Why chat apps are important for businesses

CHATTEN More and more companies are communicating with their customers via chat apps. The top 10 such applications already have over two billion users. Chris Moore, Head of App at Nexmo, reveals why other companies should also jump on this bandwagon.Within a few years, billions of consumers switched from plain, static person-to-person (P2P) SMS messaging to the more engaging, entertaining chat app. In particular, the high fees charged by network operators for SMS messages deterred users and made the new, low-cost chat apps increasingly attractive.In most larger countries, there is one player that dominates the market, and outside Asia, North America and the Middle East, these are often WhatsApp and Facebook Messenger. In Asia, however, WeChat/Weixin in China, LINE in Japan, Taiwan and Thailand, and Kakao in Korea hold the monopoly. Viber dominates the market in various countries around the world.

Chat apps are conquering the world - BBC India, for example, also distributes its news via Whatsapp.After growth comes businessAfter acquiring a huge customer base, chat apps began exploring opportunities for commercialization, initially selling virtual products such as games and stickers (e.g., emoticons). Now, chat app providers are tapping into other innovative revenue streams while looking for ways to solidify their position in core markets.Many chat apps now allow companies to maintain an official business account on their platforms. For businesses, this is an opportunity to generate new revenue through tangible user benefits while keeping users engaged. An official account allows marketing, sales and support systems to engage in authentic, personalized dialogue with individual customers - all through the same chat brand account. According to the motto "close to the customer", relevant information can be provided promptly where the user spends a lot of time anyway - that is a decisive success factor.With several million enterprise customers in China, Weixin, Chinese sister product of WeChat, is clearly number one in terms of the number of "official accounts". There, all companies - from airlines to financial institutions and retailers to hotels and restaurants - have moved to integrate their apps with WeChat/Weixin. LINE, Kakao and Kik also now offer official accounts, and earlier this year Facebook announced new offerings of its messenger for businesses with a clear focus on customer service communications.Even WhatsApp, known for not communicating about commercial activities on its platform, have allowed official accounts, albeit unofficially. Examples of commercial WhatsApp use include public utility customer service in India. Even the BBC uses WhatsApp to distribute its news. This clearly shows that there is an unmet need in the market for opt-in services such as customer service and content publishing.WeChat, Line, and Kakao now also have new services on offer, such as online payments, e-commerce stores, and cab and delivery services, to name a few. For their part, Tango, WeChat, Snapchat, and Blackberry offer businesses the option of in-app advertising.The great opportunity for companiesThe future will undoubtedly bring upheaval in many industries and change the A2P (application-to-person) messaging market in its current form. If companies such as WeChat, LINE, and Kakao have already earned hundreds of millions of dollars in the P2P messaging sector through the sale of virtual products, A2P messaging holds much greater potential in our view: chat apps are easy to operate and can be used by the user in a self-determined manner.In the short term, we will see the consumer take on a controlling function and a significant part of the e-commerce business shift to the chat app channel. It is the customer who decides which channel he uses to communicate. He chooses the chat app through which he contacts a brand and decides when that brand may communicate with him. For example, he selects his favorite store to view discounted T-shirts. He then buys the T-shirt and has delivery status notifications sent to his chat app. If a problem arises, he can contact customer service directly on the chat app. He no longer has to switch from one brand app to the next to order something and call customer service if a problem arises. All interactions go directly through the chat app.The challengeWith its rapid dynamics, the chat app market presents companies with major challenges. Today, all online customer interactions are handled through a central platform: Marketing Cloud, Sales Cloud, and Service Cloud solutions that manage interactions taking place across different communication channels. In order to integrate the new chat app channel into the core service platforms and reach customers around the world, there needs to be a connection to WeChat, Line, Kakao, Kik, Facebook Messenger, and the 150+ other apps that exist around the globe.Success will come to those companies that can execute the connection to all of these chat apps and handle the huge volume of communication. But the multiple integration requirements, changing APIs, business contracts and legal reviews alone can delay approval by several months. Not to mention the ongoing monitoring and maintenance of chat app APIs. The world of chat apps is evolving at a rapid pace into a vast, complex entity. One way to address this challenge is to centralize connectivity to the chat apps that exist around the world, simplifying the process by which companies contact their customers - no matter where they are. About NexmoNexmo is one of the leading providers of cloud communication platforms and develops innovative communication APIs and SDKs for voice and text messaging services as well as for phone number verification.