Many years ago, cell phones were very valuable. This is because we could use them to make and receive calls, send and receive messages. The advent of smartphones disrupted the phone industry. It redefined the value of this handheld device. Your phone has now become a hub for a lot of daily activities. Activities that define our everyday existence, making life a lot easier. Most people cannot live 24 hours without their phone. In fact, research by Deloitte’s US edition of the 2018 Global Mobile Consumer Survey is stunning. Americans look at their phones 52 times a day on average.
The question is, what are people doing on their phones? They are using apps. The average smartphone user has about 80 apps on their phone. They use 40 of them monthly. This is according to data from App Annie, an online resource. On demand apps are the king of apps. People use them to get most important things done. Most other apps are either for entertainment, networking or education purposes. But, on demand apps help us get our most important things done. On demand apps serve various purposes. These include ordering food, ordering a ride, or hosting business meetings.
What Are On-Demand Apps?
On-demand apps are apps that allow you to order goods and services when and where you need it. With these kind of apps customers can request a company’s service. It will be delivered to them exactly when they need it. Not only when it is needed, but also at the preferred location of the customer. On-demand apps have revolutionized the world of service delivery. Such apps have replaced the brick and mortar business model. The service providing company now has its office situated right on the consumer’s phone. Goods and services are a click away. With a click on the phone, the consumer can have their order right at their doorstep.
Companies like Uber and Airbnb were the forerunners of the on-demand service industry. The industry has now grown by leaps and bounds. The on demand app economy allows consumers to order anything at their convenience. From food, to a ride, home, massage, or gifts and flowers delivered at your doorstep. The on-demand app is a one stop shop used by companies to provide all kinds of services across the board.
The National Technology Readiness Survey, is also known as NTRS. They made some interesting findings about the growth of the on-demand service sector. A Study carried out in 2017 revealed that a total of $75.7 billion was spent on on-demand services that year. This is an increase from $48 billion in 2016. This figure was only $14 billion as of 2014. The number of on-demand service users also increased to 41.5 million from 24.9 million in 2016. These figures have continued to climb the ladder year-in, year-out. The amount of customer spending in the on-demand industry is expected to climb to $335 billion by 2025.
8 Important Features Of A Profitable On-Demand App
On-demand apps are very different from most other apps on the Apple App Store or Android Play Store. These are strictly business apps created to meet defined consumer needs. An on-demand app must have certain outstanding features. These will affect the profitability and revenue of the on-demand service providing company.
The crux of the on-demand service business model is problem solving. An on demand app must be offering a solution to people’s daily problems. You must first identify a problem in the society and then create a solution for it. The problem Uber identified is people having difficulty getting a ride. The company discovered that people would rather have a taxi come to meet them. Most people didn’t want to walk to meet the taxi. People also wanted a chauffeur-like transportation. A system where it feels like they are being chauffeured in their own personal ride. At the same time they want it to be affordable. The company identified these problems and needs. Then they came up with an on-demand ridesharing app. With this, the consumer’s problem is solved and the company makes billions in revenue.
But, it is not only about identifying and seeking to solve a problem. It is about solving a real problem. A constant, daily and recurring need that people have. It should be a frequent problem, not a seasonal one. Otherwise, you will not be making money. Millions of people take transportation every day. People are always on the move. So it makes sense to create an on-demand transportation app. People also eat every day. Creating an on-demand food delivery service app is solving a very specific and recurring need. The service must be addressing a very specific need that people have on a daily basis.
The major reason a person will order food through an on-demand app is because it is more convenient for them. It helps reduce their stress. They don’t have to walk to McDonald’s or KFC to order a meal. So, they are willing to part with some money to have the meal delivered to them when and where they need it. Convenience is the driving force for any on-demand service app.
The more time and effort you have to invest in an activity, the more inconvenient it becomes. An on-demand app should be built in a way that people can achieve their aim within seconds. The app should not be crowded with too many features. The user interface should be simple and seamless. Uber’s app is a good reference in this regard. Once you open the app it takes you directly to your business with the app. There are minimal features on the app, so much that a new user doesn’t get confused.
There is a direct relationship between the convenience of making an order and the convenience of receiving the order. If customers are able to place their order quickly, but they have to wait a long time for delivery, the notion of convenience has been defeated. There must be synergy between the convenience of placing a demand and getting the supply. Time is of the essence in building a functional on demand app and business model.
The cashless mode of payment is one of the most attractive features of on-demand service apps. Consumers can get whatever they want without having cash on hand. It gets more interesting if users can pay without friction. The app should provide users different payment options. The popular payment portals should be incorporated into the app. You should integrate several payment platforms. Include credit cards, online payment, and payment gateway processors like Stripe and PayPal. Restricting users to a single portal limits the usability of your app. The ability to make a choice makes users more relaxed and boosts confidence.
The payment options need to be fast, secure, and reliable. The user doesn’t have the luxury of time waiting for payment to load. Slow or difficult payment processes defeat the purpose of an on-demand app. Your aim must be to make it fast and easy to make payments. Most on-demand app developers pay less attention to the UI of the payment section of the app. This section is very important. This is what actually brings in the revenue. The formatting should be automated when users enter their credit card details. This will help avoid errors. You should also give users the option of saving their details. You may place a lock icon next to the payment option. Details like this boost users’ confidence.
