Conversational Marketing
Conversational Marketing Growth Marketing

Communication is one dimensional. Conversations are real, human-centric and empathy imbibed. All this time marketing communications were product-centric and not customer-centric. When you are customer-centric, then your brand should converse with your customers in their language, not just communicate. 

Even in this modern age, typical marketing communication is still entwined with, what I call the flyer slip in approach, which means broadcasting stale messages through all marketing channels for the sake of communication to increase sales. These monotonous promotional materials are not going to create any difference or get a voice in the marketplace, which is already crowded and noisy after the release of Social Media. Conversations have become one of the brand identities.

What is conversational marketing?

Even social media allows the company to connect personally but the language they use still sounds from the previous era. They apply the same template without any thought. But this wouldn’t work on messengers because these are personal spaces where nourished relationships are built. If a business would like to succeed in this messenger era, they need to revise their approach in terms of their language. It should be a conversation, not just content. Merely stating things won’t work anymore. Brands should speak with their customers not just about what the brand is doing. 

This is the opportunity for the brands to engage with their audience directly without any intermediate, how they utilize it, is their choice. We have seen businesses splurge into an older approach that broadcasts messages to their customers like before.

Why Conversation? Messaging channels present us with an opportunity to speak to our customers in their natural language. Now the question is, how we utilize these channels to build a personal relationship that would last long. These are their personal spaces and we are trying to enter into that space and it can get sensitive. If the brands don’t consider the sensitiveness of this space, it may backfire and it would become noisy out there. An honest and sincere approach towards building the relationship is imperative in this conversational realm.

90% of consumers are more likely to buy when helped by a knowledgeable associate. Thus, interactive campaigns are 7.5x more effective than passive campaigns.

 

Conversational Channels

Messenger

Whatsapp

Google Message

Instagram Direct

Onsite/Native Apps

Apple Business Chat

 

Other channels [Beyond Content Marketing]

Social Media

Email

Push Notification  via Mobile and Browser

 

4 reasons to convert your marketing communication to conversation. 

1. Machine Natural Language Processing 

Recent advancement in the A.I. realm channelled the steam that diffused the machines non-capability of comprehending the human natural language that was a long-pending machine diabolic. Now, the possibility of having a human conversational interface, which removes the barrier between humans and machines is more.

2. Messaging Apps

After the advent of messaging apps, the time spent on messaging apps have surpassed social media, and now it seems social media has become a thing of the past. If we ponder over the engagement rates on both channels, the social media rate has gone down. This demonstrates the latent human instinct to have their personal space and this urge is quenched by a surge of messengers where intensified relationships are possible. The reason behind why the users’ obsession with social media drained is because of the excessive noise which is out of their control but when it comes to messaging apps they regain that control to filter messages. 

From the marketing perspective, social media has levelled the playing field as it allows even the SMEs to connect with their audience directly where previously, in the TV era, the MNCs used to monopolize the advertising space. What was unexpected is the trivialised effects on social media. The connection between people is way beyond psychological limits. Suddenly, their feeds are filled and a tremendous amount of information has clouded the passage. Initially, businesses have enjoyed the benefits of social media due to the high engagement rate but now it has gone down due to the volume of information out there. There is just too much noise. 

3. App Fatigue

In the era of billions of websites and millions of apps, on average, the smartphone screen space is taken by 100’s of apps but studies demonstrate that a maximum of 15 apps is used frequently.

There’s no denying the fact that we’re moving away from emails, SMS and phone calls. We’re using mobile-friendly messenger apps like Facebook Messenger, iMessage, and WhatsApp to keep in touch with friends, family, and even businesses more. It’s the quickest, easiest, and most convenient way to reach someone.

Just look how quickly messaging apps surpassed social networks in monthly active users and why:

Rise of instant messaging as the preferred channel

Instant messaging has become the most preferred channel of communication for technology users for its ease of use and instant response. They prefer this familiar user experience to instantly communicate with enterprises.

Deliver superior customer service

Today’s customers expect real-time service.  Because of its ability to mimic human conversation you can deliver extremely proactive customer service leaving them feeling like there is always somebody at your service.

4. How people are making search behave like a personal adviser.

Recent Google data reveals that search queries have become more personal than before. Through searches, users are looking for personal advice rather than gathering information. Static and stale content is no longer enough to hold the users’ attention. The prevalent attitude towards search queries as to gather information should be changed in the current context and the efforts are to be deviated to create personalized content which resonates with ‘me’ queries.

