By Prometteur solutions 21 Min Read

Have you been searching for information on how to calculate the ROI of a mobile App? Would you like to have a detailed explanation of the calculations involved?

When starting a business, it will be highly beneficial to understand every aspect of business and each factor that can help boost your sales and profit. An important aspect of the business is the Return on investment (ROI). 

This is a formula to measure the gain acquired from an investment which is relative to the amount invested. However, before delving deep, we need to answer the question: “what is app ROI?”

Every business needs an extraordinary amount of effort to set up and grow! It’s all about the result in the form of expenses, sales, revenue, and profit. As a business owner, it’s essential that you are always making plans to take your company to the next level. Are you using the same traditional ways or trying modern ways to decrease expenses and increase profitability?

If you are using a computer or web-based software, then it’s a partially achieved solution. The mobile app will give you a complete one.

Do mobile apps improve your business ROI? Well essentially – Yes. Your business is not going to collapse if it does not have a mobile app but it can be a buster to your business operations and sales. Market research has proven that people spend 90 percent of their time on mobile apps when they are using their smartphones.

What Is Mobile App ROI? 

With what you know of ROI, you might begin to wonder how to attain a successful ROI rate.

Mobile app ROI is a key figure in increasing your business ROI. However, this begs the question, ‘what is mobile ROI?’

This is the ROI that comes about as a result of a mobile marketing strategy. An example of such strategies is mobile ads.

This sort of strategy can be achieved through the usage of mobile app ROI.

A mobile app can increase your business returns in so many ways.

Most sales and purchases in this day and with so much technology are now being done online. With a smartphone, internet, and a mobile app, you can get your customers the convenience they need to have access to your products. 

This convenience has attracted so many sales to companies who make use of mobile apps. This has, in turn, led to an increase in mobile and technological commerce which in turn boosts a company’s mobile app ROI.

This industry of mobile app marketing has shown prominent results and research has confirmed that it will only increase commercially.

So many organizations and industries are beginning to become aware of this vital path towards high profit. Although, no business owner is quite convinced of what mobile app ROI has to offer.

The reason for such reluctance is the lack of proper understanding surrounding a mobile ROI and the uncertainty that precedes it. This uncertainty is due to the complexity and high competition it brings about. 

The cost for a mobile app ROI is quite much, this makes it absolutely vital that it produces a high ROI to benefit the company making use of it. Such a risk is enough to dissuade any business from its usage. However, with proper understanding, the use of mobile app ROI can be maximized to achieve greater yields.

After understanding ‘what is mobile app ROI,’ we need to properly understand the ROI from mobile apps. We must first understand the different types of ROI and its usages. 

Types of Mobile App ROI For Your Business

While it is agreed that fixing an app purchase price is the quickest way to make ROI from your app, it is known to dissuade customers as most people are unwilling to pay for something they haven’t tried out or they might not benefit from. 

Therefore a type of mobile app ROI will be the smart use of low prices on each app. It will be a good idea to set the app purchasing price very low. This will incur profit over time. However, it highly depends on your business prototype and your possibility to yield success. 

Businesses can also flourish with a high price app purchasing price if they are sure their app is a necessity and will yield profits. 

Another alternative type of ROI app development would be to initiate a different way to make money off the app without actually asking people to directly pay for the use of the services. In this case, ROI can be attained through indirect means such as popular in-app purchases or subscriptions. 

A known method of obtaining ROI is the use of a free app, which is separated from a premium app that requires purchasing. This will enable you have attained ROI from both in-app purchases and app purchasing. 

Another type of ROI app development is to source your ROI externally, which is beyond your customer base. This can be seen from the use of ads within the application. It can also be obtained through the sales of user data to third parties. 

This transaction does not violate the user’s privacy as it is within the terms and agreements. It is also a fast way to obtain ROI. Many third parties that purchase this data, can use it for experiments, user analysis, and more.

What are the major benefits of having an Enterprise Mobile App?

As we know that, the high penetration of smartphones and technology made high-end services accessible to everyone on their phone. No doubt why everyone wants services which they can access through their mobile phones. So, investing in mobile apps is going to beat conventional investing in the same way investing in websites. A mobile app allows you to offer numerous services to improve the user’s experience and their loyalty towards your brand. Here, I have listed some of the features which are always helpful for conversion or reducing cost and that ultimately affect the ROI.

1. Improves Brand Awareness :

A mobile app keeps the users in touch with your brand always and makes them learn about your products or services in detail.

2. Improves Productivity :

Because of smartphones, it is easy to manage each task over the mobile than on desktops or laptops. It helps to avoid paperwork and makes things available at a simple touch.

3. Help to Target the Right Segment of Customers :

No one prefers to get useless or irrelevant information from the mobile app’s notification. It is vital to optimize your app to deliver customized and targeted content to the app users on the basis of behavior, preferences, demographics, context, and time.

4. Can Automated Event-Based Triggers :

Always, remember one thing.– the best time to interact with your audience is when they are active, which means they are using the app and have completed one of the events. At this time you can get their attention and then you can promote something or send additional information. It not only improves user engagement but also helps to increase your ROI.

5. Increase Worker Capabilities :

Mobile apps can help to boost the capabilities of field workers.

6. Improves Effective Customer Communication :

With a mobile application, your customer gives their comments, feedback, and reviews on the service provided by you. With the help of push notification features in your apps, you can also inform your customers about new offers, products, and services.

Strategies That Can Be Used In ROI App Development To Boost Business. 

In this section, we’ll take a look at some of the strategies that you can adopt to improve ROI App development for your business.

  • Cut down on customer service cost

Having automated software to handle most of your customer service can relieve you do the expenses of having it done manually. The use of chatbots is now a popular utility in most websites or applications. 

