Conversational marketing channels are set to flip the funnel on its head but offer huge opportunity for marketers according to SAP Emarsys’ global chief services officer, Mo Awada.
While social media has transformed the way brands communicate with customers over the last decade, with fast-moving and near-instant comms being the order of the day, Awada believes that conversational channels will have a greater impact yet.
“Conversational is giving consumers more power. We have been preaching for many years to marketers that you need to serve the right message, in the right channel at the right time. That isn’t the case any longer,” he told B&T as part of an exclusive event
“Conversational is giving consumers the power to decide: ‘I want you to talk to me on WhatsApp and I want it now,’ right? It’s moving away from classic marketing which is very much outbound to ‘I’m going to request the information now’. If you don’t use conversational as part of your marketing mix, you’re not going to be able to respond. Someone else will and [the consumer] will go to them. It’s creating more competition and giving consumers this power back.”
It’s a heady vision for the future of marketing. However, there are a number of challenges standing in the way of this prophecy becoming reality—at least for most brands.
Awada said that to make conversational effective, businesses need to invest in automation. However, Peter Munckton, chief economist and head of market strategy at the Bank of Queensland, said during his keynote at the event that businesses are struggling to find the cash to invest in a tightened market.
“The biggest reason our productivity has taken a step down is the amount of investment from businesses has taken a step down. We talked about AI, that could be one big thing that lifts it back up,” he told the room.
“But for now, we haven’t invested enough and one of the outcomes is that our productivity is lower.”
That lack of investment has led to brands falling behind customers’ expectations of near-instant communication. However, Awada believes that generative AI will make the creation of these journeys easier—saving money for businesses and brands and potentially improving the bottom line at the same time.
“If you think about the effort as a marketer that it used to take to create these journeys, Emarsys is offering our Tactics as a starter. We’re bringing in the knowledge layer, we’re crowdsourcing a lot of these automations. We’re giving our customers 20 years of experience in building automations, making it available to them to simply switch on,” he said.
“Then you can use Gen AI to it better when it comes to generating the content, audiences, adding your products. We are making it cost effective, easier and reducing the entry barrier. Every marketer should be able to create these journeys.”
As prices for almost everything climb, however, consumers are dropping their spending compared to previous decades. Again, this lowers the opportunity for investment from businesses, though not through any fault of their own.
“If you look back at the noughties, there was very strong disposable income growth. The economy was white hot. Taxes were low. In the last decade, retail spending was lower,” said Munckton.
“One of the critical reasons for that is disposable income growth was lower. Then there’s Covid.”
However, there is good news coming—or less bad news, at least.
“It’s already the case that our incomes, in real household terms, are no longer going backwards. As we get from this half year into next half year and the year after, we are actually going to have more and more cash. Why? Inflation is coming down above our wages. We know there are tax cuts and the government is kind enough to subsidise a whole bunch of stuff,” added Munckton.
Heartening news for many, we’d imagine coming into the festive period.
Carolina de Figueiredo, ecommerce and digital solutions manager at Krispy Kreme Australia & New Zealand, agreed with Munckton that it has been tough.
“It’s definitely been a challenging period for most Australian and New Zealand households which has impacted their discretionary spend. With this challenge, it emphasises our focus to invest within our first party data and reinforcement of expanding our digital capabilities to meet consumer demand,” she told B&T.
de Figueiredo explained how Krispy Kreme started working with with Emarsys a little more than two years ago and has spent its time optimising and implementing a multi-channel consumer lifecycle roadmap. As a result, she said, the brand has seen positive results in its engagement KPIs, which have ultimately resulted in a YoY database growth and CLV growth.
This rising consumer confidence and improving technology—leading to the growth in less conventional marketing channels—present marketers with a prime opportunity to steal a march on their competitors.
“Conversational has very high untapped potential,” said Awada.
Who knows what the next year will hold?
