Anyone who owns a smartphone or tablet PC has experienced the thrill of downloading apps. These handy little software programs help us navigate our world, play games, connect with friends, save money and unlock the little mysteries of everyday life.
But even though there are thousands of apps on the App Store and other app marketplaces, most people don’t use very many apps and end up deleting most of the apps that they downloaded.
As this article in USA Today points out, most apps quickly lose their “app-eal.” Of the 42% of Americans who have smartphones with apps, 68% of people only use five or fewer apps in the course of a given week. 80-90% of apps are eventually deleted. Clearly, only a few apps prove themselves to be useful enough and relevant enough to stay on people’s “must-use” list, day after day.
Two marketing lessons that your company can learn from America’s thousands of abandoned apps?
- Don’t get caught up in “innovation” if it’s not relevant to your customers: I’ve seen this happen time and time again in dozens of situations and dozens of industries. Often companies get entranced with the idea of “innovation” or using technology for its own sake, but they forget to ask if the new technology is going to be relevant to customers and make customers want to buy it. It’s no good to create a new product with lots of bells and whistles if your customers don’t want the bells and whistles, or don’t know how to use them, or don’t know how to fit the new technology into their lives. Do your homework first: research customers perspectives.
- Follow the right metrics: The app marketplace is a popularity contest. App developers pay close attention to how many people have downloaded their apps onto their smartphones. But according to the USA Today article, a better measure of an app’s success is not the number of downloads, but how many people are actually using it. An app that is retained by at least 30% of the people who downloaded it is considered “sticky;” all the other apps are just taking up space on people’s smartphone screens. In the same way, many companies measure marketing success by the wrong metrics. It doesn’t matter how many people watch your ad or watch your YouTube video if those marketing efforts don’t lead to actual sales. (Or worse, my own pet peeve, it doesn’t matter how many “creativity” awards your ad agency wins if the ads don’t help sell products.)
There are over 1 million apps waiting for people to download, but most will never become the next “Angry Birds” or “Words With Friends.” How can your company become more “sticky” with your customers? Is your company’s idea of “innovation” actually making something better and more efficient and more valuable in a way that is relevant to your customer’s buying decision, or is it just “technology in search of a home?”
I had the privilege years ago of meeting David Neeleman, founder of JetBlue. I am as impressed today as I was then by JetBlue’s understanding of delivering relevant competitive advantages. Most airlines deliver next to none, I am sorry to report. I fly over 100,000 miles each year so I can report from personal experience: most airlines don’t focus on customer care. Early in my career I worked in management for two major airlines, both now dead: Pan Am and Eastern Airlines.
There are many reasons those two carriers are no longer here. The head of a major union walked his members off the proverbial plank killing Eastern Airlines when they were struggling to make ends meet. Pan Am also had union issues as well as cash flow challenges due to over extending on new aircraft and then the Lockerbie, Scotland explosion was the last straw. They could not withstand the last knockout punch.
But early in the aviation glory days, the one thing airlines focused on was being relevant to passengers in ways that mattered most. This is what brought the success to those carriers and made them the preeminent names in aviation as the industry was growing. There was a great deal of attention paid to schedule timings - arrivals and departures times most valued by fliers. We analyzed the heck out of competitive time slots and fought hard to win favorable departure and arrival times from airport authorities. Today I cannot find a nonstop from my hometown airport Fort Lauderdale to 80% of the destinations I travel to. The Nonstop flight is an endangered species. It’s an example of how the airlines operate their businesses based on their internal systems, and not based on what customer’s value.
JetBlue on the other hand makes great efforts to meet the customer needs in many ways. In a Wall Street Journal article, How JetBlue Cracked the Boston Market , it is made clear that JetBlue is cleaning the clock of its rivals at this major airport. Their competitors pulled back on nonstops and made business travelers fly through hubs. As a result the business traveler happily moved over to JetBlue. Business travelers prefer convenience of nonstop flying over accruing thousands of miles we may never use (We travel so much that the last thing many of us want to do with our precious downtime is fly somewhere with our free miles).
