4 Ways Mobile App Providers Can Deliver Better Customer Service

It's relatively simple—if you want loyal customers, you have to keep them happy with service that provides a great experience. Poor service is the main reason customers switch companies; according to Accenture, 66 percent of customers who leave do so because of poor service. Conversely, good service brings rewards: surveys show that 55 percent say easy access to information and support can make them fall in love with a brand. And 58 percent are willing to spend more on companies that provide excellent customer service.

Mobile app companies, in particular, should sit up and take notice of the way that service fosters greater customer loyalty. They're jostling for share in a booming market—revenue from mobile apps is estimated to reach $70 billion by 2017 and $99 billion just two years later, according to some analysts. Consumers spend more than 85 percent of their time on smartphones using apps, and usage in 2014 grew 76 percent.

Winning this competition for consumers' time and attention is tough. Downloading is usually so easy that commitment is low to start with, and severing a relationship with an app is as easy as a two-second double-tap. As a result, churn is high—users keep only 36 percent of apps longer than a month and just 11 percent for an entire year. Worse still, app engagement drops significantly 24 hours after initial install as the initial burst of excitement wanes, according to eMarketer. For companies that depend on displaying ads for revenue, an unused app is as useless as a deleted one.

Service Is the Key to Retention

To increase profitability, you must shift focus from just adding new users to retaining and engaging existing ones. It costs six to seven times more to attract a new customer than to retain an existing one, and just a 10 percent increase in retention levels, according to Bain & Co., can result in a 30 percent increase in the value of the company.

But to retain more customers, you need to know why so many leave. In a recent study by iProgrammer, 26.8 percent cited "poor design/didn't understand how to use it" as a reason for uninstalling apps. One cross-industry report shows 89 percent of consumers have stopped doing business with a company after experiencing poor customer service. Many mobile app companies launch apps with no support other than an email address, yet eConsultancy found that 83 percent of consumers require some degree of support while making an online purchase, and 45 percent of U.S. consumers will abandon an online transaction if their questions or concerns are not addressed quickly. And when those disgruntled users leave, there can be a sting in the tail: Consumers are twice as likely to share bad customer service experiences as they are to talk about positive experiences. News spreads fast on social media, and too many poor ratings can lead to losing prospective customers as well as existing ones.

Set Your Support Priorities

Since customer service is critical to mobile app profitability, you must devote resources to it. Especially if your app is free and relies on in-app purchases, chances are you can't afford to roll out red carpet support for everyone, so mobile app developers need to be savvy about spending. Follow these four suggestions to get the best return on your investment in support.

Prioritize ruthlessly. Not all customers are equally profitable, so prioritize higher-touch service to your highest-value customers. Identify what markers indicate that a user will make it into your top tier of customers. Is it a certain amount of app session time, a level of game play, a threshold of in-app purchase? Once you know the value of each audience segment, you can determine which support channels to make available to each and differentiate service levels and support queues accordingly.

Leverage low-cost support options. Mobile app users do not require pricey 24/7 call centers. Instead, opt for self-service FAQs and mobile messaging support to help them navigate through common issues. You'll find that a well-designed FAQ section can address the vast majority of user inquiries, curbing the need for heavy assisted support. For issues that do require escalation to a support agent, allow users to submit tickets and go about their business by sending push notifications that alert users to any new updates. These will satisfy most customers more cost-effectively than expensive, traditional support methods.

Offer incentives. People love freebies, so take the time to figure out which custom rewards—such as in-app currency, virtual items, or credits—matter most to your customers. Then when someone is having a mobile messaging session to sort out an app issue, empower your support team to instantly grant rewards as appeasements. These are virtually free for you, but they're worth a lot to customers, so they're a great way to show your appreciation for their patience. And coincidentally, awards will increase customers' motivation to keep using your app since they now have free credits to burn. 

Preempt problems. This last suggestion is probably last on your list of priorities—but it's valuable. Track purchases, usage, app upgrades, support requests, and more so you can leverage that user data both to guide issue resolution right now and gain insights on user behavior that ultimately drive your future product development.

Win Now, Win Later

Investing in customer support is likely to increase the value of your business more than adding another shiny new feature to your app. It can help you build revenue right away by enabling you to retain your high-value customers and start fostering long-term relationships with them. Going forward, it informs the design of your new products and services so that they'll better meet the needs of your high-value customers and help build revenue, business scope, and your brand. While it can be hard for a mobile app company to disengage—even briefly—from the drive to develop cool new features as fast as your competitors, the success of a business is not measured by the feature set of its mobile app. It's measured by profitability—and keeping customers happy is the best way to retain and grow revenue.

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Barry Coleman is CEO at UserCare, an in-app customer service solution that uses Big Data to help companies grow lifetime value by blending real-time support with relationship management. Coleman is also senior vice president of engineering at Manage, the premier mobile performance advertising platform. Prior to UserCare, Coleman served as CTO and vice president of support and customer optimization products at ATG, which was acquired by Oracle for $1 billion. Coleman is the author on several patents and applications in the areas of online customer support, including cross-channel data passing, dynamic customer invitation, and customer privacy. He holds a B.A. in Artificial Intelligence from the University of Sussex.