Mobile

Crossing the divide: Why on earth would a B2B company want to make a consumer app?

This sponsored post is produced by ArcSoft president, North America, Todd Peters.

Thirty seconds or less: In the consumer mobile app business, that’s all it takes to keep — or lose — your audience. This is in stark contrast to the months and months business-to-business (B2B) companies have traditionally spent building relationships with potential clients – from developing in-depth PowerPoint presentations, conducting extensive ROI analysis, or, of course, attending those numerous requisite dinners.

Many app developers think the consumer mobile app business is an instant gold mine. But the truth is that the competition is fierce, and the chances for success are far outweighed by the extreme likelihood that your app will fail. In 2013, of the top 250 publishers, only 2 percent were new to the Apple App Store in the U.S., according to app analytics firm Distimo. This is because the new apps that generate the greatest number of downloads and the highest revenue are really just spinoffs from successful current apps (like Angry Birds: Star Wars). Facing such a narrow gateway to success in the consumer app business, why would a successful B2B company spend tens of thousands of dollars on marketing and mobile advertising when the chances of hitting even one million downloads are extremely low?

Why take the risk?

The once clearly defined lines between B2B and B2C (business-to-consumer) models are blurring because customers have both greater knowledge about, and higher expectations of, the companies with which they do business. They know Apple. They know Google. They know Disney. They think: If these companies are making these apps, they must be good. And with the introduction of the “app store” and the seemingly overnight success of many companies releasing apps into the market, B2B companies are now looking to leverage new revenue streams and ride the wave of the mobile app business.

For ArcSoft, when we decided to enter the consumer market, it was not on a whim. We spent 18 years building a profitable imaging technology business; it’s our company’s heritage, and it’s in our blood. By leveraging our strength in delivering underlying technologies to the best OEMs in the world, we saw an obvious opportunity to open additional channels to new markets in the consumer space. As a provider of “ingredient technology,” even though our customers were already using our technology, they weren’t aware of it, so our consumer brand recognition was quite low. By taking our product direct to the consumer, we’ve created an occasion to draw a new audience and establish a strong customer base. A customer base that will then develop a relationship with the ArcSoft brand.

Here are a few lessons we’ve learned along the way.

1. Be relevant: Redefine your marketing strategy

Marketing directly to consumer audiences presents a whole new set of challenges and considerations, particularly in the app world. While B2B marketing often focuses on logical facts and figures and the multiple stages of a purchasing decision, consumer decision-making tends to be more emotionally driven. Free apps are a low-involvement, short-cycle purchase because you can delete them even more quickly than you can download them. They’re highly expendable. In contrast, while the ROI on B2B may happen over time, B2C is all about quick decisions that expect immediate results. This all boils down to the user experience. If a consumer finds that an app is poorly designed or irritating to use, instead of calling IT, they often delete it immediately and move on to the next app. And then you’ve lost them – in a mere 30 seconds or less.

From my technology-marketing experience — with Intel, Staples, Microsoft and now ArcSoft — I’ve learned that in order to successfully cross over, a company must educate itself on how the consumer game is played. In a world where brand allegiance is low and barriers to switching are even lower, reaching consumers with fresh and innovative tactics is the only way to survive in an “app eat app” world.

2. Get personal: Use social media and the mobile platform to reach customers

An April Forbes article noted that “it would appear that both B2B marketers and B2C marketers are finally realizing that engaging and establishing a relationship with consumers is paramount to ultimate success.” The article calls 2013 “the beginning of the relationship era … whereby marketers will move away from an acquisition-first mentality to a relationship-first one.” In fact, a recent survey in eMarketer found that more than half the B2C business respondents cited customer engagement as the most important part of their social media marketing strategy.

The mobile device (specifically, the smartphone) plays a crucial role in crossing the divide from B2B to B2C. According to a Canalys Report, smartphone sales are up 63 percent. The audience/customer for both models is increasingly mobile. Mobile devices are the major source for communication and media consumption today. What that means is that reaching people right on their smartphones — where they access much of their news and information — is the key to successful social marketing.

3. Be nimble: See your company’s strengths in a new light

Flexibility combined with innovation: Your company must be willing to change and adjust to new rules. As Jay-Z said in a recent plug for his new album (which has now turned into a free app for the first one million Samsung Galaxy customers to download), “The Internet has no rules … we need to write the new rules.” You have to be willing to throw out the old rules of B2B or even B2C marketing and be willing to try new things, employ new strategies, and engage consumers in different, unexpected ways.

Partnerships are everything: Partnerships in the app world may enable companies to gain an entirely new customer base. Partnerships may also provide additional value or conveniences through, or to, a company’s existing app portfolio. ArcSoft, for example, partners with Qualcomm to bring its cutting-edge digital imaging technology to smartphone manufacturers around the world, enabling these manufacturers to build richly featured devices, many of which also will carry ArcSoft’s leading consumer apps, Perfect365 one-tap makeover and Whip social photo album.

Cross-platform is key: Bet on all the horses. Perfect365 reached more than 1.2 million downloads in its 60 days. Our goal was to release the app on multiple platforms for the widest reach. We became No. 1 in the Windows Store for photo apps and reached top-ranked positions for iPhone and Android as well.

Leverage your strong suit

The most successful B2B companies will be able to build upon their strong technology expertise and leverage their successes in the enterprise space to expand their consumer reach. For ArcSoft, this is a relatively low-risk endeavor for us; the vast majority of our revenue and profit margin is secure regardless of our success rate in the consumer market. Of course it will be challenging in such a heavily saturated market. Yet business case studies are full of newcomers that launch successful apps despite these challenges — or even because of them. We maintain that if you have an intuitive, well-designed U.I., some great SNS features and, most important, a strong, differentiating innovative technology that addresses your consumer’s needs, you have a real shot at big success.

Todd Peters is the president, North America, of ArcSoft, the software developer of multimedia imaging technologies and applications, including those found in over 500 million mobile phones. A former Intel, Microsoft and Staples executive, Peters’ experience with ArcSoft spans working with OEM partners and customers that include Samsung, Qualcomm, and Dell, as well as launching hot new consumer apps into the award-winning ArcSoft portfolio.


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