In the second part of our Mobile Chat series, Vince Malouf dives deeper into the emergence of mobile chat applications.
If you thought Facebook’s $19 billion valuation of mobile chat app WhatsApp was shocking, you weren’t the only one. Over the past weeks, the opinions rolled in, from the incredulous to the optimistic. Everyone wondered just how Facebook planned to get $19 billion of value out of an app that supports no transactions (unlike its Asian competitors). Not to mention the fact that WhatsApp only charges users a scant $1 yearly subscription fee. Although we’re probably years away from seeing Facebook’s plans unfold, the conversation surrounding the acquisition offers a glimpse into how mobile chat is poised to change not only mobile communication, but commerce.
First, let’s take a moment to consider what smartphones actually spend the most time doing: communicating. It may be text, Snapchat, Instagram, sharing a recipe, or commenting on a blog, but it’s always some form of communication. And what kinds of communication keep us hooked? Which ones actually make us check our phones repeatedly over the course of the day? Messages from people. Messages that are unique, personally relevant and above all time-sensitive. And what better way to describe mobile chat. More unique than text, and much more time-sensitive, these communications encourage longer and deeper engagement. To paraphrase from my previous post (which you can find here) mobile chat creates the feeling of a private personal conversation. It’s having coffee with a friend, as opposed to leaving them a post-it note.
In a recent post, tech blogger Ben Thompson drew an interesting analogy between mobile chat and the advent of the home telephone. When our house was our home base, the phone was the prime communication portal. We communicated not just with individuals, but individuals when they were at a particular time and place. Real time communication was the only option. If house phones were the home base, what were those phones you made with your friends made of 2 tin cans and string?
With a smartphone in arm’s reach at all times, our communication portal can travel with us. Interactions are enabled by availability more than time and place. While verbal communication may have created the need for the phone, and by extension the mobile phone, that kind of communication is feasible in fewer situations throughout the day. A text communication, however, is more private, more flexible, and much easier to begin. It’s no surprise that analysts project that mobile chat message volume will eclipse even SMS text very soon.
Control of a major communication channel gives you access to users and their data, but doesn’t necessarily point to revenue. WhatsApp competitors WeChat and Line offer something that WhatsApp currently doesn’t; the ability to make purchases directly from the app. Most of these purchases are app-only badges or stickers that users can share. Line, for example, took in over $338.4 million last year in sticker sales and in-app purchases.
While that is certainly impressive, it barely hints at the sea change in online commerce that mobile chat makes possible. With purchases possible from inside a communication channel, mobile chat is shrinking the distance between the impulse to purchase and the purchase itself. It’s the new direct marketing. Imagine getting a flier in the mail advertising a great deal on a new couch. Now imagine being able to purchase that couch with the flier in your hand, without ever having to go anywhere else. Email marketing got us a little closer to this goal, but it’s mobile chat that will finally get us all the way there. With payment and contact information already stored on your phone, it’s possible that you could receive actionable ads from brands with one-click purchasing. Marketing and purchase could be united into one communication and one experience.
Of course, opportunities exist outside traditional purchases. Mobile chat communications could drive donations, event registrations, advocacy, list building, or any number of other activities. Most notably, in mobile chat the path from call-to-action to result could be much shorter. Your organization could push a message to everyone who has opted in to communications, and without leaving their chat app, they could make a donation and share the message. In the popular UX parlance, the loop would be tighter, meaning you increase the chance of a conversion. And now the world is a better place.