How Effective is Conversational Commerce?

At Vouch, enabling conversational commerce is our passion. By automating the selling process for online sellers on Facebook, time and energy is freed up for them to focus on other aspects of their core business instead of having to reply to customers all the time. And simply because chat is a great, intuitive, and non-intrusive form of communication, it raises customer engagement and increases the percentage of customers closed since they don’t have to switch to a separate website to complete their purchase. But how effective is chat in ecommerce? What kind of impact can one expect when leveraging conversational commerce?

We wanted to validate the benefits of using chat to do business, and also get some metrics on how effective conversational commerce really is. To do so, we decided to jump into the thick of things and took a practical approach to validate our assumptions instead of simple theory-crafting.

The Plan

We started a food delivery service for university students from SUTD and gave ourselves 5 days to generate as much value out of this as possible. We created a Facebook page, and asked students to order through chat.

Here’s what we learnt:

1. Ordering through chat? Sure :)

…conversational commerce can provide that “foot in the door” that eventually helps you acquire the customer…

Very early on, we found that customers took to ordering on chat really well. They had no qualms texting us their orders and there were no cases of miscommunication or annoyance at the choice of a messaging platform for ordering. Chat commerce has a very low barrier to entry for consumers. Simply add a new contact and you are good to go. In other words, conversational commerce can provide that “foot in the door” that eventually helps you acquire the customer.

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2. Chat provides opportunities to build trust

Transform the conversation from a sales pitch into a conversation between friends.

By chatting with customers, we were able to begin building rapport with them. This transformed the conversation from a sales pitch into a conversation between friends. Having gained their trust, we noticed that when ordering food, customers barely focused on price - only 2% of customers asked about the total cost. Want to upsell or provide further recommendations to customers? Chat is perfect for this.

Besides potentially increasing revenue, chat also provides many advantages over traditional communication methods. For example, sending out survey forms for feedback can be pretty inefficient at times. By simply asking a customer for feedback through chat, customers are more likely to reply and offer conducive feedback.

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3. Chat is Social, Social is Good For Brands

…chat can help brands overcome customer skepticism by leveraging its social nature…

The rapid success we had at SUTD encouraged us to expand our services to DBS Asia Hub. However, the initial response was disappointing. Through interviews with employees there, we found that older adults (>40 years old) have a greater distrust of social interactions on Facebook. That is understandable since identities can be rather dubious on Facebook at times. One lady even commented that she has 3 Facebook accounts.

We realized that social proof truly is critical, and made it a point to take photos and tag people who bought from us to build trust. Because chat apps also provide easy ways to share with friends, we made sure to provide share buttons extensively in communications with potential customers. Eugenia, our first customer from DBS, was sceptical but decided to try us out. We made the delivery in less than 15 minutes, and she was happy to share the experience with her colleagues. Before we knew it, her entire office was ordering food through us!

The older audience tend to be more guarded and loyal, preferring to stick with the familiar, and our experience highlights the importance of first impressions and customer service for firms in today’s highly competitive environment. More importantly, it emphasises how chat can help brands overcome customer skepticism by leveraging its social nature.

4. Personality is important

“its more fun to talk to you than eating macs” - A Real Customer

A dash of humour and quirkiness keeps customers entertained and interested, giving a totally different experience from the usual ordering channels. Engagement becomes more lively and service feels more personalised. Here’s a genuine reply from one of our customers:

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5. Loyal customers matter

This post was shared in the internal SUTD FB group by one of our very first customers. By investing a little extra time and effort into better service for our customers, we gained massive returns when customers advocate for us. As can be seen, that one post had an exponentially higher impact than any of our own posts.

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Interesting Metrics

High conversion rate - 52% of customers that engaged with us via chat eventually made an order. Compare that against eCommerce norms of 1.33% and you can see how effective chat is at customer conversion!

High open rate - Our broadcasted promotional chat messages had open rates of > 70%. Again, this is more than double the median open rates of 32% for email!

Mobile Heavy - > 50% of the traffic to our Facebook Page came from mobile sources. Its clear that mobile is rapidly overtaking the desktop in terms of web traffic.

Conclusion

So is conversational commerce really all its made out to be? Our 5-day experiment yielded a resounding yes! If you’re looking to boost sales and foster better customer relationships, you need to take advantage of conversational commerce right now! By using conversational commerce to get one foot in the door, and capitalizing on its social properties to build trust and grow awareness of your brand, you’ll have a great tool to delight your customers and grow your business.

But what if you don’t have the resources to dedicate a whole team to communicating with your customers via chat? With limited manpower and a high volume of queries, customers are bound to be dissatisfied with slow replies or overlooked queries. Having to reply to the same question thousands of times a day can become mundane and routine, leaving even the most zealous of employees drained.

Let us help! Vouch provides a scaleable and affordable solution by leveraging A.I. and chatbot technology to help you grow your sales, boost retention, and make your customers happy. Simply get in touch with us and we’ll get you started!