How to Merchandise Your App 2 Years Ai (after the iPhone)
I want to write about merchandising apps in the mobile ecosystem, but first let me say that we need a new way to measure time in mobile. The launch of the iPhone changed the ecosystem so dramatically that any discussion of how the mobile ecosystem works must specify Ai or Bi (After or Before the iPhone), in a similar way that historians use BC and AD to date historical events.
As an example, how you merchandise a mobile application today is very different than at any time Bi. And this is what I want to post about.
At CTIA in San Diego I attended and spoke at the #wipjam event and I found the discussion on merchandising apps most interesting. It was led by Mitch Oliver from Qualcomm with many developers sharing their experiences, and I thought it would be good to share some of the learnings with developers looking to go mobile. Some of you not interested in the details may want to skip to the recommendations below.
Before the iPhone (Bi): it was all about getting on deck:
Operators had a virtual monopoly on application distribution. If your application could get on deck with an operator, this was half the battle. Investing in additional marketing helped, but was not required if your app got decent deck placement. Because the operators had very limited shelf space, they did not take chances with “hit or miss” long tail developers. So they pretty much stuck with proven, larger developers with a recognizable brand. If your app did not perform (often because it was hard to discover), out you went. Your livelihood depended not on consumer choice, but on the operator team responsible for programming its deck. The programming team allocated valuable deck placement based on their own view of how an app would perform or in many cases based on behind the scenes deals. Worse yet, developers had to make a significant investment without any assurances of ever getting on deck. This model left the small developers – often the more creative ones – out of mobile. Small developers did have an opportunity to work with publishers (or aggregators) who had reserved shelf pace with the operators – but this model required the developer to share a significant portion of the revenue with the publisher, making it financially unattractive.
As a result, before the iPhone, the most creative developers focused their energies on the desktop and the Web. The operators had squandered their monopoly position to distribute mobile apps and had stifled innovation. There was pent up demand, however, by brands, content owners and developers to extend their reach to mobile. Enter the iPhone.
After the iPhone (Ai): leveling the playing field for the small developer:
One year Ai, Apple launched the the App Store. 85,000 apps and 2 billion downloads later, the app store has redefined the model and is now being copied by many other app stores:
- The App Store made the playing field even so small developers can get on deck as easily as the big guys.
- The App Store eliminated the need for middle men (publishers or aggregators). Small developers have a direct path to market.
- The programming team is gone, other than for programming the carousel (very important if you can get on it) and for blocking competing apps that Steve does not like.
- Developers get to price their own applications. Amazingly, before the iPhone operators insisted in setting the price for apps as if they knew more about the developers’ customers than the developers themselves. More importantly, developers are now able to tweak pricing based on real time feedback from the market.
- The app store eliminated certification fees lowering the entry barriers and enabling trial and error application posting.
- Introduced a model for free apps. This is a model that Lithuania based Getjar pioneered with its traditionally geeky audience, but the App Store made it mainstream.
OK, so the iPhone made it much easier to merchandize applications, right?? Think again. The iPhone simply created unlimited shelf space. If your app is one of 85000, how do you stand from the crowd? Obviously if you can get on the carousel of promoted apps, you’re golden. But this requires magic as there are no written rules. Now that the operators are not picking the winners with deck placement, you need to compete on your own merits and merchandise the old fashion way.
Here are the recommendations for developers:
- You have to do your own marketing. You can’t rely on the app store provider to market your app or on consumers discovering your app.
- Know your audience and figure out where they hang out so you can reach them. For example if you are trying to reach the social generation, use social media. Developers at #wipjam reported great results from these efforts. And it’s incredibly cheap. Use Facebook, Twitter, and the bloggosphere as your CRM system.
- If you deploy a free app with the objective of later upgrading your customers to a premium app (the “freemium” model), ensure the free app stands on its own. Don’t just put out a demo or significantly crippled version of the application. Your objective is not to upgrade every free user. Free users give you free marketing. Many will never upgrade and this is OK. But many will tell their friends, post on Facebook or tweet about your app.
- Invest in an in-app analytics tool such as Motally to understand your users and tweak your application.
- Trial and error pays, especially with today’s lower barriers to entry. It is very hard to predict what consumers will want. Don’t spend your life savings on a single app. Instead develop quickly and try it out on the app store. If consumers adopt it, update the application quickly and often. If it does not fly, move on to the next one.
- Port your app to the Palm Pre. Unlike the iPhone, the Palm Pre is hurting for apps. You have a much better chance of getting noticed. If you can get discovered on the Pre, you’ll get a ripple effect on the iPhone and other stores.
- Cross promote your application with other developers. Large developers have a significant advantage because they can cross promote their applications. If one of their applications is a hit, they can use that application to promote other apps in their lineup. Find other small developers and work out a deal to cross promote your apps. As an example, look into App Treasures a group of small game developers doing just this.
Do you have other recommendations? Please share them with a comment.