Measure and Move Mobile Apps to Greatness

A Forrester Consulting
Thought Leadership Paper
Commissioned By IBM
October 2015
Why Good Apps Are Not
Good Enough
Measure And Move Your Mobile App
To Greatness

Table Of Contents
Executive Summary ...........................................................................................1
The Mobile App Journey: From Bad To Good To Great ...............................2
Opportunity Is Beating At The Door For Great Apps ....................................5
Enterprises Must Tackle Persistent Challenges..........................................10
Understanding App Performance And Impact.............................................13
Key Recommendations ...................................................................................14
Appendix A: Methodology ..............................................................................15
Appendix B: Supplemental Material ..............................................................15
Appendix C: Endnotes.....................................................................................15
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1
Executive Summary
There’s nothing wrong with a good mobile app, except that it isn’t great. On the surface, a good mobile app may appear to
satisfy customers and generate revenue. But separating the great apps from the good reveals significant, long-term
differences in customer loyalty and spend. With companies competing for customers’ precious mobile moments, the
opportunity is ripe to meet and exceed their expectations and reap the financial rewards.
In August 2015, IBM commissioned Forrester Consulting to evaluate what turns consumers and other users both off and
onto a mobile app (and its authoring brand), focusing on the following questions: What elevates a good, serviceable, and
even profitable app into the realm of great? And if a mobile app achieves greatness, what is the impact?
Forrester Consulting conducted a survey of 1,000 consumers in the US, UK, Canada, and India who use mobile devices, a
survey of 200 technology and business professionals in the US, UK, Canada, and India responsible for mobile apps, and six
qualitative interviews with mobile app initiative leaders in enterprises of 500+ employees. Forrester found that companies
that produced mobile applications they defined as great achieved remarkable results, even over those who produced mobile
apps they defined as good.
KEY FINDINGS
Forrester’s study yielded four key findings:
3
Firms must
invest to create
great apps.
2
Great apps
increase
revenue,
reduce cost,
and engage
customers
exponentially
more than
good apps.
1
A great app not
only works
flawlessly, it
also provides
immediate and
relevant mobile
moments.
4
Firms must
measure the
things that will
lead them to
create great
mobile apps.
.

2
The Mobile App Journey: From Bad
To Good To Great
In August 2014, IBM commissioned Forrester Consulting to
examine the impact of “good” or “bad” mobile applications
on a company’s brand, revenue, and cost structure. The
study found that bad apps cost the business a great deal of
revenue opportunity and were, at best, a waste of
development time and resources; at worst, they were
damaging to brand reputation. But good apps generated
revenue and operational efficiencies. While enterprises and
consumers agree a bad app is a waste of time, what about
the difference between a good app and a truly great one?
GOOD TO GREAT: THE SUM OF THE PARTS DOES
NOT EQUAL THE WHOLE
The 2015 Forrester Consulting study commissioned by IBM
followed up on the 2014 surveys and focused on finding the
difference between good and great apps. If a mobile app
achieves greatness, what is the impact on the business? Is
it worth going from good to great?
There is no magic definition of a “great app.” What makes a
mobile banking app truly great might not work for a mobile
ride-share app. But on a higher level, there are basic
attributes of mobile apps that must be present for a mobile
app to be good — and must be flawless for a mobile app to
be great. In this study, consumers and enterprises appear
aligned on what they value in the app’s qualities. A mobile
app must master the basics (Figure 1):
• It should not crash.
• It should not use too much power.
• It should save time.
• It should provide quick, easy access to features.
Consumers are surprisingly uncomplicated at first glance.
They value performance and connection over design bells
and whistles. So why create a great app if good is good
enough? This study found that great apps provide
astonishing and compelling returns to those companies
determined enough to make them. To do this, they add a
key secret ingredient to flawless performance.
The secret ingredient is the mobile moment. Forrester
defines the mobile moment as that moment where a
customer gets anything she wants, immediately, and in
context.
1
The enterprise understands its customers and is
obsessed with winning, serving, and retaining them. This
blurs the distinction between the physical and digital worlds
and challenges the way companies do business and use
technology to help. As an example, Forrester Consulting
asked 1,000 consumers to name their favorite mobile app
and why that app was their favorite. The wide variety of
answers to the “why” question reinforces the power of
context in the mobile moment. The themes ranged from
how easy the app was to use to the connection, fun, and
context that the app provided (Figure 2).
UNDERSTANDING CONSUMER MOBILE APP
BEHAVIOR REVEALS THE IMMENSE OPPORTUNITY
It is critical that any business that creates mobile apps
understands how transformative the mobile moment is
(Figure 3). From Forrester’s Consumer Technographics
®
research on mobile use, we know that:
› Mobile moments transform commerce and service
experiences. Smartphones are now the majority of all
mobile phone sales. More than 50% of US online adults
access interactive content on their phones at least daily.
And this phenomenon is global: Among online
consumers, 47% of UK consumers, 56% of urban
Brazilian consumers, 84% of urban Chinese consumers,
and 74% of urban Indian consumers connect to
interactive content at least daily.
2
FIGURE 1
The Top Five Things Consumers See In A Great App
Base: 1,000 consumers in US, Canada, UK, India who use mobile devices
Source: A commissioned study conducted by Forrester Consulting on
behalf of IBM, September 2015
39%39%
42%
45%
50%
55%
Gives quick access to
features I use most
Sets my privacy
settings to my
preferences
Saves me time
Does not suck down
my battery or take up
a lot of memory
Does not crash/freeze/
display an error
“Is your app crash-proof?”
“Consumers still insist on the basics: stability,
performance, basic functionality. Are those flawless?”

