‘Do not botch the app’ is clear lesson
Domino’s Zero Click app has been a winner in both innovation and customer loyalty.
The importance of having a mobile app is not lost on franchise execs, but there is always a grey area of what exactly a company should look for in results. With a new collection of data from Sense360, there’s a little more clarity on what kind of results franchisors should expect from a mobile app project.
By partnering with popular apps to mine data, the company collects pinpoint location data from smartphones to determine traffic and visit frequency across day parts.
Generally, the data can be used to get a look at important competitive data by seeing which concepts perform better than others within a convenient radius. So if a company like Wendy’s can see in the data that it gets less traffic when it’s near a McDonald’s, it can aim for alternative real estate or a location nearby another brand from which it can draw market share.
Recently, the company added a new set of data that explored the usage of other apps as well as install and deletion rates.
Sense360 founder and CEO Eli Portnoy said the data validated what everyone knows about apps.
“If you look for it by any metric, if you get someone to download the app, business gets better,” said Portnoy.
Using a basket of QSR and coffee brands including non-franchised Starbucks, Steak and Shake, Panera, Chick-fil-A, McDonald’s, Dunkin’ Donuts and Firehouse, the boost from creating a good app is clear. On average, the traffic lift when downloading an app is 30 percent.
And monthly visitation bumps up by between 0.3 and 0.5 visits per month; at the high end, that’s an additional visit every two months. For a quick look at that math at someplace like Firehouse, which boasts 1.5 million sub rolls a week or 7.5 million each month, that means possibly 3.75 million more sandwiches each month.
If that doesn’t get franchisors and franchisees salivating about a great app, nothing will.
Chains offering breakfast and coffee were clear winners with an app. Early hours saw a significant spike in traffic from app users. There’s certainly a chicken-and-egg question here: are regular visitors simply choosing to get rewards from their daily coffee routine or do visits actually rise?
Portnoy said morning concepts get the same lift any restaurant does, and it actually makes the morning decision easier.
“It’s not just that there is a selecting bias, but your visitations will go up. Maybe it’s not so much of a chicken and egg, you download it and now it’s on your phone. So now when you’re thinking about breakfast and that convenience factor, it’s even more convenient because you already have the app on your phone,” said Portnoy. “And those with a payment option become even more seamless.”
Starbucks, Dunkin’ Donuts and Panera all saw major traction from app-using customers. Customers with the app outnumbered the respective brands’ market share.
The Sense360 data, however, shows some of the pitfalls of rushing an app or botching the rollout or just not providing the right value for customers to keep the app installed.
“There’s an opportunity because I’ll get that lift, but if I mess up that experience of the app by delivery that isn’t good, then I actually run the risk of turning away my customers. I thought that was really fascinating,” said Portnoy. “But even more interesting, if you uninstall the app, traffic dips lower than it was before.”
Once an app is uninstalled, traffic in that same basket of restaurants dips more than 40 percent on average—a further fall than the initial lift of downloading the app even with successful apps.
What’s at play there is not completely clear, and there are certainly a lot of factors from changing routes to deletions after promotions end, diets or just changing preferences. But the lesson is clear: do not botch the app.
“An app is another touch point with a customer; it’s worth spending money to get them to download it because it means they’re showing you a sense of loyalty. But if you build a bad experience, you basically build another touch point with the consumer that is bad,” said Portnoy. “They’re going to uninstall it and you’re going to be worse off than you were before.”
The franchise world is littered with bad apps, so singling one out would be cruel, but one national QSR restaurant actually saw traffic decline 14 percent among consumers that downloaded the app. Traffic at that brand sank a further 42 percent when it was deleted.
Customers ranked the app just two stars on the Apple App Store, and spewed a laundry list of complaints about the app from non-participating locations to non-functioning promotion redemption.
One especially annoyed customer stated in a review that they went to a competitor simply out of spite. In an era of market share battles across the industry, an ugly touch point like that can be disastrous.