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When someone says, “chatbot,” do shivers go down your spine? Or, does a big grin cover your face? If chatbots are annoying and an invasion of privacy, why are so many people engaging with this technology? More than 25% of the world’s population is using message apps, and 71% of people use messaging apps for customer assistance. People want their problems solved quickly via personal experience. Enter chatbots.
Exit traditional, one-way marketing, such as email, landing pages for Web forms, and blog posts. At least that’s what today’s guest believes. Larry Kim is the CEO of MobileMonkey, a messenger marketing platform. He describes chatbots, their benefits to marketers, and ways to utilize them. He shares how such technology will alter how we think about content creation, calls to action, and customer experiences.
Some of the highlights of the show include:
Eric: Greetings. When I say the word, ‘chatbot,’ do you recoil in horror with shivers running down your spine? Or do you grin from ear-to-ear, salivating at the forecasted $10 billion industry? Regardless of your personal reaction, the platform is built and consumer behavior indicators do not lie. According to BI Intelligence, this year more than 25% of the world’s population—that’s 1.75 billion people—will be using message apps. Now you compound that with HubSpot’s research report that state 71% of people are willing to use messaging apps to get customer assistance. You have the perfect environment for this technology to flourish. Right away, we want our problem solved fast and chatbots provide that personal experience at scale.
Are our traditional one-way means of marketing, say email, landing page at web forms, and declaratory blog posts, are they becoming antiquated? If you ask today’s guest, he would argue with a resounding yes. On this episode of the Actionable Marketing Podcast, I’ve got the one and only Larry Legend on our show. I was born in Boston and 99 of 100 times, refer to basketball great and my favorite basketball player of all time, Larry Bird. But I’m talking about the marketing universe and I think everyone knows, I’m talking about the magical marketing unicorn himself, Larry Kim. He is the CEO of MobileMonkey.
Larry breaks down what chatbots are, the benefits to marketers, he gives us some tangible applications, and importantly, how should this technology alter the way we think about content creation, calls to actions, and really the entire customer experience. It’s so good. This is Eric Piela, I’m the Brand and Buzz Manager here at CoSchedule, and your host for today’s episode. Ready or not, let’s get AMPed.
All right ladies and gentlemen, welcome to another episode of the Actionable Marketing Podcast. I am joined by the marketing unicorn himself, Larry Kim. Welcome to the podcast.
Larry: Awesome. Thanks for having me here today.
Eric: Absolutely. It’s great to have you on the show. We were talking before the show. I’m coming to you live from Fargo, North Dakota. It sounds like you spend a lot of time in Winnipeg. We’re not far apart from each other. You’re used to the cold then, right?
Larry: Yeah. It’s pretty bad growing up.
Eric: Some crazy people stuck around here. You managed to move away but we love you here. You got to be a little crazy to live up north but I’m glad you’re on the show. I’m excited. We’ve done a little bit of collaborative work in the past at CoSchedule. We had a webinar with our CEO. I think we talked about maybe 10 or 11 months ago but you haven’t been on the podcast yet so I’m excited to have you on the show.
We’re going to be talking a little bit about chatbots, we’ll talk about some of your new organization, MobileMonkey. I know most people know you. You’ve got pretty famous for sure. I love following you on Twitter. Larry, you’ve got one of the most engaging Twitter streams that I know, but for those who maybe don’t know, if you would just share with us about your journey, what you do now, and your adventure in the marketing world.
Larry: Sure. Most people know me from WordStream. WordStream is the world’s leading pay-per-click advertising software company. I started there a decade ago just working out of a bakery, Panera Bread, because it had free wifi and unlimited Diet Coke refills. I just started out as a agency. I was doing consulting work for a couple of clients and because I’m lazy, I wrote software to automate that stupid repetitive work. Then the light bulb went off, maybe I thought I should start selling that software instead. That was the genesis of that company. It’s a really exciting journey, grew up the business year over year. It did above $55 million in revenues last year, about $60 million in earnings. It’s employing over 300 people.
That was acquired in July by Gannett—that’s the owner of USA Today—for $150 million. I’m working on my next venture. The company’s still doing great. I think they’re still the best for what they do in terms of pay-per-click online advertising software. I’ve moved on to my next company in the messaging and chat marketing space. Hopefully, we’ll talk a little about that today.
Eric: Absolutely. It is a fantastic success story you’ve had there with WordStream and that’s the reason we’ve got you, not only your obviously deep experience in the marketing world, but now really you’re focused on messaging platforms and chatbots. That’s our topic today, I would say. We really haven’t covered that topic too deeply on our podcast and I thought there’s no one better than Larry Kim to talk about it. I would love to hear a little bit, you’re finishing up WordStream, you sell, and you say, “You know what? My next thing is going to be messaging platform and chatbots.” What was the precipice of that decision-making process and why did you feel like that should be your next venture?
Larry: When you’re starting something new, it’s a blank slate, so you can be picky. You can choose whatever the heck you want to do. I spent a lot of time looking into the different marketing channels, what were the trends, and where’s marketing going. I truly believe that messaging is the future. It’s communication be […] future. People already overwhelmingly prefer messaging for communication but yet businesses haven’t figured this out yet. I just thought that this was a multi billion dollar opportunity to focus here and so far, it seems to be playing out like the original thesis that we had a year-and-a-half ago when starting this thing. We’re definitely seeing that in our customer numbers.