3
› Consumers spend over 85% of their time on
smartphones within apps. They do lots of things on their
smartphones and even on their tablets, like checking mail
and checking the Web. But they click and stay for most of
their time within an app downloaded from an app store.
› Consumers consolidate their mobile moments into a
handful of experiences for their own convenience. On
average, just five apps that consumers download from the
app store make up a sizable 84% of the time spent in
mobile apps. Given the glut of choice of mobile apps,
users focus on the best apps. Winning and keeping a spot
in this coveted top five is challenging.
› Mobile commerce is on the rise. Currently, mobile
accounts for 10% of online sales, and that will continue to
grow.
3
But the bigger opportunity is mobile’s influence on
sales in-store. Like search, the value of mobile lies in the
clues the data offers about purchase intent.
4
› Momentum will build in mobile apps that generate
and use insights the fastest. This contextual data will
enable pushed, rather than pulled, moments as mobile
app professionals better anticipate customers’ needs.
To go from good to great, a mobile app must:
• Work flawlessly in terms of uptime, power use,
and speed.
• Be easy to access and use anytime, anywhere.
• Give the user control over the interaction.
• Provide relevant contextual experiences.
“A great app provides our customer with whatever
information and services that he or she wants at
whatever point he or she wants it, while keeping the
interface simple and clean but being very
responsive and quick.”
— Director of product management, mobile commerce at
US retail chain
In other words, a great mobile app masters the mobile
moment for the customer. Is it really worth it? The next
section explores the enormous opportunity of a great mobile
app.
FIGURE 2
Why Consumers Love Their Favorite Mobile App
Base: 1,000 consumers in US, Canada, UK, India who use mobile devices
Source: A commissioned study conducted by Forrester Consulting on behalf
of IBM, September 2015
EasyEasy useweather
touch
saves
Because update
Fun all free
keepgood
find
keeps communicate info love most
music chat games
useful
family app
stay access game newslike
helps anytime people
sports easily information
money
convenient
connect gives
Quick
shopping
connected
way instant
time
greatfriends
check need
anywhere

4
FIGURE 3
The Transformative Opportunity Of Mobile
Source: “Mobile Moments Transform Commerce And Service Experiences,” Forrester Research, Inc., February 11, 2015

