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Commentary

Can mobile apps build brands?

Dec 23, 2014

In the past, companies sought to please old customers and entice new ones by offering small holiday gifts. They gave away refrigerator magnets, calendars, and Christmas ornaments emblazoned with the company logo.

But in today's geo-encoded, app-enabled world, sophisticated companies are trying something new to build trust and relationships with customers. We call them ‘benevolent apps.’ Unlike some apps that are designed to generate sales and promote special deals, benevolent apps are created to offer useful information or otherwise help with decision-making. The idea is not simply to sell products or services, but instead to build trust and relationships that eventually will lead to economic success.

One good example comes from Sea Tow Service International, a company located in Southold, New York. Sea Tow offers emergency towing and rescue services for boaters in the United States, the Caribbean and Europe. The free Sea Tow app supports boaters’ navigation needs by offering information about local tide tables, detailed marine weather forecasts, GPS coordinates and bearing and speed.

A traditional marketer might argue that to the extent that Sea Tow furnishes information that can reduce accidents (thereby reducing Sea Tow calls), it is undercutting its own business. A boater, however, might be favorably disposed toward calling Sea Tow instead of its competitor, Tow Boat US, if faced with an emergency.

To further study this concept, we worked with two companies—Liberty Mutual and Suruga Bank—to create two benevolent apps and then test the results.

The Liberty Mutual app was aimed at people who were in the process of moving. The app included a digital “safe,” where they could record with text and photos their valuable-items and an inventory tool where they could record the contents of their boxes.

Although Liberty Mutual offers auto, homeowners and personal property insurance, it does not offer moving insurance. So why did the company find the idea of creating an app to help people move appealing? Their goal was to build trust through benevolence and to improve brand image, consideration and purchase intent. On the final screen of the app, users could contact Liberty Mutual for more information on the products they offer including home, life and accident insurance. So although the app was benevolent, it had a mechanism for capturing goodwill by linking users to the company’s agents.

The app was tested in 2010 in a comprehensive market research study of 750 consumers. Overall, respondents viewed the Liberty Mutual moving app as meaningful, believable and relevant. The favorable user experience led to positive attitude changes toward Liberty Mutual, which considers responsibility and trust to be among its key brand attributes. The company saw a significant increase in its trust rating, believability and confidence attributes.

The second app we created was for Suruga Bank, a bank based in Shizuoka, Japan. Called, Dream Mover, it helped Japanese consumers choose new homes to purchase or rent and assisted them in understanding the financial implications of different decisions. Based on the user’s location and budget criteria, the app presented a set of home choices with details such as size, layout and proximity to public transportation. In addition to helping users screen potential places to live, the app acted as a budget-planning advisor, providing information on personal loans and mortgages as well as providing targeted advice.

To assess the impact of Dream Mover, we surveyed 1,500 randomly selected respondents and found that among those who used the app, there was a measured increase in awareness, trust and positive consideration of Suruga Bank. Specifically, the bank’s ratings were significantly improved for characteristics such as being “open, honest and transparent” and offering “believable advice or information and a brand you can trust.”

Our two studies show that benevolent mobile apps can positively impact a company’s brand perception, consideration and preference and therefore improve the bottom line. People using the Liberty Mutual app became significantly more inclined to prefer Liberty Mutual and switch to it for insurance versus competitors. Additionally, the brand attributes related to trust increased. In the Suruga Bank study, consideration of Suruga also rose significantly. As with the Liberty Mutual study, brand attributes related to trust rose significantly.

These are powerful forces that can lead to increased revenue from consumers who perceive that the brand has their interests in mind.

Glen L. Urban is a marketing professor at the MIT Sloan School of Management. This article is adapted from The Case for Benevolent Apps, Sloan Management Review, Winter 2014.

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