Mobile apps that deliver hefty ROI

Mobile apps aren’t just for retailers and banks anymore. A wide variety of businesses are using apps to attract and retain customers, create a powerful new marketing channel or give their employees or business partners tools that enable them to be more efficient and productive.

“Mobile is now on the minds of even the most conservative companies — everyone from local government to furniture makers to chemical manufacturers,” says Jason Wong, an analyst at Gartner. “It’s almost becoming a detriment if you’re not rolling out mobile apps to your workers or your business partners.”

Earlier this year, the IDG Enterprise Digital Edge 25 awards program honored 25 organizations that are using digital technologies to transform the way they do business. The experiences of two of the winners — Horizon Blue Cross Blue Shield of New Jersey and DMEautomotive — illustrate how mobile applications can improve efficiency and grow revenue.

Health insurer broadens its horizons

How do you deliver healthcare to a man who lives under a bridge?

That was the challenge facing Horizon Blue Cross Blue Shield of New Jersey as it entered a new market created by a Medicaid program that the state of New Jersey launched in July 2014. The program, Managed Long Term Services and Supports (MLTSS), was designed to provide care to poor, disabled and elderly people. Unlike any previous program, MLTSS required Horizon to deliver services outside of the traditional healthcare system.

“At the core of this program are care managers, nurses and social workers who spend the majority of their time out with people, in people’s homes, in the community — meeting people wherever they might be, including under bridges,” says Erhardt Prei­tauer, senior vice president of government programs at Horizon Blue Cross Blue Shield of New Jersey and CEO of Horizon NJ Health, New Jersey’s largest Medicaid plan.

Disadvantaged people often have multiple chronic illnesses, including mental health problems, which makes them the highest-cost members of any healthcare system. In fact, the 5% of Medicaid beneficiaries with the highest costs account for more than half of all Medicaid spending. Last year, total Medicaid spending was more than $475 billion, so that 5% represents more than $237 billion in spending.

The Horizon NJ Health subsidiary created a program to implement MLTSS in N.J. “The goal was to be able to engage these members, understand their individual needs and then bring together a set of coordinated services,” says Preitauer. That would not only enable better healthcare, but also help curb costs.

But first, it had to enroll customers. That meant taking potential members through a 500-question healthcare assessment interview that lasted two to three hours. The information would be submitted to the state to qualify people for the program and would be used to help design a healthcare plan. Handling such a task in the field would be highly inefficient, and it would be prone to error if it were done on paper. Mobile technology was the obvious way to go.

The IT department worked with EXL Landa, the provider of Horizon’s medical management platform, CareRadius, to customize the application so it would work well in the field. They decided to use tablets — specifically, Dell Venues — because they wanted devices that were lightweight, had touchscreens and were small enough to be carried discreetly.

“You can imagine some of the places that [care managers have to go] aren’t the safest places in the world, so we wanted something that was relatively low profile, that wouldn’t be a target for theft,” says Douglas Blackwell, senior vice president and CIO at Horizon BCBSNJ.

The team also customized the front-end interface to make data entry as fast and efficient as possible. Included were features such as response-based logic that eliminated unnecessary data entry. Moreover, care managers were given BlackBerry devices for both voice and data transmission.

Horizon hired new managers and retrained current managers to use the tablets. Ease of use was critical, since the job is difficult enough without having to deal with technical snafus. “If you do this wrong, your care managers just quit,” says Preitauer.

The team made some adjustments as it rolled out the system. The BlackBerries, which Horizon originally intended to use to create mobile hotspots, had poor connectivity in some locations, so Horizon added Verizon Jetpacks for data transmission.

It also quickly realized that field workers’ needs were different from those of other Horizon employees who worked remotely — primarily people who work from home. If a tablet wasn’t working, a field worker needed it fixed or replaced immediately. So Horizon created a dedicated help desk.

A little more than a year into the program, Horizon has signed up about 11,000 people and is on its way to doubling that number, says Preitauer. Moreover, Horizon has the highest member satisfaction scores of any MLTSS provider in the state.

It also has the largest market share (about 53%, compared to about 30% for its closest competitor) and the highest profitability. According to Preitauer, those profits have come not from cutting services, but from reducing costs by moving patients off of the street and into coordinated, well-managed care settings.

He tells the story of one homeless man who suffered from several chronic ailments, including kidney disease and mental illness. Through the program, Horizon found him a bed in an assisted living facility. “Once he had a roof over his head and food in his stomach, we were able to start working on his medical issues,” says Preitauer. “Now he visits the doctor two to three times a week.”

Automotive marketer connects with drivers

DMEautomotive is a provider of marketing services to car dealerships, manufacturers and after-market service providers.

The company continually researches potential new marketing channels and prides itself on using data-driven insights to help its customers improve the profitability of their own customer loyalty programs, says Mike Martinez, chief marketing officer at DMEautomotive.

The Daytona Beach, Fla.-based company had watched the rise of mobile communications, and three years ago decided to add a mobile app to its other marketing channels of direct mail, email and phone. “We saw a very real opportunity to disrupt the industry with mobile technology,” says Martinez. “By offering a product that was relevant, feature-rich and highly adaptable in a timely fashion, we saw the potential to grab a very large share of the market.”

