why messaging apps will become the #1 customer contact channel
TRANSCRIPT
Why Messaging
Apps will become
the #1 Customer
Contact Channel
https://www.leapchat.cowww.leapchat.co
1
Contents
Section 1 Why Messaging Apps are an important Customer Contact Channel
Section 2 Why Messaging Apps will displace existing Channels
Section 3 Getting Started with Customer Support via Messaging Apps
Section 4 How Customer Service via Messaging generates a Return on Investment
Why Messaging
Apps are an
important
Customer
Contact Channel
In 2015 the top 4 messaging apps surpassed the top 4 social networks in terms of MAUs
Section 1
2
Shortly after Facebook purchased WhatsApp for $22 billion in October
2014, Mark Zuckerberg noted that “Messaging is one of the few things
that people do more than social networking.” In the interim period he has
watched both Facebook Messenger and WhatsApp grow exponentially to
the point where they both have in excess of 1 billion monthly active users
(“MAUs”). The combined growth of the top four messaging apps versus
the top four social networks shows just how right he was and continues to
be.
Sources: BI IntelligenceSource http://uk.businessinsider.com/the-messaging-app-report-2015-11?r=US&IR=T
26% of smartphone users don’t make any traditional phone calls in a given week
3
Not only has messaging outpaced the growth of social networks, it has also
displaced phone calls, SMS and email usage in a very big way.
Sources: eMarketer.com & DeloitteSource https://www.emarketer.com/Article/Watching-Death-of-SMS/
1012124
https://www2.deloitte.com/au/en/pages/technology-media-and-telecommunications/articles/tmt-
predictions-2016.html
Meanwhile Slack reports that companies using its application see an average reduction in
email volumes of 48.6%.
There has been a massive shift towards messaging as the primary channel for both
personal and work related communication. What is not so clear is why and whether it will
continue.
Over 42 billion messages are sent via WhatsApp every single day
4
1.1 Why the Migration to Messaging?
The initial motivation for consumers to adopt mobile messaging was primarily financial.
When the first messaging apps started appearing in 2009/2010, carriers in most parts of
the world were still charging their customers a few cents per SMS sent. People were
already sending dozens of messages a day, so the monthly messaging bill could be
substantial.
The story of WhatsApp’s growth in the USA and outside the USA proves this point.
WhatsApp failed to gain meaningful traction in the USA because carriers were already
offering free SMS to their customers, but grew rapidly in most other countries where
carriers were still charging a fee.
Source: Statistica
https://www.statista.com/statistics/321460/whatsapp-penetration-regions/
WhatsApp Penetration
Latin America
Middle East & Africa
Europe
North America
2015
66%
63%
33%
7%
5
1.2 The Messaging App Ecosystem
MAUs: >1bn Launched: 2009 Markets: Very popular outside the USA
Initial Traction: Free alternative to sms with increased social interaction via groups.
Current Strategy: Improving speed, reliability, security and simplicity. Recently moved closer to
Facebook and will start enabling consumer to business messaging in 2017.
MAUs: >1bn Launched: 2011 Markets: Popular wherever Facebook is popular
Initial Traction: Controversially “forced” users to download the Messenger app by removing the
messaging feature from the Facebook mobile app.
Current Strategy: Introduced a platform for developers in 2016. Huge focus on consumer to
business messaging, payments and chatbots. Wants to be the WeChat of the West.
Facebook Messenger
iMessage MAUs: >1bn Launched: 2011 Markets: Everywhere Apple is popular
Initial Traction: Default SMS/messaging app on the iPhone. Enough said!
Current Strategy: Apple opened iMessage up to 3rd party developers (on a restricted basis) in
iOS10. The potential is enormous and it would be unlike Apple to miss a trick.
WeChat MAUs: 762m Launched: 2011 Markets: Primarily China
Initial Traction: Pitched as an inexpensive alternative to China’s expensive telecom providers, while
also leveraging its parent’s (Tencent) massive QQ user base.
