What is conversational marketing? A guide to benefits, strategies, and best practices
In this article:
- Defining conversational marketing
- How conversational marketing works
- The benefits of conversational marketing
- Conversational marketing best practices
- 5 examples of conversational marketing campaigns
- Ready to go conversational?
- Frequently asked questions
Traditional direct marketing tactics are typically one-way. Companies use digital channels like messaging to send well-crafted marketing messages, but most brands aren’t prepared to field replies. The problem? Your customers want to talk to you!
According to recent research from Sinch, nearly 9 in 10 consumers (89%) say they want to be able to have two-way conversations with businesses via messaging channels and apps. Not giving them the possibility to do so is a huge missed opportunity for brands to guide engaged consumers on their path to purchase.
That’s what conversational marketing is all about — an interactive, real-time experience that allows brands to engage with customers when interest is at its highest.
Whether you’re new to the conversational marketing game or are looking to take your existing strategy to new heights, keep reading to find out how to build a fail-proof conversational marketing strategy — or download this guide as a PDF to read it later.
Defining conversational marketing
Conversational marketing is a strategy that involves using mobile messaging, live chats, artificial intelligence (AI), and natural language processing and understanding (NLP/NLU) technology to engage and serve customers throughout their journey with real-time conversations on the channels they already use.
The objective? Build deeper connections with customers and create new opportunities to engage and convert.
Whether your customers want additional information about a specific product or need help checking out or returning a product, conversational marketing allows you to provide helpful, instant answers. It’s also a great way to take your campaigns to the next level (more on this later).
How conversational marketing works
Your customers have questions — but you might have missed them.
A global study by Meta showed that almost two-thirds of consumers tried to respond to direct messages sent by brands during the holiday season... but were met with frustrating error messages or no reply. Why exactly are shoppers messaging brands?
- 45% want to get product or pricing information
- 35% would like instant responses at any time
- 33% see messaging as an easy way to shop
- 31% want personalized advice
- 30% want to be able to negotiate prices or offers
Conversational marketing is about helping brands address these questions in real time (or even better, proactively answer them before they pop up), gain a deeper understanding of customers’ needs and preferences, and provide relevant, valuable recommendations.
Using conversational AI chatbots within messaging channels or web live chats, brands can take it even further and offer always-on answers to queries while improving data collection and analysis. Unlike traditional rule-based bots, conversational AI-based chatbots leverage the power of natural language processing, machine learning, and conversational design to provide more genuine, human-like conversations.
Imagine the impact real-time, two-way conversations could have on your conversion rates. For large enterprises, a 1% increase could mean millions more in revenue. What would it mean for your bottom line if these conversations could turn a 3% conversion rate into 4%, 5%, or 10%?
One Sinch customer launched a conversational messaging welcome program for new customers to help improve customer experience and divert calls to their customer care center, resulting in:
- 19% conversion rate to an additional service
- 22% reduction in opt-out
Not bad, right?
The benefits of conversational marketing
By allowing consumers to get their questions answered, respond to marketing messages, and talk with brands like friends in real time, marketers can improve acquisition, send conversion rates through the roof, deepen loyalty, and ramp up engagement across the entire customer lifecycle. Let’s take a closer look at the benefits of a conversational marketing strategy.
Increased customer engagement and conversions
Did you know 50% of sales go to the brand that responds to customers first? Make sure you’re always first with instant, personalized conversations on the channels that suit them.
Improved CX and customer satisfaction
Conversational marketing channels allow brands to give customers real-time answers and support across their entire purchase journey.
Valuable customer data collection
Zero-party data from conversations helps brands enrich customer profiles further and optimize CX and future interactions with relevant recommendations and offers.
Improved brand loyalty and deeper customer relationships
Conversational marketing channels aren’t only a great way to provide quick and helpful answers to customer queries, they’re also highly personal. Meeting your customers on the channels they use to communicate with friends and family is an opportunity for your brand to build more meaningful relationships, and in turn, drive more loyalty.
Using conversational AI and automation, brands can automate up to 90% of customer interactions — that means better efficiency and allocation of human resources, and therefore, reduced costs.
With conversational AI chatbots, businesses can serve and support customers at any time, which not only helps provide a better experience, but also reduces purchase abandonment.
Conversational marketing best practices
In today's digital world, customer experience is a priority for both brands and consumers. Creating a stellar mobile experience with conversational marketing helps brands stand out from the competition and build lasting relationships.
Instead of customers feeling like they’re just a face in the crowd, conversational marketing campaigns can offer real-time responses to customer inquiries and deliver personalized messages.
It’s time for brands to get better at making customers feel valued and heard. It’s time to turn one-way marketing notifications into two-way conversations!
Keep reading to find out how to lay a solid foundation for your conversational marketing strategy.