Chatbots use an excellent algorithm to initiate communication with customers before human customer service takes off from there. 

This helps to cut down and classify customers based on their needs. Simpler tasks can also be handled by the bots, giving human customer services more space to handle and prioritize more difficult tasks. 

This reduction in customer service expenses can help greatly in bringing about a return on investment.

  • Customer targeting 

An increase in sales of products and services over a mobile app is bound to occur with its usage. You can get new customers or clients through the use of a mobile app, or even keep your existing customers by making it easier for them to purchase your products. 

Your app can be designed to persuade customers to keep on purchasing or intrigue them to come back for more purchases and boost your profit increase.

 It is also important to keep in mind that not all clients or customers might be useful to your mobile app ROI. Existing users can prove to be more loyal than customers that are new or not yet attained. 

  • Setting a price for the app

Setting a convenient price for customers for the app or within the app is a way to integrate your business goals which are to make a profit and obtain your ROI from the application. 

  • Avoid human error

The use of a mobile app will rid you of minor errors that result from the inevitable human flaws. Human errors no. Matter how small, can lead to something disastrous like an accident, regulation bypass, production problems, distribution issues, and so many more. 

With a mobile app, a computer can handle all processes with perfection and save you any extra cost you might have incurred on damages.

  • An improved chain of supply

With a mobile app, you’d be able to keep better track of your products, and it also facilitates swift communication amongst every point of the supply chain.

  • Automation of sales process

As a business, you will most likely have a team responsible for direct sales. However, with an app, your team would have more time to perform other functions while the mobile software can take off most of the sales process while giving them more important and practical tasks such as negotiating and lobbying new clients.

However, despite all these strategies, every business will still need to analyze their worth and system to know how much an ROI app development can be integrated into the business.

Steps to take to know if mobile apps will determine a beneficial ROI

  • Know and set your goals

As an organization or company, you will already have goals you intend to achieve. With the usage of a mobile app, you extend those goals onto the app and determine what you’d like to achieve from the app. This is a vital step that will lead to any other development.

Your intended outcome should be your influence on consumers and their interaction with the app and rate of retention.

The app itself needs to also be very distinct and explicit on the business goals and strategies. Therefore, the app must be built to suit those needs. The business goal must be integrated with every aspect of the app in other to result in a good ROI.

  • Expenses

Very clearly, developing an app comes with a cost of course. It then becomes vital that you do not reach above your finance limit. If you are unable to afford some things in the app development, then you can leave things simple.

It is also necessary to keep an account of the expenses of every aspect of the app development such as the startup cost, consultation, hardware, software, and implementation in order to relate it to the ROI. Do not forget to include a regular update and maintenance of the app for each month.

  • Ever heard of a KPI?

 translating to Key Performance Indicators is a measurement system in a business that is used to study and calculate every single factor that is vital to the success of a business or organization. It plays a key role in knowing how to calculate the ROI of your mobile app. The KPI of one organization might not be the same for another as their factors can vary. 

Some organizations might prioritize their net income as a key performance indicator, while others might focus on the stability of their customers, their ROI app development, and their customer retention rates as a KPI.

Therefore, in applying this to a mobile app ROI of any organization, it can vary depending on the KPI and objective of the mobile app.

To put it simply, if your organization prioritizes CLV(customer lifetime value), then the goal of your app and its design should be channeled towards acquiring customers on a regular. This means you’d need to go compare the yields of customers from your mobile app with that of other methods. 

When measuring this comparison, you will then know for sure if your venture in the mobile app campaign has improved your customer leads or drastically reduced them. This will assist you with further decisions.

This measurement system can also give a sales performance evaluation. It will let you know if the app’s performance is bringing you more sales and not just increasing costs. 

Thanks to this measuring system, you can have the knowledge on how to calculate the ROI of your mobile app, access your app’s efforts from every angle, scrutinize it, improve on the Android app development, or change strategy to suit your organizational needs.

  • Comparing your KPI measurements to costs incurred.

Once you now have a measuring system for your app, you will now need to know how to calculate the ROI of the mobile app. Therefore, you will need to place your KPI measurements in a relatable situation to estimate the all in all value of your app. 

You can estimate your profit margin and determine if the pros outweigh the cons. This comparison should be done with a calculated time of duration during the future or its usage.

The calculation can be done by the simple math of dividing the value of your current net income over the costs. In a realistic approach, it would take a thorough understanding of every single aspect and impact in your business to calculate your ROI. 

 However, a simplified process of calculating it is seen in the next section.

How To Calculate The ROI Of Mobile App

Having understood what is mobile app ROI, now we must tackle how to calculate the ROI of Mobile App. There are several benefits that come with understanding how to calculate the ROI of your mobile app. 

Mobile App

Calculating ROI can be quite easy! Here is a basic example; let’s say a business enterprise or organization spends 500 USD per month on promos or advert campaigns and then generates 1000 USD in return,  how do you calculate it? 

It’s simple. You divide your generated returns by your initial advertising investment which is 1000 USD divided by 500 USD. Your answer equals 2. 

In plain terms, for every one dollar invested in the advertising campaign, the organization has generated a profit of 2 USD.

What wise men do is harness the opportunities around them and use them to their advantage no matter how insignificant these opportunities may seem. 

Mobile devices, though majorly used for social media and connectivity purposes, can be used to generate huge returns for smart businesses as explained above. 

You should therefore invest in mobile app development with a reputable app development company to gain positive ROI app development.

The future is here, get involved now with the enthusiastic team of mobile app developers in Pune for building a highly functional Mobile app now. Prometteur offers excellent mobile app development services to our clients across the globe. We always ensure the best-in-class development of mobile apps. Our team understands what elements make a mobile app successful and provide a comprehensive solution to boost productivity and efficiency to a client.

Because, At the end of the day, it’s all about the profits.

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