Conversational Commerce: A Comprehensive Guide for 2023

Customers have plenty of choices when buying goods and services today, across virtually every industry. To keep your brand front of mind, it's essential to build meaningful connections with customers. But how?

You need to stay by your customers' sides throughout every step of their journey, from initial interaction to point of purchase and way beyond - in a way that's natural, friendly and engaging, not pushy, overbearing or overly promotional. And you should meet customers on the right channels, the ones they prefer to use – even if they switch to another channel during the same interaction. This is where conversational commerce comes into play.

What is meant by conversational commerce?

Conversational commerce (or conversational marketing) is about opening up a direct dialogue between your business and customers to build relationships from the outset and drive them through the sales funnel. The communication, as the name suggests, is conversational, personalized and helpful so as to achieve a greater, more significant and effective presence for the buyer during the customer journey.

Conversational messaging can be delivered across a range of channels, including SMS, social media platforms, live online chat, chatbots or voice assistants.

Why invest in conversational commerce?

Conversational commerce offers many advantages for online retailers, including increased customer satisfaction, retention and loyalty. Let's break some of the benefits down...

Better availability for customers

By utilising chatbots and automated responses, your business can be online around the clock, worldwide, no matter where your audience is based. Most chatbots can be programmed to answer common questions about opening hours, shipping details or refunds. More advanced chatbots can take care of things like tracking customer orders, routing complex queries to the right support agent, gathering data to suggest a relevant product and much more.

Enhances customer service

Your customer service team will become more effective once you employ a conversational commerce strategy. Complaints and queries can be promptly dealt with through live chat agents, reducing the need for customers to spend time making phone calls and waiting in a queue. Simpler conversations can be automated and conducted using artificial intelligence (AI) to provide quick outcomes for customers. This helps you manage your support team more efficiently and frees up individual agents to focus on more complex issues that may require a phone call or email to resolve.

Increases customer satisfaction

Conversational commerce involves real-time communication. When customers have a problem or need help, they can get answers quickly, reducing any frustration they may feel. Quicker replies and resolutions lead to content customers who are happy to stay with your business – and recommend it to their friends and family.

Enables personalized communications

The two-way nature of conversational messaging means that every interaction is personalized in some form or another. For example, a chatbot can determine what the customer wants to know and provide the information they need in the present moment. Customer information can also be stored for future use to provide personalized recommendations or streamline the ordering and payment process.

With a good communication tool, you can easily personalize conversations using the customer's name, purchase history and any other information you may hold. You can even customise message templates to a certain extent.

Boosts customer engagement

Customers want your business to know them, predict their needs and wants, and provide only a highly relevant offering. All of the above benefits help to create seamless customer experiences, increase engagement and build strong, long-lasting relationships where customers return and become ambassadors for your brand.

Leads to higher revenue and profits

It costs much more to acquire new customers than to retain existing ones, so customer retention is a top priority for every business. By successfully getting customers to return, you'll save on acquisition costs, grow sales and revenue and increase customer lifetime value. Happy customers will bring you new customers organically through word-of-mouth referrals without you having to lift a finger!

Two people shopping online

Six popular conversational commerce channels

Earlier, we highlighted the main channels used for conversational commerce. Here's more detail on how this strategy can work across those channels.

1. SMS messaging solutions

Text messages are very effective for both marketing and transactional communications. They're delivered over a cell network, not WiFi, so as long as customers have a phone signal, they'll receive your message within a couple of minutes at most. Texts are short, with a mere 160-character limit, however, you can be really creative with them. Here are some typical use cases:

  • Marketing texts – special offers, flash sales and exclusive promo codes for VIP customers.

  • Transactional texts – automated PIN codes for 2FA logins and automated order confirmations, shipping updates, and appointment reminders. You can even set up pay-by-text to allow customers to place orders via SMS; this enables customers to order and pay in just a few seconds, making the process almost frictionless and highly convenient.

A reputable SMS API provider will offer you all the functionality needed to incorporate text messages into your conversational commerce strategy.

2. OTT messaging platforms

Also known as instant messaging, OTT apps transmit messages over the internet instead of mobile networks. Most mobile phone owners use some form of instant messaging app, such as Facebook Messenger, WhatsApp, Instagram Messenger, WeChat, Viber or Line.

