Interviews, insight & analysis on digital media & marketing

How conversational commerce is driving ROI for brands

By Harvey Hodd, Founder & CEO – Blueprint

Conversational commerce sits at the intersection of communication and shopping. Consumers have no desire to wait 48 hours for a support ticket answer; in fact, they want instant information. Obviously, this is near-on impossible if you don’t have a big team or enough hours in the day, which is where conversational strategies come into play.

In real-world scenarios, conversational commerce looks like SMS and WhatsApp messages or social DMs between brands and shoppers that provide a unique journey depending on what the customer needs – and it’s completely changing the brand-buyer relationship.

Why conversations are powerful for brands

The wealth of competition in almost every ecommerce vertical makes it incredibly hard to stand out. By having real-time conversations with customers, brands are able to establish a connection and drive loyalty by providing exactly what a shopper needs at exactly the right time.

For example, if a customer has a query about a product they’ve ordered, they can get an immediate answer. The data collected can also be used to drive frictionless reordering experiences. Say a customer buys a bag of coffee on average once every two months. Brands can use this information to send automated SMS messages to customers when they’re due an order, then interact one-to-one in channel to get feedback and iron out CX issues. Research conducted at Blueprint earlier this year proved out the value of conversations. We found that consumer-facing ecommerce brands that use conversational strategies (like text messages) to speak to their audience build better customer relationships and improve retention rates. On average, LTV increases by 26% amongst customer cohorts who’d been engaged by brands in two-way SMS conversations.

For some brands, the numbers were even higher. Days Brewing saw a 62% increase in LTV and cleaning product brand Homethings saw a 33% increase.

The reason is that conversations not only deepen the connection between brand and buyer, they also tackle some of the biggest and most long-standing challenges ecommerce faces: high subscriber churn rates, encouraging customers to make a second purchase, and generating insights around product usage, to name a few.

And, with online advertising costs at an all-time high and traditional email marketing struggling to muster acceptable engagement rates, an increasing number of brands are incorporating SMS interactions throughout the customer journey.

How customer conversations solve ecommerce challenges

Brands are constantly bashing their head against new challenges. The quick evolution of ecommerce has seen some bumps in the road, but conversations can often help overcome even the most frustrating roadblocks.

● Encourage second purchases: getting a customer to go from first to second order is super tricky, but text messages can remind them they need replenishment or they can offer personalised product recommendations.

● Gaining and managing subscribers: securing new subscribers and recovering existing ones is tough. Text messages can answer queries, tackle objections, and keep subscribers engaged in the long term.

● Product usage: no brand ever really knows how customers are using their products, but text messages provide a personal insight into usage while providing important insights and data about the customer lifecycle.

Conversational commerce: the next five years

Ecommerce has accelerated dramatically in the past 18 months. The pandemic forced many brick-and-mortar brands to go online, but it also became the go-to shopping method for consumers who were stuck at home and wanted a safer way to shop.

This has seen an explosion in the amount of competition, making the difference between brands that are disconnected from their customers and those that aren’t achingly apparent. Modernising the customer journey to accommodate the changing needs of shoppers means understanding what really makes customers tick – and conversations are the most powerful way to do that.

They let you listen to your customers, understand their behaviour, and create connections that go deeper than generic marketing campaigns.

Over the next five years, we’ll see more and more brands adopting SMS into their communication strategy to drive engagement and sales. Customers will be able to make multiple repeat payments either in-channel or via a pre-populated checkout link to remove any friction from the bottom of the funnel, and brands will be able to collect reviews and garner both qualitative and quantitative insights to make data-led decisions moving forward.

Brands are quickly starting to realise the power of conversational commerce. And, the more they implement it across the customer journey, whether that’s by answering pre-purchase queries, collecting and sharing customer reviews, or creating automated subscriptions for loyal customers, the more they’ll be able to drive real, tangible ROI.