The App Mobile Case Study Book Free Download

September 22, 2011

Case Study

Product Launches: How HotelTonight's mobile app became the most downloaded app in its category in just one month

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SUMMARY: Launching a product from scratch (in this case, a brand and company, as well) in a crowded marketplace with well-funded competition can be one of the most challenging marketing endeavors.

Find out how one travel industry startup launched its mobile app through a combination of high-touch customer support, social media outreach and traditional public relations, to make it to an app store's top spot in the competitive online travel industry category.

by David Kirkpatrick, Reporter

CHALLENGE

Sometimes the product, the brand and the company are all one in the same. When this is the case, a product launch is also technically the company launch.

With an entirely new brand and corporate name to market, the effort needs to reach, and resonate with, the target audience. Especially when the new product launch enters a business filled with deep-pocketed competitors, such as the travel industry.

HotelTonight faced this very challenge. The company was formed last September, officially launched the beta of its free mobile app for last-minute hotel deals in December, and began officially marketing the app in January.

Find out how it combined traditional media outreach tactics with social media marketing and extensive customer service efforts, to reach the top Apple App Store position in the travel category ... more than once.


CAMPAIGN

Sam Shank, CEO, HotelTonight, said the company is his third startup in the online travel space. He stated that with HotelTonight he saw an opportunity, despite travel being a crowded market. He saw that no company was focusing on the last-minute hotel booking window, and no one had built a mobile-only online travel agency.

"We saw the opportunity on the marketing and branding side," he explained. "The challenges were just getting awareness within a market with a lot of other brands out there that have multi-hundred million dollar budgets."


Step #1. Encourage your customer to spread the word

Shank described the "key pillar" of HotelTonight's marketing strategy as providing a quality product and customer support, to create word-of-mouth buzz from satisfied customers.

"The strategy is to make sure everybody has an incredible experience using the application," he stated.

In order to create that "incredible experience" and quality product, HotelTonight sought to differentiate itself in several ways:

o The deals offered
o The user experience and aesthetics of the product
o The speed of booking compared to competition

Another way the company works to make sure its users have a good experience is by offering 24/7 customer support to solve issues when something goes wrong, or when a customer has a problem like booking the right room or even just finding the hotel.

"We make sure that everybody has a great experience so that they will tell people after their stay that this is something new and unique, and it was a great experience," said Shank.

- Give your customers an incentive to share their experience

Provide your customer with a positive experience and they might share that with friends. Give your customer a reason to share that experience in the form of an incentive and the likelihood goes up.

"We see people really wanting to tell other people [about their HotelTonight experiences], but we wanted to give them an incentive to do so, to really encourage them, to accelerate it, and to provide a catalyst for this viral marketing."

The result was a "tell a friend" marketing program where users can invite friends right from the app site by email, or through a Facebook or Twitter post, and receive $25 every time a new friend joins HotelTonight. The friend also receives $25 when they book their first room through the app.

HotelTonight users can invite an unlimited number of friends through the program.


Step #2. Utilize social media marketing

Because mobile computing and social media are such natural fits, it makes sense that HotelTonight expends a lot of marketing effort in social channels. This effort also ties directly into step #1 above, on encouraging customer feedback, interaction and sharing.

The company's main focus is on Facebook and Twitter, and Facebook in particular has become an important way for HotelTonight to connect with its customers.

"One of the challenges is that this is an app," explained T.J. DeGroat, Social Media Marketer, HotelTonight, "Everything is locked up in the app, so that led to [users] checking the app every single day and they still might miss out on some of the new, exciting content."

Facebook provided HotelTonight with the platform to share its content, such as videos or announcement of new hotels added to the app. Both Facebook and Twitter are used to announce specials or extra deals.

And Twitter and Facebook provide the company with an opportunity to respond to user needs, questions and concerns, as well.

DeGroat offered an example of a customer asking a question on Facebook, to which HotelTonight was able to provide an answer. But, along with the company's response, another HotelTonight user also shared a story about a similar situation they faced, and how HotelTonight solved that issue as well.

