What is conversational marketing and why do brands need it now?

By Lauren Lee

Your consumers expect you to listen, and quarantine isolation has intensified their desires for meaningful personal connections and immediate responses from brands.

Meanwhile, marketers are challenged with recalibrating their strategies and messaging to meet new consumer behaviors and demands without a clear roadmap or precedent.

In response to the “new normal” brought on by the COVID-19 pandemic, brands are striving to find a balance between leaning into empathetic, user-centric practices and safeguarding economic stability:

  • Movie studios are releasing popular titles to streaming platforms months ahead of schedule.
  • Technology companies are rolling out no-cost extended trials of digital solutions that facilitate working and schooling from home.
  • Luxury brands are producing facemasks and hand sanitizer instead of handbags and perfume.
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But the ways in which we determine what customers think about our brand must change as well. Traditional methods such as in-person focus groups are likely on hold for the foreseeable future. Similarly, social listening tools may skew toward the context of current conversations. As a result, US marketers need new tools to help them rapidly and confidently engage consumers and uncover how behaviors and brand perceptions have shifted. 

Enter: conversational marketing. Let’s break down what conversational marketing is, and how marketers can use it to strengthen their strategy in these trying times.

What is conversational marketing?

Conversational marketing is a method that engages consumers in dialogue-driven, personalized experiences at a one-to-one level, enabling brands to listen and gain unique customer insights while also providing value to the user.

For many businesses, engaging in these types of conversations with clients to gain actionable insight requires scalable technologies such as chatbots or other digital solutions. These tools can be thought of as a new set of ears for marketers and may be embedded in virtually any place you connect with consumers, whether that’s on your website, mobile app or even interactive advertisements.

What is conversational AI and what are chatbots?

Conversational AI uses the power of machine learning and computers to create unique interactions. Chatbots are a form of conversational AI, which uses natural language processing to converse with consumers. This technology is often used to scale customer service efforts or provide personalization online.

These tools can help address client questions or assist them in picking the right product for their needs. Conversational AI allows organizations to deliver a personalized experience at scale.

The benefits of conversational marketing

A sophisticated, conversational approach to marketing can enable brands to deliver personalized consumer engagements with readily available, hands-on digital experiences while supporting privacy expectations. This unique experience can extend throughout the consumer journey with deployment across various channels such as digital advertisements, owned and operated sites, a mobile app and more.

An effective conversational marketing strategy should be designed to help with the following customer service aspects.

1. Improve customer satisfaction through personalized conversations

Nearly 9 out of 10 consumers (88 percent*) expect brands to quickly expand their digital initiatives in light of recent events. Nearly half (54 percent*) say this should include building on the ways customers engage with brands.

By leveraging conversational marketing, your company can improve user satisfaction by delivering a consistent, purposeful experience at each digital touchpoint. Additionally, by providing a chatbot, you can increase consumer engagement, confidence and loyalty by empowering users to interact directly and on-demand with your brand.

2. Deepen the customer relationship

Forty-one percent* of consumers say they don’t trust that organizations look out for society’s well-being when making decisions. Forty-two percent of consumers don’t believe that companies are truthful. Yet, 82 percent of survey respondents noted that how trustworthy a company is matters more than it did last year. 

Trust takes time to build. By listening to consumer needs and addressing problems in real-time, your organization can begin to build this for a stronger customer relationship. Consumers who are frustrated with unresponsive brands on social or email have grown 5.7 times since 2019.* However, many brands struggle to deliver these interactions at scale. Differentiate your brand by using AI tools such as natural language processing to showcase your voice authentically and create a sense of empathy with users.

3. Using conversational marketing and advertising insights for future business strategy    

By using conversational marketing, your organization can gain a wide range of information. These insights can help you better advertise specific categories, optimize your websites, or create new products. You can quantify the impact of marketing campaigns on various parts of your business—including sales, product development and the in-store experience—by gathering near-real time consumer feedback. You can also optimize future strategies by better evaluating how messages are resonating with your audience.    

4. Conversational marketing allows businesses to scale

One of the most important benefits of conversational marketing is that companies can have personalized interactions with customers without needing someone behind the screen. AI can scale this effort in a way that was not previously possible. Also, through this type of platform, office hours are no longer as important. Customers can have their questions answered at any hour of the day, any day of the week.

