Answering the call to greater engagement (and revenues): WhatsApp, WeChat and chatbots

’39 Steps’ to more revenues

Not that we like to dwell on “I told you so” situations, but Zeitgeist has been rambling on about the missed opportunities of WhatsApp – relative to its Asian counterparts like Line and WeChat – for at least a year now. The platform, owned by Facebook, has had a real opportunity to borrow a page from its analogous peers in the East, particularly with regard to B2C opportunities, for some time now. It was hugely gratifying therefore when last week it was announced that WhatsApp will allow businesses to send messages to users of the platform.

Whatappening in business

The Financial Times suggests example messages along the lines of “fraud alerts from banks and updates from airlines on delayed flights”. It’s about random companies sending you somewhat-tailored messages. Snore. The potential here is so much more monumental. Think of the potential for a fast-food service, or a news publisher (we said think; we’re not going to do all your work for you). What the platform won’t do is start serving banner ads in the app. Firstly because Facebook surely acknowledge what a horrendous impact this would have on UX; secondly because WhatsApp strongly pushes their e2e encryption feature.

Interestingly, the way this will work is that Facebook will get access to your phone number (if you haven’t succumbed to their pleas asking for it already). It will formalise the link between your old-school Facebook account and your not so-old-school-but-not-quite-Snapchat-either WhatsApp account, as suggested by New York magazine. Apparently Facebook will also be able to offer you friend suggestions. Whew, yeah because that’s a tool I really am concerned about and wish was more useful and efficient.

The potential we referred to earlier (we’re still not going to do all your work for you) is around chatbots. Chatbots and this new era for WhatsApp surely make sense. And people are clamouring for them. According to eMarketer’s data from May, nearly 50% of UK internet users say they would use a chatbot to obtain quick emergency answers if the option were available. About 4 in 10 also said they would use a chatbot to forward a question or request to an appropriate human.

Whatsappening in the rest of the world

But to say WhatsApp has been missing the boat in terms of additional data insight or revenue streams outside Western markets is a touch unfair. As the FT detailed at the beginning of the month,

“Whether you are in the market for a nicely fattened goat from the United Arab Emirates or freshly caught fish in the port of Mangalore in India, you can place your order on WhatsApp”

Indeed, it seems though outside Western markets the app is used in an entirely different way. Even within Europe there are differences. In Spain it is extremely common to make and receive calls over WhatsApp. In the UK, many a caller has been befuddled by my attempts to reach them via the platform. The likes of WhatsApp though are particularly crucial in emerging markets like India, where many citizens have never registered for and may never now register for an email address. If this sounds ludicrous, it means you’re old. It’s why the aforementioned pleas from Facebook for your phone number, why Twitter occasionally does screen takeovers when you open the app asking for it, and why in a recent project engagement I managed, we recommended a major international film and TV broadcasting company that they do the same for their own login feature. The data below for emerging markets shows the astounding reach WhatsApp has managed (and the foresight in its purchase by Zuck):

While Benedict Evans of Andreessen Horowitz says the platform has struggled to acquire new customers for businesses versus Facebook and Instagram, it undoubtedly has been successful in strengthening relationships with existing customers. This is fine in Zeitgeist’s eyes. Retention is cheaper than acquisition; if you create a good CX you don’t need to worry about getting new customers. The emphasis should be on engendering loyalty, not on scrambling to reach the newbies all the time.

WeChat’s inimitable template

At the start of the piece we mentioned China’s WeChat (or Weixin) messaging platform, of which Zeitgeist is a big fan. Others are too, which is why by some estimates it’s worth $80bn. One of the advantages inherent in both WeChat and WhatsApp is that users have naturally gravitated to these applications without the need for them to be incentivised or “walled garden”ed into such interaction. And such engagement doesn’t start before you’re old enough to even lift a mobile device, again, you’re too old. As The Economist detailed in a piece earlier this month,

“[Four year-old Yu Hui] uses a Mon Mon, an internet-connected device that links through the cloud to the WeChat app. The cuddly critter’s rotund belly disguises a microphone, which Yu Hui uses to send rambling updates and songs to her parents; it lights up when she gets an incoming message back”

For the child’s mother, WeChat has replaced such antiquated features as a voice plan, as well as email. The application also integrates features for business use that mimic that of Slack in the US. According to the article she even uses QR codes to scan business associate profiles more than she uses business cards. QR came a little late to Western markets and despite the intentions of agencies like Ogilvy in the 2010s, has failed to take off. Its owner, Tencent, has used its powerful brand and powerful authentication convince millions to part with their credit card details. The likes of Snapchat and WhatsApp have yet to make the convincing case for this. It is this crucial element that allows the father of said family to use the app for eCommerce, contactless payments in store, utility bills, splitting the bill at restaurants, paying for taxis, paying for food delivery, theatre tickets and hospital appointments, all within the WeChat ecosystem. It is then no surprise that a typical user interacts with the app at least ten times a day.

