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Conversational Commerce: Definition, Examples, and Best Practices for 2021

Conversational Commerce
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    When shopping in person, a friendly conversation with a helpful sales associate makes all the difference. They answer your questions. They guide your decision-making process. They make you feel at ease.

    Brands have been trying to mimic that feeling online for years. Without face-to-face interactions, ecommerce can feel impersonal, dispassionate, and detached. Customers can email the brand, but that comes with long response times. They can call a 1-800 number but that means suffering through endless menus and mind-numbing hold music (or shall we say muzak).

    Brands have recently found a good compromise: conversational commerce. It’s the process of using natural language in mediums that consumers use every day like SMS, messaging apps, voice assistants, and chatbots. Since consumers use those channels every day, it leads to quicker issue resolution and more potential for sales.

    Conversational Commerce: The Basics

    What is conversational marketing?

    Conversational marketing is a feedback-oriented approach to ecommerce sales and marketing. It utilizes the power of real-time communication, allowing customers to interact in ways that are fast and familiar — rapidly moving them through the online shopping sales funnels and resolving issues quickly. Consumers have answers to anything at their fingertips, so conversational marketing is a great response to the instant gratification and personalized touch that consumers increasingly expect.

    What is conversational commerce?

    Google ‘conversational commerce’ and you’ll find hundreds of definitions. Some are even calling it C-Commerce. Let us cut through the noise for you.

    Conversational commerce is the process of using popular messaging platforms to turn online buying into a two-way conversation between brand and consumer. With real-time communication, live representatives and artificial intelligence assistants create a helpful, interactive environment to resolve issues and guide consumers through the purchase process.

    The term was popularized in a 2015 Medium post by Chris Messina (who invented the hashtag and developed products for Google and Uber). Here’s how he described it: “Conversational commerce is about delivering convenience, personalization, and decision support while people are on the go, with only partial attention to spare,” he wrote.

    Those words are as true today as they were back then.

    Let’s say a consumer texts a company asking why their delivery is late. The company can write back quickly — in human language — to address the problem. Here’s a great example from a brand using Postscript:

    Conversational Commerce Example

    Isn’t that friendly, two-way tone better than robotic corporate-speak? Notice how communicating via message leads to a more informal vibe, yet still allows the brand to take care of business? And -- at the end of the day -- it solves the customer's problem.

    That’s the essence of conversational commerce.

    Consumers want to message with brands…

    • 65% of consumers worldwide said they would like the ability to message with brands.

    ...But it’s not widely used.

    • Only 29% said they have experienced consumer-to-brand messaging.

    Despite the term ‘conversational commerce’ being coined six years ago, there is still great confusion around the concept’s definition and applicability.

    I suspect this is because there are a lot of technologies that advertise ‘conversational commerce’ but instead just add extra technology into the consumer experience - which makes things clunky instead of streamlined.

    One of the largest mistakes made by companies who want to become “more conversational” is not taking the end consumer in mind. You want to make their lives easier, not pummel them with extra steps in the process.

    So when done right, what success does conversational commerce warrant?

    How does conversational commerce impact shoppers?

    It helps brands meet customers where they are. Consumers feel comfortable texting or sending messages through apps like WhatsApp or Facebook — so meet them where they are. Doing so will make it more natural for them to engage with your brand and visit your ecommerce store in the future.

    It empowers two-way communication. Don’t talk at your customers. Allow consumers to chat and ask questions too, ya know, like a real conversation.

    It provides customers with real-time responses. In today’s world of instant gratification, people increasingly expect immediate responses.

    3 ways brands fail at conversational commerce

    The lack of guidance around ‘correct’ conversational commerce causes brands to fall short of their expectations.

