The App Stores Effect on Customer Engagement

Last week, I had several interesting meetings with people who don’t want to spend marketing dollars on paid advertising and prefer to put all of their investment into product offering, as they believe their products will market and sell themselves.

This got me thinking in what is the nature of these applications and the changes in the delivery models which makes this all possible. The new SaaS delivery model enables new channel and distribution models.

Viral Adoption
Some B2C applications take advantage of the network effect to go viral. A very good example is Dropbox, a file sync service, which became extremely successful by allowing people to share files with one another. Now Dropbox has no need to invest in marketing – get people to download Dropbox, they need to make sure their application continuously creates value to their users and the product will ‘sell itself’.

App Stores
Not all applications out there share the same characteristics, especially applications which are business facing. For those apps, the emerging concept of App Stores is an excellent fit.

Much like Apple changed the landscape of music industry forever with iTunes music store, the emerging app store market on Google Apps Marketplace, AppExchange and new and other enterprise marketplaces are making new applications visible and accessible for end users to try them out. That and a SaaS offering model, makes the entire experience of looking for new solution and evaluating its applicability to your business need a very simple experience.

A very good example of a company which is rapidly growing without any marketing dollars spend is myERP. I’ve met with Francois Nadal built the fastest growing ERP business by focusing on building a great and easy to use product (Nadal, is a UX guy) and channeled it’s adoption through the Google Apps Marketplace.

With such powerful distribution channels available, business owners should focus their resources on creating compelling product offerings which are easy to consume and sell themselves. This emphasizes even further the need to put the right infrastructure in place to monitor and manage customer engagement within the applications.

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