5
Opportunity Is Beating At The Door For Great Apps
Great apps outperform good apps in four key areas:
› Creating direct revenue. The revenue creation difference between a good app and a great app is astounding. Mobile
professionals in this study who thought their best-performing app was “good” reported an average of $9.5 million in
additional revenue from direct sales, advertising revenue, or other direct revenue sources. Those who thought their best-
performing app was “great” saw an average of five times that (Figure 4). Mobile commerce is steadily increasing as more
mobile users download apps and become more confident in the security of transactions. Furthermore, digital wallets and
other conveniences such as digital coupons are making it easier for customers to conduct mobile transactions, and
consumers also use mobile in-store to research and cement their purchase decision, increasing sales even more.
“What we’ve noticed is that a customer who engages with both the online site and the
mobile app tends to spend 6X more than an in-store-only customer.”
— Director of product management, mobile commerce at US retail chain
FIGURE 4
Key Area 1: Creating Direct Revenue
Base: various mobile app professionals, sorted by respondents who self-rated their best-performing mobile application as either “great” or “good”
Source: A commissioned study conducted by Forrester Consulting on behalf of IBM, September 2015
Make an average of 5x more revenue with a great app
$45,609,066
Great apps
$9,526,037
Good apps

6
› Influencing sales in other channels. Mobile commerce revenue pales in comparison to mobile’s influence on sales in the
store or on the Web. Consumers are using mobile devices to research products that they purchase at a later time; they
can use them to compare prices, check ratings and reviews, and access QR codes to get more information while shopping
in a physical store. After completing a purchase, consumers are almost as likely to use a smartphone as they are to use a
desktop/laptop; this is the first point on the customer journey where mobile devices are as popular as desktops/laptops.
The reason? Flexibility. Consumers appreciate that they can use a variety of options — emails, text messages, messaging
apps/chat functions, online communities, social networks, or traditional voice calls — to get answers and assistance.
5
And
if the mobile app is a great one, the halo effect results in an average increase of almost six percentage points (Figure 5).
“We’ve seen 10-figure sales through mobile devices. But that number is insignificant
until you attribute sales in-store to mobile — for each dollar spent online, it influenced
$5.00 in in-store purchases.”
— eCommerce director, US discount retailer
FIGURE 5
Key Area 2: Great Apps Add Six Points To Revenue From Other Channels
Great apps increase sales in other channels
“By how much would you estimate the app influenced sales
through other channels (website or in-store)?”
Average increase
38.3%
Good apps
Average increase
44.1%
Great apps

7
› Lowering costs. Well-designed mobile apps streamline a service and can decrease operational and capital costs (Figure
6). Personnel costs associated with serving customers in brick-and-mortar locations, such as selling on the retail floor,
taking reservations over the phone, or handling customer inquiries and complaints, can be reduced through apps that also
improve their productivity — sometimes by enough to save on full-time equivalents. Apps that significantly change the way
customers do business could lead to closing or consolidating locations.
“Our prescription refill feature had a twofold impact — it prompted a bump in our
customer satisfaction scores, and led to operational efficiencies because customers
were using their phones [to order refills] rather than picking up the phone and talking
to a pharmacist.”
— Director of mobile commerce, US drugstore chain
FIGURE 6
Key Area 3: Great Apps Save Money And Boost Productivity
29%29%
44%
17%
34%
Decrease
operational costs
Improve
employee productivity
Great apps Good apps
Great apps go right to the bottom line
Great apps beat good apps on cost savings by 12
percentage points. Productivity rises an additional 10 points.

8
› Increasing customer engagement and loyalty through improved customer experiences. Perhaps the most
significant long-term impact an app can have on customers is an increase in their engagement and loyalty (Figure 7). More
engaged customers become more valuable return customers who spend more money and recommend products and
services to other friends. The best mobile experiences provide their users with immediate value from the moment they
download and open the application. These leaders prioritize relevant functionality and perform reliably throughout the
experience. The laggards? They hassle customers with unnecessary content and disappoint — or crash — in moments of
need.
6
“The mobile channel . . . has proven to be a large driver of sales and customer
satisfaction and engagement. We are proportionately aligning our mobile investment
with that growth.”
— Director of product management, mobile commerce, US retail chain
FIGURE 7
Key Area 4: Great Apps Generate Higher Rates Of Customer Engagement, Experience, And Loyalty
Customer
engagement
Customer
experience
Customer
loyalty
Great apps Good apps
Great apps serve the customer
Great apps improve customer loyalty rates by 15
percentage points. Return customers spend more and cost less.
50%
46% 47%
44%
36%
32%