Live Location Tracking
Customers feel more comfortable with your service when they can live-track their order. The ability to track the location and movement of their order makes them feel in charge. It brings a sense of security which boosts consumer’s trust in your service. Users should be able to view real-time updates from anywhere at any time. They should be able to check the progress of their delivery right from the point of placing the order. Sending updates until the customer has the order goes a long way in building confidence.
The customers should be able to know the expected delivery time of their order. This can be achieved by integrating location based API within the app. This feature is important in situations where there are several service providers. Especially when the location of the service provider determines the ability to fulfill the customer’s request. It’s best to only assign orders to providers who are close to the customer location. Uber does this well. Their algorithm only matches riders to drivers who are closest to them. Riders receive constant updates about the location of the driver and how close they are.
Ratings and Reviews
The internet age has made ratings and reviews an integral part of quality service delivery. People want to see your pedigree. They want to know what others think of your service. Most people read reviews before buying. According to a 2017 research by Spiegel Research Centre, 95% of shoppers read online reviews before buying. Displaying reviews can increase conversion rates by 270%. Users of on-demand platforms like Fiverr and dVisit consider ratings and reviews before buying.
Consumers rely on the words of other customers when choosing one service over the other. You must ensure regular reviews and ratings to create a trustworthy platform. Ratings and reviews will also help you be able to identify providers who are lagging. You may choose to remove them from the platform or deactivate them after a warning period. Ratings make providers on your platform perform their best. It also makes customers feel important knowing they can give their honest opinion on the quality of service received.
Cancellation and Rejection
This is a tough one for on-demand businesses but it’s a very important feature any on-demand app should have. This is the single feature that boosts customer’s confidence the most. People will trust your services more when they know they can reject a bad delivery and get their money back. The signal you are sending to users is that you have confidence in the quality of your service. This will in turn boost their confidence.
This feature may be adopted in different forms. Uber allows riders to cancel a requested trip before the trip commences. But it has measures in place to discourage users from overusing this benefit. Riders are penalized when they cancel too may rides. A gig economy app like Fiverr allows buyers to cancel orders if sellers do not deliver on time. Buyers can also reject a bad delivery and get their money back. But the money stays in their Fiverr account. This way they are forced to use it to make another order from a different seller.
An on-demand service usually operates two different mobile applications. The first is a client app that is intended to be used by the consumer. The second is the service provider app that is expected to be used by the personnel delivering the service or the service provider. The two apps are integrated in such a way that communication can be achieved between the two. Push notifications are an important part of this two-way communication.
An efficient notification system will help keep the attention and commitment of both sides. A notification should be sent to the service provider’s app as soon as a customer makes a request. This will immediately draw their attention. A notification must also be sent to the consumer, informing them of the readiness of a service provider to fulfill their request. This communication needs to take place in a way that would not be seen as disturbing to the client. It should not be too pushy such that it would constitute disturbance. Striking the balance in this regard is integral to achieving an excellent customer experience.
Sound Matching Algorithm
On-demand apps don’t match and route users manually. There is an underlying software and algorithm that carries out the matching. The inbuilt matching logic determines which service provider is allocated to a customer. It’s important that this algorithm is built to be very effective. It’s true that perfection is a very distant relative. But the matching algorithm must be updated based on prevalent market indices.
There are two kinds of matching algorithms that can be used in an on-demand app. They are automatic matching and manual matching. Automatic matching is used when the logic to assign service providers is built into the application code. Manual matching is a system where an administrator assigns the customer request to a service provider. This system is used by businesses with small volume of transactions.
Cost Of Building An On-Demand App
The cost of building an app of this nature differs. It depends on the complexity of the features to be integrated into the app. The complexity will affect the time it will take to complete the project. Developers usually charge based on hourly rates. The kind of developers or Development Company you are hiring will also determine the cost. Senior developers charge higher than junior or intermediate developers. The complexity of your project will determine the kind of developer you will go for.
Senior developers in the US charge about $160 per hour. The total cost ranges between $10,000 and $40,000. Having a good understanding of your project and what you want will make this estimation easier. This may also reduce your cost. You should have a description of what you want your app to look like before approaching a developer.
Technology is changing the way businesses operate. The brick and mortar business model is giving way to a more seamless online model of demand and supply. Convenience is the greatest driver of this revolution. People are constantly looking for ways to carry out their day to day activities in the most convenient manner. They are looking for solutions to a wide range of problems. Businesses are created to make profit by solving specific problems in the society. The on-demand service sector has proven to be a way of providing solutions to many of our daily needs.
Traditional companies are remodeling and creating on-demand services. They’re doing so to cater to the needs of an ever evolving market. Your business can also benefit from this revolution by having an effective on-demand app. This will ensure your customers are served where and when they need your services most. On-demand apps are a way of creating visibility. You can always place your brand in the mind of your customers when you have an annex of your office right there on their phone. Each time they look at their phone they see you. This is one of many benefits of having an on-demand app.