Leverage AI-powered two-way conversations
It’s no secret — the way people prefer to communicate with brands is evolving and it's easy to understand why consumers lose the motivation to buy when the support they need isn’t readily available:
- 71% of customers expect real-time communication.
- 75% say they want to speak with businesses via messaging like they do with friends and family.
Artificial Intelligence and Natural Language Understanding are the way many brands address customers’ expectations for fast, convenient experiences on conversational channels.
AI and NLU technology can understand the intent behind a customer's message and respond instantly using everyday language, making intelligent two-way conversations between businesses and customers possible 24x7 — even when human agents aren't online to help.
Bonus: AI-driven customer support also helps reduce operating costs!
Another major advantage of conversational AI is that it can be used to automate customer data collection, helping brands continuously test and optimize customer experience.
But there’s a right and wrong way to go about using AI chatbots. Here are some of the main expectations consumers have when chatting with a bot according to a recent survey by Zendesk:
- 47% believe it should make life easier.
- 48% believe it should keep people from having to repeat things.
- 48% believe it should save time when contacting a company.
- 42% believe it should improve customer service quality.
Make it personal
Mobile messaging is intimate by nature: It’s where friends and family talk daily. When brands access this privileged space, they should respect it and make messages relevant and personalized. In other words, they should act like a friend.
By personalizing messages with customer data, brands can treat customers like individuals — because one size does not fit all! Research shows that most consumers not only expect personalized interactions with brands but become frustrated when they don’t get them. In fact, they choose to reward brands who personalize their experience with repeat purchases.
With conversational marketing, brands can collect valuable data via two-way chat by asking customers about budget, preferences, nearest store, etc. This information can then be used to make hyper-personalized recommendations in real time to create more relevant campaigns and offers.
Take advantage of rich media formats
People prefer watching over reading, and marketers are now adapting to modern-day preferences by showing instead of telling. In any direct marketing campaign, video and rich media are more engaging than text alone. It really is that simple.
The same is true for messaging. Images and video create a more compelling, app-like experience inside the messaging channel.
One Sinch client ran a test from August 2021 - February 2022 to discover if MMS (rich media) or SMS (plain text) improved customer perception more. The rich media campaign saw:
- 73% more engagement
- 12% lower opt-out
- 114% increase in NPS
Multichannel good, omnichannel better
Meeting customers where they are is crucial to customer experience. To reach the biggest audience, brands should create experiences that work across multiple channels.
There are more than five billion monthly active mobile messaging users worldwide:
- SMS and MMS dominate messaging in the US
- RCS is favored in Europe
- Messaging apps like Facebook Messenger, WhatsApp, and Viber are growing in use worldwide daily
Successful conversational marketing programs need to work across all messaging channels.
Track, analyze, and optimize your conversational marketing efforts
When rolling out your conversational marketing strategy, make sure to use conversation records and analytics to improve your understanding of customers’ needs and pain points, and identify optimization opportunities.
Most messaging APIs and chatbot platforms offer advanced analytics capabilities and can be integrated with your marketing systems, allowing you to enrich customer profiles in your existing database.
Collect customer feedback
Messaging channels and chatbots are also the perfect places to collect customer feedback quickly and easily.
Send automated surveys via messaging channels or live chat to give customers the opportunity to rate their experience and leave comments, or set up your chatbot to ask for feedback at the end of every conversation, and keep fine-tuning your conversational marketing strategy.
When done right, conversational marketing can strengthen customer relationships by creating personal, real-time experiences in their channel of choice while building a better brand experience, increasing ROI, and boosting customer loyalty.
Let’s explore examples of what a successful conversational marketing strategy looks like!
5 examples of conversational marketing campaigns
Building a conversational marketing program may seem scary, but it doesn’t have to be. We've collected some of our best examples to show you how two-way messaging can delight customers and drive engagement across the entire customer journey.
Supercharging customer acquisition in the automotive industry
Customer experience is king, and it all begins during acquisition. At this stage, consumers are shopping around and looking for answers. They need to feel confident spending their money, and unanswered questions can make them hit pause on a purchase.
Digital ads are often used by marketers to pick new customers up. Adding AI-powered chat to these ads invites customers to ask questions and helps them explore what’s on offer.
Take a look at this Facebook campaign for an automotive brand:
Next-level customer onboarding in telco
When a customer signs up for a membership, subscription, or service, they probably still have questions about what to expect. Friction-free onboarding can reassure customers and guide them through the process and pain points they might bump into. An effective onboarding process has two main benefits:
- First, if customers feel comfortable, they’re more likely to take the next step. This could be anything from buying more to switching subscriptions.
- Second, it allows companies to discover what’s stopping customers from buying more or upgrading.
Let's look at how conversational marketing can improve the onboarding process for a telco company:
- The telco brand sends a personalized welcome video to a new customer.