9
THE COMPOUNDING FINANCIAL IMPACT OF A GREAT APP
A great mobile app truly propels an organization forward when it both drives sales and increases customer satisfaction. A
great app generates five times more revenue than a good app. Furthermore, compared with a good app, a great app
increases customer engagement by six percent, increases customer experience by 10 points, and increases customer
loyalty by 15 points. Engaged, loyal customers spend more than average customers. Compounded over time, a good app
and a great app diverge further and further, setting one competitor ahead of another and on a course that can’t be imitated
easily (Figure 8).
FIGURE 8
The Compounding Financial Impact Of A Great App
5
4
3
2
1
Competitor B: Great app
Competitor A: Good app
Engaged app user
Revenue
Revenue
Compounding Financial Impact:
• The app generates 5X revenue
while decreasing costs.
• The app leads to increased
customer experience and loyalty.
• Loyal app users recommend the
company and app to friends and
family.
• The app leads to increased
spend from loyal customers.

10
Enterprises Must Tackle Persistent Challenges
ENTERPRISES ARE UNDER-RESOURCING DEVELOPMENT EFFORTS
Of the respondents surveyed, 58% plan to spend less than
$2 million in total on mobile app development: 23% plan to
spend between $1 million and $2 million, 19% plan to spend
between $500,000 and $1 million, and 16% plan to spend
less than that. For most of our respondents, that amounts to
less than 1% of their overall revenue. Yet they plan to
create several new apps in the next 12 months (Figure 9).
Depending on the situation, $2 million might be enough, but
companies must understand that the total investment in
mobile apps may require additional ecosystem investment
as well. A common pattern: A customer-facing mobile app
informed by real-time contextual data drives revenue via
eCommerce services and activates operations via existing
systems of record. Such new digital business scenarios
demand interconnections between domains, require
unprecedented integration, and can be complex and costly.
7
Under-resourced development plans could doom the best
“great app” intentions.
FIGURE 9
Enterprises Are Under-Resourcing Development Efforts
Base: 200 US, Canadian, UK, and Indian decision-makers responsible for mobile app initiatives at companies of 500+ employees
Current Plan to build in
next year
1-5 apps
6-20 apps
20+ apps
19%
7%
3%
42%
13%
3%
Firms have big ambitions . . .
Mobile apps to double in the next year . . . but spend relatively little
16%
19%
23%
$0 to less
than $500K
$501K to $1M
Between $1M
and $2M
58% of
enterprises
spend <$2M
on mobile app
development.

11
CONSUMERS AND ENTERPRISES ARE NOT ALIGNED
In order to win, serve, and retain customers with a mobile
app, organizations must understand what customers expect
and align their development efforts and investments to meet
those expectations.
There is no question that enterprises are working hard to
create mobile apps that resonate with their customers.
However, for the second year in a row, enterprises haven’t
quite synchronized with what consumers say they want
(Figure 10). This disconnect means that enterprises will not
get their mobile app to answer their customers’ needs and
demands — and that means another year of lagging behind
competitors who reap the benefits of a great app.
FIGURE 10
Where Mobile App Consumers And Enterprises Are Not Aligned
Base: 1,000 consumers in US, Canada, UK, India who use mobile devices and 200 US, Canadian, UK, and Indian decision-makers responsible for mobile
app initiatives at companies of 500+ employees
Push
notifications
Control
information
shared
Control offers
and content
Offer discounts and
extra services
Specify type/frequency
of communication
Remember who I am
Multiple
touchpoints
Updates on
products/
services
20%
25%
30%
35%
40%
45%
20% 25% 30% 35% 40% 45%
Enterprises
Consumers
Where consumers
have high expectations
and enterprises miss
the mark
Enterprises miss consumer expectations
Where enterprises
and consumers are
aligned on app
expectations
Where enterprises
incorrectly assume
that consumers want
these things

