through your user reviews to see the feedback and what needs to be changed.

Use beta testers to help you get valuable insights before releasing new versions and updates.

Conclusion

If your small business has a mobile app, you are already on the right path to success. But if your app isn’t generating high profits, it can feel as if there is a hole burning in your pocket.

One of the best ways to improve your app’s profitability is by finding ways to get more downloads. Ultimately, downloads will translate to dollars.

Make sure you offer your app as a free download. Focus on app store optimization to improve your search rankings in both stores. Encourage users to invite their friends through a referral program.

Personalize the user experience. Use your app to improve the way they shop in your physical stores. Set up a mobile loyalty program, and send promotions through push notifications.

Simplify your checkout process so it’s easy for app users to make a purchase.

If you follow these tips, your small business mobile app will turn into a money-making machine.

How are you using your small business mobile app to drive sales and increase profits?

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