• Companies risk losing $3.1 trillion or 6.7% of their total revenues in consumer spend each year because of sub-standard customer experiences
• 71% of online adults are more likely to purchase from a company they can contact via messaging

A new WARC and Meta white paper: Unlocking the potential of conversations

Creating a more personalized two-way interaction with customers is an increasingly important requirement for brands and can generate a significant advantage for businesses, as customer journeys become more complex.

‘Unlocking the potential of conversations: How Business Messaging drives value throughout the customer lifecycle’ is a new study by WARC in partnership with Meta that distills recent research into the shopper journey to help brands create a closer, more trusted and valued customer relationships.

Aditya Kishore, Insight Director, WARC, said: “Customer touchpoints have been expanding for several years. While the funnel remains a popular basic structure for understanding the marketing process, we are finding that the way in which we attract, inform, convert and engage customers has a growing number of moving parts.

“The ability to adapt to different journeys and engage and support customers through the buying process (and beyond!) is likely to be an important asset in driving engagement, customer relationships and revenue for a brand.”

Shekhar Deshpande, Head of Strategy, Global Clients, Meta, commented: “At Meta, we see Business Messaging as a transformative tool that revolutionizes how businesses and customers talk to each other. The best conversations feel personal, relevant, and in-the-moment , and build stronger, lasting connections.

“That said, it’s critical for messaging to be both data-driven and respectful of privacy, so the messages people get are both useful and secure. By using AI and machine learning, businesses can offer personalized, relevant experiences that make customers happy and provide significant cost advantages to businesses.”

Key takeaways outlined in ‘Unlocking the potential of conversations: How Business Messaging drives value throughout the customer lifecycle’ include:

• Companies risk losing $3.1 trillion in consumer spend each year (6.7% of their total revenue) due to substandard customer experiences

From social media ads to influencer marketing, social commerce and retail media, the number of digital touchpoints continue to rise, reshaping how people become aware of, shop for and buy products and services. Brands are struggling to meet consumers’ expectations as shopper journeys become more individualized and unpredictable.

Data from Qualtrics shows that globally, companies risk losing $3.1 trillion in consumer spend each year because of substandard customer experiences equating to 6.7% of their total revenue. Additionally, 80% of consumers say they have switched brands because of poor customer experience; and according to Zendesk, 62% of consumers think businesses should be doing more to personalize services.

Abhishek Jadon, VP, Global Media Transformation, PepsiCo says: “There’s a fundamental shift towards long-term engagement versus serving one-time media impressions... The biggest changes in the digitally connected world concern how people discover and engage with you. Our focus is meaningful consumer connection. If you do that with a human-centric lens, you build relationships.”

To meet the challenge, brands need new communication models to generate interest at scale, convert interest into meaningful relationships, leverage relationships across the full customer lifecycle, measure outcomes, and optimize the media mix to drive successes.

• 71% of online adults are more likely to purchase from a company they can contact via messaging

Nearly half of the world’s population (3.6 billion people) use messaging apps. There are more than 600 million conversations between people and businesses every day on Meta platforms, WeChat has more than one billion users in China, and 97% of the population in South Korea use KakaoTalk to communicate.

Yet many brands have been slow to capitalize, despite research showing that consumers think messaging is a better way to interact, motivated by familiarity, convenience and control. Data from Kantar shows that 80% of online adults agree that messaging is a quick and easy way to communicate with a business. 71% are more likely to do business with or purchase from a company they can contact via messaging, and 69% prefer to message a business rather than call.

As messaging becomes increasingly measurable and scalable and advances in AI and bots accelerate, brands that incorporate messaging solutions into the media mix can create more direct and personalized connections with their customers at scale. They can also gain unique customer insights to help build lasting relationships, driving growth across the customer journey.

Rodrigo Silva Menezes, Senior Marketing Manager, Mobile Experience, Samsung Brazil, says: “Messaging reduces the distance between the organization and the user by being present in an interface that the user is already familiar with. That’s crucial. When we run a campaign using ads that click to WhatsApp, we reduce the number of clicks in the user journey by 80%.”

• Re-thinking customer journeys: 70% of online shopping carts are abandoned

While the traditional purchase funnel remains useful from a measurement perspective, its strict linearity looks increasingly outdated.

Newer models, such as the Hankins Hexagon, show that customer journeys are highly personal and extremely fluid and that experiencing a product can lead to a repeat purchase. But equally, if the experience is disappointing or the brand fails to re-engage, it may actively encourage consumers to explore other possibilities.

When a shopper initiates a messaging interaction, they are signaling an eagerness to engage. This opens the door for brands to start a high quality, two-way conversation. Wherever they sit in the journey, messaging can nudge customers around the L.O.O.P.:

Leading them to discovery. To create awareness, brands can invest in paid social, include QR codes on print materials, or incorporate messaging on websites and product pages.

Orchestrating the journey to conversion. With a 1:1 conversation in progress, businesses can start elevating their brand within the customer’s consideration set. Personalization is key, as consideration paves the way to conversion.

Optimizing the purchase and post-purchase experience. According to research by the Baymard Institute, 70% of online shopping carts are abandoned. Whilethere are many reasons, messaging can be effective in resolving customer queries that have failed to complete.

Providing meaningful reasons to re-engage. Multiple research studies have shown how building penetration amongst non- or light buyers is the primary source of growth through promotions, competitions and rewards.

Isabelle Lafont, Global Head of Care & Consumer Experience, L’Oréal, says: “For me, messaging is really the perfect match. It’s very powerful for marketing, but it’s also important for problem-solving. It’s a big shift in efficiency compared to other channels.”

• How to implement messaging solutions efficiently and effectively: The 5 Ps

Messaging can be transformative. By impacting every part of the L.O.O.P., it’s a powerful enabler for logistics, sales and customer service teams. Guided by five fundamental principles, businesses can start small and scale up:

Prioritization: While there may be advantages to targeting quick wins at launch, attention should turn quickly to key brand and customer needs aligned with the overall brand strategy.

Privacy: According to Deloitte, just 34% of consumers feel companies are clear about how personal data is used. Customers must feel that every interaction is happening with their full permission, and brands must operate to the very highest standards.

Partners: Partners can offer ready-made analytics platforms enabling organizations to launch messaging more quickly, test more extensively and scale more effectively.

Performance: Brands need to constantly search out new ways to surprise and delight their customers. In terms of messaging, this means delivering interactions that are increasingly personalized, predictive and multimedia.

Proactivity: To stay ahead of the competition, brands need to be agile, commit to a constant cycle of test-and-earn, and be informed on how messaging platforms are developing.

A complimentary copy of the full report is available to read here. A webinar discussing the findings outlined in the report will be held in September.

Discover more on how Meta’s Business Messaging is helping businesses build two-way relationships to establish greater ownership of the customer experience.

About WARC – The global authority on marketing effectiveness

For over 35 years WARC has been powering the marketing segment by providing rigorous and unbiased evidence, expertise and guidance to make marketers more effective. Across four platforms - WARC Strategy, WARC Creative, WARC Media, WARC Digital Commerce - its services include 100,000+ case studies, best practice guides, research papers, special reports, advertising trend data, news & opinion articles, as well as awards, events and advisory services. WARC operates out of London, New York, Singapore and Shanghai, servicing a community of over 75,000 marketers in more than 1,300 companies across 100+ markets and collaborates with 50+ industry partners.

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