Conversational commerce first came into the limelight in January 2015 when Chris Messina, the creator of hashtags, published an article on their potential to bring convenience to transactions and customer support. But not even Messina could predict how hashtags could add a whole new dimension to customer experience. But it is happening here and now, thanks to the breakthroughs in artificial intelligence (AI), machine learning (ML) and natural language processing (NLP).
The concept of conversational commerce dates back to the time when businesses banked on dedicated salespeople who engaged with customers, helped them make a purchase, resolved complaints and got valuable feedback.
Today, the likes of CM.com from the Netherlands are using AI-powered chatbots, multichannel messaging APIs and automation software to help businesses interface with customers without any human involvement.
As AI-driven automation brings forth more realistic responses, businesses are increasingly using these ‘first responders’ (read intelligent chatbots) to build more agile processes.
A look at the market-size projections further validates this trend. According to a report by Dublin-based Research and Markets, the global market for conversational commerce is estimated to grow at a CAGR of 20.9% to hit $13.9 Bn by 2025. It was worth $4.8 Bn in 2020.
“As Indian businesses get more familiar with conversational AI, there is a need to turn conversations into conversions. The full potential of conversational commerce can only be realised when businesses use these tools to gain a 360-degree understanding of every customer,” says Chetan Borkar, country manager, India and Sri Lanka, at CM.com.
Building Insightful Solutions
Before we delve deep, a look at the current scenario may help. Businesses mostly automate a routine conversation script for initial customer interactions. But this can be very basic, given the limited use of conversational AI. As a result, chatbots fail to create meaningful conversation threads, thus impacting conversion and retention.
CM.com provides end-to-end enterprise solutions for customer engagement. The company was set up in 1999 at Breda, the Netherlands, by Jeroen van Glabbeek (CEO) and Gilbert Gooijers (COO). It started as a company that sent SMS messages to nightclub and festival visitors. This laid the foundation for what CM.com is today. The company now offers cloud software for conversational commerce, like mobile marketing solutions and AI chatbots besides integrating API-based communication and payment platforms for businesses.
According to CM.com’s website, it has a local presence in 20 countries and a customer base across 118 countries. But it is fairly new in India and started operations in January 2021, with headquarters in Bengaluru. The company claims it is already working with more than 50 Indian clients.
The company recommends its chatbot solution for more digitally advanced businesses. A business can opt for CM.com’s scripted or AI-powered conversational bots that converse with customers in real-time. As these chatbots reside in cloud servers, the platform can easily access, review and share insights regarding customer behaviour with client companies that help businesses build comprehensive customer profiles.
Besides, these customer insights help brands develop and implement better marketing strategies to address their target traffic. They can also customise communications (based on age, gender, geographic location, previous website visit and more), leading to enhanced customer engagement, fewer cart abandonments and improved net promoter scores, a market research metric that measures the likelihood that a customer would recommend a company product or service to a friend or colleague.
CM.com also offers payment integration solutions to help businesses build an interactive and seamless customer experience. It sends payment links and QR codes and provides an offline pre-ordering option by letting them check out at the entrance using QR codes so that customers do not have to queue up at check-out counters.
With its array of tools for businesses, CM.com clocked revenue of $158.5 Mn in FY20.
“When we entered the conversational commerce space, we felt that the segment was very fragmented, and everyone was focussing on one aspect of the problem. CM.com, covers the entire gamut of services for the customer journey, from acquisition to retention,” says Borkar.
How Conversational AI Drives Growth
At a fundamental level, the growth of a business can be summed up as the total growth of all the metrics impacting revenue. As the customer is the revenue point, these metrics revolve around customer behaviour. For instance, increasing customer lifetime value or decreasing the customer churn rate will directly impact revenue growth. This is where conversational commerce intends to impact.
Today, digital-first brands can use multiple communication channels to stay constantly in touch with their customers. The advantage: Even one notification recommending the right product or offering a product discount may result in sales. On the other hand, a quick resolution can turn a disgruntled customer into a loyal one.
In sync with this fast-paced customer engagement scenario, CM.com leverages AI-powered solutions capable of responding to line-based queries and making intelligent decisions based on keyword usage. This means the company uses NLP for its chatbots.
Simply put, these bots decipher large sets of user data to track patterns in customer communication and take pre-emptive decisions to derive positive reactions from customers. For example, if a customer is upset due to late delivery, they can be offered a discount coupon for the next purchase without needing any human intervention, thus speeding up the resolution process.
But these automated solutions may involve operational challenges, for Indian businesses, especially for smaller startups and ecommerce platforms. From integrating advanced algorithm-based chatbots to correctly analysing the insights derived from user behaviour will require either specialised teams or processes.
To solve this challenge, CM.com has in place a customer success team and onboarding managers who analyse these issues and provide customised services for the same. The team assists a business through different implementation phases and offers day-to-day relationship management so that both can plan and align time, resources, project goals and project progress.
“By hand-holding the customer through configuration, training and implementation, we help businesses to be hands-on from the start and make the most of the product. Through our collaborative, joint-venture methodology, we enable our customers to achieve self-sufficiency as quickly as possible,” says Borkar.
As reaching out to customers is becoming easier by the day, businesses need to tap into the potential of conversational commerce, Borkar tells Inc42.
Discussing some in-house strategies that companies can implement to improve engagement, he has highlighted three points. First, businesses should have an omnichannel presence to explore all possible avenues and should not restrict themselves to SMS or email marketing. This helps improve the chances of connecting with a consumer via their preferred mode of communication.
Second, using automation is the key to reducing mundane tasks. Today, many free-to-use platforms offer no-code/low-code automation tools for building scripted communication processes to speed up customer response time.
Finally, and most importantly, businesses must focus on knowing their customers. By tracking basic demographic data and deep-diving into more crucial information such as in-app user behaviour, drop off points and time taken for a purchase, a business can gain valuable insights about its customers and take suitable measures to improve conversion and retention.