When Passpack, an online password management company targeting small to mid-sized businesses, decided it needed to reach its mobile customers, President Tara Kelly says the company carefully weighed its options.

"Passpack is a rich Internet service, and a typical case where an app would normally be considered ideal," says Kelly. "Doing the math, we opted to adapt our existing product to the mobile Web. Time to market was about the same, but we saved significantly on future maintenance. We pulled it off -- and with a very app-like interface to boot."

Passpack's new mobile website launched recently, and the process the company went through to reach launch is familiar to many small and mid-sized businesses.  It's clear your company needs a mobile presence as mobile Internet usage skyrockets. Morgan Stanley's Mary Meeker, a guru among Internet analysts, predicts mobile use will surpass desktop use in the next five years.

For small businesses looking to go mobile, the question is whether to first build a mobile website or to develop an application for platforms such as the iPhone, Android, and the upcoming Windows Phone 7. "How do you connect with your clients best, that's the question you have to ask when you're building a mobile-optimized website or an app," advices Marc Nathan, vice president of strategy at Houston-based ChaiONE, which builds a mobile presence and apps for companies.

Weigh these factors

Mobile experts offer this checklist for you to consider when deciding whether to reach your customers first through a mobile website or an app:

  • Utility -- A mobile website will work across platforms, while an app developed for the iPhone won't work on the Android and vice versa. If you want to reach a broader audience with an app, you'll have to expend the resources to develop an app for each of the most popular platforms.
  • Need -- Kate McGinley, CEO of McGinley Media Limited finds that location-based companies such as restaurants and retail storefronts do best with mobile websites. "Apps are often best for companies where the product is a service, such as finance and transportation," she says. If your customers simply need to look up your phone number, address or basic information, a mobile website will do the job. "If the usage is regular to heavy, users overwhelmingly prefer to download a native application from the Android Market or iTunes App Store," says Timothy Johnson, owner and creative director of Found Design + Interactive, a digital agency that focuses on small businesses. "If your website is geared toward a sales pitch or lends itself to being consumed once and move along, then a mobile-optimized website is the better and less expensive route to go."
  • Traffic -- If your website receives a lot of traffic from mobile devices, you need to adapt, says Zak Dabbas, a managing partner with Punchkick Interactive, a mobile marketing firm. Punchkick client American Society for the Prevention of Cruelty to Animals has a high volume of mobile users, so the company developed a mobile site that lets users make donations with their smartphone. If repeated interaction is likely, then an app will probably work better. Websites are more passive, while an app "is much better for people who push lots of information out to their customers or potential customers," advises Nathan.
  • Content -- If content is mostly text-driven, a mobile website might work better, Dabbas notes. "If the content is media-rich, and the app can stand out amongst the thousands of existing apps, you could have a real winner on your hands," Dabbas says.
  • Availability -- Once your customer downloads your app, it's accessible anytime, and that little icon is a constant reminder of your business. However, your mobile Web presence will show up in search engines, and consumers are accustomed to retrieving information via a search engine. "In this day and age, businesses are increasingly relying on Google, Bing and Yahoo to send them leads and new business," says Aaron Maxwell of Mobile Web Up, which develops a mobile presence for businesses. "With high-quality smartphones spreading like wildfire, I expect the number of searches people do each day to keep rising. It's easy to spontaneously search Google when you can just pull your phone out of your pocket. Search engines will send new customers to your mobile website. They won't to your app."
  • Cost -- In most cases, you'll find it more economical to develop a mobile version of your website, says Nathan. Expect to pay anywhere from 50 to 80 percent of the cost of building your existing site. A well-done, rich application can cost from $35,000 to $50,000 on each platform. There are some alternatives developing, says Maxwell, such as AppMakr, which lets you make an app at a fraction of the cost. However, you're limited in the scope of what you can create. Maintaining an app and changing functions will likely prove more costly than maintaining a mobile website, as well.

Looking to the future

For many small businesses, it makes sense to go with a mobile website first, then develop an app, says Maxwell. And that's due in part to the evolution of the mobile Web. "Mobile websites are becoming more app-like. This is thanks to technologies like HTML5 and mobile widgets," he explains. "In the next year or two, it will be practical to create mobile websites that behave just like apps for all practical purposes, yet will work on a very wide variety of phones."