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#AFtalks: The Business Side of Apps with Charles Perry & Joe Cieplinski

AFtalks is a series of chats conducted on Twitter where we discuss building and selling apps. We’ve got a different topic/expert every week, and everyone is welcome to join the conversation.

Welcome to our #AFtalks recap!

This week we talked about the business side of apps, where we aimed to share tips and insights behind the strategy phase when developing apps.

Our guests this week were Charles Perry, owner of Metakite, and Joe Cieplinski, developer for Bombing Brain Interactive, Teleprompt & Setlists! We asked them to share their insights on this topic with the questions below. Included are their answers, as well as some of our favorite insights from the community:

Q1: What does your app do, and how did you come up with the idea? and Q2: Did you do any market research before starting to develop?

Charles: I’m going to combine these questions, because they are sort of intertwined. I have two apps in the App Store right now. Benjamin is a task manager based on Franklin Covey system of productivity, and MetaTax is a reference for independent tax preparers.

Benjamin came about because I used to have a different task manager based on a different productivity system in the App Store, and I viewed Benjamin as a broadening of that strategy. I mean, an app for one productivity system did well, so why not try another one, right? I knew that there were a lot of corporate professionals that used this productivity system, but in hindsight, I didn’t do as much research as I should have, and I sort of got lucky. But the time when Benjamin launched was a simpler time in the App Store, when there was less competition and it was easier to get attention. So it worked out.

With MetaTax, I went through a more deliberate design process. From doing research and talking to people in the field, I knew that I wanted to sell to independent accountants. The question then, was what to build for them. After doing more research, I decided on this reference product because there were already some similar products (proving that there was a market for solutions like the one I was considering), and the established competition wasn’t too big. At the end of the market that I was trying to reach, I wouldn’t be going up against big companies like Intuit or Thompson Reuters. Instead, I would be going up against other small businesses, which meant that I wouldn’t be too outgunned when it came to marketing dollars or engineering effort.

Joe: I have several different apps, and they all sort of have their own origin stories. With apps like Teleprompt+ and Setlists, the app idea came from brainstorming about new hardware that was released from Apple (in both cases the iPad). What would this device do for people that a laptop or phone couldn’t? Once you approach an app idea from the problem-to-be-solved angle, you have a better shot at success, I think, than simply asking yourself what you want to build for yourself. I happen to use Setlists all the time myself, but our most successful app, Teleprompt+, I rarely need to use in my own day-to-day work.

As far as market research goes, we didn’t do enough of that on Teleprompt+, but we got lucky in that many video professionals agreed with us that iPad was well suited to the task. We also rushed to be able to launch on day one with that app, so it was more about shipping a minimum viable product at that point than anything else. We were one of the first 500 apps on the iPad store. Once we did get the product shipped, and we started accumulating customers, then it became very important to us to listen to those customers whenever they told us what they needed. So that became our primary market research—tracking and prioritizing our customer’s wish lists. None of us was in the video business, so we didn’t assume we had all the answers when it came to solving our customers’ problems. The more we made customers happy, the more they became our evangelists.

Q3: How did your research affect the app’s development?

Charles: I’m going to restrict this answer just to MetaTax, because (as I said before) I didn’t do as much research for Benjamin as I should have. With MetaTax, my research did play a big part in the final product. As part of my research, I purchased all the competing products that I would be going up against. I looked at similarities and differences, what they did well, and what I could do better. I used that research to help me prioritize reference topics, select price points, and get ideas for marketing.

Joe: Once you have actionable data from customers or potential customers, you still have to take the important step of ranking ideas and figuring out which ones are simply not feasible, or would only benefit a small number of customers. In the early days, we would, I think, do features that maybe weren’t advisable, simply because one or two people were requesting them. But the hardware sometimes made the feature limited or unreliable. Taking things away after the fact is a lot harder than adding them, so you need to tread carefully about which bits of information on your users you turn into action, and which ones you politely decline. Everything you add to a product costs time, and thus money. And not just once. Maintenance also costs time and money. So don’t take every bit of information from every person you ask and immediately assume that it’s a good idea to act on it. Learn how to say no.