Here, the key is instant gratification only if the brands could jump into the wagon and reframe the content which addresses the users’ queries. We noticed that a few brands have implemented personalized advisors on the website to quiz the customers and then recommend the right product/service.

Why Messaging apps?

 

Conversational Engagements

Messaging channels are not the space to conduct our usual marketing practices which have been going on for five decades. It is imperative to change now, otherwise, we are again bombarding their personal space with noise which they would refuse or revoke to see. The challenge is finding the unique voice which is recognised rather than becoming an echo.  

The key is conversation and personalization. Whatever we do, this would be the basis of it. If we miss out and carry forward our old approach, it may not be fruitful. Efforts are being wasted. 

Use Cases

  1. Customer Review – As is explicit in the below chart, customer reviews on Google would give visibility a boost. To do that, a URL link is sent to their conversational space and an incentive is to be offered.
  2. Referral Engagements – A brand-specific conversational engagement campaign with a referral element is to be ingrained to have continuous personal brand engagement. This engagement should be well thought out and creative enough to hold their imagination.
  3. Reward Program: We can think of different use cases but one of the immediate applications would be integrating the existing rewards programme with Facebook Messenger by building a layer of automated messenger conversation to have engagement via messenger which encourages more purchases.
  4. Influencers – Conversational influencer marketing approach would be entirely different than typical social media-based influencer marketing. A brand community advocate should be selected and entrusted with conversational group moderation. There should be an incentive for it. Here influencers don’t have any followers or any previous relationship with the audience. Selected influencers become the brand’s loyal advocate who will moderate the conversations. A scheme should be worked out to let the conversations happen. No gimmicks or mishaps must occur. If they do, it will backfire. There should be a big no to broadcasting. Especially in WhatsApp, different groups for different segments must be created than one group for all so that the influencer status story can be set.
  5. Conversational Stories: Recent story format to be leveraged for maximum reach on Instagram, FB & Youtube Stories > share with all three.
  6. Lead Generation 
  7. Conversational Shopping

8. Conversational Viral Engagements:  

Just an example, the average number of visitors/users per day to a portal is 100 and each visitor has an average of 100 connections, which is 2 exponential by 100 equal to10000 connections.

Reed’s Law = 2 ^ 10 = 1024 connections

So the question is how to connect with these 1000 connections? 

Viral coefficient (K)

I = Number of Invitations

CR = Conversion Rate

I x CR = K = Viral Coefficient

What is Viral Coefficient?

Viral Coefficient is a metric that calculates the number of new users that comes from the reference of an existing user. It is also known as virality, and speed’s up the growth of the company. Virality is like an incentive that the user gets for referring their friends to the company.

How to calculate Viral Coefficient:

(#) invitations sent per user X (%) conversion rate = (#) Viral Coefficient

You need two metrics for calculating the viral coefficient: the number of invitations sent per user (referrals, shares, or whatever best represents an invitation to use your product/service), and the average conversion rate of those invitations. Then multiply those two metrics to get the viral coefficient (often referred to as the ‘K’ value).

Visualization Examples

Below are a couple of examples of how you might view Viral Coefficient on your marketing dashboard.

Pros:

The viral coefficient tracks the growth of your company. Improving virality starts with improving the product. The most viral products are those that only work if they are shared. It’s a good method for marketers to analyse word-of-mouth growth, which is the most effective channel of marketing.

Cons:

A viral coefficient is an indicator that the marketing department cannot change itself. Virality must be instilled in the product or service for it to be effective.

It’s also significant to consider the viral cycle time. It’s the time difference between when a user invites friends to when those users become users and begins to refer others. The viral cycle time is directly proportional to the company’s growth.

Other Terminologies

K-Factor

K-factor is a metric to understand how viral your viral loop is. 

If your viral coefficient is higher than 1, every new user you add to your system will add at least 1 other user and so on. When you have a K-Factor of 1 or more, you have a viral application. Even if you did nothing else to market your product, your customer base would continue to grow as long as your K-Factor remained above 1.

However, getting a K-Factor greater than 1 is a difficult job. For those of you looking for the math, the simplified version of calculating your K-Factor, or rate of virality is:

I = Number of Invitations

CR = Conversion Rate

I x CR = K = Viral Coefficient

Viral Loops

A viral loop is a process by which your customers refer other customers who in turn become referees referring others and this loop continues. Some example viral loops are:

  • Users inviting others to collaborate in a project management tool,
  • A discount earned for each new users who register,
  • Users sharing their progress in a game.