Although we mentioned no incentivisation has been necessary, a state-backed campaign last Chinese New Year saw a competition for millions of dollars in return for people vigorously shaking their handset during a TV show, the way to both have the app interact with a TV programme as well as the way for users to make new friends who are also users, according to The Economist, which reported that “punters did so 11 billion times during the show, with 810m shakes a minute recorded at one point”.

McKinsey reported last year that 15% of WeChat users have made a purchase through the platform; data from the same consulting firm this year shows that figure has now more than doubled, to 31%. Can such figures be replicated in the West? Time and culture have led to WeChat’s pervasive effectiveness and dominance. Just like QR codes have never taken off in the West, so SMS and email never took off in China, so there was never a competing platform to ween people off when it came to messaging. What some people had used was Tencent’s messaging platform QQ, the successor of which became WeChat. QQ contacts were easily transferable. Gift-giving idiosyncracies, leveraged and promoted with a big marketing push, as well as online games (from where over half of revenues derive) are both still nascent behaviours and territories for consumers and platforms, respectively, in the West.

Next steps

It’s fascinating of course that none of these apps for a moment consider charging for voice calls; that would anachronistic and simply bizarre. With WhatsApp’s latest announcement, it takes a step in the right direction, opening up additional revenue streams while also trying to develop a more cohesive ecosystem for its user base. Whether users in Western markets will be comfortable with a consolidation of features on one platform – owned by a company that is viewed by some as already having consolidated too much data on them – is an open question, and surely the first hurdle to begin tackling.

UPDATE (30/9/16): While messaging platforms are great, there are other opportunities to consider too. Shazam, the app that was a godsend for Zeitgeist while at university wanting to know what song was playing in the club, has been around for a while. It’s impressive then that is has managed to double its user base in the past two years, continuing its expansion into TV content. Product placement in the US has helped, and Coca-Cola worked with them on a big campaign last year. The company is breaking even for the time since 2011. An interesting platform to consider, for the right partner…

 

Obama and Brands – Jumping on the electoral bandwagon

Zeitgeist was resting easy this morning with the news that Obama had been re-elected for another four years. Before the tickertape had even fallen though, marketing managers were thinking of how they could take advantage of this national event. Leveraging, tapping into or piggybacking on a particular theme is a popular move, though it can be risky, as the recent brand activity around Sandy proved. So it’s nothing new. Nevertheless, this was a quick turnaround. For though Obama did not give his acceptance speech until around six hours later, Lacoste was ready with their latest iteration of their eCRM programme at around 7pm EST. Presented as an email to get people to “vote” for a red or blue polo, the pre-header said it all; “You’ve Picked Your President – Now, Pick Your Polo!”

How brands dealt with Hurricane Sandy

Hurricanes can be a horrible business. Before Sandy, Zeitgeist remembers being in New York on a work placement during the East Coast blackout of 2003. It was a necessary reminder of just how many things rely on electricity. In mid-August, air conditioning, a constant presence year-round in New York, vanished. Cell phones quickly died a death without anywhere to charge them. Hot water shut off, before cold water did too. And of course, without refrigeration, restaurants across the city had to abandon serving customers even as they dumped food they could no longer preserve. So it felt like one of the nicest treats ever when, after 36 hours of experiencing no electricity, Zeitgeist plonked himself down at one of his favourite eateries to indulge in a humongous lunch. There is something very therapeutic about the act of consuming a good meal. As Virginia Woolf said, “One cannot think well, love well, sleep well, if one has not dined well”.

Brand communications often generate greater engagement when they leverage topical events, but must tread carefully when it comes to occasions such as this. It was probably with Woolf’s quotation in mind that the people behind the eCRM programme for the elite diffusions of the Michelin-adorned chef Daniel Boulud sent out this comforting email (above) to those registered on its database, saying basically that their services were available for those that felt up to it. Zeitgeist thought it was a nice note, and importantly written in an appropriate tone of voice. Certainly those establishments that were able to be open saw a surge in business. Indeed, this evening sees the Cafe Boulud team with chef of currently-closed momofuku to create a $500 six-course extravaganza, proceeds of which go to the American Red Cross. The Metropolitan Museum of Art opened its doors again on October 31, welcoming over 13,000 people and making entry free. An email from the President of the Museum to friends and members made a show of solidarity and pushed the right buttons.