Q4: Do you actively promote your app, if so how?

Charles: Promotion for Benjamin is mostly limited to App Store Optimization techniques. Benjamin has been in the App Store a long time and does well in search results. I have considered Facebook ads for Benjamin, but its price point won’t support the cost of ads.

I do periodically run Facebook ad campaigns for MetaTax. It has a higher price point, and I can more narrowly focus who ads are delivered to using Facebook’s “custom audience” feature, so I can get more bang for my buck. In addition to paid promotion, I also have been somewhat successful in getting stories about MetaTax in accounting industry websites.

Joe: I talk to musicians as often as I can about our app Setlists, and I talk to people when I’m out networking about all of my apps very often. If you aren’t willing to promote what you do on a regular basis, you shouldn’t be in business. We have tried limited Facebook ad runs for Setlists, but we probably didn’t give them enough of a chance to succeed. For many of my personal smaller apps, I’ve been running Apple’s search ads with some success. I think if you have an app that costs more than 99-cents, or that has subscription revenue, and you play with your keywords enough, you can definitely see some good results with search ads.

Q5: Which metrics do you rely on to gauge the health of your app(s)?

Charles: I gauge my apps’ health by the only metric that counts: Revenue! Seriously, though, I do look at other metrics as well like downloads, and the percent of revenue that is recurring instead of one-off purchases.

Joe: Revenue is certainly a good way to know how you are doing. I also look at customer reactions quite carefully. How many support requests are we getting? Is the tone of those requests friendly, or do most people seem to be frustrated? How are the reviews? Reviews can be tough, because by and large complainers are more likely to speak up than happy customers. But with Apple’s new review request prompt, I’ve already seen a marked improvement in star rating, and more ratings popping up than ever before.

Apple has started providing more metrics for our apps, but I haven’t found a really good way to act upon that data yet. I see it; I take notes. But I haven’t done much beyond that.

Q6: What advice would you give a first-time developer about marketing/promotion?

Charles: Don’t plan to use paid marketing and promotion channels unless the average lifetime value of your customer can support the cost of paid customer acquisition. If the average lifetime value of a customer is low — under $10 or so — you’ll need to focus more on free promotion like earned media.

Joe: Yes. Start with revenue per customer. Get that number nice and healthy before you even start coding. As an indie, you are never going to reach millions of customers. So have a plan to survive on hundreds. Anyone can reach hundreds of people without spending a boatload of money. So think of your promotional budget as a percentage of what customers are paying you. The more money you make per customer, the more money you’ll have to spend on new customers.

Q7: What were some of your earliest obstacles you encountered that you hadn’t expected?

Charles: The biggest obstacle for any app, I think, is getting attention. There’s only so much attention to go around, and there are millions of apps competing for it. Luckily, I’ve always gone for niche markets where it is easier to get the attention you need to thrive. I’d recommend that strategy to anyone.

Joe: Even in a niche, like gigging musicians in the case of Setlists, it can sometimes be hard to know where to go to reach new customers. In the early days, many of us thought that the App Store would do our promotion for us. I certainly thought that musicians would simply be searching for our app, so all we had to do was make our app better than the competition. But it’s just plain silly to put an app on the store at this point and expect anyone to find it. Customers often don’t know they need a solution until you hit them over the head with it. People have given up on searching the App Store all the time. They just fall back on their old methods of getting things done. So you have to try to figure out where those customers are and how you can reach them. And if you can’t figure out where to reach them, don’t build the app. The best app in the world is useless if no one knows it exists.

Check out the rest of the insights we heard today on the #AFtalks hashtag

A huge thanks to Charles & Joe, and to all those that were part of today’s discussion! Join us for our weekly Twitter chat every Tuesday at 1pm ET (and bring your friends!). See you all on July 11th where #AFtalks about App Marketing.