The app, called Driver Connect, is branded by individual dealers. It’s designed to enable DMEautomotive customers to establish and maintain contact with their own customers so they can build relationships and, for example, entice drivers to bring their cars in for service on a regular basis. After downloading the app, drivers register their cars by entering their vehicle identification numbers (VIN) into the system.

DMEautomotive then integrates the data entered by individual users with data from many other sources, including manufacturers’ recommended service schedules. With the VIN and other information in place, the system can, for example, tell drivers about special offers or send alerts when cars are due for service.

The most important business requirement was integrating the app into DMEautomotive’s marketing and publishing engines, says Martinez. The company receives and integrates thousands of data streams a day, and then sends customized messages in conjunction with dealerships’ CRM systems, which in the automotive industry are called dealership management systems (DMS). All data is updated daily, so if John Q. Motorist gets an oil change a week early, the schedule for his next alert will be adjusted.

A critical requirement was developing a library of APIs that would allow integration with different DMS platforms and the computer systems of third-party vendors without having to recompile the app for each linkage. For example, a dealership might buy the app but then decide to use another vendor’s tool for service reminders. The API layer had to be flexible enough to integrate that third party’s system with DMEautomotive’s publishing engine so the two systems would work together seamlessly, says Martinez.

There was a learning curve for both DMEautomotive and dealerships. For example, DME originally set up the app to automatically send out recall notifications, but dealers didn’t like it. “Sometimes, alerting the consumer about recalls only creates problems,” Martinez explains.

For minor recalls, notification via less urgent channels, such as postal mail, is often sufficient. And for some major recalls, immediate notifications can be problematic because the dealership may need time to order new parts to replace the defective equipment. In the Takata airbag recall (which affects 33 million cars), for example, dealers didn’t necessarily have replacement airbags in stock.

“It’s better to let the manufacturer deal with that,” he says. “You don’t want to make the consumer any more nervous.” DME has since made recall notification features configurable.

Dealerships had to learn how to promote the app to customers. DMEautomotive puts a lot of resources into training initiatives, such as efforts to show dealers how to put QR codes on signage and brochures, says Martinez. Part of the training also involves managing expectations. It’s unrealistic, for example, for a dealership to expect the app to generate thousands of downloads and an immediate increase in business. Rather, using the app is an incremental process of building up the channel.

Mills Chevrolet in Moline, Ill., has been using the app for about 18 months, says Tobias Baskind, the dealership’s parts and service operations director. DMEautomotive helped design a QR code for the dealership and suggested creative ways to get customers to download and register the app. For example, any customer with the app is entitled to $10 off for each service visit, says Baskind.

Today, the app is the fastest-growing part of DMEautomotive’s business, by revenue on a percentage basis, according to Martinez. He considers it a competitive differentiator that shows how the company uses data to strengthen and prove its effectiveness.

After two years and with 900 dealerships using the app, the company has hard ROI data to show its customers. For example, drivers who use the app come in for service more often, averaging half a visit more per year than people who don’t use the app. If a dealership has 1,000 app customers, that translates to 500 more service visits annually. At an average price of $292 per visit, that’s an incremental $146,000 in service revenue each year, says Martinez.

Customers are shopping with the app as well. App users are 73% more likely to purchase a vehicle than people who don’t use the app. And app users spend an average of 7% more per purchase, he says. In fact, the app is an effective way for a dealership to target it most loyal customers, and it influences other customers to become more loyal, says Martinez.

Baskind agrees. At Mills Chevrolet, the customer retention rate has risen on a percentage basis from the mid-50s to the low-80s since the dealership started using the app — though Baskind acknowledges that the improvement can also be attributed in part to other marketing efforts, including the dealership’s first TV ad campaign. As of mid-August, Mills had 1,486 customers who had registered their cars in the app. That represents only 2% of the dealership’s customer base, but Baskind says he’s pleased with the number.

“That’s over 1,400 people who don’t want to go anywhere else but here,” he says.

And the low initial adoption rate means there’s plenty of opportunity to increase customer loyalty and service revenue via the app. Specifically, Mills Chevrolet sees potential in continuing to promote the app as younger people — who are the biggest users of apps — buy more cars.

Change is in the air

While early versions of the app have been successful, DMEautomotive must continually update it to keep up with changes in the iOS and Android operating systems, and with changes in smartphone hardware. For example, Apple’s new Retina display has had a major impact on the photos and icons in Driver Connect, says Martinez. And when Apple Pay was introduced, DME updated the app to enable users to pay for repairs using that service.

The company plans to support other payment methods as well, but it will have to integrate the app with dealership accounting systems in order to do so.

Change is the norm in the mobile market. Research firm Gartner predicts that by 2017, 50% of existing enterprise mobile apps will need to be replaced or rewritten. And as enterprises continue to update their apps and deploy new ones, Wong says they will likely be on the lookout for new tools to simplify the app development process.