Other brands also wishing to remind potential customers of their presence during the immense disruptions and terrible circumstances of Hurriance Sandy met with more vociferous reactions, especially on social media. Despite a recent article from the FT imploring businesses to think twice before they tweet, it appears to have gone unheeded, at least by the likes of Gap and American Apparel. Again, it was not necessarily the content, but the tone of voice that was so important here. American Apparel suggested you might be “bored in the storm”, which quickly led some to conclude that the brand was trivialising what was happening, i.e. that lives had been lost and that many were without power. Gap tried a slightly different similar tack. They offered no discount but instead talked up the fact they were shopping online, and, while hoping others were ok, wondered if some other people were also surfing gap.com. Again, this met with much consternation, particularly on Twitter.

Starbucks, meanwhile, managed a more disciplined approach. On Twitter, they reiterated again and again that their thoughts were with those affected by the storm, and that they were working as hard as they could in order to get back up and running again so they could start providing a service for YOU. They weren’t saying anything drastically different to the retailer brands above, it was all to do with the way they were saying it.

The most surprising action taken by a company in response to Sandy was by none other than Goldman Sachs. The business opened their offices to all and sundry afflicted by the disaster, setting up places for local afflicted denizens to get fresh water and, perhaps more importantly for some, to charge their cellphones. What a nice bit of brand-building, and a great humanitarian thing to do as well.

UPDATE (12/11/12): brandchannel recently featured an excellent update on how multiple brands are responding to the ongoing problems caused by Sandy.

Window shopping at Chanel

Great, recent activation and eCRM examples from the esteemed fashion house.

On Friday, Zeitgeist returned (mentally) from lunch to find a message from Chanel in their inbox. The message directs the user to a microsite of sorts, Window World. The name and idea plays on the surreal notion of the models as mere mannequins (usually of course the reverse is the case, a crude verisimilitude that shoppers seem to take in their stride) and a section of the site takes the user through what feels like a labyrinthine party, filled with mannequins as models and models as mannequins. Other than aesthetic discombobulation, there is signposted a pdf download with product information for every item featured including the item code, but naturally not mentioning anything as vulgar as prices. Complementing this is a video shot by the house’s creative director – Karl Lagerfeld, whom Zeitgeist saw speak at the end of last year – emphasising the eeriness of the concept. Clicking on the video will take you to the YouTube page, where there is ample evidence – in the form of myriad comments – of dissatisfaction with the video, and what it says of the fashion industry by proxy. Fortunately for Chanel, most of those on YouTube are not the brand’s target audience.

Indeed, to elaborate, CNN recently reported that 6% of shoppers drive 70% of luxury goods purchases, so its a very targeted niche that brands like Chanel must hit, (and succeed in so doing, time and again). Zeitgeist has reported before on how important it is that brands be seen in the right places; Louis Vuitton luggage in a McDonald’s is a no-no. Chanel have done an excellent job of being seen in the right places; whether it’s hosting surfing parties for Laird Hamilton, or, more recently, opening a pop-up shop in a tony ski resort. The ‘Chalet de Pierre’ is open until April, an ‘ephemeral’ boutique in the heart of beautiful Courchevel. The Chanel website has some select imagery of the store, which is the perfect place to pick up a pair of Chanel skis. Such marketing activity is exciting and well-executed, but curious, given that any time the brand Chanel, and Lagerfeld in particular, speak publicly, they rarely acknowledge any such efforts.

Pucci’s eCRM Fail

In the world of luxury, discretion is paramount. Not only should there be a sense of exclusivity about a brand and its wares, but the customer’s relationship with the brand should be personal and – given their probable high net worth – confidential. Which is why fashion label Emilio Pucci, whose signature designer Matthew Williamson left last year, has unfortunately failed so epically with the email it sent out to its Sloane Street of London customers last week.

The eCRM emails that the fashion label sends out are never particularly well-designed, relying on quite brief text with simple fonts. The invitation to a trunk show was first sent listing a date that had already passed. It was then sent again, this time with the correct date, but with every single one of Pucci’s Sloane Street customers clearly CC’d on the email for all to see, well over 500 customers. The message contains contact details of those high up in the worlds of law, finance, music, film and fashion. The risks to privacy violations here (as well as this evidently being illegal), are obvious. A data collector’s dream, to suddenly be in possession of the addresses for such a sought-after group of people. For the person that sent out the email however, it’s a nightmare.