Conversational Commerce In Marketing: The Complete Guide
Commerce
Oct 21, 2022

Conversational Commerce In Marketing: The Complete Guide

Erika Carmichael

For ecommerce brands, the shopping experience is largely a DIY activity. Shoppers browse through items on their own, research products, and compare prices before making a purchase decision.

But what happens when buyers can't find what they're looking for or have trouble completing a purchase? And what happens if they need help after the sale?

91% of shoppers want real-time assistance, but scaling a customer success team is expensive—especially for small and medium-sized businesses that don't have the budget to allocate toward a 24/7 human-led operation.

This is where conversational commerce comes in.

Conversational commerce uses chatbots, instant messaging apps, SMS, humans, and other automation tools to have conversations with customers—with the goal of providing a more humanized shopping experience.

What Is Conversational Commerce?

In 2015, Uber's Chris Messina (inventor of the hashtag) coined the term "conversational commerce" to describe the intersection of messaging, ecommerce, and artificial intelligence and the race to provide personalized service at scale.

At its core, conversational commerce is about bridging the gap between the human need for connection and the efficiency of technology.

On a deeper level, it's about using technology to create more human experiences.

The primary goals of conversational commerce are to:

Ecommerce businesses and online consumers mutually benefit from this exchange—chatting with a chatbot or live person improves the customer experience while providing valuable data points that businesses can use to improve their marketing and sales efforts.

How Conversational Commerce Works

Ecommerce marketers use conversational commerce throughout the customer journey, from initial awareness to post-purchase support.

For example, a business might use live chat on its website to answer questions and help potential customers learn more about its products or services. Once a customer has made a purchase, conversational commerce can continue to be used to provide customer service or follow up on feedback.

Let's examine the five steps of the purchase journey and how conversational commerce works in each stage:

Awareness

In the first phase of the customer journey, the customer recognizes their need for a product or service. They may visit your ecommerce website for a connection or inquiry at this stage.

Your goal in the awareness stage is to introduce your brand and build interest within your target audience. In this stage, you can use conversational commerce to engage with website visitors, answer their questions, and provide helpful information about your products or services.

Since 59% of buyers prefer to make purchases through familiar brands, it's important to establish a one-on-one connection between your brand and the customer as early as possible.

Consideration

By the time a customer reaches the consideration phase of the buyer's journey, they might know what they need and might be actively researching their options.

If they still need help, many eCommerce brands will use surveys and questionnaires to continue to help guide their customers to the right product fit or product combination.

Your goal in this stage is to help customers understand how your product or service can meet their needs. You can use conversational commerce to provide more information about your products or services, answer customer questions, and further the connection with their expert.

Interactive chat features are critical at this stage because they allow your brand to answer questions they might not be able to find anywhere else. 

This is your chance to show off your product's features, dispel any myths or concerns, prove your value, and ultimately build trust with the customer—all while delivering convenience.

Given the number of users who make purchases on mobile devices, this is also your opportunity to build a seamless connection between the chat applications they already use (think SMS) and their source of information. These conversations can occur via an onsite chat widget, but also frequently happen via text or other channels like Facebook Messenger, Instagram messages, or even Twitter DMs.

Decision

At this stage of the buyer's journey, your customers are ready to make a purchase—but that doesn't mean they'll actually follow through.

According to Baymard Institute, 68.8% of users abandon their online shopping carts. This results from several factors, such as unexpected delivery costs or a lack of customer support.

Using conversational commerce to remind your customer about the items in their cart and provide customer support can help reduce the number of abandoned carts. 

Moreover, companies that communicate with potential customers during this stage instill trust in their brand and make them more likely to become loyal customers. Here, depth of communication matters. Many companies opt for simple retargeting ad strategies or automation to lure potential customers back to their carts, but an elevated experience involving human touch opens the door for new sales opportunities, upselling, and cross-selling by highlighting different product and pricing options, verifying product quality, and describing relevant features and details that the customer otherwise might have overlooked.

Retention

Just because someone makes a purchase doesn't mean they'll come back and buy again. Buyer's remorse, changes in needs or circumstances, and a poor customer experience can all lead to customers who defect to your competitors.

That's why it's important to use conversational commerce in the retention stage of the buyer's journey. By continuing to engage with your customers after they make a purchase, you can utilize marketing tactics that feel more integrated and personal to the customer, such as offering deals, coupons, and other buyer incentives.

