Applause is a software company that helps startups and enterprises create winning applications for mobile, web, wearables and beyond through in-the-wild testing, software tools and analytics. We recently caught up with their Chief Marketing & Strategy Officer, Matt Johnston, to find out what businesses are doing right, what they’re doing wrong, and what to expect from mobile applications in 2016.


It’s not about checking the box, it’s about thinking about that customer journey, and what problems you’re trying to solve.


HATHWAY: As more and more brands are leveraging mobile, what challenges are you recognizing across industries?

MATT: Mobile in and of itself, from my perspective (and that of other CMOs), is a vehicle. A means to an end. A lot of times people jump into the solution without understanding the nature of the problem. When wise companies really start thinking about the role mobile is going to play in their customer experience, they start by thinking about what problems they are going to solve for their users, what benefits they’re trying to create for users. And then out of that falls:

  • Are they talking about responsive web?
  • Are they talking about native iOS and native Android?
  • If it is a B2B company, are they talking about the 3rd, 4th, 5th players: Amazon Kindle, Windows Phone, Blackberry?

I think too often companies just dive headlong into it and just say, “We have an iOS app! Check the box.”

It’s not about checking the box, it’s about thinking about that customer journey, and what problems you’re trying to solve. I think, in the past, too often companies have gotten hung up on the “how”, on the nuts and bolts of it, as opposed to the “what” and the “why”. And that’s actually one of the things we’ve seen shifting, especially among enterprises, that in the past it seems the CFO has just been a stakeholder in those conversations. Now we’re actually seeing them drive the digital agenda, drive the digital budget and drive the digital strategy. That includes public-facing web, public-facing mobile, etc.

HATHWAY: An app alone is not a strategy, what are some of the other components that you would recommend considering in developing a holistic mobile strategy?

MATT: You have to start with: “What’s in it for the customers and prospective customers?”

Then very quickly thereafter: “What’s the goal for our company, for our brand and our business?”

For example, mobile native applications. Is the goal of your application to help the customer research products? Is it to help them find the location? Is it to allow them to conduct commerce and actually transact in the application? Those are wildly different experiences and different feature functionality to pack into a responsive web or iOS or Android application.

You also have to consider and understand:

  • “What are we trying to solve for the user?”
  • “Why is the company doing this, why are we making these investments?”
  • “How are we going to define and measure success? Is it going to be based on monthly average uniques, on downloads or on app store ratings, or will it be based on hard transactional dollars?”

If you think about applications that are for sale, for purchase, that’s a whole different animal than free applications.


HATHWAY: When apps first came out, they were very focused on providing one specific piece of utility, whereas now they are much more robust. Are you seeing a similar trend with the clients you work with?

MATT: Yes, I think about enterprises. I always draw a distinction, if you think about applications that are for sale, for purchase, that’s a whole different animal than free applications. I also think if you think about companies where the application is the product, it is the company, that’s a wildly different animal than if you’re talking about a preexisting retailer or financial services company. So yes, we’re certainly seeing a lot more complexity, especially among companies that existed before web, that existed before mobile. They started off and their 1st and 2nd gen mobile applications were just a store locator or just a product catalog, and that’s all it was. We’re seeing a lot more breadth to the applications, in terms of feature functionality, and we’re seeing a lot more integration with their core business.

In retail, that might mean that it’s an omnichannel experience:

  1. You browse on the mobile application
  2. You walk into a brick & mortar store
  3. The beacons know who you are and can direct you to aisle 4 where that thing you’ve been researching is.

Consumer expectations are rising — they’ll no longer download an application from a big retailer and say “Oh, it’s got a store locator on it!”. That’s not helpful.


HATHWAY: Do you think this is driven by the business or the enterprise looking to accomplish their goals or is it driven by consumers demanding more robust mobile experiences? In other words, is it pull demand from consumers or push demand from the line of business?

MATT: It’s a combination, what we’re seeing is mobile is maturing and evolving out of the R&D stage, where we’re figuring out the “how”, and “what’s possible and what isn’t?” and now we’re getting into solving real problems for the user which benefits the brand and the business.

I think it’s a combination of pull demand [and push demand], meaning consumer expectations are rising — they’ll no longer download an application from a big retailer and say “Oh, it’s got a store locator on it!”. That’s not helpful. Their expectations have certainly risen, but I also think it’s about the CMO, the Chief Digital Officer, the VP of Mobile, etc., recognizing that “We’ve figured out most of the nuts & bolts, we’re out of the R&D phase, we’re into the P&L phase.”

 

HATHWAY: Mobile is generally viewed as technology, but how important is creative (visual design) to the mobile experience?

MATT: I think that both the technology nuts and bolts and the visual design are really important, but they are still a means to an end. It has to start with what’s in it for the user and what’s in it for the brand & business. Because I have seen fabulously beautiful applications that were horribly misguided and I’ve seen very simple, kind of undesigned applications that were right on the critical path in terms of creating utility.

HATHWAY: Have you seen or can you site any apps that invested a lot in creative but didn’t perform as well as the company might have expected?

