Conversations shape the world of business. They spark innovative new ideas, help recommendations spread through word of mouth, and lead to corporate deals and mergers. And, increasingly, they’re playing a role in eCommerce.
In the last decade or so, conversational commerce has come to the forefront of marketing, sales, and customer retention strategy. But what is conversational commerce exactly? And how does it benefit your business?
By combining genuine human interaction with AI, conversational commerce gives you a two-way line of communication with new leads as well as loyal customers. It’s the future of customer experience—and it’s already here.
What Is Conversational Commerce?
Conversational commerce is a customer relationship strategy that combines two-way messaging with shopping and marketing. The technology allows customers to make purchases, ask questions, set up returns, give feedback, and much more—all from the comfort of their favorite online platforms.
Conversational commerce is often touted as an omnichannel solution. Why? Because it facilitates the customer-brand connection through numerous popular messaging channels at once. Customers may speak with humans, AI-powered bots, or a combination of the two through chat apps, social media, and voice assistants like:
- Facebook Messenger
- Amazon Echo
- Proprietary live chat features
The Rise of Conversational Commerce
Popularized by Chris Messina—former Developer Experience Lead at Uber (and inventor of the hashtag)—the idea of conversational commerce turns eCommerce on its head. It promotes relationship-building and personalized experiences by establishing a direct and convenient link between customer and company. Or rather, by reestablishing this link.
Because, when you think about it, conversational commerce is nothing new. For thousands of years, buyers engaged face-to-face with sellers in markets across the world. More recently, customer interactions took place with employees at retail locations. But the rise of one-click online shopping erased the direct line of communication between consumers and brand representatives.
But there’s a reason that this two-way tactic is making a comeback: Humans crave connection, even in their online shopping experiences. Today’s app-based conversational commerce aims to bring back the age-old concept of two-way business in our modern, hyperconnected era.
Why Is Conversational Commerce Important?
In short, conversational commerce is a tried-and-true method of building and maintaining customer relationships. And in the current marketing climate, relationships are everything.
When consumers feel like they’ve developed a positive relationship with a brand, they’re more likely to stick around. According to a KPMG survey, 86% of loyal customers are likely to recommend a brand to family or friends.
And what turns a potential customer into a loyal lifer? Perhaps unsurprisingly, true loyalty isn’t about points programs or rewards. It’s about creating an experience that brings people back. Per KPMG, 56% of consumers look for quality customer service, while 55% want an easy shopping experience. Conversational commerce makes these lofty goals possible.
Loyalty isn’t the only benefit of conversational commerce, either.
The Benefits of Conversational Commerce for Businesses
Regardless of your industry, you can leverage conversational commerce to improve customer support, increase your ROI, and save valuable time.
Some of the most tangible advantages of conversational commerce include:
- Ubiquity – Perhaps most importantly, conversational commerce allows you to connect with customers where they are: On their mobile devices. Globally, more than 80% of people have smartphones. In the U.S., that figure reaches 85%, according to a Pew Research Center survey. And because conversational commerce allows for connections via any smart device, you can reach practically anyone in the world.
- 24/7 coverage – When your business goes international, the notion of “business hours” goes out the window. Even if you’re only operating across three time zones, having a human or automated agents available 24/7 means that customers can get support anytime.
- Cost-effectiveness – One of the most exciting parts of conversational commerce is how it incorporates artificial intelligence. A single AI-powered chatbot can replace dozens of customer service agents, resulting in massive savings.
While you’ll still need experienced customer service reps to handle nuanced requests, their workload will be greatly reduced. Plus, as Natural Language Processing (NLP) and Machine Learning (ML) technologies continue to improve, bots will be able to take on more complex tasks.
- Upselling and cross-selling – At any point in the customer journey, you can recommend additional products and services or remind customers of free shipping thresholds to incentivize extra spending. Best of all, through conversational commerce, cross-sells feel more like friendly suggestions than sales tactics.
The Benefits of Conversational Commerce for Consumers
Conversational commerce also benefits your customers, which in turn benefits your business even more. By setting up channels that allow new and existing customers to communicate on their terms, you provide a simple, memorable experience.
For the average consumer, conversational commerce is:
- Preferred – Simply put, your customers want conversational commerce. When consumers have the option to call or send a message, they choose the latter 70% of the time.
- Personalized – From the very beginning, conversational commerce allows for a uniquely personalized customer journey. Instead of having to call or email, your customers can choose exactly how they want to communicate. And when they do reach out they are given a tailored, one-on-one experience.
- User-friendly – If your customers can message you using everyday apps, there’s no learning curve. A simplified, familiar experience translates to less frustration for the customer. For your business, more overall satisfaction means more conversions, fewer abandoned shopping carts, and better customer retention.
- Convenient, but not crushing – Crucially, conversational commerce keeps assistance within arm’s reach. It’s close enough when you need immediate help, but it stays away from the overbearing “always right behind you” feeling of a sales associate on commission. Because some shoppers want a guided experience and others prefer to be left alone, conversational commerce is the best of both worlds.
How to Leverage Conversational Commerce
There’s no such thing as a “one-size-fits-all” approach to conversational commerce. While it can work effectively in any industry, it won’t always look the same.
To maximize the impact of conversational commerce, you can utilize different channels and strategies at different points in the customer journey.
In the Awareness Stage
The awareness stage is the first part of the marketing funnel; it’s where consumers first learn about your business. Chatbots have proven to be effective during this stage, as they help redirect most low-level traffic away from humans.
