Conversational Commerce: What is it? How does it work for your business?

Conversational Commerce: What is it? How does it work for your business? blog

By Jay Pendragon

Copywriter

Updated on December 7, 2022

Nowadays, there's more and more terms coming alive in the world of marketing and tech. One of the rising markets includes eCommerce, which charles is empowering using a similar new term: Conversational Commerce. But what exactly does it mean and how does it work?

 

What is conversational commerce?

First things first: conversational commerce or cCom, as it’s often abbreviated, describes when e-commerce brands use the power of conversation to sell their products and create an all-around positive customer experience. 

 

As Christopher Schubert puts it: “Conversational commerce happens when a conversation turns into a transaction.”


The term itself has existed since 2015, when the creator of the hashtag, Chris Messina, coined the term in an article on Medium. He predicted that “concierge-style services may become the primary way in which people transact on their mobile devices”.

 

How does conversational commerce really work?

Speaking of the customer journey: When and where does conversational commerce connect people with an online store or a customer service agent? Where are the touchpoints that lead from chat to conversion?

 

Christopher Schubert makes two distinctions: Using cCom for marketing purposes vs. for sales purposes. 

 

For him, the term “customer journey” has become an inflationary phrase that is more buzzword than substance. Beyond the traditional sales funnel, a customer connects with brands via several touchpoints with different intentions. Let’s look at them in more depth, shall we? 🔍​🤓​

 

1. The role of conversational commerce in marketing 

The by far easier, aka less resource-intensive, strategy for applying conversational commerce to your business is automation. Automation in the context of cCom supports and expands human-led interactions.

 

A prime example is post-purchase flows. Here’s how conversational commerce improves the customer experience: 

  • On the order confirmation page of an online store, the customer sees an opt-in.
  • This offers them to receive the tracking number and all updates via Whatsapp. No looking for emails in your inbox when you want to check the shipping status – the information is just one glance at your WhatsApp chat away. 
  • The customer opts in and promptly receives the confirmation on their phone. 
  • From now on, the customer is always up-to-date on their shipment without having to leave the sphere of messenger apps. 
  • After delivery, the online store can send out a personalized message. Ideally, they thank the customer for their purchase and share a survey about their experience. 

 

 

ccom-post-purchase-flows-info

 

“Using cCom for marketing,” Christopher Schubert says, “means being able to accomplish quite a lot very quickly with few resources. Automation is a highly effective tool to support sales.”

 

Another example of using the power of conversation for marketing purposes: providing an incentive to receive a customer’s – or potential customers’ – opt-in for the online shop’s newsletter delivered via messaging apps


WhatsApp newsletters in particular are effective in the DACH region since they reach people in their daily habits. And this trend includes target audiences of all ages: Even 53% of people above 70 use WhatsApp at least once a week. For those 14-49, the number exceeds 90%.

 

2. The role of conversational commerce in sales

Of course, the term conversational commerce goes way beyond order tracking flows and newsletters. Christopher Schubert nails it when he states: “You can’t automate conversations.” 

 

That’s why it is vital to put real people behind the screen and why chatbots will never replace sales, Schubert is certain. 

 

Depending on your niche, you don’t need a large number of salespeople to leverage conversational commerce strategies in sales. One charles client, a jewellery brand with a prolific online store and 14 offline locations, has one advisor to chat with clients. This advisor answers any questions the customer might have, gives recommendations, and organizes the order after a purchasing decision. Through this, the jewellery brand managed to 2-3x their sales conversion in the week of opt-ins. Since then, they receive over 100 opt-ins weekly. 

 

On a psychological level, this makes sense: conversational commerce leans heavily on actions and strategies that inspire trust, which is vital to buying decisions. 85% of people say they will only consider a brand if they trust the brand. 

 

What’s more, a study conducted in 11 countries in 2020 identified trust as a driver of acquisition and long-term revenue: For 53% of respondents, trust is the second most important factor when deciding to buy a new brand. For 49%, there is no loyalty without trust. 

 

Fortunately, mechanisms to build trust are the foundation of conversational commerce:

 

  • Privacy protection: Before receiving any kind of correspondence like a WhatsApp newsletter, users must opt-in or double opt-in. This manages expectations and provides transparency, both of which are key to respecting users’ needs
  • Accessible service: Building trust by being inclusive goes beyond advertising efforts. The fact that cCom happens on messenger apps alone shows customers that a brand understands their needs and shares key values. 
  • Brand competence: Delivering a seamless customer experience via messenger apps will leave clients excited and satisfied. The more competent they perceive you, the higher their trust. 