Organic Viral Loop

Organic viral loops occur naturally if your service or product is used on a regular basis.

An example of an organic viral loop is inviting a coworker to review a plan in a project management tool. This is organic as here, others can view and collaborate on a project and in turn, the invited user will likely invite others to the project as it grows.

Organic viral loops are difficult to build into an already existing product. So, Seth Godin asks you to include it in your initial design phase.

Artificial Viral Loop

Artificial viral loops are created exclusively to encourage a viral loop and do not add to the natural use of your product or service. 

Rewarding a customer with $20 credit for every friend that registers for your service is an example of an artificial viral loop. 

These are far more common than organic viral loops because there are many products and services where organic viral loops are not possible. 

Happy Moment

A happy moment is a time when a referrer is most likely to refer, typically due to a recent happy experience while using your product or service.

If a user is asked to make a referral right after an unhappy experience, referring chances are low because they don’t want to tell their friends about bad products. But if a user is asked to promote a product after a happy moment, they are much more likely to refer even if they had a bad experience previously.

Finding a happy moment is not an easy task. To find your optimal happy moment can require a critical eye, trial and error and strong in-app analytics.

Rewards – Reward Me (One-Sided) vs Reward Both (Two-Sided)

Rewards are what participants in a referral program earn on the successful completion of an artificial viral loop.

An integral part of an artificial viral loop’s success is choosing who to reward. Programs typically reward either the referrer (reward me) or the referrer or both.

Studies have found that one-sided rewards (reward me) work slightly better if you have a weaker brand, and two-sided rewards (reward both) work better if you have a stronger brand.

THE REFERRAL MARKETING FUNNEL

The referral conversion funnel is an interdependent sequence of events, just like any marketing funnel.

Sharing rate

This is the percentage of people who share when presented with an opportunity to do so via a referral widget (overlay or embed).

  • 7% – meh
  • 15% – solid
  • 30% – you’ve nailed it
  • Some of Friendbuy’s customers have exceeded a 50% sharing rate, a notable optimization goal for everyone

Please Note: Performance will vary by placement (homepage, user account pages, order confirmation page, etc.) So, getting as many widget placements as possible is highly encouraged.

How you can improve sharing rate

  • A/B test offers (store credit, gift, etc.)
  • A/B test the content (copy, images, etc.)

Referral Visits

The number of friends who see shared content on Facebook, Twitter, Email Message, or click on a Personal URL (PURL), and click to visit your website are called referral visitors.  The tricky part here is that Facebook, Twitter, and PURLs don’t report impressions, sort of busting a normal marketing calculation.  While email reporting does include opens and unique opens, the best way to approach this, in aggregate and across all channels, is to measure the number of visits per share.  That levels the playing field.

  • 1 visit per share – meh
  • 2 visits per share – solid
  • More than 5 visits per share – you’ve nailed it

How you can improve referral visits

  • A/B test offers
  • A/B test copy, images, etc. – shared images on Facebook are quite prominent in the friend’s news feed and deserve special attention

Referral conversion rate

The percentage of referred visitors (friends) that convert when they get to your site.

  • Less than 4% – meh
  • 10% – solid
  • More than 15% – you’ve nailed it

How you can improve the referral conversion rate

  • A/B test offers
  • Build and A/B test a dedicated referral landing page (much better than driving referred visitors to your home page)

REFERRAL MARKETING RESULTS

 Two key metrics summarize it all, your lift on revenue and cost per acquisition.

Lift on Revenue

  • Less than 5% – meh
  • 5 to 15 %  – solid
  • 30% – you’ve nailed it

Cost per acquisition (CPA)

Referral programs average ‘single-digit CPAs.’  That is to say, you should see your cost per acquisition no more than $10 per new customer.

Compared to display advertising ($20 to $40 CPAs), Pay Per Click ($30) and display retargeting ($10), referral programs are extremely efficient.

