Hype vs. truth: Mobile apps

If you follow the industry buzz, or talk to app developing agencies, it sounds as if everyone is madly buying apps for their smartphones. However, a recent study found that 45% of smartphone users have never bought an app. Also, more than 38% spoke of their frustrations regarding the cost of apps.

61% of app purchases are music, which narrows the market for app buyers down significantly. Of the customers who purchased apps, 87% spent less than $50 on apps total last year.

So what is the truth? Are apps hot, or not?

Yes, they are hot. But if someone tells you that you have to have one, and it is a guaranteed revenue channel, they're exaggerating. Actually, outright lying. This is how buzzwords are used to manipulate how we view the world. Apple, Motorola, and other device manufacturers are advertising about apps because they are a feature that many customers are looking for. More than a billion apps have been downloaded from Apple's iTunes App Store. The hype is used by the get-rich-quick types to push app development, and next thing we know, many businesses are creating mobile apps that no one wants.

Reality is, a great mobile app can help customers connect with brands, if it is the right fit. The key is to know your audience, and what they want. Follow your customers, not the industry buzzwords.

Does Redbox exist anymore?

Of course I am kidding. But there is definitely a lot less talk about the DVD rental kiosks lately. It is still a household word, but could it be that like all new retail concepts, people have gotten used to it? Or, could this be an early indicator of another business destined for the declining revenue train?

Right now, Redbox kiosks are still being installed everywhere. It is the best deal in movie rentals in nearly every city across America. But recent changes to their promotions are not only causing increasing frustration among customers, it has also stopped the conversation about the brand.

Customers subscribed to receive emails and mobile updates so they could receive free rental codes every Monday. The codes worked for every customer, which prompted people to forward the SMS messages to everyone on their phones, post on Facebook, and post to Twitter. The codes were spread so quickly and frequently that you could count on Redbox as a trending topic on Twitter each Monday.

Then the free Monday rentals were cut-off. Redbox announced it would only offer their mobile subscribers one free code each month. Shortly after, the codes became personalized, so that each code could only be redeemed once, not just once per customer.

Understandably, it can be hard to make money when giving your product away. The problem is that Redbox cut off too much, too quickly. Then they followed that up by eliminating their best advertising program when they made the new codes unsharable.

Customers can understand when prices increase. We are not happy about it, but we know it happens. However, Redbox needed to find a way to increase revenue without throwing this many disruptions into their customers' behavior. Especially considering that they are in a business that is increasingly threatened by new technology.

I'm sure Blockbuster could tell them what happens when the customer base is no longer talking about them.

Keep your fans & subscribers

Every day we see or hear ads from companies that want us to sign up to receive emails, SMS alerts, facebook updates, tweets, and more. But what does the consumer get in return? Sales pitches, irrelevant updates, and repeated messages from their many methods of advertising.

The value exchange is out of balance. The advertisers get what they want, but too often the consumers don't often get anything of significant value in exchange for the opt-in. Companies assume that when people opt-in, that they want to hear everything from that brand. This may not always be the case, which results in unsubscribes and consumers who just ignore and delete.

When a customer opts-in, this is not traditional advertising where you broadcast the same message everywhere and hope for a small percentage to act on it. This is your time to show these customers you truly value them. Offer your text-message subscribers something more than the general public will receive. Give your "fans" a reason to follow your facebook updates. Most importantly, encourage these opt-in customers to talk about you and share with their friends.

It's about building business, right? So make these fans of your business fanatics. Don't just buy your time with them until they give up on you.