How mobile apps can offset labor costs

Aug 22, 2016 | App

Mobile app development for your business can have all kinds of unforeseen benefits, such as reducing labor costs per employees. We built an app for a restaurant a few years ago that generated $200,000+ in sales, you can watch the case study here. Another consequence of this app was it posed potential to significantly reduce labor costs.

This can work for more than restaurant apps, but really any service based company taking phone orders or phone scheduling somehow. Let’s break down the following scenario to show you just how much money per year you could save.

Average Hourly Rate: $10/hour (We figure this is just above min wage & a good reference point)

Average Time on Phone Order: 7 minutes (Some people talk longer than others & ask more questions, some are more direct)

Average Orders: 5,000 / year (This is what a client of ours did)

So now we look at 5,000 orders times average call time of 7 minutes to equal 35,000 minutes spent on the phone. We now take 35,000 minutes divided by 60 to find out how many hours spent on the phone, which equals about 583 hours. If you divide 583 by 40, you get roughly 14 weeks (40 hour work weeks). This means that for 14 weeks straight, 9am-5pm (8 hour work days for 40 hours a week) you would save an employee on the phone.

By developing the app, you are saving about $5,600 direct labor costs at a $10/ hour employee. We are not including taxes, increased app sales or opportunity costs.

This could literally be a swing of $5,000 – $10,000 of direct savings by adding an app to your marketing mix. This kind of makes it a no brainer if you really think about it.

Let us know how mobile saved your company!