Startups Compete To Win The Mobile App CRM Battle

Editor's note: Ankur Jain is an investor at Nexus Venture Partners. Nexus invests in early stage companies across sectors in India and US, and manages $600 million in assets. Follow him on Twitter @Ankur_Jain_VC.

The rapid growth of mobile device use has created major gaps in CRM capability. As smartphone adoption has exploded, companies have scrambled to launch mobile apps, many of which are disconnected from an organization's broader CRM capabilities.

Many organizations have little knowledge about the people using their mobile apps, how and why they are using them, how to effectively communicate with them, and how to support them — all of which are critical to providing a tailored mobile customer experience. Indeed, failing any one of these things can lead to users abandoning an app at a time when the competition among apps is increasingly fierce:

• The average phone in 2013 has 41 apps, up from 28 apps the year before (Nielsen, 2012).
• Average user retention rate for a mobile app is 54 percent after 30 days and 35 percent after 90 days (Flurry, 2012).

In order to drive a differentiated experience and service level for every mobile customer, mobile businesses should strive to segment their user bases on a variety of metrics and then leverage the data to drive user acquisition, retention, engagement, transactions and upsell, as well as cross-sell opportunities.

If a frustrated or confused user leaves an app, they're far less likely to return.

Often overlooked but equally important is enabling users to communicate with businesses via the mobile app. Rather than a one-way channel, users should feel empowered to provide feedback or instantly and easily get help without needing to leave the app, send and email or make a phone call. Remember the user retention rate: If a frustrated or confused user leaves an app, they're far less likely to return.

In addition, it is incredibly important for the business to measure the customer experience: Is the app delivering the right service levels to the right customers? What is the level of customer satisfaction and how does it compare to user retention, user engagement and app reviews?

The Mobile App CRM Players

Many businesses are leveraging CRM for their web and retail businesses, but have yet to apply their CRM strategy to mobile customers. Indeed, mobile-app CRM is a continuation of traditional CRM that sits inside the mobile app, enabling the same capabilities — but for mobile customers. Here are some of the startups that are helping businesses bridge the CRM gap on mobile.

• Flurry helps answer the first question that organizations have: "Who are my mobile app users and how are they using my app?" Though an ad network by business model, Flurry is used by mobile apps to provide CRM metrics, such as number of active users, user retention rates, and more. Flurry helps segment users into categories and measures ROI on user-acquisition spend compared with user-retention and engagement rates.
• Urban Airship provides a simple way for apps to communicate with their audience via push notifications and supports context-aware notifications. It's among the most popular third-party notification platforms used by mobile apps today.
• Crittercism initially focused on providing mobile developers with a platform to identify and analyze crashes and bugs in their mobile apps similar to Crashlytics (acquired by Twitter) and BugSense. More New Relic than Salesforce, Crittercism now also offers broader application performance management with system logs and tracing.
• AppBoy offers analytics, segmentation and communication from one dashboard and has the ability to manage rich marketing profiles at an individual user level. It also allows messaging via multiple channels: push notifications, in-app messages, and email.
• Helpshift recently launched the world's first native customer service and support solution for mobile applications. Helpshift enables businesses to provide a contextualized mobile customer experience by unlocking customer information and device diagnostics for in-app service, support, and marketing. Helpshift also integrates with enterprise CRM systems like Oracle and Salesforce for a seamless CRM solution across business units.

Forward-thinking businesses are realizing the need for integrated CRM capability across all revenue streams, the value of a multi-channel view of their users, and the ability to interact effectively with these users across their lifecycle. Any organization that has deployed CRM software would be wise to integrate it with its mobile app, just as it would integrate it with web and call centers.

And that raises the question: Why should mobile app CRM be different from traditional CRM? The answer is that it shouldn't be. And traditional CRM vendors who have been slow to move have provided a unique opportunity for these fast-moving startups to capture this market.

While it would not be surprising to see enterprise CRM vendors like Salesforce, Oracle or SAP acquire any of these startups to fill the glaring gap in their offerings, a more interesting question is whether these startups can be the enterprise CRM behemoths of tomorrow. In other words – can the next big enterprise CRM be mobile first? We may be a few years away but it's possible. One thing is clear: We've only seen the tip of the iceberg.

Note: Nexus Venture Partners is an investor in Helpshift

[Image via Shutterstock]