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Push notification service – 5 easy steps to grow recurring revenue

 

In this post, we’ll explore how to get going with one of the easiest recurring revenue offerings — a push notification service for your customer’s mobile apps.

One of the biggest concerns any mobile app publisher will have is “Will my app be a success?”. And while success comes in many forms, ultimately it’s about app user engagement — getting more people using the app, more often. There’s nothing more frustrating for a client, (and for you I guess) than investing time and cash, in an app, and it becoming a “static” statistic — one the 83% of apps that become zombie apps.

As an agency, you have a great opportunity to help your clients and manage this concern. It’s your job, after all, to make sure the app you give them is a great app. In the eyes of the client greatness comes in two parts. First, an app that does the job it’s set out to do. Second, an app with a community of highly engaged users delivering the business results your client needs to get a return on investment. Many Mobile App Development Agencies focus hard on the first part, with little attention paid to helping build highly engaged users.

But you’re different. Right? You stay with your clients through the life of the app, so your clients get a better outcome from their sizable investment with you. That’s why big companies the length and breadth of the land work with you, year after year. They stay with you because you continue to offer them value, by continually helping their app perform better and better. That’s why you are special, that’s why YOU are different.

So in this blog we’ll show you one way to do this with a Push Notification Service. This is a great place to start building services that tackle that second stage of “greatness”, customer engagement, AND a perfect service to start building agency recurring revenue. A Push Notification Service lets you stay with your customers through the life of their app; working with them to building highly engaged user community for their app. Your customers win. They get a better app. You win. You build recurring revenue services that will give you a better business. A business that’s built on strong foundations of recurring revenue. A business that’s worth 8–10 times more when you come to sell.

Why are Recurring Revenue Services Important?

At Kumulos we get the chance to talk to and work with some of the largest and most successful mobile app development agencies in the world. One thing struck us a while back. Big mobile app development agencies generate a large share of client income from recurring revenue services. The question is: Do they do this because they are big? Or have they grown big because they do this? Well, we asked them. And they told us, every one of them, that building a monthly recurring revenue base for their business was the single most important ingredient in allowing them to succeed. They said it gave them the breathing space to innovate and grow, by taking the edge off meeting monthly expenses, like payroll. They said it took stress out of the decision to scale, removing some of the anxiety that they’d over-stretch themselves.

When we asked them to think back about the challenges they said the biggest problem was knowing how to get started: which services to pick, how to package them up and how to price. So to help you get started, in this blog we’ve picked a Push Notification Service. Its one of the easiest places to start and can offer real impact on the successful outcome of your clients app.

What is a push notification service and how does it help my agency grow?

A Push Notification Service is a series of campaigns driven by your mobile app agency to increase user engagement within your customer’s apps. The types of campaign you build will depend on what the objectives of the app are and where you need to make the biggest improvement, so you focus resources on the areas that will have the biggest impact on the outcome your client needs from their app.

Push Notifications are a great way to remind your client’s app users that you’re thinking of them. Push campaigns for your client’s app users should act as a discreet nudge, rather than being overly sales focused or intrusive. They are there to draw wandering app users back into the app by offering them information or something that they find useful. Push messages should also be timely, well personalized (you can do this by segmenting your audience into different groups) and highly engaging, without each message being perceived as an annoyance.

Why your customers value them so much is because they drive engagement within their user base. Users that are in the app regularly and have been in the app recently going to be highly engaged with the app. The more engaged users the better the app will perform.

So here are 5 ways you can create your first agency push notification service:

1. Start small and scale up

If you’re new to running push notification campaigns for your clients, the best thing to do is to start small, scale up gradually and use a Build/Test/Learn/Optimize approach. Many App Agencies start by working with an existing customer who has a decent sized user base, but has struggled to get that user base to engage.

Understanding the client and their app users is going to be important here, so you can build the right sort of campaign for them. Once you crack this with one client it’s relatively easy to then wrap this up in a service and offer it to the rest of your clients or to new prospects apps that you’d like to work with. Showing new customers how you can drive success for them is a sure-fire way to win that next mobile app project from them.

