Authors: Allen Wong
11
Retail Business
Besides web development, I enjoyed fixing other people’s computers. When I was just a teenager, I used to fix my neighbors’ computers for free. I even held a job at Best Buy’s Geek Squad once during college. And since my job required me to interact with the customers, I picked up a few retail business lessons while working there.
The job was not all about fixing people’s computers. I was also a salesman and a customer service representative at the same time. At the job, they taught me to push the computer owners to upgrade their computer while I was servicing their computer. They told me that once I got my foot through the door, I had a great opportunity to make some sales. It was from that tip that I learned to advertise other apps on my apps.
They also taught me about the different types of customers that existed in the retail ecosystem. There were the ones who had a lot of money, but not a lot of time. Those were the ones who you could push value-added services onto. They would be more willing to pay for installation setups and premium features such as expensive cables and more powerful video cards. They wanted the best, and money wasn’t an issue for them. Then on the opposite side of the spectrum, there were people who wanted the most value for their money. They wanted to squeeze everything they could out of their penny. These are the ones who you had to explain in detail why they must upgrade and why they need something. And these are the ones who would jump on any chances of a sale.
The way to deal with the customers changes dramatically depending on who you are dealing with. And knowing how to appeal to both sides of the spectrum (and everyone in between) is the best way to maximize your profits.
App development tip #3: Tailor to different types of customers.
One of the most asked questions about app development is how much you should charge for an app and whether or not to create a free version of your app. The answer is that you should sell your app to both the rich and the frugal. If you charge too much for your app, then you only get sales from the ones who have that kind of money to fling around. If you charge too little for an app, then you might be losing out on some chances to maximize your profits. For example, if your app is $1 instead of $2, then your app sales better be more than double the app sales of when you sold your app for $2. In some cases, charging $2 actually increases your profits even more. But you also lose the sale to those who would have been willing to pay only $1 for the app. So what can you try doing? Sell your app for $1, but sell additional features as an in-app purchase. That way you get the people who are willing to pay $1. And you also can get profits from those who have extra money through your in-app purchases.
If you go even one step further, you can also create a free app. Apple allows you to sell both a free version of your app and a paid version. So take advantage of that fact and create a free version of your app to get profits from those who aren’t even willing to pay a dollar for your app. Just put a banner ad in that free version and remove some of the extra features.
The great thing about having an ad-driven free app is that even if your paid app loses popularity in the future, you will still get consistent ad revenue from those who already downloaded your app and will still be using it. I have had to deal with the issue of my 5-0 Radio app losing steam after being in the top of the App Store for over three years. With more competitors nibbling away at my sales and the fact that I’m running out of interested customers to sell to, it was inevitable for 5-0 Radio to drop in sales gradually. However, the ad revenue gained by the free version of 5-0 Radio has been growing steadily. At the time of this writing, my ad revenue has surpassed my paid app revenue by two-three folds. And if you combine both my paid apps revenue and my free apps revenue, my overall revenue has been growing steadily each year.
App development tip #4: Grow your user base.
The other major benefit of having a free app is the ability to grow your user base by over ten folds. As a rule of thumb, free app downloads are almost always ten times more than your paid app downloads (if popularity remains the same and your paid app only costs a dollar). And having a large user base is very powerful, especially when combined with social media.
If you’re aware of how viral marketing works, then you’ll understand the benefits of word-of-mouth marketing. I’ve made it a personal commitment to never buy advertisements for my apps. I’ve been relying heavily on word-of-mouth marketing, and in this day and age of social media, word-of-mouth marketing has never been easier.
Create a Facebook page for your app, and add a “like” button in your app for your Facebook page. This is free advertisement for your app. Your users are advertising your app to their friends each time they “like” your Facebook page. Take it one step further and add Facebook integration to your app. Have your app have the option to post “achievements” on your users’ timeline (for example, have your app post a top game score on their timeline). Some users like to brag about their achievements, so they will be the ones willing to post these achievements. What they may not be aware of is that they’re helping you advertise your app without you paying them. If you want to be even more extreme, you can integrate Twitter®, and other social media websites to further your exposure.
Keep in mind that there is no greater advertisement for your app than when someone, who a potential customer trusts, recommends your app. Therefore, when those potential customers see those Facebook status updates or Twitter tweets about your app, they are more willing to download your app than if they saw your app rotated into some ad banner. That is why having a large user base is important, even if you lose some paid app sales to your free version. The user may have gotten the app for free, but you potentially gained a free salesman. And those friends of the user who got the app in turn will help advertise your app even further. That’s the basis for viral marketing.
Thus, growing your user base is same as growing your army of salesmen. And if you create other products, you can also sell those products to your user base as well to further harness the power of having a large user base. That’s why the popular app Angry Birds® now has Halloween costumes, stuffed dolls, t-shirts, and other merchandise. Not only are they getting revenue for their merchandise, they are also creating walking human advertisements for their products.
App development tip #5: Learn how to interact with your users.