Best practices for conversational marketing

For brands to make the most use of conversational marketing, they need to consider the following steps.

1. Use the right data and better analytics

Making the right decisions starts with the right data. When it comes to conversational marketing, your tool must be able to utilize this data to craft individualized responses based on the user’s history and preferences.

2. Personalize the customer journey

Personalization is key in conversational marketing. A personalized solution considers user data when drafting responses to questions your users may have about your brand. These interactions can help strengthen the consumer’s relationship with your brand by fostering a one-on-one connection.

3. Focus on customer engagement

The biggest difference between conversational marketing and other, traditional approaches is that it is designed to engage the customer with natural dialog. By talking to customers on a human level, you can connect in a way they may never have experienced before with a brand. These conversations can make users feel more comfortable, and you’ll be able to gain key consumer insights and understand leads.

Why would a company use conversational marketing?

Companies that are not embracing conversational marketing may fall behind, especially in a world where digital matters more than ever before. Companies need to consider the importance of the customer experience and how the competition is leveraging AI conversations.

1. The brand experience matters more now than ever

Consumers care about the experience provided by the brand and the messaging surrounding it. One of the reasons Apple has been so successful is the brand experience. The Apple Store delivers a different experience than other computer stores. It was fashioned after upscale boutiques to convey a sense of luxury.

Conversational marketing can help create a positive experience for customers; for example, it can facilitate purchase decisions and help address their questions.

2. Your competitors are already taking advantage of conversational marketing

Forty-one percent* of survey respondents say that they use conversational marketing to make a transaction or a purchase. About 7 out of 10* are using it for a quick response to their questions. Live chat is also one of the preferred ways that B2B consumers get in touch with organizations.

In an ever-evolving world, consumers are looking for answers and issues to be resolved quickly. Additionally, with the onset of COVID-19, consumers are craving that in-person connection that was afforded to them in-store. By using conversational marketing, you can address clients in a personal way from the comfort of their own home.

Conversational marketing can be a great tool for marketers to use due to its impact on sales and leads. Through a personalized conversation, you’re able to establish a deeper connection with consumers. When someone lands on your site, this is an opportunity for you to engage with them and begin those consumer relationships. Your response time must be quick and the answers to your AI crafts should be individualized.

Not being able to respond promptly can negate the efforts you put into your conversational marketing strategy. If a user is looking for answers they aren’t receiving due to an impersonal chatbot or submitting a generic Contact Us form, they’ll leave. That’s why it’s a smart move to implement a real, live chat right onto your site.

By implementing an AI advertising tool on your website, you can also foster this direct line of communication without users having to leave your site.

Examples of conversational marketing**

One of the best ways to look at conversational marketing is through example. Below, we’ve outlined examples of companies that have implemented conversational marketing with success.    

1. Behr Paint Company leverages AI-powered conversations         

When Behr Paint Company wanted to drive sales by promoting the Color Finder—a new recommendation tool that streamlines the process of paint selection—they weren’t sure where to start. To help distribute their message in a personalized way, the company launched an AI-powered campaign on weather.com to facilitate near-real time dialogue with consumers. The tool offers personalized paint recommendations to users while gaining insight into color trends based on their responses.

These dynamic ad experiences generated over 15,000 conversations with consumers, driving a 17 percent increase in purchase considerations among the target audience and an 8.5 percent incremental lift in store foot traffic. The interactions also helped shape future production strategies by giving Behr deeper insight into the types of color choices their customers preferred.

2. Hulu connects with customers with conversational marketing

Another example of conversation marketing is Hulu’s launch of their live TV services. When they were getting ready to launch Hulu with Live TV, they wanted to ensure their users understood the new service and how it set them apart from top-tier competitors.

To help, the Hulu Watson Conversations campaign ran alongside high-impact branded backgrounds and homepage takeovers on select days during the holiday season. These ads leverage natural language dialog to ask users about their viewing habits and overall mood. As a result, these meaningful conversations led to 14,000 total button clicks, with 3,000 heading directly to Hulu.com.