    1. The conversation isn’t two-way. Conversations inherently are back-and-forth. If you don’t let customers reply back, it isn’t conversational.
    2. The conversation is happening where customers don’t care. This is where research becomes very important. Make sure you know where your customers want to communicate with you. If you know they’d prefer texting, don’t invest in an Amazon Alexa app.
    3. There isn’t anyone to respond to inquiries. Imagine giving your customers the option to get in touch with you, but when they take the plunge and message in, they’re met with crickets. That’s a bad customer experience.

    Why conversational commerce is good for business

    1. It provides a great customer experience.

    In an era where Amazon can always win on price and delivery speed, you need to stand out. Customer experience can be that differentiator. In fact, 86% of consumers are willing to pay more for a good experience, and businesses identified consumer experience as their No. 1 priority for the next five years.

    2. It encourages loyalty.

    Brands that make interactions simple and easy are more likely to earn loyal customers. In fact, 79% of customers are more loyal to brands that are easy to contact. But beware, one in three consumers will walk away from a brand after just one bad experience.

    3. Consumers want it.

    Younger consumers have a strong desire to message with brands — including 70% of 18-34 year olds. They are the generation that hates talking voice-to-voice and use messaging all the time. But it’s not just the young folks — American interest in messaging businesses grew from 52% in 2018 to 62% in 2019 for all demographic groups.

    Types of Conversational Commerce

    1. SMS.

    Text messaging is as conversational as it gets. It is far less formal than other types of communication and gives the entire interaction a personal feel — like chatting with a helpful friend. For businesses, the benefits are obvious: SMS marketing open rates are nearly 100% and most messages are read within 5 seconds. It also reduces stress on customer support staff, deflecting as many as 40% of inbound calls — leading to less waiting time for customers and more efficient work days for agents. For customers, texting with a business makes them feel like their issue is being handled in the most immediate way possible, which makes it no surprise that it is their preferred form of communication for urgent matters.

    SMS Benchmark Report

    Want to see how your brand stacks up against the rest of your industry? Check out our Benchmark Report.

    2. Chat.

    When done correctly, chatting with a brand feels natural. Simply write a sentence or two explaining your issue and you’ll probably get an instantaneous response from a chatbot. It’s mobile-friendly and legitimately mimics the types of SMS and messaging consumers use all day with friends and family. In fact, 15% of consumers have made a purchase via a chatbot and 81% of them would do it again.

    While chatbots can help with initial responses, make sure a live person hops on soon afterward. Remember, 82% want to interact with a real person, not an automated bot, so be sure to strike the right balance.

    3. Messaging apps.

    Facebook Messenger, WhatsApp, WeChat, Kik and other messaging apps are growing in popularity. It is estimated that they have 2.77 billion users combined. Not only do people rely on them to communicate with family and friends, they increasingly use them to chat with businesses. With open rates of 75%, consumers are likely to see and respond to a brand’s message on a messaging app. Meanwhile, 53% say they are more likely to shop with a business if they can communicate through a chat app. The Washington Post put the paradigm more plainly, calling messaging apps “the biggest shift in customer service since the 1-800-number.”

    4. Email (well, it’s complicated).

    Email is a powerful marketing tool that leads to conversions. With the right language, tone, and response times, it can be effective at cultivating a conversational commerce feeling. But let’s be honest, email has its flaws. Open rates hover around 21%. Important messages get lost in a sea of junk mail. Plus the lack of real-time reciprocation makes messaging apps or SMS feel more engaging.

    5. Voice assistants.

    With voice assistants, interaction literally is a conversation. With Amazon Alexa, Apple’s Siri, Google Home, or other services, consumers legitimately talk in natural language to make a purchase or solve an issue. They are only gaining popularity as 38.5% of the U.S. population use voice assistants in some form.

    Benefits of conversational commerce

    1. Abandoned cart reduction.

    Try starting a conversation with people who left items in their shopping carts. Guide them through the buying process, answer questions, or offer coupons to help get them to convert.

    2. Nurture leads.

    Use the power of conversation to nurture consumers through the sales funnel. Offer chat on the checkout page or the ability to text anytime. Sending discounts or advice just might push them over the edge.