Current Strategy: A true messaging platform, WeChat dominates the Chinese mobile internet
ecosystem where it generates >$7 ARPU from social and commercial activities.
MAUs: > 300m Launched: 2006 Markets: Internationally Popular
Not a true messaging app, but DMs are becoming more important and most major brands already
offer support via Twitter. Recently made some bot like features available to developers on a
restricted basis. Needs to commit to the customer service use case to compete with Messenger.
You no longer need a Facebook account to use the Messenger app
6
Many more apps like Telegram, Slack, Kik, Line and
SnapChat could be included, but we have limited the list
to the apps showing strong potential in B2C messaging.
1.3 Why Messaging is continuing to grow
All the leading apps either started out as an SMS
replacement app (e.g. WhatsApp), or have leveraged an
existing user base (e.g. Facebook Messenger) or both
(e.g. WeChat) to build traction. Today SMS messages are
free and existing user bases have mostly been exhausted,
so how and why are these apps still growing so rapidly?
1.3.1 Messaging is for Everyday Communication
Messaging apps work differently to the way Facebook,
Twitter and other social platforms operate. Social
platforms are focused on posting and consuming
content. Very little in the way of meaningful conversation
happens on them. Messaging apps on the other hand
revolve primarily around conversations.
1.3.2 Messaging Apps offer more than Messaging
While most messaging app interactions are still in text
form, audio and video conversations are becoming more
and more prevalent (300m people use Messenger’s audio
and video calling features each month). It is also possible
to send videos, links, stickers and even money via
messaging apps. And new developments are enabling
consumers to browse stores, book flights and make
purchases all within the one app.
1.3.3 Messaging makes Group Chats easy
Organising a sports team or a group of friends ahead of a
“You can make video and voice calls while at the same time not needing to know someone’s phone number. You don’t need to have a Facebook account to use Messenger anymore, and it’s also a cross platform experience - so you can pick up where you left off whether you’re on a desktop computer, a tablet, or your phone.” David Marcus (VP of Product, Facebook Messenger)
Messaging is built for mobile and mobile browsing surpassed desktop in Q1 2015
7
night out used to be so difficult. Using a messaging app
creates a whole digital experience before the event
actually takes place, which greatly adds to the ease of
organisation as well as the overall social experience.
This is one of the reasons why Slack, a team
communication app, has grown so quickly since it
launched in 2013. In a work context people operate in
teams and Slack channels make team communication so
efficient when compared to group email.
1.3.4 Messaging is asynchronous and is built for Mobile
Like its predecessor SMS, messaging is asynchronous and
was designed for the small screen. For millennials and in
many developing countries, the small screen is often the
only screen, which spells trouble for email.
Asynchronicity is a key attribute in a mobile context. It is
hard to know for sure why phone calls are in decline, but
certainly the missed call issue has got to be a big part of
the reason. Messaging fits into our busy digital lives
where we now have to set time aside to have an actual
telephone conversation. How many times have you not
answered a call in the past week? Before the mobile
phone came along, the idea of letting a phone ring out
would have been almost unheard of.
1.3.5 Messaging App users don’t require a number or an
email address
David Marcus (VP of Messaging Products at Facebook)
has been very blunt about Facebook’s intention to make
the phone number “disappear”. They are making great
progress in that direction and you can be sure that
millennials are not asking for phone numbers in bars
anymore. It is so much easier to scan a Messenger Code
or a Snapcode. Alternatively you can just search for their
name within the app and follow up with a message later.
The days of the phone number may indeed be
numbered.
If the phone number dies how will we contact businesses?
You guessed it. Via messaging apps.
Why Messaging
Apps will displace
existing Channels
34% of millennials say they would rather visit the dentist than call customer support.
Section 2
8
We have already demonstrated the popularity of messaging apps and the
ongoing demise of traditional customer support channels like phone calls
and email. A recent report from Dimension Data shows how it is only a
matter of time before call centres will need a new name, as channels other
than the phone begin to dominate.
