How to Motivate Mobile App Adoption? Evidence from a Field Experiment

Marketing Department; Faculty Adviser: Raghuram Iyengar

Mobile apps have become a prominent channel through which firms interact with customers and sell products and services. From firms’ perspective, the first step of an effective mobile app strategy is to motivate customers to adopt their app. In practice, two approaches commonly used by firms to motivate mobile app adoption include offering customers an economic incentive to download and use the app and informing customers about the usefulness of the app. To compare the effectiveness of these two different approaches, we conducted a field experiment on a global beauty company’s loyalty program app. In the experiment, we varied the amount of incentive that customers would receive after adopting the app, and also manipulated whether customers were notified about their loyalty program points, information that could signal to customers the usefulness of the loyalty program app. We find that notifying customers about their loyalty program points was more effective than the economic incentive the firm offered in motivating customers to adopt the app. Interestingly, these two approaches turned out to be complementary in driving app adoption, suggesting that the firm should simultaneously use both approaches.