  • $10 CPA – meh
  • $5 CPA – solid
  • $2 CPA – you’ve nailed it

With the data from our platform and independent research we know that referred customers are better for brands than non-referred customers in six main ways:

  • They have a 25% higher lifetime value (LTV)
  • They have a 20% higher average order value (AOV) each year
  • They have a 15 point–higher average net promoter score (NPS)
  • They’re 18% less likely to churn
  • They’re 25% more profitable over their lifetimes
  • They’re between four and five times more likely to refer additional new customers

Best way to build continuous engagements with the in-store visitors even after their visit 

The solution lies with Facebook Messenger ‘’Code” and a recent ‘’Nametag’’ feature by Instagram! Where the businesses’ messenger code & name tag can be placed on the retail counter or anywhere in the vicinity of the store and is incentivized to encourage users to scan it. Scanning the code connects the user to the businesses’ FB messenger and he/she starts receiving direct messages from it. 

Whatsapp QR Code – Create a group and label it. Invite via the link or QR code. 

Facebook Messenger Code l Instagram Nametag l

Facebook QR – to be placed and ask for check-in or recommendation with an incentive. tap on the search bar and a QR code icon will appear. Tap the icon to open the QR code scanner.

Google Review link to be sent via WhatsApp or social media with an incentive.

Message us: Whatsapp link,  Messenger Link & Google message.

Conversational Engagement Promotional Tactics

Conversation to be sent with a link to web or messenger on the following media

  • Whatsapp status with link. Whatsapp Link post which they are able to share. Greetings. Business Profile session 
  • Post on Instagram. Stories with the link can be posted. highlight stories. 
  • Post on Facebook  and call to action with send message
  • Google message with a link
  • Conversation to be sent to messenger

For consumer products, the average revenue per user tends to be relatively low, so you won’t be able to afford to spend much on advertising or sales. You have to think about how to do that before the product exists and is in the design phase.

Sam Altman of YCombinator says that your product has to be so good that users immediately recommend it to their friends. Indeed, people don’t recommend crappy products. But you can do a lot to nudge users to invite others.

“At Area 120, I spend a lot of time with Googlers encouraging them to think about early product growth. It’s hard to think about virality in the abstract: Most people are only consciously aware of one or two products to which they’ve invited their friends. I figured it would be useful to provide a guide to 9 common viral mechanisms:”

9 viral mechanisms for consumer products

1. Two-Sided Reward

Create an incentive for a user to invite their friends, and for their friends to accept the invite. Rewarding both sides is crucial — if the incentive is missing for either side, it won’t catch.

In 2008 and 2009, Dropbox grew by leaps and bounds through its referral program. In the beginning, the product looked like this: Dropbox’s early referral flow.

For every friend that joined Dropbox, they would give both you and your friend 500 MB of bonus space on your account for free. This created an incentive for the inviter to invite their friends, and for the invitee to accept the invite. This rewarded both sides and created a viral loop.

What made Dropbox’s reward particularly brilliant is that the cost of additional storage space was due to a drastic decline. The storage space that they gave you was worth a lot to you at the time, but for the company, it cost less and less to provide over time. 500MB of free storage seems quaint these days.

Giving users a monetary incentive to invite their friends is also compelling. For example, here’s Good Eggs, a Bay Area-based grocery delivery service, which offers $20 of store credit for every friend I invite to their platform: Referrals with store credit on Good Eggs.

This is a version of a 2-sided reward loop: Good Eggs gives me a store credit and will send my friend a free item in their delivery if they order. For this to work, Good Eggs has to have a lifetime value (LTV) of the invited customer greater than $40 (since they are offering $20 to me and items worth about $20 to my friend). For my friend to receive the free item, they must also make an order to purchase at least $30 worth of groceries, which makes this work economically for Good Eggs.

The above is also a nice example of the gifting effect. By letting me choose which of the options I send to my friend, my attention is redirected from fears of spamming them, to finding something that they would like. By receiving both the value of a gift and knowing that I put thought into selecting it, my friend is more likely to accept the gift than if it were impersonal.

2. Appeal to Vanity

Appeal to users’ sense of vanity and competitiveness to encourage them to spend more time using your product and invite others into it. Expose metrics for them to drive up.

Remember the 2009 popularity contest on Twitter between Ashton Kutcher and CNN of who would first get to 1M followers? By showing follower counts prominently on Twitter profiles, both Ashton and CNN’s competitive bent was activated.

This battle created a lot of free publicity for Twitter, as both Ashton and CNN used their media power to blast out requests for followers. Users would sign up for Twitter, and then immediately follow one or both of them, thus populating their feeds with interesting and relevant content. Having your Twitter feed populated with interesting information would then in turn make you more likely to stick around as a Twitter user.

