For decades, companies operated in a product-focused economy, competing with other brands to deliver the best products at the lowest prices. However, as competition in every industry continues to increase and customer priorities evolve, this model has been replaced with something new.
Today, it’s not the products companies sell, or the prices they set that have the biggest impact on conversions, but the experience a brand delivers. Over two-thirds of consumers say they crave meaningful experiences with brands. A further 86% say they’ll pay more for a guaranteed great experience. The question is, how do companies deliver the experience their customers want?
While it’s true that customers want fast and efficient service, they also want experiences that are humanized, personalized, and streamlined. Conversational commerce could be the key to creating the customer-first experience today’s buyers need.
What is Conversational Commerce?
In simple terms, conversational commerce refers to the intersection between messaging apps, conversational communication tools, and the buyer journey. Investor Chris Messina defines the concept as a tool for delivering convenience, support, and personalization to customers in a world where customers are pressed for time.
Through SMS integrations, messaging apps, and chatbots, companies can interact effectively with customers when they’re on the move, driving opportunities for sales. However, conversational commerce isn’t just about meeting audiences where they are. It’s also a way for companies to bring the intimate, personal interactions of traditional shopping into the digital landscape.
“While there has been a massive shift to shopping online, many consumers still want quality customer service. Direct communications from brands allows consumers to enjoy instant feedback and insights using the digital channels they love. Conversational commerce allows brands to deliver individualized interactions that will set them apart from competitors.” – Andrea Giacomini, CEO at Mitto
In conversational commerce, customers don’t have to call a company to get support. They can access unique recommendations, guidance, and even assistance, through the channels they use most.
According to studies, this unique approach to e-commerce is rapidly delivering value to brands. The market for conversational commerce is expected to reach a value of $290 billion by 2025 alone.
How Does Conversational Commerce Work?
Conversational commerce gives businesses a unique opportunity to not only capture customers’ attention but connect with leads at every stage of the buying journey. It’s a way to open a dialogue between a company and its potential customers, building deeper, more meaningful relationships.
With conversational commerce, brands can connect with customers who have just started their journey, in the awareness stage, showcasing products through chat apps and proactive bots. When consumers enter the consideration stage, businesses can use the power of conversation to answer questions, showcase the benefits of specific items, and help customers compare tools.
In the decision stage, conversational commerce makes it easy for customers to rapidly make a purchase by clicking on a link in a chat box or using a checkout form. Conversational commerce even helps with retention and customer advocacy strategy. It gives businesses a way to reach out and request reviews, up-sell and cross-sell customers, and follow up to check satisfaction rates.
While the exact strategy companies use for conversational commerce can vary, the process usually involves one or more of the following tools:
- Chatbots: Chatbots, created with machine learning, conversational AI, and generative AI solutions, can simulate customer conversations. They provide access to guidance, support, and recommendations throughout the customer journey.
- Social messaging apps: Messaging apps such as WhatsApp, Facebook Messenger, and Viber, offer a convenient way for customers to communicate with brands. These tools can also be used to help facilitate transactions in some cases.
- SMS commerce: With SMS solutions, businesses can send messages to customers via text, promote products, offer discounts, and deliver fantastic customer service.
The Benefits of Conversational Commerce for Businesses
The biggest benefit of conversational commerce is it allows businesses to adapt to changing customer preferences.
With conversational commerce, companies can implement an omnichannel strategy for sales, marketing, and customer support. According to research from Mitto, businesses that implement these strategies earn a 50% higher net promoter score and are four times more likely to report high customer loyalty. Used correctly, conversational commerce can:
- Create more personalized customer experiences: Modern consumers want experiences tailored to them. Using conversational commerce channels like SMS, messaging platforms, and chatbots allows companies to connect with clients on the platforms of their choice and deliver a more unique experience. With CRM integrations, it’s even possible to provide personalized product recommendations and guidance.
- Ensure customer experiences are consistent: 75% of customers expect the same consistent level of service across all channels. The right conversational commerce strategy allows companies to deliver the same convenient, powerful experience on any platform. This increases brand loyalty and improves customer retention rates.
- Increase sales: Conversational commerce allows brands to efficiently guide customers through the purchasing journey. It helps to close potential deals by answering customer questions in a convenient format. It can also help companies minimize cart abandonment rates by encouraging buyers to continue purchasing.
- Improve customer lifetime value: With conversational commerce, businesses can improve customer retention rates and turn one-time buyers into brand advocates. Companies can use this strategy to keep customers updated on order information, implement cross-selling and up-selling techniques, and even ask them to join loyalty programs.
- Enhance brand reputations: Customer experience is the most important factor a business can focus on for differentiation today. With conversational commerce, companies can bring the personal touch of offline interactions into the digital world. This leads to a more memorable, valuable brand reputation.
Getting Started with Conversational Commerce
While conversational commerce might seem like a relatively nascent concept in today’s world, it’s quickly becoming easier to access. As consumer trends evolve, companies in the technology landscape are introducing exciting new ways for brands to invest in conversational commerce.
With the right platform, any business can start building powerful, personalized conversational experiences into every stage of the buyer journey.