Customer service gurus like Shep Hyken advocate that businesses should
provide customer support on whichever channels their customers use. I
wouldn’t argue with that advice and most businesses followed it eventually
with regard to social channels.
But this time it’s different. The likes of Facebook and Twitter were not built
Source: Dimension Data
Phone is #1 Support Channel
Generation Y
Generation X
Baby Boomers
Silent Generation
Yes
12%
29%
64%
90%
https://www.dimensiondata.com/
30% of customers report spending a high level of effort to resolve their problem
9
to handle customer support; it is something that came
about because of user demand (Twitter for example has
only recently started providing lots of the tools necessary
to offer customer support efficiently). On the other hand,
Facebook and WhatsApp have been very open about the
fact that they are putting business to consumer
communication at the heart of the design of their
applications.
The monetisation strategies for both these applications
are not 100% clear, but becoming a platform for
commercial activity and not just an advertising channel is
definitely a key part of the strategy. This deliberateness
and some of the basic DNA of messaging apps, means
messaging has the potential to become the dominant
channel for customer support. That was never a likely
scenario with social networks.
At the same time, messaging might not be appropriate
for every business. So let’s see what the benefits of
offering customer support via messaging apps are and
which businesses are likely to gain the most from it.
2.1 Why messaging works for customer support
The vast majority of customer journey mapping focuses
on the path from discovery of a product or service to the
point of purchase, where it abruptly ends. Having gone to
so much trouble and expense to acquire the customer,
surely it is worth applying the same rigour to making sure
they do not churn?
As the chart on the following page illustrates, messaging
apps reduce Customer Effort Scores to a minimum when
compared to the other leading channels, particularly
when using mobile devices. The customer in this case is
using a smartphone.
“We want to build things that are utilitarian - that allow a company like American Airlines or Bank of America to communicate efficiently through a messaging app like WhatsApp.” Jan Koum, CEO of WhatsApp
Customer Effort by Contact Channel for a User on a Smartphone
1
CustomerQuestion
Search for phone number Search for email address Open website & web chat Message @businessname
Eventually chat with agent
Filter chat from transcript
Navigates through IVR Send email & hope Wait attentively for agent Send message & relax
Wait on hold indefinitely Check spam folder Careful not to refresh page & don’t answer any
calls
Receive response notification. Review &
repeat
10
Good customer service is important, because 90% of consumers trust peer reviews
11
Let’s do a deeper dive into why messaging will displace
each of these channels.
Messaging Apps v’s Phone
• Only 12% of Millennials rank telephone as their
preferred means of customer support.
• With messaging, the customer sends his message
and the agent responds when available, so no
more waiting on hold.
• Messaging is private and discreet so customer
interactions can be conducted in public locations.
• It is estimated that phone support is 3 times more
expensive to operate than messaging.
Messaging v’s Email • 56% of total email volume is regarded as spam
(Statista 2016) and that is why many consumers
have dedicated spam email accounts.
• An e-mail thread quickly becomes cumbersome,
whereas a messaging thread is to the point,
condensed and easy to scan.
• An email thread is broken if the subject line is
changed or a new thread started, whereas
messaging keeps all chats in one clean flow.
• Brief messages are the norm for smartphone users,
whereas email harks back to the desktop era.
Messaging v’s Web Chat • In 2015, internet access via mobile surpassed
desktop access and web chat offers poor user
exeprience on mobile devices.
• Web chat relies on cookies to retain chat history,
so user identification is lost when moving from one
device to another, or when cookies are deleted.
• Asynchronous messaging fits into busy digital lives
“In the future, “customer service” won’t be something consumers dread having to call, it will be something that builds powerful relationships with consumers. The best marketing is great customer service, and chatbots are a great step forward.” Michael Schneider, Techcrunch
In order to re-engage customers on mobile web chat they must switch channel
12
whereas web chat’s live experience does not suit
the sporadic use of mobile devices.