12
MOBILE APP INITIATIVES ARE STARVED OF INFORMATION
Companies are not tracking the right measures of mobile
app performance that will help them understand the impact
of their app once it has been released and is being used.
For example, companies that thought their best-performing
app was good tended to measure things like number of
downloads, number of monthly active users, and number of
daily active users as their top three metrics. These metrics
measure activity but don’t give a deeper indication about
whether a user is more deeply engaged in the app.
By contrast, companies that thought their best-performing
app was great measured the number of completed
transactions through the app along with the revenue and
cost-savings it enabled — better indications of the overall
business performance of the app (Figure 11).
“Downloads are great, but if they’re not
opening, using, and engaging in the app,
then I’m not satisfied. We need to know
their comments, our ratings, and
enhance their in-store experience and
drive them there. We have to report the
mobile sales up to the C level, but really
it’s about engagement and customer
satisfaction.”
— eCommerce director at discount retailer
FIGURE 11
Organizations With Great Apps Tend To Measure More
Base: 158 mobile application professionals who rated their best-performing mobile app as either “great” or “good”
Measuring business performance
Financial metrics create a broader picture of a mobile app’s impact.
“How do you measure the business performance of an app?”
21%
15%
26%
39%
37%
41%
44%
46%
Average revenue per user (ARPU)
Revenue generated indirectly through the app
(leads to in-store or website purchases)
Cost savings enabled by the app
(e.g., reduced time or cost per transaction)
Number of completed transactions
through app
Great apps
Good apps

13
Understanding App Performance
And Impact
Mobile excellence doesn't happen by accident: It takes
budget, the right organization, and a sound strategy.
Enterprises that have developed a great mobile app:
› Invest like they mean it. Understanding clearly that
creating a great mobile application requires investment
across the business and across technologies has put
great app organizations on the right track. Focused
mobile app development and testing, a robust data
management architecture, and the integration of mobile
into enterprise applications all come together to create
well-designed mobile experiences.
› Organize for success. Given the depth and breadth of
expertise needed, it takes the right organization of both
the business and technology sides of the house to pull it
off. It is often necessary to combine with the right outside
partners for design, development, and access to
technology. Organizations in this survey outsourced about
half the time; great app organizations did about the same
but clearly in a more strategic way.
“When I launched mobile, our IT team
didn’t have the depth and resources, so
we worked with outside agencies to
develop the best mobile experience we
could. After that, IT realized the
importance of mobile; now within IT,
there is a mobility services team. Mobile
has a seat at every table for these
projects we’re going through.”
— eCommerce director, US discount retailer
› Develop a strategic focus. Like any product, mobile
must meet customers’ needs while benefiting business
goals. And, like any product strategy, customer input and
ideas generated for improvement must be carefully
studied and ranked against key performance indicators,
like customer satisfaction and engagement, strategic
mobile objectives, and cost.
8
In this study, respondents
who rated their best app as great measured everything
more and focused on measures of performance that could
tell them about engagement, what users thought about
the app, and how the app impacted both revenue and
cost.
“For every feature or capability we
consider, we consider how it will
improve the experience of a customer
and if it makes it much easier to access a
service. Also, is that feature innovative
and are we first to market with it to
garner buzz and attention in the
market? Finally, we think about how
well that feature supports the business
goals of the company at large.”
— Director of mobile commerce, US drugstore chain
Actively measuring an app’s use and how a user interacts
with it will give enterprises a much clearer picture of what is
working, what isn’t, and whether that matters across both
financial and customer experience metrics. That in turn
feeds improvement strategies and plans. Great app
organizations use this cycle to improve their app and create
the best mobile moments for their customers.
“We’ve found that customers who
interact with our brand through mobile
have increased conversion rates overall
– instore and online. By analyzing those
together, we figured out the real value of
a mobile visitor. The combination is
mind-blowing. We don’t debate how big
it is, we just act on it.”
— VP of digital, US home improvement chain

