One of the biggest reasons why digital marketing has changed so rapidly over the past six years is because advertisers and stores are deploying more complex tools than they ever have before. Due to the sophistication of these systems, there can be a tendency to see them as essentially technological solutions – tools that allow you to gather and analyze data on your customers, rather than increasing your ability to actually engage with them.
While some of these tools are focused on providing this kind of functionality, others have been designed to increase the level of trust that your customers place in you. The canonical example of this is the chatbot, which can automate many aspects of the customer journey, and allow you to focus on providing a great service to your most valuable customers.
Approaches like this have come to be known as “conversational commerce”, and they provide a powerful new way of utilizing AI to drive sales.
In this article, we’ll look at what conversational commerce is, how it can drive your business forward, and how to use it.
What is conversational commerce?
The term “conversational commerce” was first used in 2015. However, the concept behind this “new” form of advertising is not new. Essentially, conversational commerce attempts to replicate the experience of interacting with an in-store sales assistant, but via online systems. It uses chat, messaging, or other natural language interfaces to facilitate interaction between people, brands, and services.
The central idea behind conversational commerce is drawn from a crucial realization that there is a right and a wrong way to use bots: chatbots are not, primarily, an extension of your analytics and segmentation systems, but are best looked at as semi-autonomous sales assistants in themselves.
In case this rather general definition is still vague, it can help to look at some examples of conversational commerce. Today, you really don’t have to look far to find successful examples of conversational approaches, because many of the biggest and most innovative brands in the world are using the technique.
Sephora’s virtual artist, for instance, is a chatbot that also includes elements of augmented reality to allow users to use selfies to ‘try on’ makeup. Similarly, Kik bot utilizes a customer’s history to generate personalized recommendations. Both tools require users to fill in a basic questionnaire, which is then fed as input to their recommendation engine. However, after the completion of this initial step, customers’ interactions with these systems are completely (and convincingly) conversational.
The advantages of conversational commerce
There are several key advantages to using conversational techniques for eCommerce retailers, and this approach Is useful in different ways for different retailers.
For instance, moving to a conversational on-site marketing system – such as by having a chatbot engage with customers as soon as they land on your estore – can be very effective for eCommerce stores that are going through a period of rapid growth.
Without careful design, adding dozens (or even hundreds) of new product lines to your store can quickly leave your customers feeling confused. A chatbot that is able to direct them to the product they are looking for, in a way that is both friendly and engaging, can help to avoid this.
Of course, some companies take a different approach and are focused on selling one product. The challenge faced by these firms is a different one – how to explain the advantages of their product in a way that is responsive to the needs of individual consumers.
Conversational approaches are also useful here and have been used to great effect by one of the best examples of growth marketing in the last year – Zoom, which has seen installations rise by over 700% since last March. By deploying a chatbot that can take potential customers through the key features of their software, the company was able to capture a large share of the video conferencing market this year.
Finally, whatever the current objectives of your business, it’s important to recognize that the way in which people interact with brands is changing. Specifically, the meteoric rise of voice assistants in the last few years means that consumers are far more comfortable searching for products in a conversational way, and are increasingly demanding this functionality from their favorite brands.
How to use conversational commerce to increase sales
If you’ve read through the examples of conversational commerce marketing above, you’ve probably already got some ideas as to how you can deploy this technique in your own business. It’s important to realize, however, that conversational techniques (and, indeed, chatbots) can be usefully applied to almost any form of an eCommerce store. Here’s how:
Retail sales
The most direct way to use chatbots is to drive sales of products directly, as this is one of the easiest ways to start bringing conversational elements to your online store. By giving chatbot access to key information on your range of products, it can be used to provide a customized, conversational interface for customers visiting your website.
Driving subscriptions
Subscription models have enjoyed a resurgence in popularity this year, as the Covid-19 pandemic has driven many customers to look for curated products and content in lieu of the in-person shopping experience. As a result, technological tools that allow brands to easily implement subscription models have also done well for this very reason.
Using a chatbot to encourage your customers to purchase a subscription – or to upgrade their existing subscription – can be achieved easily, and relies on the same kind of training as that used to teach conversational interfaces about a range of products.
Affiliate marketing
The potential of chatbots goes far beyond directly marketing your products, however. Once you’ve deployed and trained a chatbot, you have control of a very powerful marketing tool, and it could well be that other companies will pay you to send customers their way.
One of the most effective strategies as well as to reach out directly to the sellers of products rather than through third parties such as Amazon. As Ottawa-based website developer and online marketer Gary Stevens of Hosting Canada says, “Amazon is the big dog here, but given Amazon’s slashing of commission rates, it’s become much more profitable to go directly to the seller.”
Using chatbots in this way, or essentially as a tool for affiliate marketing directly to sellers, is relatively new but already meeting with great success. The central idea, here, is that a chatbot can be used as a customer researcher – instead of just responding to queries, it can proactively reach out to customers in order to understand what kind of products will appeal to them. The customer can then (with their permission, of course) be referred to a third party who offers these products.
The bottom line
Chatbots and conversational approaches can increase trust and sales in all the ways we’ve listed above. However, it’s also important to recognize that they can only take you so far – that no matter how many cutting-edge applications of AI you are using, at some point your customers will want to talk to a real human.
Chatbots, by removing the requirement to spend hours explaining basic product features, help you to do that. They ensure that the conversations you have with your customers are as effective as they can be and that you are focusing on what really matters – building a relationship with your loyal consumers.