2. Cover all of the major push bases

This part is obviously very important. You can’t deliver great push campaigns for your clients until you have the basics covered. The good news is that there are some great quick wins when it comes to creating your first push notification service for clients.

You need to have a high percentage of your app users with Push Notifications enabled. These won’t be enabled by default by the app. They are an opt-in feature. It goes without saying that there’s little point sinking effort into running push campaigns if very few of the current app users have push messages enabled. How the app invites users to accept push messages is really important. Make sure it’s clear why this service will be valuable to them and make sure that there is a critical feature in the app that needs push enabled. A quick win here is to look carefully at the app onboarding process and see how you can improve the percentage of new app downloads that activate push within the app. Next is to see how many existing users you can get push enabled for. If there’s a new feature coming out that needs push, this is a great opportunity.

Creating user segments is a huge selling point when suggesting a push notification service to new and existing clients. The days of effective mass-marketing techniques are long gone and it’s essential that you adopt a tailored approach for each customer you work with. ‘Blanket bomb’ push messaging is grossly ineffective and leads to high push notification opt-out rates. It’s important to work with each app you develop to identify clear user segments based on behavioral traits and characteristics of their users. The segments you pick will in part be driven by the nature of the app and what your client needs to achieve. The trick is then using the right messaging to target each individual user segment.

Great push messages always possess a clear call to action (CTA). Once app users have opted in, they expect mobile marketing messages to be delivered in a highly targeted and contextually relevant manner. Avoid fluffy language in your messages and make sure that whatever action you’re asking the app user to perform, that it’s clear, concise, and most importantly, liable to deliver value for your app client. Convey urgency in your messaging and make it clear what your client is offering.

Timing is essential. Make sure you always use the right time zone and avoid waking app users up in the middle of the night. This is one sure fire way to generate eye watering opt-out rates. Using holidays or special events can also be a great way to ensure that your messages are perceived in a contextually considerate way. Timing is essential, but frequency of deployment is also crucial. Be very careful when it comes to defining push frequency. Over communicating is almost as bad as no communication at all. So strike the right balance between frequency and the relevance of the message to that target segment.

So having covered the basics of your first client push campaign, it’s time to start thinking about how you test and manage on an ongoing basis. Use split testing to create and analyze different variations of each message and test varying message lengths and styles to suit your client’s audience.

3. Prove that you can deliver great value

Proving that you can deliver great value is all about having the right reporting and analytics tools in place for the app, at the get go. This also means always starting with the end in mind and define with your client what the key measures of success and performance indicators will be. This might tie into engagement such as the ratio of daily active users to monthly active users, number of downloads with push enabled or monetization of push notification offers. What is success, of course, depends on your customer’s priorities for their app. So make sure you agree a clear set of KPI’s based on the technical and commercial priorities.

We’ve touched on this earlier, but it’s important so worth mentioning again. You’ll need to focus on increasing opt-in rates and minimizing the number of app users that opt-out and abandon your campaign. This is not just something that you can do once and forget about, it’s about constantly finding new ways to optimize the performance of your app clients push campaigns. An area where you can constantly provide value to your clients and a service that should be baked into your Push Notification Service Offering. To prove your value, make sure you produce reports monthly and that you are offering insight and recommendations on how things can be improved, rather than just giving clients the raw data. That said, there is a place for just communicating raw information. See the section on pricing below.

Make sure you Test, Test, Test. If certain tactics (perhaps altering frequency of deployment and style of messaging) prove to be successful, then you know where to double down your efforts. Similarly, if certain push techniques aren’t working and causing high app abandonment rates, dial them back. This is common sense of course, but it’s easy to lose sight of this, so worth stressing.