• Follow ups on web chat require a channel switch
Messaging v’s Social
• Social networks were not designed for customer
support and where they have become channels
with meaningful traction, it has often been inspite
of the tools available rather than because of them.
For example, Twitter only recently removed the
need to follow a business to direct message them.
Messaging apps like Facebook Messenger and
WhatsApp on the other hand are actively building
tools to make their channel more appealing to
businesses and developers.
• Social networks by their nature are noisy channels.
It is challenging for businesses to decipher what is
a comment and what is a customer support query.
Within a messaging context, customers only
contact businesses to ask a question or provide
feedback, as no one else is listening.
• Finally, social networks pose a significant PR risk to
businesses. While this in itself is not a bad thing,
not giving the business the opportunity to react in
private first can be unfair.
Over 55% of WeChat’s 850m MAUs open the app more than 10 times every day
13
2.2 WeChat - The Leader in B2C MessagingIn case you’re still questioning the potential of messaging
apps as a customer service channel, a quick look at what
WeChat has done in China should remove all doubt.
• Over 300k offline stores accept WeChat Payments
• 67% of WeChat users spend over 100rmb ($15)
per month on the platform in 2016, which is
double what they spent in 2015
• WeChat, accounts for 40% of of all mobile
payment transactions in China
• WeChat generate >$7 annual revenue per user
2.3 The Future of MessagingAlong with payments, the developments taking place
with bots and the rapid slip in the number of apps being
downloaded has lead some commentators to forecast
that messaging apps will replace browsers and operating
systems at the heart of the internet.
Only time will tell whether such forecasts come true, but
what is certain is that there is no sign of these messaging
apps going away anytime soon. The opportunities for
early adopters on the business side of things are
enormous.
So how does a business go about getting started?
“Mobile payments in China are at least 3 to 5 years ahead of Europe.” Tobias Futze, consultant at Mediamen Shanghai
“WeChat is not so much an app as an entire mobile operating system, and accounts for more than one-third of all time spent online by Chinese mobile users; HSBC values the app at over $80 billion” The Economist
It may seem unusual that it is the West playing catch up
with China, but really the race is on to become the
WeChat of the West. It shouldn’t surprise you then that
prior to becoming VP of Product at Messenger, David
Marcus was the CEO of PayPal.
Getting started
with Customer
Support via
Messaging Apps
Moving to messaging will help reduce PR risks for businesses already on social networks
Section 3
14
Getting started with customer
support via messaging apps is
extremely easy. It is really just a
case of letting your customers
k n o w y o u ’ r e a v a i l a b l e o n
Messenger, Twitter and WhatsApp
etc. There are loads of different
ways to do that which we will cover
later.
While I firmly believe in the future
of messaging as a customer
support channel, it would be
remiss of me to suggest it is
suitable for every business. The
following are some key questions
b u s i n e s s e s s h o u l d a s k o f
themseslves before making the
decision to open up the messaging
channel.
It is estimated that messaging is 3 times more efficient than a phone support
15
3.1 Is Messaging Suitable for your business?Some questions to ask prior to making a decision to offer
customer support via messaging:
1. Are a significant proportion of your customers
likely to be users of messaging apps?
This question is hardly worth asking for most businesses,
because the adoption rates of messaging apps are so
high. But if you run a service targeted at old age
pensioners, then it may not make sense.3. Are you willing to allocate the resources to the
messaging channel to make it a good experience for
the customer?2. Will your target market see messaging as a
suitable channel for your business?
young technology companies, then offering support via
messaging is likely to mark you out as a customer centric
company (assuming you manage it actively). On the other
hand, where you are dealing with large corporates, there
may be a reluctance to use personal Messenger or
WhatsApp accounts to handle business related queries. I
can see that changing, but it might take a year or two to
happen.