3. Best Western delivers more personalized travel recommendations

Best Western partnered with IBM Watson Advertising to target travelers planning their holiday vacations around peak holiday weekends. The Conversations solution was used by The Best Western team to provide travelers with personal recommendations for their trips. At the end of the campaign, Best Western saw a 48.6 percent lift in visits to Best Western locations versus those who had already planned to visit Best Western hotel properties.

4. Toyota Prius Prime engages in 1:1 Conversations with users

Toyota came to IBM Watson Advertising searching for a way to engage people looking for a car. By using IBM’s conversational marketing platform, they were able to interact with prospects and customers in a new way. The campaign led to 6,000 conversations and a 20 percent increase in Purchase Consideration among M35-49.

5. Campbell’s recommends recipes for each consumer

Campbell’s worked with IBM to create a campaign that could deliver personalized recommendations. IBM Watson Advertising Conversations can ask users questions to give them more personalized information.

For this campaign, Campbell’s leveraged Chef Watson to analyze thousands of recipes. This helped the AI platform understand how ingredients worked together and how to pair food with other dishes. Chef Watson was then able to give users recommendations based on their individual tastes. This campaign resulted in 10,000 interactions and a 1.9x increase in Desktop Ingredient Submissions Rate Throughout the Campaign.

6. Lufthansa uses personalized interactions to inform strategy

This conversational marketing experience used by Lufthansa helped the company gain insights into what travel recommendations to make. It also helped them prepare for unanticipated plans.

They also leveraged the tool to learn about the consumer through a personality test, which triggers recommendations based on the results. Lufthansa saw an 8 percent conversation rate driven by the Mobile Integrated Marquee.

How to implement an AI conversation strategy

When forming a conversational AI strategy, we recommend the following steps.

1. Evaluate current customer touchpoints

When looking at the current online experience for your consumers, are there any areas that would benefit customers if they were more personalized? When we consider the in-store experience, customers usually can ask sales associates for help or recommendations about your products. By considering how this can be done at scale via a chatbot, your team can provide this personalized touch online as well.

2. Evaluate any roadblocks in the customer journey

Many customers feel frustrated when they must wait on the phone for a sales associate, can’t find an answer online, or get a delay in correspondence. Conversational marketing can help your customer team provide answers to questions consumers need help with. This provides a more seamless and enjoyable experience.

3. Implement conversational marketing software

Once you have evaluated the opportunities, it’s important to leverage the right solution. You’ll want a partner who has vast experience in both the advertising industry and with large amounts of data. These solutions can spot trends to help inform your strategy while delivering high-quality customer service.

4. Don’t forget about the in-person connection

It’s important when working on the online solution, not to forget about your physical locations, if any. Make sure staff is trained, so that the customer experience remains consistent offline and online.

Enable two-way brand conversations with Watson AI 

To achieve these results, brands should seek out experienced, trusted partners to assist in developing and deploying a conversational marketing strategy. As an industry leader in conversational marketing, IBM Watson Advertising Conversations solution is designed to drive deeper engagement, awareness, action and affinity by creating one-to-one connections between brands and consumers at scale through machine learning.

These solutions begin by training award-winning AI from IBM Watson Advertising to be an expert on your brand by utilizing content from your website, FAQ documents and relevant marketing materials. IBM works with you to develop a custom creative and conversation experience that invites consumers to ask questions about your brand and delivers personalized responses in natural language that are unique to each user.

The IBM Watson Advertising Conversations portfolio of solutions can be deployed on virtually any digital property based on your marketing strategy, acting as a massive virtual focus group for your brand.

The result is a solution that helps you enhance the user experience, drive revenue and improve future business practices by uncovering valuable insights and emerging trends.

Listen to your customers and let your voice be heard.

To learn more about Conversations, watch our breakout session—Connect with Consumers Through AI-Powered Conversational Marketing—from the recent MMA Impact virtual session.

*Link resides outside of ibm.com.

**The performance data and client examples cited are presented for illustrative purposes only. Actual performance results may vary depending on specific configurations and operating conditions.

Listen to your customers and let your voice be heard.

Watch the webinar: Connect with Consumers Through AI-Powered Conversational Marketing