For Customer Engagement, Social Media was trendy – but the trend is something else: Message-Based Communication

Customer Acquisition Costs (CAC) are rising, as Mary Meeker points out in this year’s much-cited and always-anticipated Internet Trends Report. Glenn D. Fogel, CEO at Bookings Holdings, is quoted with saying that “in performance-based [digital advertising] channels, competition for top placement has reduced ROIs over the years & has been a source of margin pressure.” The Salesforce Digital Advertising 2020 Report finds: “Brands continue to use legacy KPI metrics such as impressions, but are moving beyond simple metrics to quantify [… what is among the] most important metrics cited by advertisers[…]: the complex notion of the lifetime value of a customer (27 percent).”

LTV (Lifetime Value) divided by CAC is thus becoming an increasingly important metric for brands. The shift to LTV goes along with a change in behavior of product purchases evolving from buying to subscribing. These have left the world of digital quite a while ago and now include product and service categories such as toothbrushes, fashion, and even haircuts.

Other trends contribute to a shift in how businesses should be looking at customer engagement:

  • consumerization of technology in the enterprise (remember “bring your own device”?), which brings new opportunities to replace “corporate” with “human”
  • personalization: the never-ending pursuit to achieve truly personalized and individualized service (the challenges around “Segment-of-one Marketing” were already explored in the eighties, as a Boston Consulting piece from 1989 (!) exemplifies…)

The move towards lifetime engagement finds its best buddy in what I call the “final frontier” in customer communication: Messaging. Messaging has all the characteristics of a channel that can become the vehicle to fuel the above-mentioned much sought-after metric of Customer Lifetime Value (LTV).

To message a business is still a novelty, and the journey started about 10 years ago when Comcast’s Frank Eliason explored ways to use social media for customer service. Let’s have a look back at the impact of social media.

The rise and fall of Social

As humans, we’re social animals. Personal connections, love, and attention are as important to us as the air we breathe and the sunbeams we absorb. The complexity of these connections and interhuman exchange goes counter to a growing force in our lives that favors the predictable, the describable, the black and white: technology. As technology has changed from something we occasionally use to something we rely on to live a modern life, it is making us adapt to its strict rules of algorithms and deterministic thinking. With it comes a change in language. Words like “social”, “like”, “share”, or “friends” have gone through a semantic transformation in less than 10 years or so, due to technology. “Sharing is caring” has turned from spending time, making a personal effort, or giving up materialistic possession, to a simple click, tap, or swipe, springing from oftentimes egotistical, not altruistic motivation.

In business, “social media” manifests the desire of companies to capitalize on these facts. To stay in touch, to engage in public, to be seen, heard, with the ultimate goal of increasing revenue. Rules- and logic-based technology and the rules-based practice of doing business are certainly a good match. What started out of a corporate function that was traditionally on a one-way street – Marketing – quickly turned into a 2-way affair, and Marketing departments had to learn to respond to customers. Social CRM was born: the “use of social media services, techniques and technology to enable organizations to engage with their customers”, and with it software products to manage that engagement.

Social media, at its core, is something an (old-school?) business would fear: loss of control and ownership of “the brand”, as customers are handed a megaphone for their struggles, frustrations, and yes, occasionally, their joys in using corporate products and services. The consumer learned that they could go online, tweet a complaint, and “force” a business through public shaming to attend to their needs. When the medium was new and thus low-volume and dedicated social media teams were formed to engage, either under the same roof as the contact center or completely separate, consumers often got a quicker response than when using private, traditional channels such as email or the telephone. But as they learned to use these mediums that are based on textual communication, they started using them for more, asking for account-specific information, attempting to make transactions, often to get a “Please call this number or email this address or go to this website” type of response from the social media team that wasn’t equipped to handle these inquiries.

Moving away from the public spotlight

The channel has grown up and isn’t new anymore. Volumes aren’t low anymore. At the same time a shift has happened that was easy to predict: communication went private again. Twitter started adding private customer service features in 2016. Mark Zuckerberg himself told the audience at his 2016 F8 event “I’ve never met anyone who likes calling a business” to advertise his Messenger product, a 1:1 messaging solution – despite owning the largest social network. Several of these messaging apps cracked the billion MAU mark in 2016/17.

 

The trend away from public to more privacy is reflected in other areas of our lives, too. Smaller communities, down to neighborhoods or families, form new micro networks; the social network app Nextdoor sees a steep increase in the usage of their service, which lets neighborhoods create small social networks to stay in touch – away from the larger “public”.

Finally, messaging’s surpassing of social networks dates back to early 2015, when the number of monthly active users of the top 4 social network apps fell behind that of the top 4 messaging apps.

The business potential of messaging

In a lifelong relationship that the idea of LTV tries to monetize, there are many reasons for customers to contact a business (or a business to proactively engage with a customer,) but we can categorize them as follows:

Many realize that while complaints work great on public channels and get the intended attention, reaching out to a business to make an appointment, inquire about the specifics of a purchased product, or check in about open insurance claims is not something the public should necessarily hear about. Messaging, however, can carry all of these interactions, and so many more than suit the public nature of social.

Convenient and time-saving: The asynchronous nature of messaging

I believe the main reason that people started using social media for business communication in the first place was less the public nature of it, but the fact that it was more convenient and less time consuming than using traditional channels. Or, in a nutshell: because the channel is asynchronous.

Calling a business requires waiting on hold and directing one’s entire attention to the conversation. Chatting with a business through web chat is barely different: waiting until an agent becomes available, then not letting too many minutes pass before replying to an agent, lest the chat times out and you have to start all over again. Emailing with a business meant lengthy text and sometimes week-long conversations. Yet messaging with a business allows you to send off your question and go on with your life. How many times have you wished the call center agent would let you hang up after you explained your need so that they could perform the necessary work without keeping you on the phone? Messaging establishes an eternal thread between the consumer and a business that both can turn back to whenever needed – what is not to love about that?

Calls, chats, engaging with companies through ticketing systems, even email: all of these traditional methods consider our needs as incidental, spotty, something to close out on as fast as possible. Yet, we are not tickets – we are humans with a life, who cherish the most valuable asset of all: time. Anything saving us time has worth.

So given that messaging is private and time-saving and persist state on both ends, it has a huge potential to be a sticky channel for consumer engagement in ways that voice, email, chat and social just never could. It is the final frontier in customer engagement — time to explore it!

We have some experience and ideas in how to pull this off for your company – reach out to me personally at “tpgoebel” on Twitter, Messenger, or LinkedIn, or find Sparkcentral on Messenger, Twitter DM, or WhatsApp.

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