In the early days, LinkedIn had a similar thing going. By showing the number of connections front and centre on your profile, they incentivized you to start thinking about inviting more users to connect with you. And by inviting more people to your network, you consequently brought more into their network.

It’s hard to see your profile metrics and not think about how to make them go up. One sure sign came out of it, appealing to vanity drove interest in the fact that the Internet is littered with articles about how to get more social media followers.

3. Collaboration

Apps built for collaboration or communication between coworkers are inherently viral. Some have a single user mode, but the additional value is realized from the product with multiple people.

Slack is built for instant communication between teams, and to unleash its power, you first have to invite your whole team. Google Docs have the single-player mode of just editing a document by yourself, but the real power of it gets unlocked once you click “Share” and start collaborating with coworkers. Buttons labelled “Invite people” or “Share” is the viral mechanisms of these products.

I guess that we’re going to see more specialized tools that take advantage of this type of virality. Think of tools like AirTable, with its part spreadsheet, part database. Once they establish a foothold within a company or organization, these tools tend to spread quite rapidly within each company.

4. Embeds

Create the ability for others to embed your product into their website. This will create exposure, and also model to potential users the expected content and behaviours in your product.

If you’re building a product with user-generated content (UGC), you should make the content easily embeddable into other sites. You’ll often see tweets from Twitter embedded in news articles, and similarly, it’s common to see YouTube videos on a variety of sites.

Embeds also serve as an educational tool for potential users. Seeing examples educate them about the type of content that’s on your platform, the creators that are on it, and model the behaviour of your platform to them. Moreover, seeing the content on a site they already trust, gives your platform credibility.

Your hope for this viral channel is that users will eventually be curious enough about the content that’s embedded to click through to your site and sign up. But it may take some time to get there, depending on your content. It may take many impressions of your embedded content before they are familiar enough with your brand to consider signing up.

5. Artifacts Shared on Social

Your product naturally produces artefacts that can be shared manually or automatically on social networks. Clicking through takes potential users back to your product.

For user-generated content (UGC) products, there exists an even more powerful viral channel than embeddable content: social sharing. If your product creates uniquely interesting content, users can be encouraged to share it on their social networks, thus spreading knowledge of your product to their network. The most successful examples in this genre are auto-shared content onto other networks.

Instagram initially existed to create beautiful photos from your bad smartphone camera. Those photos were often auto-shared to Facebook or Twitter, with a link back to Instagram. If you saw someone else’s beautiful photo, you would become curious as to how they made it, and in turn, would have downloaded Instagram.

Pinterest would let you pin items from the web, and then share the pins onto Facebook. This worked well. When someone discovered the Pin, they would click on Pinterest and be shown a collection of more interesting items, quickly going down a Wikipedia-style browsing black hole.

Another way to draw attention to your product is watermarking: If your product creates images or videos of some kind, add a watermark into the main image to let users know where they were created. However, this is less effective than the social loops above because the watermarks don’t directly link into your product.

You create a uniquely appealing artefact and make users want to share it on their networks. As that user’s friends discover the artefact, they click into your experience where you can educate them about your platform. Eventually, they’ll consider signing up as well, creating more content, which in turn is then shared out to their users.

6. Artefacts Shared via Messaging

Your product generates artefacts or URLs that are expected to be shared via messaging. Your product provides a rich experience around the information that’s shared.

While you’re on a ride in Lyft, you’ll see a screen like the one below. The “Send ETA” button is a viral feature. Pressing it prompts the user to send a tracking URL to another person, which in turn spreads the word about Lyft.

By sharing the real-time tracking page with them that Lyft sends out, they’ll be reminded to use Lyft in their next time-critical scenario as well.

There’s another class of examples where the link being shared is less timely and more permanent. It’s when a URL in a product can serve as the canonical representation of a concept or thing. Here are a few examples:

These are all items that are usually shared with others via some form of messaging. You want to send over the address where you’re going to meet, or the product you’d like to get someone as a birthday present. By creating a URL that richly represents what your user wants to share, the product becomes viral as well.

7. Signatures

Your product sends messages of some kind. You attach a promotional signature to each message, linking back to your product.

Appending promotional signatures is a powerful way to make messaging products spread. Folks that are about my age usually think of Hotmail’s signature line at the end of every email, which helped Hotmail grow from 20K to 1.5M users over 4 months in the early days of the web.