This shall be the first of a series of 4 articles, aimed at analysing the Changing Landscape of App Messaging, and the advent of new technologies that is shaping the future.

“Life is tough for a tech consumer startup. Building one is 100X harder than in the past and it will only get harder each year”, says Shailesh Lakhani , Managing Director, Sequoia Capital India. The data which suggests only one percent of the apps in Apple App Store are successful and about 92% of startups fail within the first 3 years, reaffirms that for most apps the odds of a big time payday is somewhere between zero and almost zero.

While building a startup has become much easier than in the past, sustaining one is becoming difficult due to the evolving market trends. Incessant idea replication, and too much venture funding have put entrepreneurs at risk of losing their customers to newer competitors. This, plus constant platform evolution have made existing businesses vulnerable.

Customer Loyalty is on a downward slope and the famous rule of 20% of customers accounting for 80% of turnover has now become the 60/40 rule, slowly moving towards 50/50 rule. The basic reason for this is diminished interaction among the various actors of the play. Most apps today operate in isolation, where customers hardly engage with the platform, thereby making the solution offered a mere commodity. This is more evident in the Digital World, where there is a huge rift between customer’s expectations and what the average company is actually offering.

Cust loyalty

Customers empowered by the digital age are the key and the real innovators. They have unprecedented opportunity to be active participants in shaping the product, rather than being passive receivers. The key to enabling this is in listening to the customers and prior to that letting the customers converse with each other and with the company.

The three pillars to Success is Growth or User Acquisition, followed by the most important pillar i.e User Engagement and lastly it is Monetization. The User plays an important role in every step of the above Success drivers.

In order to build that viral co-efficient in your User Acquisition strategy, customers need to be your preferred marketing channel. Nothing can be better than one satisfied customer telling another about your product. Secondly the only way of retaining customers is keeping them engaged. It is essential to make customers stay within the app throughout the purchase cycle, which not only increases loyalty but also provides valuable interaction data for making custom made promotions. And lastly monetization for apps operating on a freemium model rests on how well you keep customers coming back for more, by combining messaging and push notifications.

Recent data published by Localytics, also suggests that apps that send in-app messages perform 2-3.5 times higher in terms of user retention, than apps that don’t.

Thus it becomes imperative for businesses to build an end-to-end communication channel both to and fro and within customers. This will not only solve the problem of increasing User Interaction and the time users spend within the app, therby simultaneously increasing Customer Loyalty & Retention, but will also help in tapping into Customer Expectations by analysing keywords used during conversation. Businesses will also have the option to direct in-app messages and push notifications based on User interests, thereby creating a smoother conversion funnel.

For more information into various types of messaging, businesses from different domains are using to gain more customer traction, read our blog post here.

In our next article we will delve deeper into the recent hype around Conversational Commerce and Chat bots, and how they are going to disrupt the way we converse. We will also highlight how these technologies can help apps gain more traction and engagement.

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