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When does a business need a mobile app, and how much is it?

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Mobile app development can help a business attract a new audience, increase customer loyalty and create a unique product. Roman Shtykh is CEO of the MetaLamp web development studio. In this article, he tells us about the benefits of mobile apps for businesses and their clients. Also, Roman covers the topic of app cost estimation.

The demand for mobile applications is constantly growing. In 2021, 67.03% of the global population had a mobile phone. Mobile sales have reached $3.56 trillion by the end of this year.

he fact is that global trade is moving rapidly and steadily towards mobile commerce. Of course, one of the main reasons is Covid-19, but we can not stop this process now. As a result, business demand for mobile apps development is very high. From optimising internal business processes to branding and delivering unique services, the potential of mobile apps is unlimited.

Mobile app vs website

To begin with, you need to identify which sales channel is better to invest in - a mobile application or a website?

Major retailers have no choice. The user interaction with a favourite brand should be convenient everywhere, including offline, in social networks, through a website or a mobile application.

The Mobile first principle involves two adaptive options: a mobile version of the website and a mobile application. Many users continue to use websites because apps need to be downloaded and regularly updated while storage is limited. However, there are cases when a mobile application provides exclusive advantages or just can not be replaced:

1. If you need to use a mobile device features — camera, contact list, GPS, QR-code recognition, pedometer etc. For example, “CMTPL Assistant” is a mobile application by Rosgosstrakh. It delegates a part of the business process to users and allows them to spend less effort and time on road accidents registration. In case of a road accident, the user takes phone pictures of the damage and sends information to CMTPL. Moreover, much data automatically comes from the State Services and the CMTPL system.

2. If you need to access content offline or use the app features without a network connection. Mobile apps still require the internet connection for most tasks, such as making transactions, downloading, sending messages etc. However, the basic functionality can be available to users offline. For example, navigators such as 2GIS and work offline through regularly updated offline OpenStreetMap maps, while Spotify users can listen to their favourite music offline.

3. If users use the personalised app regularly. For example, the employees of our courier service worked without a computer. Every day when they were on the way, the couriers needed to receive and manage data, communicate with colleagues and customers, use financial tools and create reports. All these functions are much more convenient and efficient to perform in the application.

What business pains does a mobile application solve?

How does a mobile application help increase sales?

Business owners are daily concerned about how to earn more. Following the goal, they use all resources, keep going and look for innovative solutions.

Sales grow along with customer satisfaction. The more people are satisfied with the product, the higher the demand for it. However, user demands are constantly changing. So, it requires a constant business transformation. Due to technologies, business processes, consumer models and markets are transforming. New products, services and business directions appear.

Today it is impossible to create a product without transformation. Of course, unless you make flatbreads in the tandoor. Digital transformation allows you to provide a service to more people at a lower cost. It is profitable and convenient, so people take advantage of it. For example, the emergence of self-checkouts has made significant changes in retail.

On the one hand, it has affected the recruitment, adaptation and staff performance. Only one salesperson can work in the entire self-checkout area, operating as a consultant at once. There is no need to hire more employees, train them, take care of vacations and sick leaves in the long run. On the other hand, self-checkouts solve one of the customers' problems — a checkout queue. About 60% of respondents complained about them.

Today's consumption is focused on comfort. Mobile apps perfectly meet this demand through greater engagement. For example, the online store Wildberries was founded in the 2000s as an order centre for Otto's catalogue. It is a prime example of the new sales channels development. First, the retailer launched its website, then courier delivery. Later, sales increased due to an additional channel in the mobile application.

In addition to the ability to buy food and clothes, mobile applications make taxi, car sharing, delivery, rental, banking, etc. services more accessible and easy to use. From chatbots to analytics, there is almost no limit to the benefits.

How does a mobile app increase customer loyalty?

A high level of customer loyalty is the basis for long term business viability and growth. Loyal customers generate not only source income. They become brand ambassadors and advertise the product online and offline for free, attracting new clients. Successful companies with many years of experience know it and prioritise customer loyalty.

When people talk about customer loyalty, they usually mean brand loyalty. If a business can't keep a customer's attention, it will result in a vicious circle of recurrent costs on new customers' attraction. There is no way out and development prospects. In such a case, you will spend all the resources to keep up the business.  According to the research, advertising and marketing costs on a new customer are five times higher than those to keep the regular one.

Mobile apps are an easy and convenient way to communicate with customers. You can enhance user engagement and loyalty through interactive programs by offering unique services or experiences.

The quality of customer service affects specifically brand loyalty. 80% of customers say that meeting their expectations has the same significance as a company product or service. Nowadays, it is not enough to create something unique to keep the customers' loyalty. The service convenience and efficiency is essential for building brand loyalty.

Another way to foster loyalty is the instant reward system for regular customers. For example, members of the Sephora Beauty Insider loyalty program get points for every purchase in the mobile app and exchange them into products. Points and discounts encourage customers to stay loyal to a rather expensive beauty brand.

How does a mobile application help reduce costs and increase employee efficiency?

Automation or optimization of business processes is necessary for keeping up a business. It is based on existing or slightly modified processes in the company and improves the employees' efficiency. A CRM system is a typical example of automation.