    3. Upsell.

    Provide personal product recommendations or connect with consumers who bought from you in the past.

    4. Build customer loyalty.

    Build trust by offering a personalized experience through the customer journey — especially during someone’s very first time buying with you. It will leave them with a good first impression and keep them coming back.

    Examples of Conversational Commerce

    It’s time to see conversational commerce in action. In the following examples, notice how each brand takes an informal, personal tone with their audience. Their messaging feels human and resonates whether they are seeking information or helping a customer solve an issue.

    OLIPOP

    When natural soda brand OLIPOP wanted to survey its customers about possible expansion locations, it turned to SMS. Rather than a long-form with many questions, they empowered customers to answer with a quick text — then offered a conversational message back.

    Olipop

    Dr. Squatch

    Personal care brand Dr. Squatch uses SMS to handle issues as quickly as possible. In the following example, notice that they collect tracking information and email immediately, leaving the customer feeling like the company will stop at nothing to resolve their problem.

    DrSquatch_2

    Blume

    Skin and body care company Blume also uses SMS for fast customer service. In the following example, notice how Blume uses simple, conversation language to offer multiple solutions. Not only do they promise to look into the issue, they also offer a gift card immediately.

    Blume

    For more examples, check out Fantastic Texts, a collection of terrifically worded, never spammy text messages that are sure to provide much needed inspo.

    3 Steps to conversational commerce success

    1. Set goals.

    Are you looking to reduce cart abandonment? Make a better first impression when customers reach your online store? Increase brand loyalty? Sell via social media? Determining your goals will help you get started.

    2. Find the right vendor.

    The right partner can help you send conversational messages that are enticing and never pushy. Find a vendor that has templates to help you craft the best possible messaging and a supportive staff eager to help you improve while keeping you compliant.

    3. Measure success.

    Metrics are everything. Be sure to measure the number of conversations, conversion rates, and satisfaction rates — then tweak your approach to improve those metrics.

    Predictions for the future of conversational commerce

    More personalization

    As much as people might complain about seeing Facebook ads for a product they were just thinking about, consumers really do crave personalization. In fact, 80% want personalization from retailers. Expect retailers to capitalize on that during conversations, serving them personalized products and messaging.

    Fewer promotions

    Junk mail is just that … junk. Marketers are wising up about blasting their audience with blanket promotions. They know consumers don’t see them as meaningful and don’t want to be spammed. This is particularly true with SMS messages where companies must be very selective about what they send and how often they send it.

    Better AI

    Artificial intelligence is going to improve massively in the next few years. That means conversational AI delivered by chatbots will begin to rival the real thing. The advancement of machine learning could even lead to chatbots from your bank or insurance company that proactively reach out with personalized offers or can handle complex problems without the assistance of humans.

    More streamlined purchases

    Buying through SMS or messaging apps is going to be the norm. It’s the latest way that brands can meet consumers where they are. If you’re texting with a consumer, why make them navigate to your website, find a product, input their payment information, and complete a purchase? Why not have them text to buy instead? Every brand wants to shorten the path to purchase — and buying through messaging is the next evolution of that process.

    Discover the next step of commerce

    You know the benefits of conversational commerce and how to get started. Make sure your messages sound human, and make sure you are accessible. Is your brand available via SMS, chat, or messaging apps? Are those channels managed by live humans, chatbots, or a combination of the two?

    Answering those questions is the first step towards embracing conversational commerce. Implementing it correctly will lead to a great customer experience that promotes loyalty and helps you compete with the world’s largest retailers.

    jaredshelly_square
    Author: Jared Shelly

    Jared Shelly is the founder of Shelly Digital, a freelance writing and content marketing agency. He’s written for Philadelphia magazine, the Philadelphia Inquirer Business Journal, and Risk & Insurance, and his ghostwritten content has appeared in Forbes, Quartz, and Inc.