At M-Pulse it’s a month dedicated to mobile developer issues and we talk mobile app business basics opportunities with Ray Anderson, co-founder and CEO of Bango, a U.K.-based billing and analytics company that enables mobile developers to collect money for their apps.
But it’s not just about providing a platform that makes it possible for mobile app developers to sell apps and collect payments using carrier billing. Bango has cleverly inserted itself at the center of the burgeoning App Economy, collecting data and insights (about how users pay and how they prefer to be treated when they make their next purchase). It’s a stockpile of anonymized data that allows app developers plugging into the Bango platform to architect entire retail strategies, not just manage occasional sales.
RIM, Facebook and Amazon
Bango may be billed as a platform for developers, but recent mega-deals show Bango has its eye on the Big(ger) Picture.
RIM chose Bango in 2010 to provide billing across its App World appstore, a move RIM says has not only made its easier for developers to charge for their apps. It also claims that one-click to payment (and allowing that purchase to be charged to the carrier mobile phone bill) has helped its developers make more money.
This post (via Ingrid Lunden at TechCrunch) tells us Bango is also providing back-end billing to Facebook, a capability the social network giant will offer to developers that want to offer premium content around apps built for Facebook’s mobile Web platform.
Amazon is the newest deal — and the one we know the least about. TechCrunch lists some directions the deal could take. Bango’ carrier billing could be incorporated into Amazon’s existing appstore, or it could end up the basis of an altogether new product. Of course, it could also be something else…
Ray is vague about his plans with Amazon in his answer. But he does confirm my hunch that Bango is sharply focused on making digital commerce — that is, the sale of anything over any mobile phone or tablet device — a no-brainer.
Ray’s take is that Bango sees “interesting opportunities” with companies that have different forms of content to sell — all easily accessed through our smartphones. “And therefore if a person wants to pay for them, why can’t they just pay for them on their carrier bill?”
Data to drive sales
To make serious money with their apps mobile developers have to know their customer. This requires insights into many aspects of the customer, starting with the basics (like the device they own and if they are on Wi-Fi, for example) and growing encompasses other more granular details (like the payment mechanism the individual prefers).
Significantly, this is just part of what Bango sees and records, insights that its community of merchants contribute to (and improve) as part of the payment process. As Ray puts it: “The more people that join Bango, the better it is for everybody else because the interactions with those people are made better by all the other people who are on the platform already.”
To make his point Ray walks us through the following scenario.
Say Ray, who is British, shows up in San Francisco Airport. A developer who is not plugged into the Bango platform would assume that Ray is just another guy in San Francisco on a certain make of smartphone, and start a sales pitch based on that knowledge. Bango goes deeper. “They can ask Bango to tell them a bit more about the guy and [we’ll] say he’s a Vodafone UK subscriber and can pay on his mobile phone bill.”
Armed with this background the developer can approach Ray in the way he appreciates. They can offer their apps in pound sterling (GBP), instead of U.S. dollars. And developers know the payment option they need to offer to deliver the customer the best payment experience. No need to list all the payment options, or assume Ray would like to input a credit card number. It’s all about reducing the clicks, screens and distractions that separate us from the apps we want to buy.
How is this possible? It’s all wrapped up in the Bango Identifier, homegrown IP the company has used since it was founded in 2002 to facilitate payments.
In a nutshell, Bango’s technology allows it to assign a unique user ID (Identifier) based on information Bango gathers from browser analysis, session information and its long-established billing relationships with mobile operators. This unique user ID enables Bango to distinguish between new and repeat users, and piece together the digital bread crumb trail users leave behind as they visit websites and make purchases.
Let’s make a deal
Of course, this data is anonymized. But it nonetheless allows mobile merchants and app developers to approach customers in a way they would likely appreciate based on current and past data regarding their preference in payment — and pricing.
The latter may have not been a USP when Bango started out a decade ago and mobile commerce was focused on the sale of ringtones and downloads. However, knowing about what a customer is prepared to pay at the moment they are intend to purchase is crucial. As Ray explains: Bango has clients that use Bango to find out if the customer is able to pay easily. If the data says the customer is not able (or willing) to pay, then the developer may make the decision to offer a cheaper alternative or an app supported by advertising.
The logic here: making a sale at a lower price point is most times better than not making a sale at all. The trick is to know how low to go, and not simply dump your app on the market at a ridiculously low price.
Turn it around and Bango also aims to act as a kind of Experian, helping app developers manage risk. Take refunds and customers who tend to ask for their money back more often than others. “It’s good … if there aren’t too many refunds because the carriers don’t want to handle the refunds,” Ray explains. In fact, refunds are a hassle for everyone, particularly since the revenue sits with so many providers and players.
Bango can see if a user has done refunds in the past. Just about to sell a six-month subscription to a user? You may think again if that same user has a high propensity to ask for a refund a couple of months later.
The big news isn’t about the huge deals Bango has sealed. (Although it is to the company’s credit that it has managed to ink deals with RIM, Facebook and Amazon — as well as over 60 carriers, leading app publishers (EA, Gameloft, Fox) and Opera (for its app storefront). Nope. I am excited about the evolution in models and mindsets that is making it possible for app developers to think ‘strategy’ and build real customer relationships. For the App Economy to grow and thrive we need a robust ecosystem capable of conducting serious and sustainable business. But just because it’s all about apps doesn’t mean the rules are that different. There are lots of payment companies out there (Boku, Zong, Netsize, OpenMarket) and developers must choose what works for them. Meantime, Bango is riding a wave because it knows it is still (and always will) be about delighting the customer. Add mobile devices to the equation and part of exceeding my expectations as a customer lies in the merchant’s ability to reduce clicks, present me with the payment options I want from the get-go and enable instant sales and gratification.
Check out Episode #10 of m-pulse here.
Next week we delve even deeper into the developer ecosystem. Check out untetherTV for the full-length interview – and I’ll provide additional analysis in a companion post here at MobileGroove. If you have a good company or a great story, then submit it for consideration (email@example.com or firstname.lastname@example.org). It may be that we include YOU in an upcoming segment of the show.