To send OTT messages, both you and your customers must have the same app downloaded to your devices. It's a good idea to run a quick survey to see which app customers use heavily and go with the same. That way, you'll meet customers where they already like to hang out.

3. Chatbots

Chatbots can be either rule-based or AI-powered and simple or advanced. Which you choose depends on your budget and requirements. You can build a basic chatbot yourself for free using a tool like Facebook Messenger, however, you can do much more when you use a dedicated communication platform that's built specifically for conversational commerce.

SMS chatbots and OTT messaging bots can be set up for various workflows to collect and provide information. For example, you can use a chatbot to collect feedback after a customer receives their order or send an onboarding message whenever you get a new subscriber or customer. A more advanced flow includes responding to user-initiated enquiries and taking the user through different options, e.g.:

User: Hi, what hair treatments do you offer?

Bot: We offer cut and style, wash, cut and blow dry, highlights and foils. Which one interests you?

User: Highlights.

Bot: Great! Our highlight treatments range from $50 to $100, depending on the stylist. We have slots available from tomorrow. Would you like to see available dates and times?

User: Yes.

Bot: [Lists dates and time slots with buttons to book online].

Chatbots are frequently used to provide automated replies, such as a holding message acknowledging receipt of the enquiry and giving a timeframe for a detailed response.

4. Live chat

Live chat is often used to deliver customer support. It can work via in-app messaging, a website plugin, or a separate website. Usually, live chat options appear as a button on a website's bottom right corner. When clicked, a chat box opens up for the customer to type in their enquiry. Although you can use live chat to send canned responses, it's often used for back-and-forth chat with customers when they need technical support, sales assistance and post-purchase support.

5. Virtual shopping assistants/voice assistants

Virtual shopping assistants are used to search for products or place orders online without customers having to pick up their phones. Examples of voice assistants include Amazon’s Alexa, Siri and Google Assistant.

Virtual shopping assistants are also found on brands' online stores. These help guide visitors through the entire online shopping process and are intelligent enough to have dynamic customer conversations. They're typically a combination of conversational AI and chatbot technology, requiring no human agent intervention. However, they're more advanced than chatbots as they usually have access to a store's entire database, can provide advanced information, answer complex questions and even place orders on a customer's behalf.

6. Email platforms

Email is best used for sending out newsletters and long-form promotional content which incorporates images, videos or GIFs. However, it can be used for conversational commerce too. You can use email to send personalized recommendations based on a customer's order history or as a two-way chat to answer queries and solve problems. With the help of an email platform, you can easily automate messages – commerce brands often use an automatic email series to walk customers through the sales funnel.

Email marketing concept

Common challenges in conversational commerce and how to tackle them

Conversational commerce can present a few challenges, which you'll need to address to ensure a positive customer experience. Here are the main ones you might come across:

Inconsistent brand voice

An off-the-shelf conversational commerce solution shouldn't be put to use straight away, as it'll have a generic language. You'll need to modify it to align with your brand’s voice so that your messaging is consistent with your other marketing channels and doesn't come across as disjointed when customers engage one-to-one.

Impersonal communication

Unsurprisingly, an automated text-based conversational commerce tool like a chatbot can seem robotic. Try to make your bot friendly, relatable and approachable so your messaging comes across as human-like. If using live chat, train your agents on making conversations feel personal for each customer.

Data privacy concerns

As a business, you have a responsibility to keep customer data safe. Conversational commerce platforms capture, store and process customer data, so it's important to understand how this occurs and include this information in your data privacy policy. Choose tools that are compliant with the local or global data protection laws that apply to your customers, such as the GDPR and PSD2 – and ensure you brush up on the relevant legislation yourself so you don't unwittingly breach it.

Language barriers

If you have a multilingual target audience, your strategy should cater to everyone. Many customers will feel alienated and dissatisfied with your service if your chatbot or live agents only speak one language.

A good conversational commerce platform will have built-in multilingual capabilities, but if you're not using one, you should integrate translation tools into your communication channels or employ multilingual service agents to assist your diverse audience.