The customer gets a response to the issue at hand, and by creating an atmosphere where app users are satisfied and willing to share their experiences, HotelTonight received a positive affirmation of its customer support from another user.

DeGroat added just monitoring social media channels helps the company keep an eye out for potential problems.

"A lot of times we are able to reach out without [the user] actually directly asking for help," he said. "And that has proven to be very effective in how they view us."

- Use social media to target new market areas

The company started one Facebook effort that spilled over into Twitter, as well. Instead of targeting its main audience of early tech adopters, the campaign reached out to mothers encouraging them to take a "break-cation" and to share stories about why they deserve that break in the form of a night off in a hotel.

These stories began collecting anywhere from 15 to 100 comments on each post, and many "likes." Eventually everyone adding stories and comments to the campaign started sharing these posts with friends and family on Facebook and Twitter, introducing an entire new group of people to the HotelTonight app.

- Move outside the box with social media

Facebook and Twitter command the most attention, but HotelTonight does continue to identify social networks that offer a cross-section of its main target audience, the tech early-adopter community, such as Tumblr, Instagram, Foursquare and Turntable.fm.

Of these additional channels, Turntable.fm is most "outside" of HotelTonight's brand. Turntable is a way to connect people in listening to music, and the idea from HotelTonight's perspective is to, as DeGroat put it, "share a part of our brand with the music that we think exemplifies our brand."

"Turntable.fm is a non-obvious place that a hotel website would be," explained Shank.

He added it makes sense because its core target audience is using the channel, and, "It's just great visibility, and shows that we are not only giving in terms of great deals, we are also giving in terms of
being a community participant."


Step #3. Don't forget about traditional media outreach

Because the product is a mobile app and social media is such a main piece of the marketing pie, it could have been easy for HotelTonight to overlook traditional media outreach in the form of public relations and seeking organic media exposure. Overlooking this marketing area would have been a mistake.

HotelTonight hired an outside firm to handle public relations, and coupled that firms’ experience with Shank's online travel community contacts developed during previous business ventures.

One aspect of this effort that helped make it successful was what might be considered luck -- or maybe just taking advantage of an opportunity.

HotelTonight launched during a time where it could exploit the intersection of several trends that were grabbing media attention:

o Mobile computing in general

o Mobile applications

o The "deal" space (Groupon, etc.)

o The "instant commerce" trend (i.e., "I don't know what I'm interested in until right now")

Because HotelTonight combined all of these areas with a new product in a crowded travel industry market, it was able to get stories in major outlets such as: USA Today, CBS News, Forbes, TechCrunch and Time.

One way it grabbed that organic media exposure was by carefully crafting story angles for each media outlet's audience that offered a story beyond just the HotelTonight mobile app.

For example, the TechCrunch piece was a video story that involved walking around San Francisco for an hour and a half and booking three hotel rooms from the app interspersed with commentary about mobile and hotel industry trends.

"It worked out really well for both of us," said Shank. "It was really compelling visuals and a really compelling story for them. And of course for us it was really nice and immersive."

RESULTS

The most interesting result of the product launch effort is in a very crowded travel app space, HotelTonight has reached number one in the App Store category twice. Both occurred around media pushes that included organic publicity in major media outlets.

The app has ranked as the #1 download in the travel category on Apple's App Store, maintains a steady top 25 position in the App Store travel category, and even reached number 35 overall.

Other notable metrics include:

o HotelTonight's cost-per-download is $0.20

o 60% of customers come in through word-of-mouth or social media; 40% from mobile

o From 0 to 70,071 Facebook fans in around nine months

o One initiative in June to increase Facebook activity boosted average daily active users by 51%

o From 0 to 6,791 Twitter followers in around nine months

At launch, HotelTonight set a goal of $2.00 for loyal user acquisition, defined as someone who has taken action beyond downloading the app that can be directly tied to ROI, such as user registration or an in-app purchase. HotelTonight is achieving loyal user acquisition "well below" its targeted value of $2.00.

Shank said customer expectations are higher with mobile marketing or launching a mobile product compared to website commerce, and that customers are empowered to have a voice and share feedback, positive or negative, through social media or reviews at the App Store.