MATT: I’ll give you an example of a big retailer who’s name I will leave out. They were on generation 9 of their mobile application, they’re very, very active, publicly traded, big company. But they said “Ugh it’s so transactional, just so utilitarian, we need to create an experience!” So they hired this exec from Apple who’s phenomenal at creating experiences. They rolled it out without a lot of feedback, they didn’t do a beta program, they didn’t do an early release program, they clearly didn’t do any user experience testing. If you look at their App store rating, their Applause Analytics score – which is a score of 1-100 – plummeted from a 68 a lifetime score (over 6 years they had maintained a 68 out of 100, which is a very good score) to a 51 in a matter of about 8 weeks.

It was beautifully designed by all accounts, but they had disrupted these critical flows. They had made things that used to be easy very difficult. They also maybe didn’t recognize that their users really didn’t want an experience, they wanted it very simple, very transactional. I think it comes back to mapping to the audience and the problems that they’re trying to solve. Until you really know an audience and know what their priorities are (i.e. Why did they download that app in the first place? Why do they click on that app 3 times a day? What are they trying to solve?), you’re designing or developing or rating content in the dark.


 There might be peaks and valleys in the investment, but if you ever think you’re done, you’re literally done.


HATHWAY: At Hathway, we often talk about mobile being viewed as a “product” rather than a “project,” what does that mean to you?

MATT: I think this applies to digital in general, I think web, I think mobile, if you have wearables, whatever it might be. They are certainly not a project, because that implies there is a starting line and a finish line. To me, they’re not even a product, unless your company is mobile first. If you’re a Jamba Juice or a retailer, a media company, a financial services company, these are channels, these are conduits through which you reach your audience.

I like to put it in terms of a retailer:

If they think about their brick & mortar stores, they don’t think of them as a product or as a project. They think of them as this go-to-market channel, this distribution conduit, and they’ll make a big investment and then they’ll continually invest, they’ll continually audit and they’ll continually measure:

  • How effective is this store layout?
  • How effective is this merchandising panel?
  • How effective is this POS system?

A mobile application is the exact same thing. If I am a retailer, it is a conduit through which I reach users. Same with my website. There is no starting line and finish line. There might be peaks and valleys in the investment, but if you ever think you’re done, you’re literally done.

To me, it’s not a project if you have an offline business. I don’t even think of it as a product, I think it’s a channel. Companies really get lost in the weeds if they think of it as a project. Even if they are thinking of it as a product unto itself, they should be thinking of it as a means to reach their audience. That is something that needs to be maintained and extended and iterated upon.


 We’re only going to be as successful as our understanding of what our customers actually want.


 

HATHWAY: What is the biggest pitfall you might warn a product group about in the early-stage development of a mobile project?

MATT: If they’re just getting into it, I think it’s:

  1. When they think of it as a check box. “Oh we don’t have an Android app. Alright, check! We have an Android app.” Congratulations. I don’t know what you just accomplished.
  2. If they think of it as a project, with a beginning and an end. In a world of ever rising consumer expectations and competitors who are continually making investments, if you just think about it as this thing you are going to turn on and then turn off, you are already at a competitive disadvantage.
  3. When they do something because they can. CTOs, VPs of Engineering, the more technical set, are often infatuated with the nuts and bolts technology, the “how”. “We’re gonna do this thing because we can, because Apple enables it.” That’s not a good reason to do something.

In the past, and this is changing, the CMO, the brand and business have been overly deferential. They just kind of sat back and said “Well, you know best,” to the gatekeepers who have all the technical expertise. Now I see it becoming much more of a collaboration between the two. The smart CMO, the informed Chief Digital Officer is no longer just sitting back and saying “Well, I’m just a passive stakeholder, you guys design and develop what you think is best.” They’re getting involved in pulling market research, pulling user panels, pulling in-the-wild testing into that mix and saying: “Wait a minute, we’re only going to be as successful as our understanding of what our customers actually want.”

 

HATHWAY: What are the risks of not investing in mobile – is there a way to quantify this risk?

MATT: I don’t know if there is a way to empirically measure it but I will give you an example.

There is a pizza chain called Little Caesar’s.

If you look at their competitive set, like Domino’s, all they’re talking about is “You can order your favorite pizza with a tweet, or from a wearable device, or from our award-winning mobile application!” It’s literally the convenience of the purchase that they are highlighting in their multi-million dollar advertising campaigns. Pizza Hut is doing the same thing. Papa John’s is doing the same thing with web, and increasingly with mobile.

And here’s Little Caesar’s, running ads basically saying: “Well, we’re not going to invest in digital, we’re not going to invest in convenience. So let’s try and make fun of it. Let’s try and make fun of: ‘Oh it’s too connected, I just want to go into my local Little Caesar’s and pick up a pizza that’s been under the heat lamp for a while, and not have it be tailored.’”

I think it’s a losing proposition because I’ve never seen another brand that basically celebrated their own lack of investment. I watch those commercials as a marketer, as a brand purist, and I think, if you took one tenth of that TV advertising budget, you could have built a world-class web application, you could have built an iOS and Android application. And to me, that’s a mistake, and time will tell.