Integration issues

Ideally, whichever conversational commerce tools you choose should work seamlessly with existing business tools, such as customer engagement platforms (CEPs), CRMs or order management systems. Look for solutions that can easily integrate with third-party tools to streamline and enhance customer conversations.

Eight steps to implement a conversational commerce strategy

There's a lot to consider when putting together your conversational commerce plan, including goal-setting, mapping out customer communication flows, staff training and how to actually launch your strategy. Read about the key steps involved below.

1. Define specific goals

First, figure out exactly what you want to achieve with conversational commerce. The ultimate goal is to connect with customers in a meaningful way to improve customer satisfaction and retention, but what specific objectives do you need to set to get there? Do you need a more vocal and engaged customer base? Faster lead response times? Better customer service? More cross/upselling opportunities?

When setting goals, make them SMART (specific, measurable, attainable, realistic and time-bound). This will help when you come to evaluate your progress.

2. Learn about customer preferences

Survey your customers to learn more about their needs, wants and which communication channels they prefer to use. It's doubtful that you'll get one definitive answer to the latter, so be prepared that you may have to adopt an omnichannel or multichannel communications solution. This may have implications for the type of conversational commerce platform you choose.

3. Choose your channels

Based on your research, determine which communication channels are the preferred options for customers and ensure they'll also work for your business. Decide whether it makes financial sense to use a conversational commerce tool or not. If yes, compare different platforms to discover the features each offers and which will give you the best value for money.

4. Create content and map out communication flows

Suppose you want to try SMS marketing as a conversational messaging tool. Think about the different ways you can use SMS to connect with customers – how customers might end up utilising it. Perhaps you'll use texts to answer FAQS, make product recommendations, or direct customers to resolve their enquiries through self-service?

In any case, you'll need to create content for those specific use cases. If you intend to use a chatbot, consider all the questions customers might ask and how the bot should answer. At what point should a query be transferred to a live agent or a different channel, e.g. phone?

Map out workflows that take into account the different questions and routes conversations could take. Remember to factor in personalization and how you can tailor messaging to individual customers.

5. Integrate

Decide how to integrate your new strategy into your existing systems. For example, if you have a CEP, will your SMS messaging API or WhatsApp chatbot integrate seamlessly into that so you can view all messaging within one central inbox and route enquiries to support agents quickly?

6. Train your teams (or bots!)

Arrange training sessions or virtual webinars to train your staff on your conversational commerce strategy. This should start with an explanation of why the strategy is needed and the objectives you want to achieve, and include technical or operational training for any new systems you're introducing. You should also provide a refresher on brand voice and explain how to report any issues that might arise during initial implementation. Have a contingency plan in place in case anything goes wrong.

It's also crucial to train AI-powered tools to recognise and respond appropriately to user input and learn from questions and behaviours (depending on how advanced they are).

7. Test

Any new strategy or technology should be thoroughly tested before you unleash it on your customers. There are bound to be a few teething problems, and the testing phase allows you to iron out any kinks and avoid embarrassing mishaps. The last thing you want is to leave a negative impression on your target audience and risk losing them to your competitors.

8. Launch, get feedback, improve and repeat

Once you've done all the above, it's time to push the button and go live with your strategy. See how customers respond and monitor engagement metrics such as customer lifetime value (CLV), repeat purchase rate (RPR) and net promoter scores.

By evaluating your strategy regularly, you'll see which areas of conversational commerce you need to improve for long-term success.

Customer submitting feedback on mobile phone

Strengthen customer relationships with conversational commerce

Conversational commerce is a strategy you can employ to nurture your target audience from the very first interaction with your business and long after they become a customer. It can help you enhance your service function, boost customer engagement, satisfaction and retention and increase sales and profits (while reducing new customer acquisition costs).

Use communication channels that suit your customers – survey them to see which channel(s) are the most popular among your target audience. Consider using a dedicated conversational commerce tool if the benefits to your business outweigh the costs.

Further reading: learn more about customer engagement and why it's essential for your business.

Marcus Kallavus
https://www.linkedin.com/in/marcus-kallavus-a9122a137/
2023-10-30 00:00:00 UTC
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