Application economy puts pressure on brands

“European businesses need to urgently close the gap between what consumers are asking for and their own goals for application development,” says Marco Comastri, President & General Manager, EMEA, CA Technologies. “Apps have become a crucial interface between brands and consumers. Businesses risk losing a significant proportion of their customer base, temporarily or permanently, by not satisfying consumer needs. Quickly delivering customer-winning applications to market can translate into real competitive advantage.”

This disparity between how well businesses think they are delivering applications, versus how well consumers think they are doing, is wider in some countries and industries than others. In Germany for example, 69% of healthcare Business Decision Makers (BDMs) think they are doing “well or excellent” at delivering apps, but only 46% of consumers agree. In the UK, 75% of BDMs in telecommunications think they’re doing well, versus 59% of consumers. And in France, there is a wide gulf in Financial Services: 83% of BDMs in this sector think they’re doing well, versus 54% of consumers.

The study also reveals disconnect between what European consumers want from their applications and what businesses think they need, with alarming implications for customer loyalty. Some 77% of European businesses believe “making aspects of consumers lives more convenient” is “important/very important”, for example, while only 63% of consumers think the same way. And 79% of BDMs think it’s important that an app allows for more complicated functions in less time, but only 62% of consumers agree. Businesses must identify these gaps and realize that all that matters to consumers is that the app is quick, secure and delivers on its promise—without much effort on their part. Unless businesses recalibrate now, they risk pouring time and money into developing and deploying applications that don’t resonate with consumers.

Brand loyalty is also fleeting in the application economy, and brands in Europe are at risk of losing 25% of their customer base through a poor reliability application: 6% of EMEA consumers would never return to a brand and 19% would leave it temporarily, the study shows. Moreover, 58% of consumers say their tolerance for technical issues impacts their decision to use or purchase a brand’s application, and 47% have dumped a brand’s application for another brand due to a better feature or service. In response, businesses need to shift the way they approach app development. Apps have to fire up instantly, quickly present options for solving consumer problems and work intuitively throughout the entire experience.

In fact, businesses have six seconds to get it right. “ Software: the New Battleground for Brand Loyalty” shows that if European consumers’ needs aren’t met by an app in six seconds, 59% of EMEA consumers will leave it—forever, in some cases. In some countries that window or opportunity is even smaller. In Germany, 87% of consumers expect an app to load in less than six seconds. In the UK, 40% of consumers expect an app to load in less than one second—any longer is unacceptable. Some 71% of French consumers expect an app to load in less than six seconds, and in Italy 50% of consumers expect an app to load in less than three seconds.

A previous survey conducted by Vanson Bourne on behalf of CA Technologies showed business leaders consider security a top obstacle to becoming more effective in the application economy. That’s because while the application economy increases opportunities for the expansion of products and services, it also increases the threat landscape. The Zogby research takes this issue further, revealing that when a security experience is poor, 22% of consumers would either abandon the brand forever, or leave the brand temporarily but eventually come back. Some 40% of consumers state that security was “fair” or “poor” 40% of the time they use apps.

The study also highlighted how applications have become a crucial meeting point between consumers and organisations. According to the survey, 51% of consumers are using applications to make online purchases and 47% use applications to bank; and more than half of respondents say they would be willing to use applications to perform tasks like paying taxes, managing healthcare or even voting in elections.

“Software is the new battleground for brand loyalty,” says Comastri. “This study indicates that European consumers demand high performing applications that provide a flawless consumer experience, that load almost instantly and are secure and protect their privacy. Brands that don’t meet these high standards are often abandoned, sometimes forever. Consumers are now the disruptors—driving innovation by affecting a highly competitive market for applications - and businesses must invest in finding out what their consumers want. Companies that align with consumer wants, by leveraging research and application data will flourish.”
 

Image courtesy of Bloomua