14
Key Recommendations
There is no magic formula for creating a great mobile app. It starts with a desire to serve customers by trying to deliver
the mobile moments they demand through a careful collection of their opinions, tracked behaviors, and historical data.
A good mobile strategy never sees the job as done; it measures the response and impact of the app in use and then
uses the insights from that to iterate and improve the app. The app improves in its quest to deliver a perfect mobile
moment. It is a journey from good to great; in order to move your mobile app along that journey, you need to:
› Find out what your customers want and align with that. Get qualitative feedback and insights into your
customers’ experience of your app, and then create the mobile moments that give them the best experience
possible. Context is the key: What can you do to serve them in their mobile moment?
› Make measurement a religion. And then do it again. Get quantitative insight into your app’s operational
performance and health. Understand the impact it has on your bottom line. Make sure that it reconciles with the
qualitative data you are studying.
› Invest well. Invest wisely. Invest long term. Mobile apps require rigor in development, integration, data
architecture, and business planning in order to make them great for demanding consumers. Over the lifetime of a
great mobile app, the investment must be significant, but the returns will be well worth it.
› Suppress the urge to try everything; center core app capabilities on improving the customer’s
experience. The capabilities that mobile developers have today compared with their first iteration of the corporate
app are overwhelming. Geo-fencing, beacons, behavioral analytics, location tracking, push notification (and the
list goes on) are exciting and potentially powerful but only if they align with what customers expect the app to do
and if it makes their experience truly better. Companies that develop great apps rein in the urge to try all the new-
fangled features. Instead, they carefully choose the capabilities that will have the most impact.
› Focus on the company’s core competency; partner on the rest. Mobile apps are a complex, enterprisewide
undertaking, and making them great requires a total focus and investment of money, time, and people. It is a
daunting task for an enterprise of any size. The good news is that there are great partners to be found, ones who
can provide tools and services to help with design, integration, technology development and management,
testing, and analytics. Focus on what your do best, and outsource or buy the rest.
With a focused strategy and both qualitative and quantitative measurement, mobile apps will move from good to great
and enterprises will reap the enormous benefits in revenue, cost, and customer engagement, experience, and loyalty.

15
Appendix A: Methodology
Forrester Consulting conducted a survey of 1,000 consumers in the US, UK, Canada, and India who use mobile devices, a
survey of 200 technology and business professionals for mobile apps in the US, UK, Canada, and India, and six qualitative
interviews with mobile app initiative leaders in enterprises of 500+ employees. Forrester found that companies that produced
mobile applications they defined as great achieved remarkable results, even over those who produced mobile apps they
defined as good. The study began in July 2015 and was completed in September 2015
Appendix B: Supplemental Material
RELATED FORRESTER RESEARCH
“The Best Of Mobile User Experience, 2015,” Forrester Research, Inc., August 10, 2015
“Your Customers Will Not Download Your App,” Forrester Research, Inc., June 22, 2015
“The Next App Platforms Will Bridge Corporate, Consumer, Commerce, And Connected Devices,” Forrester Research, Inc.,
May 14, 2015
“Engage Customers Through Mobile,” Forrester Research, Inc., May 4, 2015
“Forrester Research eCommerce Forecast, 2014 To 2019 (US),” Forrester Research, April 22, 2015
“Mobile’s Role In The Consumer’s Path To Purchase,” Forrester Research, Inc., April 15, 2015
“Mobile Moments Transform Commerce And Service Experiences,” Forrester Research, Inc., February 11, 2015
Appendix C: Endnotes
1
Source: “Engage Customers Through Mobile,” Forrester Research, Inc., May 4, 2015
2
Source: “Mobile Moments Transform Commerce And Service Experiences,” Forrester Research, Inc., February 11, 2015
3
Source: “Forrester Research eCommerce Forecast, 2014 To 2019 (US),” Forrester Research, April 22, 2015
4
Source: “Your Customers Will Not Download Your App,” Forrester Research, Inc., June 22, 2015
5
Source: “Mobile's Role In The Consumer's Path To Purchase,” Forrester Research, Inc., April 15, 2015
6
Source: “The Best Of Mobile User Experience, 2015,” Forrester Research, Inc., August 10, 2015
7
Source: “The Next App Platforms Will Bridge Corporate, Consumer, Commerce, And Connected Devices,” Forrester
Research, Inc., May 14, 2015
8
Source: “The Best Of Mobile User Experience, 2015,” Forrester Research, Inc., August 10, 2015

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