 

Of course, there’s more to building trust than simply setting up a WhatsApp newsletter or a post-purchase flow. The entire process of using the power of conversation to generate sales takes up resources. And if a business finds this challenging, Christopher Schubert points out, they can focus on marketing first.

 

On the other hand, if you have a high average order value and a high-priced, consulting-intensive product, you need conversational commerce to maximize your potential.

 

3. How to measure the success of conversational commerce

Now that we’ve seen how cCom applies to the reality of a business, how do you measure its success? The metric to choose for your conversational commerce methods depends on the strategy you’ve implemented:

 

Conversions/revenue per conversation (RpC)

The usual metrics for customer service are how many tickets a sales agent completes per hour. When using conversational commerce to increase sales, however, we measure revenue per conversation, i. e. how much revenue a conversation generates

 

Take woodboom, for example: Their hero product is a 1,500€ bed that incurs an average of 7 questions from interested buyers. This process stretches over 2 to 4 weeks when conducted over email. Yet a strength of the Berlin-based woodboom has always been their customer-centric style of communication and the ability to convince and win back customers in empathetic conversations. 


After adding WhatsApp as a sales channel, woodboom reduced the sales cycle to 2-4 days. Adding exceptional service and timely replies, WhatsApp turned into woodboom’s #1 sales channel with over 70% of purchases initiated via chat.

 

CTR and order rates

When implementing conversational commerce by sending newsletters, the obvious metrics are the open rate, click rates, and conversions, i.e. orders resulting from these clicks. 

 

Maniko is a beauty brand giving the classic nail polish an overhaul with their innovative products. The way they re-engage and build their community is by pulling them into their newsletter channel after a purchase. Compared to when they used email, Maniko’s CTR on WhatsApp is 11x that of email newsletters. Woah! 🤩​

 

Types of conversational commerce

The example of how Maniko 11x’d their CTR through WhatsApp newsletters brings us to another important question: What types of conversational commerce are there? 

 

1. Sending conversational commerce newsletters in messenger apps

Email is still going strong, sure. Yet if you want to reach customers where they and their friends are, establishing a presence on messenger apps through newsletter communication is a must. 

 

A conversational commerce newsletter is a message sent from a brand’s Business account to a specific audience of customers.

 

Like a traditional email newsletter, a WhatsApp newsletter can contain anything from:

  • a special offer
  • an exclusive discount 
  • a new product announcement
  • A picture or video message


As we stated in our WhatsApp newsletter guide, both can co-exist and complement one another in a company’s marketing strategy. That is, “as long as you use them as they’re intended to be used (i.e. email newsletters for high-frequency communication, WhatsApp newsletters for lower frequency, highly relevant communication).”

 

2. Selling in chat through conversational commerce

When buying online, one of the drawbacks is the lack of face-to-face interaction with trained salespeople inside the store. While email works for answering customer questions, you can’t replicate an authentic conversation via email. 

 

Sales chats on messenger apps manage to skirt the line better: They unite the convenience of online stores with the personal touch of sales conversations. 

 

The possibilities of using conversational commerce for sales go far beyond advising and clearing concerns, though. Conversational commerce allows you to

  • Create baskets 
  • Trigger reorders
  • Send out status updates 
  • Resolve abandoned baskets
  • Update shipping information

 

… and much more. Basically everything you need to create a groundbreaking experience for your customer that will inspire loyalty and build trust. 

 

3. Using the power of conversational commerce in customer service

Speaking of customer service, this is where the true power of cCom really shines. As Christopher Schubert puts it: “Once I’m in contact with someone, I’m there long-term.”

 

With WhatsApp, the threshold of getting in touch is much lower for customers than email or phone calls might be. 81% of millennials even get apprehension anxiety before making a call, which takes courage for them. This “Generation Mute”, which certainly also includes the younger demographics, will appreciate it if they can chat with brands rather than summon the will to place a call. 

 

Once in contact, brands are able to turn customers into life-long fans through excellent service. WhatsApp has an incredibly high retention rate, Christopher Schubert confirms. One of charles’ customers 2.5x’d their customer lifetime value through cCom. 💪​

 

Get started with conversational commerce

To see how we can help you boost your business with the power if cCom, simply request a demo. During the chat and subsequent calls, Christopher Schubert and our team will help you design the strategy that best fits your cCom needs. 

 

Ready to transform your business and inspire long-lasting customer relationships?

 

Reach out to us for a chat today! 💛

 

 

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