- The video explains the customer’s bill, using data such as payment due date, the amount for each elected service, and the total the customer can expect to see on their first statement.
- Once the customer watches the video, they’re invited to ask questions.
- The AI-powered chat allows the customer to learn more and upgrade their account with an additional service.
A conversational marketing campaign during onboarding can boost many marketing KPIs as providing insights into your business can help customers make informed decisions on what to buy.
Transforming engagement in retail
One of the biggest benefits of conversational marketing is higher customer engagement. One-way direct marketing talks at customers, but two-way messaging invites a response. Using rich media via messaging also builds an opportunity to start and close the sales cycle in messaging.
Check out the campaign below for a hardware retailer.
- The retailer sends a marketing message with a video to showcase their featured products.
- It follows with a question inviting engagement. Throughout the conversation, the AI builds a picture of the type of product the customer is interested in, their location, and budget.
- Using that data, the retailer makes a personalized recommendation and sends a link to purchase with a special discount.
The conversation maximizes impact by grabbing attention and responding to questions in real time. Engaging existing customers with two-way chat and rich media is a powerful strategy for boosting engagement and conversions.
Unlocking new conversion and upsell opportunities in hospitality
Brands are increasingly using messaging to interact with customers in all kinds of ways, whether it’s support, marketing, or even commerce.
We call this last one “conversational commerce” because it’s where messaging apps meet shopping. This means consumers can use chat to browse and select a product or service, learn about it, and complete payment inside the messaging app.
The opportunity to complete transactions in the messaging channel means brands can remove barriers to purchase and create a more frictionless shopping experience.
What would this approach look like for a restaurant?
- The customer clicks on a Facebook ad, which opens Facebook Messenger.
- The virtual assistant finds the nearest store and confirms pick-up options.
- The customer browses the menu via rich media carousels, places an order, and makes payment in the messaging app.
- The restaurant completes the interaction and collects key customer data.
Driving loyalty with five-star service in banking
Relationships between brands and consumers don't end with a purchase. Loyalty drives real customer lifetime value, and excellent customer experiences build loyalty. It should come as no surprise that 80% of companies that invest in customer experience outperform those that don't.
Conversational messaging can help build loyalty. With AI-driven chats, brands can offer instant service and support 24x7 in a customer’s favorite channel. That’s a massively better experience than calling a helpline and waiting on hold for a live agent!
And that’s not the only way brands can use messaging to offer a top-class service. From order tracking to personalized offers to time-sensitive alerts, the opportunities to engage with conversational messaging are as varied as your customer base.
Let's look at a banking industry use case. The example below uses two-way chat to verify a fraudulent transaction and quickly put things right.
- The bank sends a fraud alert message using personalized rich media to clearly communicate important information.
- The customer responds, and the bank guides them through the next steps.
- The bank resolves the customer's problem without having to place a service call.
- Finally, the virtual assistant sends a video with tips to prevent the same issue from happening again.
Conversational messaging helps build loyalty by delivering smoother experiences — that means real-time, one-to-one communication and support enhanced with personalization and rich media, all in the customer’s channel of choice.
Ready to go conversational?
Brands are built on the experiences they provide and today’s customers now demand more than one-way marketing messaging. With innovation at an all-time high and competition fiercer than ever, conversational marketing can be a true game-changer, helping marketers drive true differentiation with personalized, value-adding experiences at every step of the buyer journey, on the right channels.
Need more insights to start building your conversational strategy? Explore our guide to conversational messaging channels to find the right ones for your business, and learn more about conversational commerce.
Frequently asked questions
1. How do I measure the performance of my conversational marketing strategy?
The right conversational marketing tools will allow you to monitor and optimize every single campaign (from deliverability to engagement, and conversations) and collect valuable insights into general and individual customer needs and behaviors. You can also monitor the number of users who engage with your web live chat or messaging chatbot, see how many of them convert, and ask them to rate their experience to track the evolution of your CSAT score.
2. Are conversational AI and chatbots good for customer support?
Conversational AI and chatbots are great for customer support. With natural language processing and understanding, businesses can design seamless, human-like conversational experiences and provide 24/7 customer service and instant responses to frequently asked questions. Not only does it help streamline customer service processes, but it also reduces costs.
3. What tools can I use to scale my conversational marketing?
Sinch’s conversational marketing solutions are built with scale and campaign performance in mind. Whether you want to take the leap to omnichannel, add conversational AI capabilities to your marketing workflows, or create powerful messaging campaigns that can’t be ignored, we make it easy and scalable.
4. Are there any disadvantages to conversational marketing?
Scaling personalized conversations on all the channels your customers use can be a challenge. But with the right tools, it doesn’t have to be so hard! At Sinch, we’re all about keeping it simple. Find out more about our conversational marketing solutions.