Damsinier: Chat Commerce Driving Higher Revenue, Better CX | Customer Experience


By Jack M. Germain

Nov 6, 2020 5:00 AM PT

More and more consumers are shopping through phones and other mobile devices, and businesses that use chat with commerce are reaping rewards while improving the customer experience.

A new business study finds that at least two-thirds of companies using chat apps like WhatsApp and WeChat see larger business gains than their competitors who don’t. These gains include 75% year-over-year revenue growth, greater annual cross-selling / upselling revenue growth of 89%, an annual increase in customer retention rates of 48% and a almost double the increase in marketing ROI.

Computer research firm Aberdeen recently surveyed the world’s top IT executives across a range of industry verticals to help quantify the impacts of chat deployments on their business. The study shows significant benefits for customer experience metrics and other key KPIs for companies using chat for customer service and commerce activities.

Chat-enabled commerce users optimize CX results

– Click on the image to enlarge –

Chat transactions

The digitization of business activities continues to grow with increasing speed and diversity. This is the result of a growing number of consumers using mobile devices – smartphones, tablets and portable devices.

Buyers use these devices to interact with trendy businesses in almost every consumer related industry. This new marketing strategy is impacting the retail, CPG, hospitality, transportation, banking and telecommunications markets.

Think of chat commerce as a method by which businesses can build rich and engaging information exchanges with consumers. This allows them to go from an investigation to a business transaction without ever having to leave the chat app, according to Pieter de Villiers, CEO and co-founder of Clickatell.

“Thousands of businesses are now using chat to onboard, offer and sell to customers,” he told CRM Buyer.

Report credible results

Aberdeen’s research supports the results that Verint Intelligent Self-Service client companies have been recognizing in recent years, according to Jen Snell, vice president of product marketing for Verint.

“One surprisingly simple reason we’ve found chat to work so well for cross-sell and up-sell situations is that assistants actually ask the questions,” she told CRM Buyer.

Additionally, with chatbots, customers are less likely to feel sold with incentive offers. Instead, customers feel like they’re just hearing about the options available, Snell added.

“It makes a dramatic difference in the effectiveness of cross-selling and upselling,” she said.

Familiar technology

Culturally, Verint sees consumers becoming more comfortable and familiar with chat technology for business. Its use is at a point where customers expect quality chat experiences and the know-how to navigate them effectively.

“We also have to remember that for a growing number of customers this technology is not new. It is something that has always been around. Gen Z are born into a high tech culture,” he said. Snell said.

The oldest of Gen Z were 10 years old when the iPhone was released. They had 3G and 4G cellular access even before they reached high school, and on-demand content has always been the rule, not the exception. It makes sense that they would expect – and probably prefer – to engage in the chat business, she observed.

At the same time, technology has also improved significantly. Today’s chat technology offers better natural language processing and intent understanding capabilities that make these experiences more effective for users.

“So what we are seeing is not an unexpected trend, but rather a solidification and evidence of a movement towards chat interactions for business,” Snell noted.

American companies behind the cat curve

Chat commerce pioneer Clickatell sees digital transformation succeed as chat moves from self-service to real commerce. To date, companies outside of the United States are leading the way in this area, but Apple and Google are advancing, like others.

Aberdeen’s March 2020 survey shows that companies in Asia Pacific (APAC), Europe, Middle East and Africa (EMEA) are currently leading chat adoption, 77% and 76% using. These regions are followed by businesses in North America and Latin America (LATAM), with 67% and 63% respectively using one or more of the chat features.


The surge in these regions was largely due to a lack of smartphone penetration and the use of mobile apps. Add to that the high cost of mobile data combined with low range in terms of high-speed WiFi, according to de Villiers.

Chat commerce has grown outside of the United States because text messaging is expensive. Consumers have chosen to use the cheaper IP chat apps to communicate with each other, he explained.

The cat is where he is

Chat adoption in all regions has been steadily increasing, with companies continually enriching and refining their chat capabilities. Consumer expectations are the engine of modern business operations, the Aberdeen report added.

“However, it quickly became clear that chat is not a second-class alternative, but a first-class customer experience in terms of convenience,” de Villiers told CRM Buyer.

Now, with AI-powered bots and advanced assisted chat desks, chat commerce is poised to become mainstream in the United States. de Villiers is already seeing an increase in inquiries as brands in the United States seek to reach their customers where they are most comfortable in a more convenient way.

“Frankly, it’s in the chat,” he noted.

WhatsApp leads the way with over two billion users worldwide. There are 2-3 billion users of other chat apps such as WeChat and Telegram.

“These apps are more interactive and feature rich than SMS text messaging, and companies have come to understand that these apps can also be go-to business platforms,” said de Villiers.

Integrated approach needed

Chat business has been slower to develop due to good consumer service through mobile apps. However, app downloads are dropping and consumers are spending less time on branded apps and more time chatting, according to de Villiers.

Added to this, the chat business experience has only recently become very compelling and more convenient. This credit goes to the progress made in robotic process automation (RPA) and AI.

Aberdeen’s report describes several key building blocks that commerce users using chat should establish to maximize performance, de Villiers noted.

Businesses don’t see chat commerce as a purely technological initiative. To get the most out of chat investments, companies should support their businesses with capabilities classified according to these three points:

  • Enrich chat commerce with context
  • Minimize complexity and personalize chat activities
  • Regularly evaluate performance to drive continuous improvements and keep up with changing buyer needs

Using chat platforms for business forces businesses to determine which activities of the three elements are not performing well. Once they figure that out, correct them by implementing the missing abilities, de Villiers directed.

Inevitable delay

The trend towards a cat economy has already started. A strong pipeline of innovative brands looking to launch cat commerce capability now awaits, de Villiers observed.

“We believe the market will move from a phase of current innovation in the cat business to an early majority phase over the next 18-24 months,” he said.

But de Villiers doesn’t think the cat should or will become the primary marketing channel. In fact, he prefers that chat platforms refrain from such a goal.

As consumers, chat platforms are very important messaging and engagement channels for getting things done. Organizing it and turning it into a marketing driven channel will not serve consumers well.

“However, we believe commerce chat will happen everywhere and that being able to pay bills, improve travel and resolve customer queries through our favorite chat platform are powerful things,” he insisted.

Jack M. Germain has been a reporter for ECT News Network since 2003. His main areas of interest are business computing, Linux and open source technologies. He is an esteemed critic of Linux distributions and other open source software. In addition, Jack extensively covers business technology and privacy issues, as well as developments in e-commerce and consumer electronics. Send Jack an email.


Leave a Reply

Your email address will not be published. Required fields are marked *