Whatever number of customers you have or whatever
volume of contact you expect to receive via messaging,
there is no point opening up the channels unless you are
willing to support it. The following table gives an idea of
customer expectations in terms of timing of responses,
but the sooner you respond the happier the customer will
be. The goal should be to delight the customer with as
live a response as possible and that requires human
agents. In time bots may lessen the man hours required,
This question is more challenging. In a B2C world it is
likely that most businesses will find an enthusiastic
audience for messaging based support. Some exceptions
might be for legal or medical related services, though I
could easily be wrong about that.
In a B2B context it is likely to be different, depending on
the type of business. If you are providing services to the
42% of customers expect a response in less than 1 hour
16
but ultimately a decision needs to be made that some
team members will allocate time to the messaging
channel. As you will see in Section 4, we would argue that
diverting contact to messaging actually reduces the
resources required to manage the same volume of
queries, as messaging based agents are significantly
more productive than phone based agents.
4. Are you willing to promote customer contact via
messaging apps?
5. Do you need a messaging platform to handle the
contact efficiently?
If you are willing to allocate the resources then this
question should be easy to answer, but ultimately a
business needs to let their customers know they are
available on whichever apps you are supporting. You
should be prepared to implement some or all of the
strategies outlined in Section 3.2.
If you only expect to receive a handful of queries from
customers each day, the likelihood is the tools available
within Facebook and Twitter etc. will be adequate. But
once volumes start to increase and you have more than a
few people looking after the channels and/or are
supporting multiple channels, chances are investing in
some software to help handle it will make sense. Large
companies like utilities, financial institutions and retail
chains should look into this from the get go. Please feel
free to contact us with any questions you might have.
Within 30 mins12%
Within 1 hour10%
More than 1 hour, but later same day 25%
Within a few days33%
Within 5 mins9%
Within 15 mins11%
How soon do you expect a
response?
Source: Edison Researchhttps://adespresso.com/academy/blog/importance-responding-quickly-customers-social-media/
http://www.convinceandconvert.com/social-media-research/42-percent-of-consumers-complaining-in-social-media-expect-60-minute-response-time/
Messaging apps like Facebook Messenger work equally well on desktop as on mobile
3.2 How to promote Customer Contact via MessagingThere are lots of different ways to encourage your
customers to contact you via messaging apps. And all of
them are so much easier than having to remember an
email address or phone number. Different mechanisms
will work better in different contexts.
17
You could build your own web plugin or if using a service
like Leapchat you should expect one to be included.
Perfect for sending out with hardware or placing on
hardcopy ads. Try scan our one to see how it works.
Promote your handles (e.g. @leapchat) at events etc.
Twitter and Messenger (http://m.me/leapchat) have
created URLs and associated buttons, which bring
customers directly into their messaging account, already
pointing at your business account. On a mobile device it
will avail of the mobile app, while on desktop it will use
the customer’s Twitter page or Messenger.com account.
3.2.3 Messenger Codes and similar
Messenger codes are
essentially QR codes that
can be scanned within
the Messenger app.
S n a p c h a t h a v e
Snapcodes and I expect
WhatsApp w i l l have
something similar.
Facebook have
provided guidance
o n h o w t o
implement a basic
Messenger plugin.
h t t p s : / /
developers.facebo
o k . c o m / d o c s /
m e s s e n g e r -
platform/plugin-
reference
Message Us
powered by Leapchat
Direct Message Message Us
3.2.1. Online Buttons / Links
3.2.2. Web Plugin
3.2.4 Twitter and Messenger handles
http://m.me/leapchat
How Customer
Service via
Messaging
generates a Return
on Investment
The Millennial Generation is now the largest generation by population worldwide
Section 4
18
When it comes to making a decision on whether or not to support a
particular channel for customer service, return on investment is naturally
going to be a significant determining factor. This is where messaging
comes into its own. When you are making the case for allocating resources
to messaging, be sure to include these key points in your presentation:
4.1 Customer experience will be improved
4.2 Customer churn should be reduced
4.3 Agent productivity will increase
4.4 Overall customer support headcount can be reduced
4.5 New revenue can be generated
Some of our customers have also highlighted social benefits of messaging,
such as the ease with which people who are hard of hearing can use it, but
we will only focus on the financial benefits here.
