The beginner's guide to conversational commerce

Posted by Justin Lee on 6/8/18 11:40 AM

Your greengrocer does it. So does that guy selling sunglasses on the beach. It’s why the funny old French bakery around the corner’s been running for 15 years.

Conversational marketing. A buzzword, a footnote, a revelation. Everyone’s talking about it, but what is it?

At its most simple, it’s the act of talking — and more importantly, listening — to your customers: their problems, their stories, their successes. Forging a genuine connection and using that connection to inform your marketing decisions.

At its most complex, conversational marketing has become synonymous with cutting-edge technologies for computer-based dialog processing.

Brands have always known that one-to-one conversations are valuable; but up until very recently, it was impossible to personalize these conversations at scale, in real-time.

No longer. Chatbots have become a mainstay of digital marketing, and every day their underlying AI becomes more sophisticated. Gartner predicts that by 2020, 30% of our interactions with technology will be through “conversations” with smart machines.

In his 1999 Cluetrain Manifesto, David Weinberger reminded us that

“Markets are nothing more than conversations”;

that’s a hundred times more true today.

A successful conversational marketing strategy will pair the spark of authenticity from real conversation with the emerging technologies of the future.

What is conversational commerce?

In a 2016 article, Chris Messina distills the concept:

“Conversational commerce (as I see it) largely pertains to utilizing chat, messaging, or other natural language interfaces (i.e., voice) to interact with people, brands, or services and bots that heretofore have had no real place in the bidirectional, asynchronous messaging context.”

Conversational converse is the process of having a real-time, one-to-one conversation with a customer or lead. It’s a direct, personalized, dialog-driven approach to nurturing long-term relationships, collecting data and increasing sales.

Unlike traditional digital marketing, it ‘pulls’ users in instead of ‘pushing’ content on them. It’s a discourse, not a lecture.

The history of conversational commerce

Despite recently picking up speed, conversational marketing isn’t new. 

The concept made its first appearance in 2007 with Joseph Jaffe’s Join the Conversation. Jaffe wanted to teach marketers to re-engage their customers through community, partnership, and dialog:

“There are literally millions of alive, flawed, human, passionate, influential and authentic conversations going on around you right now: isn’t it time you joined in? Through the power of community, dialogue and partnership, marketing can be a conversation; a welcome guest in the homes, experiences and lives of our consumers.”
  • First came ‘outbound’ marketing: broadcasting messages to audiences through medias like print and TV. 
  • Next was ‘inbound’ marketing: creating interesting content to provide value to users through blogging, social media and email campaigns; content marketing fell under the same subset.
  • Today, conversational marketing marks the natural next step in the evolution of marketing.

Why?

In the past, brands have been able to talk at their customers — through email, website interactions and social media — not with them. 

Brands have struggled to capture, keep and convert attention into sales, sign-ups, and long-term loyalty. Engagement was passive, and results were shallow.

Customer service was relegated to a formulaic question-answer scenario that was unsatisfying for everyone involved. Take it from leading conversational marketing platform Drift’s stellar report:

“[…] the buying experience most companies provide has become cold and impersonal. For many marketing and sales teams, their leads have become faceless entities that exist only inside of spreadsheets — they aren’t treated like actual people. At some point, being data-driven started being more important than being customer-driven.”
Cold call conversion rates are plummeting. Cold emails have a 1% open rate. 
81% of tech buyers who encounter gated content don’t fill out the form. 
But the open rate for a private message? 92%.

Today, messaging apps have over 5 billion monthly active users, and for the first time, usage rates have surpassed social networks. Whether it’s chatting with friends on WhatsApp or exchanging ideas with coworkers on Slack, messaging has become an integral part of our lives.

Despite extreme app saturation, the average person only uses five apps regularly and, you guessed it — messaging apps claim these spots, boasting 10x better open rates than the next leading digital channel. These messaging platforms have huge audiences: there are over 4 billion active monthly users on the top three messaging apps.

Like the rise of the internet or the app economy of the past decade, conversational marketing is born from current desires: for real-time connection and genuine value.

How does it work?

Conversational marketing is an umbrella term that encompasses every dialog-driven tactic, from opt-in email marketing to customer feedback.

But the engine powering recent developments is Artificial Intelligence (AI). Chatbots represent the new era in conversational marketing: scaleable, personalized, real-time and data-driven.

Of course, these bots aren’t intended to replace human-to-human interactions; they’re there to support and enhance them: helping users have the right conversations with the right people at the right time.

(For the meantime, anyway. According to Gartner research, chatbots will account for 85% of all customer service by 2020).

Chatbots are a blank canvas, with the potential to be molded and infused with a persona that reflects a company’s values — like our very own GrowthBot(AKA a mini Dharmesh Shah).

This technology is still in its infancy, so most bots follow a set of rules programmed by a human via a bot-building platform. The differentiator is that the chatbots carry out conversations with users using natural language.

AI uses first-person data to learn more about each customer and deliver a hyper-personalized experience. Reps and bots can then join forces to manage these conversations at scale.

Conversational marketing in practice

Let’s imagine I’m going to a fancy party. Tonight. It’s last minute, and I’ve just received a message that it’s black tie; but I don’t have the right shoes. I need to quickly find a pair that is appropriate; my size; coherent with the rest of my outfit; a good price, etc.

I would usually Google for a shop in my area, then go to browse on their website to find a pair I like. But other issues would soon crop up: do they have my size? Are the shoes smart enough? Are they in stock?