4. Roll out your services

Once you’ve proved a Push Notification Service can be successful for your first customer, you can start to consider how your market them to your existing customer base and to new customers. The trick here is to leverage the success of your first client campaign to convey value to other clients. Again, this will all come down to analytics and concise reporting that gives prospective push notification service customers an insight into why this is essential to drive success for your clients app. You need to convey that you’re focused on the right push notification KPI’s and develop marketing programs for your agency that enable you to scale up your push notification service. This may be as simple as baking this service into your sales process and customer on-boarding, to making sure that all new customers know this is just part of your standard offering. It may be targeting existing customers to get them to adopt this or it may also be a very lucrative way to target existing apps built by our competition. Competition that most likely is only focused on the build phase of the app.

Often one of the best ways to achieve this is by having a dedication optimization account manager. Generally speaking, app developers are not always best positioned to deliver optimization and push services to clients, and it’s tough to make the leap and hire someone in the hope that someone will buy. Kumulos may be able to help you here. We support App Agencies who want to offer these services, but don’t have the in-house skills right now. We offer Kick Start App Optimization Services that helps you get going. We act as your optimization back office and then transition this to you once you’re ready.

5. Get your pricing right

Most Agencies want their Push Notification Service to make them money, so it’s important that you have it priced correctly. If you don’t already have a push notification system in place that enables you to deliver these services, there are a bunch of different platforms that you can choose. Find a decent platform that fulfils your app client’s goals and make sure that you’re able to access the right analytics to measure KPI’s. Ideally try and use a platform that enables you to package up these KPI’s into a weekly or monthly report that outlines the success of each campaign and makes recommendations in terms of what you plan to do in order to enhance campaign performance.

A good way to structure your offer is to have a number (three seems to work best) service packages and offer tiered pricing. This gives you two advantages. First it allows you to sell progressive services, services that you can upsell when the client is ready to take a more strategic service for you. It also lets you show that’s you can “right fit” the service for each client. A tailored service rather than a one size fits all.

First Tier – Reactive Push Notification Service

This is as you’d guess simply reporting on the key metrics of push within the app. Things like percentage of downloads that have push enabled, the number of push notifications sent, the number opened, the number of unsubscribes. This is a good entry level service, just to let your customers see how things are performing. It’s a fully automated service, so you’d sell it at low price to get the customer used to paying you monthly.

Second Tier – Proactive Push Notification Service

As you’d guess it’s a bit more involved and your customer pay more for it. It covers the same metrics as the reactive push notification service, but offers insight and commentary into what should be done to drive the numbers in the right direction. Improvements to the app onboarding to drive up notification opt-ins, changes to messages to drive down opt-out rates and more. This is a great way to flag up work your customer needs done. Work that you would do for an additional fee.

Third Tier – Managed Push Notification Service

This is where you run everything for them. All the campaigns, all the messaging. Everything. You agree the KPI’s and targets up front and you commit to delivering that for them. To do this you really need to have a good understanding of the customer and their target audience, so most App Agencies progress to this having first delivered Reactive, then Proactive Push Notification Services. Of course, this is the highest cost and highest margin service you can offer and an awesome way to really get close and stay close to the client.

The critical thing here is to consider the cost of deploying your push notification services in terms of systems and labor. You’ll find that it will be pretty labor-intensive at first to build highly effective and highly engaging campaigns. So make sure you allow for this in the price you agree with your customers. Also make sure that your app customers are committed to you with a monthly retainer. This lets you plan with more confidence and know it’s worthwhile sinking that effort in up front, safe in the knowledge that you are building a long relationship with the client and, of course, a long term revenue stream for your App Agency.

Final words on building a Push Notification Service

So, one of the key ingredients for building a successful (and valuable) mobile app business is an underpin of monthly recurring revenue. It takes the edge of your monthly running costs and makes sure that money keeps coming in, no matter how busy you are. There are many services that you can offer, but the best ones are those most closely aligned to the needs and desired outcomes of your clients. A Push Notification Service isn’t right for every client or every app. But for those that need a highly engaged user community this is the easiest way to deliver services that customers will pay monthly for. It’s also easy to build clear KPI’s for your work so you can easily demonstrate your value add.

Here at Kumulos, we’re fanatical about helping mobile app agencies grow and we have some awesome features to help you achieve these goals. If you’re a mobile agency looking to increase monthly recurring revenue streams, check out Kumulos today and sign-up for free.

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