An important result of this effort for him was being ready to address this feedback, and preventing negative responses by providing what he described as, "a stellar experience."


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“If your plans don’t include mobile, your plans are not finished…”

– Wendy Clark, President and CEO of DDB Worldwide

Mobile commerce shattered revenue records in 2016, and by all appearance it will only continue its prolific growth in the coming years. With $123 billion in mobile commerce sales recorded last year, m-commerce experienced a 39.1% increase over 2015’s output numbers, and more than doubled the amount of sales for 2014. In 2017 m-commerce is not only projected to pull in $151 billion, but it should increase 2016’s output by almost 23%! This recent, rapid, and enormous growth begs the question… how??

The answer, my friends, is in the app.

Due to the rigid limitations of the mobile web, many retail companies have recently jumped on the mobile boom bang wagon to develop mobile shopping apps. Across all industries and sectors apps are changing the way consumers, especially Millennials, interact with retailers. By creating a more socially-centric and personalized consumer experience, apps are changing the way consumers purchase their goods. This change is evidenced in the fact that mobile shopping app usage is now growing faster than any other category of app. In adapting to the new consumer value paradigm of the digital age, retailers have the potential to supercharge new user acquisition like never before. Nowhere is this more evident than with the two most popular m-commerce apps on the market today:

Walmart and Amazon

In order to help aspiring retailers with their user acquisition and retention strategies, this post is dedicated to reviewing both Walmart and Amazon, and the foundational pillars of their successful acquisition, retention, and engagement strategies. The hope is to provide some insight into those companies that do mobile retail best, and in turn, help today’s retailers take their mobile app user acquisition to the next level.
Let’s take a look!

Walmart – The Rising Star of Mobile Commerce

While a traditional giant of brick and mortar retail, Walmart is a relatively new player on the mobile app scene. This fact makes it all the more impressive that Walmart has managed to persuade users to do something that very few retailers have been able to do: to reserve a spot for their retail app on their mobile phone homepage (i.e. the highest value mobile real estate available). Typically reserved for social media and utility apps such as Facebook, Instagram, and Google Maps, securing a homepage app reservation proves a difficult task for most large retailers, as their customers are likely to have dozens of preferred brands.

How did Walmart overcome this barrier to mobile home screen entry?

Walmart achieved this rare feat by going back to the basics of user acquisition while simultaneously emphasizing the fact that offline consumer habits drive consumer engagement just as much as their online habits do. With 27 million users as of June 2016 (up from 22 million in 2015), Walmart’s app is now the second most popular retailer app after the godfather of mobile commerce, aka Amazon. In addition to its recent surge in new users, the Walmart app also recorded a unique visitor increase of 26% year-over-year, closely rivaling their mobile app rivals and current duopoly kings Facebook and Google. A quick review of this dramatic growth reveals one consist theme:

Agile experimentation.

In 2014, after realizing the importance of having an engaged target market, Walmart introduced an innovative in-app feature called Savings Catcher. This highly popular feature guarantees app users the lowest-price possible by allowing them to scan QR codes directly into the Walmart app rather than by manually entering into the app the long form codes. While a relatively simple feature, the Savings Catcher struck a chord with Walmart’s target market (who frequently visit the brick and mortar locations), and resulted in 10 million Walmart app downloads within a week of its release. This should come as no surprise considering the top-two reasons for using retail apps in-store are to compare prices and redeem discounts. Now serving as a key value driver for user acquisition, Walmart understands that app longevity and scalability are intimately tied to incentivization. By offering more ways to earn rewards and automating the user savings experience, Walmart customers now have a concrete motivation to download the mobile app, and to regularly check their balance, scan receipts, price items, and pass the app along to friends (i.e. a real world example of social proof).

Perhaps Neil Ashe, President & CEO, Global eCommerce, described the app best at Walmart’s recent 22nd Annual Meeting for the Investment Community. He explained:

“The Walmart app solves problems. A customer wants to refill her prescription, but needs to get out of the store quickly, she can save herself time by simply taking a picture of the label. She can pull up the mobile registry and see what to get her friend next weekend for the baby shower. When it’s time to check out, she can get an e-receipt right on her phone. And thanks to Savings Catcher, she knows that if a competitor has a lower advertised price on something she just bought, she’ll get that difference back rate on a gift card.”