I see in the QSR space, particularly within the pizza subset, it’s become almost more about the convenience and speed of purchase than the pizza, which in itself is table space. You like pizza, that’s a given. Whether you like Pizza Hut or you like Papa John’s, they’re really trying to eliminate all the friction. And then I see Little Caesar’s going about it in such a different way. I don’t know if there is a way to quantify it, but there will be a case study about the Pizza Wars of the Teen Years.


 We’ve gone from no financial services customers to probably 20 financial services customers in the past 12 months.


HATHWAY: Is there an industry that could greatly benefit from mobile innovation in 2016, but is currently being underserved?

MATT: I think if you look at media, retail, maybe even travel, and those were some of the early adopters, not only in the quantity of applications but in the quality. I’m not saying that subjectively, we have something called Applause Analytics that measures sentiment analysis across app stores, across verticals and across application.

We also have a research arm called ARC (Application Resource Center) which has empirical evidence that there are industries that exceed others. If we do an ARC report on leading industries, the scores will be in the 60s and 70s — really good scores, very mature scores.

Then if you go look at another category, like financial services, there will be a bigger variance between the mobile winners and mobile losers, and also a lower overall score than you see in a space like retail or media. I would say financial services is one category that has historically been behind. That could be because of regulation or risk mitigation. It could be because they felt like they are so successful in their offline and web business that they don’t need to mess around with mobile. That has changed dramatically and quickly in the last 12 months. Now you actually see Bank of America in their TV spots highlighting mobile as a differentiator. “You can take a picture of a check and and automatically deposit it to your account!” You actually see this arms race between the big brands in financial services, especially retail banking, or stock trading. Anything that’s really consumer facing. We’ve seen that heat up really, really quickly. We’ve seen it in our own business. We’ve gone from no financial services customers to probably 20 financial services customers in the past 12 months.

I think we’re seeing the early stages, I think financial services really tipped a year ago, and now the investments are increasing in mobile, in web, in these consumer facing technologies and I think we’re seeing the same thing now in insurance. This is maybe 6 months behind financial services, but even if you look at the the Geico’s and the Progressive’s of the world that were disruptors to the space, and now we’re seeing the Nationwide’s and the Aetna’s and those types of companies, for B2C purposes, you can research different packages, you can file a claim. But also for B2E purposes, the agent goes out into the field to document a house fire or a fender bender, they’re not sitting there with a clipboard and pen and paper anymore. They’re sitting there with a tablet application designed specifically for this. They’re taking pictures and uploading them to this account or this claim.


 “Did it work, yes or no? And what do you think about that? What do you like, what didn’t you like? How can we make this better?”


HATHWAY: Is there anything that Applause is rolling out in 2016 that can help these emerging industries?

MATT: When we started, we were uTest, which was very much a QA function sold to the Director of QA or the VP of Engineering. Because the nature of mobile has changed and because the economic buyer for us has changed and has shifted over more to the Chief Marketing Officer and Chief Digital Officer, we have invested a lot and will continue investing in usability testing, market research services. Especially user acceptance testing which is not just hard QA, black and white:

  • “Did it work, yes or no?”

but:

  • “Did it work, yes or no? And what do you think about that? What do you like, what didn’t you like? How can we make this better?”

The subjective, squishy user feedback.

A big part of that is that we can’t just match technically. If we were doing QA, we would just need to say, “Yeah this person has an iPhone 6, this person has a Samsung Galaxy S, whatever,” and that’s all the customer would care about.

Now we have customers coming to us and saying, “I want 80% female, 20% male, I want everyone between the ages of 25-39 and they have to have a household income above $X and an interest in sports.”

So we’re actually getting much more into demographically matching filters, functional testing QA purposes and this user acceptance testing customer experience feedback.

 

HATHWAY: Can you tell us more about the research component?

MATT: If you think about what Applause is in its testing business, it’s fundamentally crowdsourcing. It’s going and finding the right people demographically, technically and geographically that are aligned for a project. It’s not publicly available or publicly promoted, but we’ve had probably about 2 dozen customers come to us and they’re pulling us into this market research mode where it’s:

“Hey I don’t have an application but we’re talking concepts, maybe not even wireframes yet, but we’d like to see if this in an interesting idea. Go find a bunch of retail consumers that demographically match us and are already familiar with our brand and we’re thinking about what our 1st generation of mobile application should actually be. Do they use Apple Pay? Do they want beacons in the stores? How would they like to interact with the mobile application outside of the store and then inside the store?”

So they’re actually coming to us before they write code, before they’re starting designs, to help shape that product roadmap for an iOS application and an Android application.


TL;DR: Mobile applications should be much more than just a means to an end. Businesses and brands must take the consumers’ wants and needs into consideration if they want an app that wins. Technology and design are important, but solving real problems for consumers is the actual goal. When brands begin discussing a new application, or a new generation of their current application, they must first focus on the “what” and the “why”, as opposed to the “how”.


*Responses have been edited for clarity and length. Feel free to listen to the whole interview below!

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