For example, WordPress hosting provider WP Engine uses an automated chatbot to welcome website visitors. A live chat message from Walter P. pops up when potential customers visit the site, asking how “he” can help. Users can either ask the bot a question from a ready-made list or opt to speak directly with a live expert.
This type of strategy helps engage customers and move them further down the marketing funnel because it:
- Actively greets the customer
- Provides an effortless way to learn more about the company and the product
- Gives the option of speaking with a human from the get-go
In the Consideration Stage
The consideration stage is the tipping point; your leads are now potential customers. Once a consumer is considering your business as a solution to their problem, you can leverage conversational commerce to convince them.
If an interested customer has opted into marketing messages, you can use WhatsApp, WeChat, or SMS to continue the conversation. With a conversational commerce marketing platform, you can efficiently send out content to segmented audience sections, such as:
- Case studies
- Product recommendations
- Blog posts
- Free trial offers
The distinct advantage here is the conversational aspect. When you encourage dialogue and don’t shy away from questions, you showcase a level of transparency that inspires trust and, ultimately, loyalty.
In the Purchase Stage
The days of clicking “Add to Cart” may soon be over. Automated conversational commerce can also help guide customers through a purchase, up to and including placing the order.
Chilean gas company Lipigas found success with WhatsApp-based conversational commerce. By allowing customers to place orders 24/7, the company saw a 60% reduction in operational time while increasing the conversional rate.
The trick to creating a checkout experience through conversational commerce is adding guardrails. In other words, you don’t give customers free rein to type anything into the message field. Instead, you offer two or three options as clickable buttons—for instance, “Yes,” “No,” and “Find out more.” These pre-approved options speed up purchasing on the customer end and remove unknown variables for online stores.
In the Post-Purchase Stage
One of the biggest advantages of conversational commerce is the way conversations are saved within messaging apps.
If a customer used WhatsApp or Facebook Messenger to communicate with you during their journey, that conversation won’t disappear afterward. Instead, it will sit in their “Chats” list as if it’s an ongoing thread with a friend. When they want to reach out post-purchase, the past conversation is immediately accessible. No more searching for a customer support phone number or starting over from scratch.
Not only it’s convenient, but it also keeps you top of mind as customers scroll through their (frequently used) apps. Think of it as a free banner ad disguised as instant messaging.
At this post-purchase stage of their journey, you can leverage conversational commerce and encourage customers to reach out about:
- Product questions
- Delivery or experience dissatisfaction
- Tech issues
And because the line of communication is 2-way, you can also proactively touch base with previous customers. Consider sending surveys, “we miss you” texts, or promo codes and coupons to incentivize future purchases.
Conversational Commerce Tools
Regardless of the stage you meet your new and existing customers at, you need the right tools to fulfill their needs. In the world of conversational commerce, these “tools” equate to apps and messaging platforms, each having its own place.
Without a doubt, one of the most effective conversational commerce tools is WhatsApp.
The Meta-owned messaging app has more than two billion active users who send over 100 billion messages every day. And while North Americans may be more familiar with text messaging, much of the world relies on WhatsApp. In fact, in more than 100 countries, WhatsApp is the most popular messaging app.
With mobile and desktop apps available, WhatsApp offers a user-friendly approach to conversational commerce for businesses and customers.
Another option is to connect with customers via SMS (text messaging).
As Tom Wozniak, head of Marketing and Communications for OPTIZMO Technologies, writes in Forbes, “Message open rates… can reach 98%.” When compared to email’s 20% open rate, it’s clear that text messages offer a more successful method of communication.
The major downside to text messaging is that wireless carriers restrict the size of incoming and outgoing messages. Case in point: T-Mobile limits outgoing MMS to 1 MB, as does AT&T. So if you’re looking to send marketing images or videos, SMS may not suit your needs.
Live chat as a customer service tool has been around for years, but only recently companies began using it for conversational commerce.
Live chat comes in handy when customers are already on your website. With a little message icon in the bottom corner, you assure customers that support is never far away.
The drawback to live chat is that it’s only on your website. Customers can still communicate with you on mobile or desktop, but with a few extra steps involved).
For those customers who want to have an actual conversation, there’s conversational commerce through smart speakers. Products like Amazon’s Echo and Google Home allow for a hands-free, voice-only commerce experience.
Most conversational commerce through virtual assistants occurs at the purchase stage of the customer journey. As a well-known example, shoppers with an Amazon.com account can add items to their cart and place an order using only a virtual assistant.
As voice assistant technology continues to penetrate the market, options throughout the customer journey will expand. For example, customers of Canada’s TD Bank can use their Amazon Alexa to find official exchange rates, obtain stock quotes, and inquire about accounts or credit cards.
Get Started With Conversational Commerce
As the world’s top businesses shift to conversational commerce, it’s easy to see why. It puts the customer back in control of the conversation, allowing them to reach out how, when, and where they want.
And for much of the world, the how is through WhatsApp. With an enormous user base that continues to grow, WhatsApp is the ideal tool for communicating with consumers worldwide.
For a code-free approach to conversational commerce over WhatsApp, consider Connectly. Through AI-powered Natural Language Processing (NLP) and real-time data, Connectly can help you boost response rate, click-through rate, conversions, and more.
Book a demo today to find out more about the Connectly approach to conversational commerce.