Advocacy

Marketing is a huge part of getting customers to come back—but it's not the only thing. Customer loyalty and advocacy are essential for the long-term success of any online store.

New customer acquisition costs five times as much per customer as retaining an existing one, and customer advocacy is an excellent way to organically grow your customer base while also reducing acquisition costs.

When customers are advocates for your brand, they're more likely to continue doing business with you and recommend you to others.

Conversational commerce can help turn one-time buyers into lifelong fans by keeping them updated on new products, providing customer support, and building a relationship with them over time.

Businesses can also use conversational commerce to encourage customers to leave positive feedback, review products, and even create content that voices customer satisfaction.

By incentivizing customers to participate in these activities, you can not only improve the customer experience but also generate valuable user-generated content (UGC) that can be used in your marketing strategy.

Types of Conversational Commerce

There are four types of conversational commerce: chatbots, live chat, conversational SMS, and voice assistants.

Each type has its own use cases, so understanding the difference is essential for formulating your conversational commerce strategy.

Man having texting customer service chat bot

Chatbots

For small businesses and online stores with limited resources and simple product or service offerings, chatbots are able to fulfill a number of customer needs and support a variety of conversational marketing use cases, including:

Chatbots are computer programs that use a decision tree with prepopulated paths to attempt to answer the most commonly asked questions. Advanced versions also include conversational AI that adds another layer of realism to the interaction by using Natural Language Processing (NLP) to understand human speech and respond accordingly, but most businesses don’t have this capability.

One of the benefits of chatbots is that they're available 24/7, so customers can get answers to their questions immediately, even if it's outside of normal business hours.

Another advantage is that chatbots can handle multiple conversations at the same time, so you're not limited by the number of customer service representatives you have on staff.

Live Chat Software

Live chat is a real-time conversation between a customer and a company representative. Ecommerce websites use live chat apps throughout the purchasing journey to answer questions, give personalized advice, and solve customers' problems with real-time responses.

Often, an AI chatbot would be the first point of communication, but a human would be brought in to take over the conversation if the issue is complex or requires additional context.

These tools can be either reactive (e.g., a customer initiates the conversation) or proactive (e.g., the company sends a message to the customer through a popup window).

Live chat is beneficial because it allows businesses to provide an immediate, personal response to customers' questions and concerns.

It's also useful for upselling and cross-selling opportunities since agents can make product recommendations in real-time based on the customer's needs.

Conversational SMS

Connecting with brands through a messaging app on mobile devices is something that consumers are already comfortable with and expect.

Conversational SMS is a type of conversational commerce that allows businesses to manage customer conversations through iMessage, WhatsApp, and other texting platforms. This channel can be used for customer support, appointment reminders, updates on order status, etc.

One of the advantages of using messaging tools is that it's a very personal form of connecting with a customer. By using emojis, GIFs, and other forms of interactive communication, businesses can help their customers feel connected and valued.

Another upside is that SMS messages have a high open rate, so you can be confident that your message will be seen by the customer.

Voice Assistants

Voice assistants (e.g., Siri, Alexa, Google Assistant) are computer programs that use AI to answer questions, provide customer support, and make recommendations based on the customer's statement or question.

Since they can respond immediately to customer queries, voice assistants can be used for a variety of customer support needs, such as answering frequently asked questions, providing updates on order status, and giving directions to the nearest store location.

And since they're always available, voice assistants can help customers even when your business is closed.

Unify Your Conversational Commerce Tools With Humankind

If you're wondering which type of conversational commerce tool is best for your business strategy, the answer is: it depends.

For businesses with limited customer service bandwidth, a chatbot is a good place to start. But as customer service needs scale, businesses don't just move on to the next solution, they add new solutions to their tech stack.

For example, a business with a complex product may have users begin their queries on-site with a chatbot, but if they need more complex support, they'll be escalated to a human agent through live chat, SMS, or even a phone call.

The important thing is to have a plan for how you'll use each tool to support your customer base. SMS-based connections, shopper-specific landing pages, and tailored product recommendations help online retailers create extraordinary consumer experiences, encouraging brand loyalty, acquisition, and retention.

And that's where Humankind comes in.

We help users embrace the human side of commerce by unifying all of the above tools—and more—with a human touch.

Click here to find out how.

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