28 Jul 2016

How to Measure The ROI of Your Mobile Solution Project

A recent analysis shows that the demand for enterprise mobility will increase more than 4 times by the end of 2021 compared to 4.65 billion USD market worth in 2016.1. This indicates that there are many opportunities waiting for mobility solutions across industries and various use cases.

Enterprises all around the world are hungry for  customized  mobile solutions that posess the capability to boost employees’ productivity and the company’s revenue to new limits.

Apart from the management aspect, the marketing platform can also benefit from this mobile solution. Hence, it is only justifiable that the calculation of the ROI of the project is of great importance and value to the organisations. This computation can be done following a series of steps taking into account a wide range of key metrics such as audience engagement, cost per acquisition, and customer retention.


Step 1 – Determine Your Goal

The first step is to define your goals.

Companies primarily engage in fulfilling two main goals: workplace efficiency and consumer interaction


The analysis of your workplace efficiency should be based on:

  • Sales & Marketing
  • Supply Chain
  • Asset Management
  • Field Service
  • Others


When analyzing customer interaction, you should mainly look at:

  • User Acquisition
  • Mobile Influence
  • Lead Acquisition
  • Retention Rate


Make sure to clearly define your goals with careful attention to details, so that you can execute your action plan more accurately.


Step 2 – Add Your Development Costs


This is crucial for the calculation of the final ROI. In this procedure, you first need to answer the following questions:

  1. How much does the mobile app development cost?
  2. Can my company afford it?


In addition to the above, you also have to think about the expenses relating to factors such as:

  • Resource Training
  • Deployment
  • App Distribution
  • Hardware
  • Application Upgrade
  • App Marketing


Step 3 – Give Each App a measurable Key Performance Indicator (KPI)

KPI is a business metric used to evaluate factors that are crucial to the success of an enterprise.

Your KPI for the app can be calculated as follows:


User acquisition: To discover how much you spend per new customer.

For example: If the TCO (Total Cost of Ownership) of the mobile front is $10,000 for 5,000 users, then the user acquisition cost is $2 per user. With this, you can compare the costs of the mobile channel with those of the others.


Lead acquisition: How many of your business leads came forth as a result of  your mobile campaign.

It enables you to compare the costs of your leads emerging from using the mobile channel as opposed to the cost of the leads emerging from the other channels.


Mobile Influence: Are your mobile apps impacting customers?

If you have 40 new leads and 10 customers used your mobile app, the influence rate would be 25%. It shows how effective the mobile app project is in terms of driving your current customers to new app users.


Retention Rate: Retention rate is measured as the percentage of app downloads among existing customers.

For example, if 600 customers are retained and 120 of them downloaded the app, then the retention rate would be 20%.


These metrics help you maximize your results in the campaign. However, in order for it to be efficient, it is necessary for these calculations to be based on realistic expectations. The best KPI is based on comprehensive research and full consideration of the actual factors and all the potential obstacles that you might face during the project.


Step 4 – Last Calculation – Key Performance Indicators Measurements against Costs

For the final step, you need to measure KPI results against the development costs. This entails estimating the lifespan of the mobile solution for the time frame you want to maintain the app.


ROI = Net Present Value of Benefits / Net Present Value of Costs

The ROI that you calculated represents your need for a mobile solution.

Net Present Value of Benefits:

NPV = Business benefits x time periods – Opportunity cost of capital

Net Present Cost (NPC):

NPV = One time app development costs + (Yearly maintenance expenses x Time periods) – Opportunity cost of capital


If your company is looking for a mobile solution, you should first estimate the ROI that you could obtain, but keep in mind that an enterprise mobility platform is not a stock investment and therefor its ROI doesn’t reflect its book value. Instead, work efficiency, better user engagement, and improved company image will lead your business to success. Consult your mobile solution partner today to learn about all the possible solutions and find the most suitable one for your company.


1 ‘Managed Mobility Services Market by Function (Device Management, Application Management, Security Management, and Maintenance & Support), by Organization Size (SME and Enterprise), Industry Vertical, and by Region – Global Forecast to 2021’ published by MarketsandMarkets.


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