Mobile apps are perfect employee assistants within the company. They are not attached to the workplace. Mobile apps let us complete tasks in a more effective and fast way, minimise risks and bugs, as well as reduce costs. Delivery Services Express Courier are a good example of such a companies. Before we had mobile apps, bureaucracy was a big challenge for the couriers. It was necessary to control the application list and accept customers' payments somehow. At the same time, managers had to monitor the location and operation of the courier.

The development of the mobile app has made the couriers' work less challenging. They have all the necessary features in their hands, or rather, in their phones, including the order lists, payments and contact with managers. Communication has become easier and more accessible, control is better, the processes are automated.

How much does mobile app development cost?

In short, the application cost directly depends on how much time it takes to develop it. The more hours spent, the more expensive your product costs. Before going into the numbers, let's look at what a mobile app cost includes.

Teamwork cost

The cost of an hour is formed during the evaluation process. During the estimation process, you discuss the charge of a working hour.

A fixed payment model helps the client calculate the final cost and time frames of the development in advance. It includes the working hours of developers, managers and designers, coordination, improvements and emergencies. For example, a web studio estimated that the development would cost $12,000–$13,000 and take 500 working hours. It means that one working hour of the studio costs $25.

In case of charge per hour, the client pays according to the result and begins faster. Also, he can change the scale and scope of work. The cost of a working hour is made up of the salary of developers, managers, designers, taxes, company compulsory expenses and desired profit. According to Tagline, the average cost for one developer’s working hour in Russia is $23. At the same time, the rates in Moscow companies are on average 40% higher than in the regions. The average cost of one developer’s working hour in the US, Canada and the UK is 3–5 times higher. It is 1.5–2 times lower in India and Pakistan than in Russia. As a result, there is a wide range of project estimates.

Number of supported platforms

Applications can be native and cross-platform. Native apps are developed in the mother language for iOS or Android platforms. They have access to the camera, microphone, contact list, calendar, and other phone services. Given the number of Android smartphone models, the cost of app development can be 20% more expensive than for iOS.

Cross-platform apps are developed in the same language as mobile websites. They are multifunctional for all platforms and most devices. The cost of a cross-platform app is 15–20% cheaper than two native ones.

Post-release expenses

There are expenses for the mobile application after its complete development. When the application is launched, it requires continued server support, update and interface improvements.

Additional costs

Additional costs include everything that does not match the paragraphs above. These are analytics and requirements specification, management, research and paid services connection.

Finally, how much money do you need?

If we divide applications into three groups according to the number and charge of hours, the cost is:

1. Up to $12,000. As a rule, such apps are developed in builds. They have a user-friendly design and consist of a limited toolkit. Such a project takes a couple of months. This option is suitable for a marketplace with standard features including payment, cart, booking, sorting, filters etc.

2. From $12,000 to $60,000. This price category is applied to the applications of different complexity from MVP to complete long-term products. The cost depends not only on the complexity but also on the number of app features. It takes up to 6 months to develop a project. For example, this is the cost of the first app version for our courier service Couriers had access to such features like registration, order search and filter, responses, customer chat, money withdrawal etc.

Using this budget, we developed a simple mobile loan service secured by cryptocurrencies. The user sent the cryptocurrency, the accountant registered the transaction and transferred the money to the client. In this case, we spent the working time mostly on bank integration. The bank did not have the required functionality, so we developed it ourselves.

3. From $60,000 to an infinite number for one platform app. These apps are usually made for large businesses. The development involves many different components, a great service integration, different types of users and individual design. The process can take 6 months and more. This price range implies large business apps. For example, the cost of an Uber app is estimated at $67,000 - $150,000 (depending on the number of iOS/Android platforms). They also include even government contracts. Last fall, the Ministry of Digital Development, Communications and Mass Media of the Russian Federation announced a tender for 5,9 million dollars to develop its super app.

Can I save money on development?

In a nutshell: yes, you can. Nowadays, No-code platforms allow us to implement and test new business processes cheaply and quickly. So, everyone gets an opportunity to enter the mobile business at a minimal cost.

Today, even the nearby coffee house has its app. It promotes the services and gives the tenth coffee to loyal customers for free. An app made in an online build can cost less than $1,200. Apps, which were developed using ready-made No-code services, have limited functionality. However, they are perfect for marketplaces and any MVP. These apps will assess whether your business needs a mobile app without extra costs (perhaps, a social network or website will be more suitable).

Finally, do you need a mobile app?

Mobile phones have become an essential part of our lives. We spend on average five and a half hours using our smartphones every day. In 2021, 79% of smartphone users did shopping online using mobile devices.

A mobile app is the first assistant inside the business processes. It is also the best channel for interaction with customers, as your business is literally in their homes. Due to mobile apps, you can easily stay in touch with customers, increase their loyalty and get feedback. Apps help optimise internal business processes. Moreover, they can transform or even create a new type of product or service. Mobile applications allow you to earn more. Due to the broad geographical presence, all the world’s smartphone users become your potential customers, about 5 billion people.

So, if you are wondering if you need a mobile app, you probably have already answered it. The mobile market growth rate is steadily increasing. Then, companies are not supposed to stay behind. Finally, the only thing left is to understand what business task the app solves and what resources you are ready to spend on it.

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