I could fill out a query on the site’s contact form, or give them a ring, but will they answer? And if they don’t have the right pair, they are unlikely to suggest a range of alternatives. The whole process is time-consuming and inefficient.

But suppose the brand I like has a strong conversational marketing culture. Instead of resorting to email, I would be able to conduct the conversation in seconds on my phone; instantly, I’m given the colours, sizes and styles in stock. I can pay for the right shoes with a tap of a button.

Conversational marketing enables users to get the information they need instantly, without picking up the phone or engaging with a person. It’s not about laziness; it’s about ease.

Chris Messina concludes,

“Innovative brands are realizing that messaging offers the kind of convenience that drives engagement — and the kind of intimacy that inspires deep customer loyalty.”

Developing a strategy

As Clara de Soto, cofounder of Reply.ai, told VentureBeat,

“You’re never just ‘building a bot’ so much as launching a ‘conversational strategy’ — one that’s constantly evolving and being optimized based on how users are actually interacting with it.”

If users are made to toggle between various apps and platforms to get the answer they need, the value of the bot is moot: it needs to be native to the place they spend most time, whether that’s Slack, Messenger or onsite chat.

But it can be tricky for brands to consolidate all their conversations in one place. That’s why HubSpot created Conversations, a free, multi-channel tool that lets businesses have one-to-one conversations at scale.

“Whether it’s between two humans, or a human and a bot, one-to-one messaging is the future of communications. Messages are simpler, smarter, and truly essential for creating an amazing customer experience. 
With Conversations, we’re going beyond a single solution, like site chat, to build something that centralizes all of a business’s communications with customers and prospects into one, collaborative environment.”

says Dharmesh Shah, co-founder and CTO of HubSpot.

Where is the opportunity?

  • More sales: Conversations drive conversions. Every customer wants the most direct path from their problem to a solution, and that path is a conversation. Research shows that responding to a new lead within five minutes of when they first reach out is crucial. After 10 minutes, there’s a 400% decrease in your odds of qualifying that lead. Employing conversational marketing ensures that users never need to wait around.
  • ROI: Sure, you have to invest in setting up and maintaining a bot. But think of this: a chatbot gives your brand the opportunity to talk to people one-to-one without hiring an army of customer service reps; a bot works 24/7, 365 days of the year. Juniper Research found that bots will help businesses save $8 billion annually by 2022. Today, that number is only $20 million.
  • Data-driven: Conversational marketing offers a brand new network of knowledge, collective wisdom. A big part of the chatbot appeal comes down to first-party data. Marketers typically rely on pixel tracking and predictive analytics to gather details about their target audience. As a result, they just end up relying on guesswork. But the logs of conversations between a bot and your customers will give you a whole lot more data about customers’ responses, and inform you about their preferences and concerns, opening up plenty of quantitative possibilities. The better the conversation, the better the data will be.
  • Personalized: By integrating your bot into a multi-channel customer support solution, your business gets a huge win. Drawing on the data stored in your CRM, the bot can be more intelligent about the options it offers to the customer. Rather than simply helping a customer change to an earlier flight, for example, conversational AI for an airline could also tell her what time her favorite door-to-door shuttle service would pick her up, and maybe even book her a seat.
  • Customer-led: Using conversational marketing, customers can make the first move; contacting a brand when it suits them, on their terms. This means businesses will likely get engagement from customers who are already interested in their brand and ready to follow through.

What are the dangers?

“This is the double-edged sword of messaging. Bots provide a scalable way to interact one-on-one with buyers. Yet they fail when they don’t deliver an experience as efficient and delightful as the complex, multi-layered conversations people are accustomed to having with other humans on messaging apps.”

We have a much lower tolerance for mistakes with machines compared to humans: 73% of people say they won’t interact with a bot again after one negative experience. And if a bot seems to be able to converse in English, we tend to easily overestimate how capable it is.

That’s why it’s crucial to manage your customers’ expectations appropriately. Bots are far from being autonomous, and people aren’t easily fooled; trying to present your bot as a human agent is likely to be self-defeating. Bots don’t understand context created by preceding text, and conversational nuances can easily affect their capacity to answer.

User: When is next flight to Chicago?
System: 9:30 am
User: What time does it arrive?
System: I don’t understand “it”.

Because bots live inside messaging apps, they have the potential to invade a highly personal space, making the stakes of getting it right much higher.

According to research, people use messaging apps for customer assistance with one key goal: to get their problem solved, fast. Bots should serve one simple purpose well, without getting tangled up in the conversational complications that are better left to humans.

Final thoughts

The way brands and users interract is undergoing a monumental shift. Customers are smarter and better-informed than ever before. They expect personalization and transparency as a prerequisite. They feel empowered by their options. It’s hard to fool them, and even harder to gain their loyalty.

And most significantly, they want 24/7, 365 days of the year instantaneousness: to be heard, to be helped, right now; not in half an hour, not tomorrow. That’s why conversational marketing represents a new cornerstone in marketing but also in customer service and experience, branding and sales.

Building a bot for the sake of being on-trend is not enough; it needs to be part of a larger strategy where each conversation has a purpose. As a long-term strategy intended to facilitate lasting relationships, it needs to be spearheaded towards a long-term goal.

Effective conversational marketing is an intersection of brand values, user engagement and valuable dialogue. It’s about building your audience first, selling last.

 

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