Another area of user acquisition focus that Walmart has perfected pertains to highly personalized (and relevant) targeting. Upon releasing its in-house search engine Polaris in 2012, Walmart made an important shift to semantic search technology in order to populate relevant search results by predicting shopper intent. In plain english, this means that if a user searches for the term “blender” on Walmart.com (or the app), the engine will equate the keyword to the main category of “home and appliance,” and will then display additional relevant prouct suggestions. In a true omni channel experience, these relevant product suggestions can then be transferred from desktop, to tablet, to mobile app. As the Millennial preference for relevant personalization is here to stay, Polaris’ personalized targeting is one of the digital age keys to Walmart’s off-the-charts customer loyalty and user retention rates.

Amazon – The Retail App King

With over 67 million app users as of June 2016 (up from 43 million in 2015), Amazon is the undisputed retail app king. While there are obvious differences between Amazon and its closest competitors (such as Walmart’s reliance on brick and mortar locations), these differences fail to tell the whole story as to why leading retailers are still playing catch up to Amazon’s app. Yes, amazon was an early adopter of social innovation, loyalty programs, and omni channel marketing, but so were many other retail giants. A closer examination reveals that its recent growth is owed to two main, and often overlooked, user acquisition value drivers:

Referrals and app preloading.

Looking to encourage more customers to install its app and engage in m-commerce, Amazon began to offer consumers a mobile referral program in 2015. The program rewarded current app users $5 to share the Amazon app with friends, and also rewarded their friends who installed the app $5 do spend on the site. Understanding that 84% of consumers trust the recommendations of friends and family most, Amazon was not only able to break down barriers and encourage new user acquisition, but it was able to artificially create an organic uplift by increasing the app’s ranking. That is to say, the strategy almost simultaneously resulted in more downloads and higher rankings, both at greater speeds and volume. As the program was exclusively focused on mobile, Amazon presented current app users with dynamic and varied in-app native ads. These ads included a wide range of engaging copy, value propositions, and CTAs in order to maximize user impact.

Turning our attention to the picture above, we find three different examples of CTAs from Amazon’s native ad infused referral program. The first ad contains a simple message with a basic CTA that is aimed at inducing the user to engage in a referral. The second contains some engaging imagery and offers two CTAs, one to invite referrals from contacts, and a second to share the referral code through social media or email. Looking at the third CTA, we find an example of a highly important success determining factor, as the CTA is in fact requesting permission to access the app user’s address book permission. This is typically a huge hurdle for app publishers and mobile retailers to overcome. Yet, with an an already successful Amazon app, the referral program was able to provide context to justify this highly sensitive request. The success of this program was a major reason why Amazon was able to increase its mobile app users by 24 million since the programs 2015 inception.

Another innovative user acquisition tactic that has failed to catch on with mobile app competitors is the process of preloading native apps on cellular devices. Announcing a partnership with Verizon Wireless in 2012, the Amazon App Suite (which includes apps such as the Kindle app, Audible app, and the primary Amazon app) has been preloaded on select Android devices for the better part of five years. By thinking outside-the-box early and often, Amazon realized that a preloaded app delivery service would allow mobile operators to seamlessly manage applications uploaded to their phone upon first boot, while simultaneously providing users with a steady stream of Amazon content, 1-click ordering, and cross-category search capabilities. Given the many benefits of dynamic app preloading, this trendsetting choice by Amazon set the stage for other retail and non-retail app publishers (such as Lyft) to follow suit.

In Conclusion…

With no end in sight of the global mobile commerce boom, Walmart and Amazon represent two shining examples of value driven and creative acquisition strategies. From Amazon’s preloading and referral program, to Walmart’s agile experimentation and personalized targeting, the growth tactics of both companies prove to be valuable case studies for user app acquisition in the digital age.

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