56% of customers report having to re-explain an issue
19
Good customer experience should naturally lead to
better customer retention, but obviously the humans at
the heart of the messaging experience have a role to
play. The same CEB Global report found the following to
to be the key drivers of customer churn.
4.1 Customer experience will be improved 4.2 Customer churn should be reduced
Messaging, used properly, can help combat all of these
issues. Repeat contact is less likely because chat history is
there for reference. Even if transfers occur in messaging it
should not affect the customer, as ID and chat history are
persistent. Switching channels should be minimised as
messaging is a private channel. Bots should be used for
simple tasks and always be backed up by human agents.
As the chart on page 10 illustrated, messaging apps
reduce customer effort significantly, when compared to
the other leading channels. A study by CEB Global put
some numbers on the impact of increased effort and how
it dramtically reduces the potential for future business.
There are lots of other material improvements in
customer service experience. Messaging is free for the
customer to use, unlike the phone. The ready availability
of chat history is not matched by any of the other
channels and disputes over who said what can be one of
the most damaging in a customer / business relationship.
Key Drivers of Customer Churn
Repeat Contacts
Transfers / Repeating Info.
Robotic Service Having to Switch Channels
General Hassle Factor
Policies & Procedures
https://www.cebglobal.com/content/dam/cebglobal/us/EN/best-practices-decision-support/sales-service/pdfs/four-customer-loyalty-myths-busted-ebook.pdf
Customers can contact your business 24 hours a day. Agents can respond when available
20
than at peak times like lunchtime. Agents can handle
multiple chats via messaging and if a customer is not
responding they can simply move onto the next
customer. There is no easier way for customers to send or
receive images or links from a mobile device, which
means video tutorials can easily be used. Bots and built in
self-serve tools like the persistent menu in Messenger can
deflect lots of contact from the call centre.
There are many reasons why messaging increases agent
productivity. Its asynchronous nature means it facilitates
the spreading out of contact throughout the day, rather
4.3 Agent productivity will increase
The increased productivity and improved options for
customers to self-serve via messaging app features like
bots means less FTEs and outsourced services costs.
4.4 Overall support headcount can be reduced
The likes of Facebook have already introduced
promotional messages into the Messenger platform. The
trick is that businesses can only send promotional
messages to customers who have contacted them and
opened up the messaging channel. New marketing
channels like this work best when adopted early.
4.5 New revenue can be generated
@leapchat
@leapchathq
http://m.me/leapchat+353 (0)1 906 [email protected]
Leapchat Ltd is headquartered in Dublin, IrelandGW115 DIT Grangegorman Dublin 7, Ireland
c 2017, Leapchat Ltd
21
About Leapchat
Written and designed by Oisin Ryan (CEO, Leapchat)
Primary researcher: Sinead Kennedy
Leapchat is a software as a service platform for customer communication
via messaging apps. We have developed a market leading product and
we back it up with world class customer support.
Our software can be used by small teams or across enormous call centres
with hundreds of agents and it is so intuitive that it only takes a few
minutes to get up and running.
We take a proactive approach to protecting sensitive customer
information. All our data is stored securely with Microsoft Azure in Dublin,
Ireland, while we adhere to the guidelines set out in the EU GDPR.
We offer free trials on our startup and business plans, as well as
customised solutions for larger enterprise customers. Please check out our
website at www.leapchat.co to start a trial or get in touch with us via one
of the channels below if you have any questions.
Sign up for our blog at blog.leapchat.co for more articles like this.https://blog.leapchat.co
https://www.leapchat.co