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Top Use Cases and Benefits of Consumer Messaging Apps for CRM

Published: 17 October 2017 ID: G00324823

Analyst(s):

Summary

Consumer messaging apps enable organizations to engage with customers in a private, one-to-one environment. Application leaders supporting customer experience can propose the use of consumer messaging apps for CRM as a way to resolve customer issues and personalize experiences.

Overview

Key Challenges

  • The initial success of consumer messaging apps across different use cases has been promising, but nearly limited to the geographies of China and Japan.

  • Apart from WeChat and Line, there are few examples of tangible business improvements as a result of using consumer messaging apps for CRM. Therefore, organizations looking to experiment in this space will need to take the lead.

  • Organizations need to respect regionally specific consumer dynamics: China's success with WeChat doesn't mean that the same use cases on the same app can be transferred successfully to other regions.

  • Consumer messaging apps are improving their API capabilities and building chatbot APIs, but organizations are yet to be fully convinced of the tangible benefits of introducing them.

Recommendations

Application leaders supporting CRM and the customer experience must:

  • Increase organization loyalty and affinity with consumer messaging apps advertisements.

  • Deflect support costs by providing self-service and assisted service to customers that is both quick and personalized.

  • Understand which customers, such as the next generation of customers, use messaging apps and explore ways to generate new business using consumer messaging apps for digital commerce.

Strategic Planning Assumption

By 2019, requests for customer support through consumer mobile messaging apps will exceed requests for customer support through traditional social media.

Introduction

The user base of the top four messaging apps combined has surpassed the user base of the top four social networks, as WhatsApp has more than 1.3 billion monthly active users, followed by Facebook Messenger with 1.2 billion users, and WeChat with 889 million users (see Figure 1).

Figure 1. Global Messaging App Users

Users: WhatsApp (February 2016), Viber (August 2016), Kik (August 2016).
Monthly Active Users: Facebook Messenger (July 2016), WeChat (August 2016), Line (June 2016), Skype (March 2016).
Daily Active Users: Snapchat (June 2016)

Research image courtesy of Gartner, Inc.

Source: Gartner (October 2017)

This user base provides undeniable opportunity for organizations to engage with customers, assuming they can identify an appropriate use case. However, although there is no doubt with regard to the potential of consumer messaging apps, the success they've enabled organizations to achieve, up until now, has been at a regional level (see Figure 2). Because of this, it is difficult to frame a strategy that can drive engagements at a global level.

Figure 2. Consumer Messaging Apps by Regional Popularity
Research image courtesy of Gartner, Inc.

Source: Gartner (October 2017)

The initial success achieved by consumer messaging apps in China and Japan is heavily influenced by the regional market dynamics. The ease of use, superior UI, third-party apps, and wide penetration of WeChat and Line has enabled organizations to use these apps for marketing campaigns, recommending and selling products, making payments, running promotions and loyalty programs, and providing customer service. The same success has not been replicated in North America and Europe because of different market dynamics and the popularity of other messaging apps in these markets, like WhatsApp, whose terms of service, until recently, stated that companies could not use their app for commercial purposes. Facebook continues its investments in making Messenger as omnipresent as WeChat is in China and Line is in Japan. Other apps like Snapchat and Kik are attempting to figure ways to enable organizations to engage with customers more efficiently and effectively over their networks.

Application leaders supporting CRM and the customer experience have a choice: attempt to lead the way in systematically engaging customers over consumer messaging apps or wait and see what their peers do in the space. In some scenarios, employees may already be engaged in a consumer messaging strategy, so it is critical that IT take inventory of what is already happening in their organizations: from B2B sellers engaging with their clients one-on-one, to marketing departments that have already set up a Messenger strategy. We advise clients, particularly those in B2C organizations, to assess the use cases and benefits outlined below and compare them to their overall organizational initiatives.

Analysis

Expand Your Organization's Footprint and Help Marketers Increase Customer Engagement Through Messaging Apps

Marketing teams are constantly looking to increase engagement with customers in order to improve customer retention. IT leaders supporting CRM and the customer experience should partner with marketing, customer service and digital commerce teams on using messaging apps to expand reach and increase engagement in a way that will likely surprise and delight customers who don't currently expect businesses to be present on the channel.

All messaging apps now offer the same opportunities for companies to engage with customers. Line and WeChat offer partner-driven digital commerce opportunities, Viber offers public chats and promotional stickers, Telegram, Kik and Facebook Messenger offer bots, and all require IT leaders to consider future possibilities while acknowledging what is currently possible.

Most messaging apps are open to advertisers, but we advise clients to look beyond advertisements, and consider how organic information sharing and engagement can help them achieve their business goals without the high cost.

As early as 2014, Taco Bell used Snapchat to launch its new "Spicy Chicken Ranch Doritos Locos Tacos" through a series of snaps that customers could play synchronously in a Snapchat Story that was six minutes long. 1

The Washington Post sought to expand its footprint with the under-20s demographic by creating a marketing bot on Kik, which allowed potential customers to get on an "American road trip." 1 Customers would engage the bot by saying the name of their state, get a Washington Post picture from the state and then a prompt to go to a bordering state.

