Forrester warns mobile apps can lose you customers

Disruptive applications can pull customers away from their incumbent banks and retailers

Forrester has warned companies that if they don't properly invest in a mobile application strategy, other companies with convenient and useful applications will attract customers to their services.

In a report entitled 'The business impact of mobile engagement', Forrester says businesses that can "create a mobile app that offers a fundamentally different capability or service by addressing people's needs in their physical context [can] increase loyalty or pull customers away from their incumbent banks, retailers and media companies".

New technologies made available by the latest smartphone applications are the cause of this stress on maintaining a company's core customer base.

For example, Forrester points to mobile payments via applications. The payments market is becoming increasingly volatile as consumers start to use their phones as a digital wallet and seek to pay with their phones, which will challenge the incumbent suppliers.

Forrester says: "Mobile payment entrants from every direction will disrupt traditional payment models. Incumbents built on traditional models will be challenged to maintain their current fee structures.

"Other core services ripe for mobile disruption include mapping (Apple), identity (Facebook), and telecommunications (Skype)."

The report also points to aggregators of content in media, travel and personal finance that challenge business' customer relationships. This is because mobile applications provide the opportunity for aggregating services in a way that is more convenient for consumers than if they were working with individual companies.

Similarly, mobile applications create new service models that eliminate intermediaries. Forrester says: "If a producer and a consumer can immediately connect and do business together using a mobile app, then traditional intermediaries become irrelevant."

Finally, because the likes of Apple, Amazon, Microsoft and Google are building customer databases of millions of consumer credit card details, this provides an opportunity to easily buy new services via mobile applications from a company that consumers may not have used before.

The report says: "Mobile will become a dominant channel as people pull out their phones to buy on a whim or order content in the living room, hotel room, or dorm room."

Forrester argues that companies need to address these changes head on, but they need to invest carefully. IT departments need to focus on two key attributes of an application - is it convenient and does it provide a utility?

For example, the report says: "If your target audience can accomplish something in moments using a smartphone or tablet app, then the convenience score is very high. If they can just as easily accomplish their goal later on a desktop application, then the convenience score is low: Mobilising the service just doesn't matter enough."

It continues: "Does the utility of the app make it home-screen-worth? Does the app accomplish something as valuable as Google Maps? If so, then the app has high utility and may end up on the home screen of the customer's smartphone.

"If the app is nice to have but not truly useful, then it will be relegated to the last screen and seldom called upon."

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Tags Mobile & WirelessAppleapplicationsskypesoftwareFacebookIT Business

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