Business News of Tuesday, 3 February 2015
WhatsApp, the social messaging service acquired by Facebook for $19bn last year, is arguably the world’s fastest-growing communication app.
It has more than 700m monthly active users and carries 30bn messages per day, double Facebook’s daily message traffic.
Its international market penetration is significant: a survey of 4,000 smartphone users by On Device found that 44pc of users in five countries used Whatsapp at least once a week.
The question company bosses are now asking is: how can I use the channel for business?
As a communication tool, WhatsApp has all the bells and whistles. It allows users to chat in real-time, supports multimedia, including video and voice messages, and can transmit to groups of up to 50 people. Unlike the social platform Twitter, it allows for messages longer than 140 characters.
Direct advertising and soliciting business via WhatsApp is a violation of its terms of service; the company clearly states in its legal documents that “your use of the service as permitted is solely for your personal use”. But sharing images, blog posts, and engaging with customers (without going for the hard sell) is deemed above board.
Nickolay Piriankov, co-founder of bespoke diamond ring maker Rare Pink, uses the app to build rapport with his customers.
“WhatsApp wasn’t something we planned to use,” he says. “Customers asked for it. Now every design consultant has WhatsApp on their work phone.”
Rare Pink offers online consultations to customers who are looking for unique rings. “Every customer has a personal consultant, which helps us to de-commoditise our offering,” says Piriankov. “We make sure they can reach their consultant, 24 hours a day, through any medium they choose.”
One customer, a female City trader, chose to use WhatsApp because she was not allowed to make calls at work and her emails were monitored. She purchased a ring for £13,000.
The start-up, which launched in October 2013, also offers “live chat” through its website for more old-fashioned clients. “But that’s so 90s,” says Piriankov, 27.
“We’re relaunching our website with a responsive mobile version, and that will integrate WhatsApp and its Chinese counterpart WeChat, so that customers can send a message on those platforms straight from the product page.”
WhatsApp makes it easy for Rare Pink’s staff to send videos of the jewels that will be incorporated in the bespoke jewellery. These videos are crucial to their pitch: showing the diamonds sparkling from all angles can be a powerful sales driver.
Rare Pink, which has offices in New York and Hong Kong, is expected to turn over £1m this year, but Piriankov also works with a wholesale diamond business that made a £250,000 sale through social messaging.
“Chinese customers often prefer the privacy and ease of their local service, WeChat,” he says. “In one of the weirdest conversations ever, where I got hardly any responses, I sent through images and quotes to a wholesale customer.
“I only knew the customer was engaged because I could see that the message was read. I persisted and eventually got an order that remains one of our largest ever.”
For fashion designer Roberto Revilla, WhatsApp is a crucial communication tool at his eponymous high-end tailoring business. “Our clients are mid-to-upper level executives who are so busy that taking the time to respond to an email or voicemail is just not an option,” he says.
“Receiving an instant message is better for them as it takes seconds to respond.”
Alongside WhatsApp, Revilla uses Apple’s iMessage and regular SMS messaging to stay in touch with his customers – but WhatsApp, unlike iMessage, works on Android devices too.
“Now the response time is much quicker,” he says. “In the past 12 months, we’ve gained more than 320 hours by using instant messaging, which is worth at least £80,000 in revenue.”
However, Revilla warns against using WhatsApp to “cold call” prospects. “That would be invasive, not to mention downright annoying,” he says. “I only message someone I know.”
According to research from CTIA, the wireless association, the average text message is read within 90 seconds, whereas email responses average 90 minutes.
For business owners, there are are a few other important points to note about the service. Rich Pleeth, chief marketing officer of taxi app GetTaxi, recommends using local SIM cards when travelling to keep roaming costs down – and to log on to Wifi networks where possible.
He also warns that WhatsApp should be used sparingly. “Don’t have too many WhatsApp groups as people will be inundated with messages and it will get annoying,” he says.
“It would be great if we could increase the group size beyond 50,” adds Revilla. “Sometimes we need to send short updates to our client base if we’re away suddenly or to talk about lead times. This doesn’t happen often but we’re a family business so things can crop up from time to time.”
WhatsApp is not designed for business use – founders Jan Koum and Brian Acton have been highly vocal in their criticism of the advertising industry.
On the company blog, Koum quotes Tyler Durden, Brad Pitt’s character in the move Fight Club: “Advertising has us chasing cars and clothes, working jobs we hate so we can buy s**t we don’t need.”
This means it is unlikely that WhasApp will ever incorporate direct advertising as a feature, and also explains the group message cap.
Revilla and Piriankov agree that WhatsApp should complement, rather than replace your email, phone and wider social media offering. “This is as an important channel but it’s not the only one,” says Piriankov. “The key is to give your customers choice.”