Deflect Support Costs by Providing Self-Service and Assisted Service to Customers

Digital engagement channels continue to be of high interest, and organizations have been early to realize the potential of consumer messaging apps for customer care. As compared to social media — a channel to which messaging services are commonly compared — messaging apps provide a one-to-one engagement environment for customer service representatives to gather the personal and order information they need in order to fully close out support cases. Customers can start and end their entire support issue within a messaging app, which is already an improvement from social media, but they can also do so in a time frame that suits them. Unlike phone calls or webchat, messaging apps allow for asynchronous communication so that customers can engage with organizations in a time frame that best suits them while both customers and customer service representatives can attend to separate issues as needed.

The asynchronous nature of the engagement contributes to making messaging apps a more cost-effective option than traditional phone-based support conversations. The convenience of messaging to the customer makes it a more accessible and appealing option as compared to the phone or email channel.

Some messaging apps are easier for companies to work with than others. For example, Messenger and WeChat both have APIs that allow organizations to pull messages from those channels and push messages out through those channels through a third-party application provider such as their legacy CRM system. Others, such as WhatsApp and Apple Business Chat, have yet to release an API and have announced their intent to build their own enterprise application for organizations to invest in in the future. We anticipate that, with these releases by 2019, requests for customer support through consumer mobile messaging apps will exceed requests for customer support through traditional social media.

Some messaging apps enable organizations' chatbots to engage with customers through their app. APIs that enable chatbots are already live for some Facebook Messenger partners, as well as Kakao Talk, Kik, Line, Viber and WeChat.

Organizations can follow both an assisted- and self-service-driven approach to engage their consumers over these service channels. In only the assisted approach will consumers be interacting with a human agent who can help them in an asynchronous conversation. With a self-service approach, organizations can deploy chatbots to answer simple questions pertaining to one or very limited use cases. This will help to deflect simpler customer service issues with no human involvement. The chatbots can transfer the conversation to human agents for more complex requests.

We've seen organizations in the hospitality, retail and travel industries leading the way in offering customer service via consumer messaging apps.

Hyatt, for example, has effectively leveraged Facebook Messenger to provide real-time customer support. 2 By using Facebook Messenger, consumers can make reservations, ask for room service and check for vacancies right from the app. This platform allows Hyatt to resolve customer issues quickly in a private manner that increases the scope of service.

Air France became the first non-Chinese airline to provide service to its customers on WeChat. 3 The service is available seven days a week for certain fixed business hours, and is available to all customers irrespective of their locations. Customers can send any issues pertaining to the airline, and the airline will respond back within an hour and provide solution for all issues within one business day.

Understand Customers Better and Explore Ways to Generate New Business Using Consumer Messaging Apps for Digital Commerce

Organizations can analyze individual and segment-based customer dynamics via messaging apps. Application leaders supporting digital commerce can learn about customers by engaging with them in a private and interactive conversation, or on a broader scale by understanding how customers are engaging with their public profile (note, however, that not all messaging apps have public profile functionality). The insights provided by knowing customer preferences and product purchase history can help organizations drive effective campaigns.

Sephora became the first beauty retailer to understand customer preferences and sell preferred products by using a messaging app. 4 Sephora leveraged Kik chatbots to offer makeup tips, product recommendations, item reviews and video tutorials, and allow consumers to make purchases directly within the app. The bot also asked specific questions in a quizzing manner to understand consumer preferences. This enabled Sephora to elevate the customer experience.

Organizations are heavily leveraging bot APIs (as noted above) in developing a means to enable transactions through consumer messaging apps. In China, WeChat has become a channel for commerce, which, for small or midsize businesses, often supersedes its use as a social tool. Companies within the entertainment, retail and transportation industries are among those that have capitalized on the opportunities that the app provides, and we see Line and Kakao Talk moving to provide similar commerce opportunities.

In order for application leaders to enable messaging-based commerce, they must first understand APIs, as well as their customers' regional societal norms. They next need to determine which commerce-related activities are simplistic enough to be managed by the form-based chatbots that are active today. Integration with an app-native payment system, a primary digital commerce system or another payment applications will be necessary, and IT teams should consult their existing and prospective vendors to ascertain if they have any experience doing this type of work (see "Social Messaging App Wallets Increase Their Influence on Payment Value Chain" and "How to Drive Adoption of Digital Wallets" ). Critical to the success of messaging apps for commerce is the ability to accept payments, for which WeChat and Facebook have already developed proprietary solutions, while others are currently developing a solution.

As an illustrative example of messaging-based commerce working well, Dior created an online customization campaign in 2016 around its "Lady Dior" handbag. 5 Customers could mix and match accessories with the bag and then purchase the bag using WeChat's own payment system. The bags were limited edition for Chinese Valentine's Day and sold out in one day at 28,000 renminbi each (around US$4,000 per bag).

Evidence

1 "5 Ways Brands Are Using Snapchat, Kik, and WhatsApp to Engage Consumers." iMedia.

2 "Hyatt Takes Customer Service to Facebook Messenger." Digiday.

3 "10 WeChat Travel Industry Case Studies." WalktheChat.

4 "Sephora." Topbots.

5 "Luxury Brands Finally Begin to Master WeChat Commerce." ChoZan.