JetBlue welcomed the business travelers by adding extra leg room options without charging an arm and a leg and global computer reservations systems for complex ticketing. It also added expedited security screening to match the carriers who previously catered to the business crowd. They have a newer fleet than most carriers, and a much more amenable culture for service personnel than many airlines. Their free onboard DirectTV at every seat is a major hit, few competitors have matched. Dave Barger, JetBlue’s chief executive says that 30% of their traffic is now business travelers, aka the higher yield passenger. Not bad for an airline that started out as a low cost, vacation traveler’s airline.
I spend most of those 100,000 air miles each year presenting to business leaders. I stress the importance of aligning internal decisions based on customer needs. It is interesting to note how few companies are using customer needs as their strategic driver. Customers know when companies are customer focused, or internally focused.
Like the JetBlue story, every day we find examples of the companies whose meteoric rise tanked because they stopped tuning in to their customers. Please don’t be one of those. Learn what is most relevant from your customers, the return on investment is staggering.
This year the cost of a 30-second Super Bowl ad was $3.5 million – up from $3 million the year before. Since 2001, the price of a Super Bowl ad has gone up by 59% (from $2.2 million per 30-second spot).
The ever-rising price of a Super Bowl ad is another sign of why it’s wrong to try to compete on price. Even in a down economy, it is possible to raise your prices if your customers value what you offer and if you know your competitive advantages.
We tell this to our clients all the time: “Price wars have no winners.” If your only way to compete is to cut your prices to the point where you can barely make a profit, then you need to re-think the game; or find a new market to play in.
If you look at the example of the Super Bowl, the customers who buy Super Bowl ads (marketers – ad agencies and the companies that hire them) clearly are not “price sensitive.” Most companies would think “it’s crazy to pay $3.5 million for a single 30-second TV ad,” and yet the Super Bowl TV ads were all sold out.
Why are customers willing to pay almost any price for a Super Bowl ad?
3 Competitive Advantages of the Super Bowl in the TV advertising market:
- Unmatched audience and reach: Super Bowl ads are guaranteed to put advertisers in front of millions of eyeballs (this year’s Super Bowl was watched by 111 million Americans) and the ads get additional attention from news coverage, viral campaigns and social media commentary about the commercials themselves. The Super Bowl has become an unofficial national holiday dedicated not only to football, but on a smaller level, to advertising itself.
- Prestige play: Buying ad time for the Super Bowl is often a sign of prestige. By buying a Super Bowl ad, big companies can show that they have powerful brands with mass audience appeal, and emerging companies can get a big splash of media attention. Running an ad during the Super Bowl sends a signal that a company is willing to be a big player in the media landscape.
- Nothing else compares: There is only one Super Bowl. No other TV advertising opportunity is quite like it. If you want to put an ad in front of millions of highly focused consumers who will be more likely than usual to actually watch and remember the ad, the Super Bowl is the time to do it.
For all of these reasons, it’s no wonder that the Super Bowl can charge whatever they want for ad time.
Where do you offer something specific that can’t be found elsewhere that is perceived as very relevant to your customers? What will make your customers feel like they got something very special? How well does your company communicate that?
If you can you give your customers an unmatched, one-of-a-kind experience, and communicate your competitive advantages in your marketing messages, you’ll be able to command more profitable prices, year after year.
One final thought on the Super Bowl: It’s obvious that the Super Bowl is a good business for the TV networks that broadcast it, and although the Madison Avenue advertising agency world always gets excited about Super Bowl Sunday, I’m not convinced that these Super Bowl ads are actually a smart use of money for the advertisers themselves.
Do most of the companies that advertise at the Super Bowl even know what their ROI is for their Super Bowl ads? Or are these companies’ ad agencies selling their clients on expensive ads based on the nebulous concept of “brand awareness,” which is hard to calculate and hard to value? I personally find very few ads that deliver a message of relevance. I am not going to run out and buy chips because some sloppy guy is licking his fingers after devouring a bag. Did that send you racing out to the store? I surely didn't.