Besides turning your users into salesmen, you can also turn them into your quality control manager and your boss. Keep in mind that the success of an app is almost never about luck. Apps have to click with the users. The litmus test is to see if even you will use the app yourself. That is the test I do whenever I code a new app. If I am not using the app myself, then I think it is a failure. At that point, I’d either scrap the idea or keep improving the app until it got to the point where I liked using it.
That is why it is important to listen to user feedback and implement the changes that they want. Chances are that if at least one or two users have a complaint about the app, then there are hundreds and maybe even thousands of other people who have the same complaint. Those other ones who haven’t been vocal about their complaints either live with it, or do not want to spend their free time complaining about it.
Always address the negative feedback that you receive. Do not take constructive criticism personally. Instead, try to fix your bugs and add the features that users are requesting. If your app’s reviews are not constantly averaging with 4.5 stars or higher, then you need to either fix your app or come up with a new app.
A friend of mine who’s also an app developer used to ignore his negative feedback. His ego made him block out the criticism. He thought his app was one of the best apps ever made, and thus, he labeled all of his negative critics as haters. Every time he got a negative review, he was in denial and said that the review must have come from a competitor or a hater. His app was actually pretty good, but his sales were hurting because of the negative reviews he received. He asked me for help, so I played around with his app and told him what needed to be changed in the app to make it better. A lot of the changes that I thought could have helped the app were actually similar to the complaints made by his “haters”. He finally listened and made the changes to his app. Since then, his app’s reviews have been mostly positive, and his sales have been growing because of the positive reviews.
Thus, don’t do what my friend did in the beginning. Instead, do the complete opposite. When you get emails with complaints and feature-requests, thank the senders and tell them that you are getting on it immediately. This usually stalls them from leaving your app a bad review, if they haven’t left one for your app already. When they see the changes, they will praise your app, because these users are not used to being heard by big companies. They are used to getting the same politically-correct, cookie-cutter response from some outsourced customer service representative. This happens usually when they send an email to a large American corporation. By personalizing your emails and reassuring them that their complaints are heard from the makers of the app, you are developing a potentially rewarding mutual bond with them. They get the changes they want, and you get a satisfied customer who will praise your app to other people.
Users love when their voices are heard, and love it even more when they are individually responsible for actual changes to products. A lot of my positive reviews in the early days have been from customers who praised me for having great customer service. I was quick and responsive in my interactions with them. Whenever there was a change requested, I emailed them back within the hour, and told them that I would make the change immediately or in the next version. Then, I would actually spend the time implementing the changes and pushing the change out to the App Store as soon as possible. This went back and forth for many versions of my apps (with at least 20 versions for 5-0 radio alone). Finally, my apps stopped receiving complaints and feature requests, because they had nothing left to complain about. And now my apps are constantly getting overwhelmingly more positive reviews than negative reviews. And as those who have ever done online shopping would know, positive reviews for a product are extremely important when people decide whether or not to get your product.
Besides making changes based on user feedback, you should use the app everyday and implement the changes that you would like to see yourself. By making an app that people want to use, the app promotes and markets itself, because users will tell their friends and family to download the app. Thus, customer interaction is important and is something you should invest your time in.
Lifehack #20: Treat customers like they’re the only ones left in the world.
Sometimes we can be dismissive of people if we feel that they are a waste of our time. We may get impatient with how slow someone is to understanding what you are saying. We may get frustrated with how ignorant someone can be. We may get offended by how inappropriate a person is being. We’re very tempted to just walk away from these people or even give them an earful. But in the world of business, you must treat each customer like he/she was the only customer you will ever have.
It does not matter who you’re speaking to. You must not judge them based on their looks, age, financial status, or gender. You may think that pandering to only the wealthy would get you further in profits. But then you’d be forgetting the power of social media. You know that waitress working for minimal wage down at the local diner? She has thousands of friends on Facebook. You know that rich housewife that’s eating at the local diner? She only has a few dozen friends. If you get that waitress hooked on your product, you’re potentially spreading the word about your product to thousands of people. If you get that wealthy housewife hooked on the app, then you’re probably only spreading the word to a few of her country club friends.
So, don’t be dismissive of a person who you think is not going to be a great customer. That customer could be your greatest salesman or your greatest reviewer. When I first walked into one of the Lamborghini dealerships in sneakers and a pair of jeans, I got dismissed by the sales representatives working there – my age might have had something to do with it as well. They thought that I’m just another teenager trying to get a free exotic car show. That kind of dismissive attitude left a bad taste in my mouth, and I ultimately never bought a Lamborghini from them. Now that I’ve bought my second new Lamborghini already from another dealership, they’re inviting me to car unveilings and private parties. As a customer, I felt that the relationship was already broken the day they were dismissive of me. It goes to show you that you can’t really judge a customer by how they look.
Even your next door neighbor could be a millionaire, and you would never know it by the car he drives or the clothes he wears. Looks can be quite deceiving, and frankly, I would be suspicious of someone who feels the need to show off his wealth. The millionaires who can stay humble and low-key are the ones who gain the most respect from me. And since these low-key millionaires are incognito, I always treat every customer of mine like he is a personal friend. You can only do right when you treat people with respect and care. When a customer feels good about doing business with you, they sometimes are willing to pay higher prices just for the better customer service.