Eric: That makes sense. I actually came across one of the articles. I know you’re a contributor for a lot of great publications, one of them being Ink, and you had published an article a while back about some amazing facts about chatbots. Your number one is like, “We’ve got 1.4 billion people already using messaging apps, larger than a lot of the top four social networks.” People are ready to engage in these platforms and obviously see that there’s an opportunity there.
But before we get ahead of ourselves, Larry, let’s just pretend someone’s been living under a rock and they’re like, “I’ve heard about chatbots but I can’t quite put my finger on what exactly a chatbot is. Have I engage with one before?” Maybe what’s your best definition of a messenger or a chatbot for our listeners?
Larry: Sure. Most people, they think of chatbots as like Siri or Google Home or Alexa, one of those things, but that’s absolutely wrong. In a marketing context, what you should be thinking about when you think chatbots is it’s the top of the funnel, marketing, lead acquisition, nurturing, and conversion technology. To make that a little more concrete, think of it as kind of like email marketing. It’s also kind of like website or landing page software. I know you’re probably wondering like, “What the heck is he talking about?”
Chat marketing is like email marketing in one way in that I can do push notifications. Like in email, the goal is to collect a lot of emails so that we can send them periodic newsletters and stuff like that. In chat, similar idea. You try to get people to subscribe to your channel so that you can periodically send them messages to their phone.
But the messages aren’t just emails. Emails are stupid. You can’t respond to them. They’re not very interactive. What emails do is they just have links to a website. When you get an offer, it’s like, “Click here,” and then it just opens up a new browser. In chat, not only can I send you these push notifications, I can encapsulate the entire experience in the chat. If I’m trying to get you to register for a webinar, then I can just have you do that in that chat session without having to redirect you to some clunky, crappy website.
It’s kind of like a website, too, where all the stuff that marketers typically do in a website, like getting people to register for things and qualifying them, asking them questions like, “Are you an agency? Are you an advertiser? What’s your primary objective? How many clients you have?” You can ask those questions conversationally to the user and build up significant knowledge and understanding and a relationship with these users at scale in a way that’s just not possible if either manually or using alternative technologies like email. I think it’s really a transform of technology. What do you use, HubSpot, or Marketo, or MailChimp? What do you use as your marketing automation technology?
Eric: We obviously, either on […] or for the CoSchedule, we use a lot of […] a lot of our planning and some execution but from an email platform, we have Autopilot that does a lot of our email journeys, etc.
Larry: So what I’m saying is Autopilot is sending all these sequences and triggers-based emails. You really got to understand that those emails, the typical open rate is somewhere around 5%-10%. That means 90%-95% of people aren’t engaging with that stuff. In chat marketing, the open rates are typically 70%-80% but the click rates or the post-read engagement rates are through the roof. It’s like 10%-20% whereas the click-through rates in emails of the 5%-10% of people who open, typically 1% or 2% actually click on one of those links.
Basically, you can reimagine all of your marketing stack. You can reimagine that just swapping out email and changing it for chat marketing instead, like autoresponder sequences based on chat. Just sending out a sequence of three or four or five messages over the next few days but scheduling it so that they’re being sent to their phones. You can use these as destination pages.
Like in Facebook ads, instead of having people click on an ad that goes to your website, you can have them click on an ad that goes into your chat session. They can start chatting with either a live representative or with your bot in real time. I think that’s really kind of a new trend. I think more and more people are understanding this everyday.
Eric: Yeah. Even you explain this, it is really transformative. You have certain technologies that can shift and change the way in which marketers are engaging with prospects and with customers. I think it’s really moving that experience to these interactions and more dialogue based on marketing, which is a big shift to what a lot of marketers are thinking of. We push communications out, we wait, either they respond or they don’t respond, we ask them to go to a website and like you said, register for a webinar, but very few communications are real-time dialogues. That’s a different way of thinking for a lot of marketers to wrap their heads around to think about marketing in that way, to create experiences that are like that, and to know that. This scaling-wise, I don’t have people to do this. That’s where the chatbot comes in to help with those conversations, right?
Larry: Yes. What we’re talking about here is enabling personalized experiences at scale and just making marketing feel more like regular interactions that you would typically do if you were to walk into a store and talk to a clerk, that type of back-and-forth interaction.
Conventional marketing is based on assumptions. Let’s just think about online advertising for a second, like Facebook advertising. The assumptions that we make is that we target our content to an audience. That audience is derived based on assumptions from their browsing history or from the pages that they like and interact with. Marketers make audiences and we assume things about this audience to be true, and then we target them with some offer. Some landing page that offers some kind of an offer. Again, the problem is these assumptions. Just because I like the Tesla page, it doesn’t mean I’m in the market for that right now.
With chat, you can get rid of the assumptions. You can just send them down a dialogue where you can ask them like, “Are you an agency or an advertiser?” You can ask very specific questions and then based on their response, you can then customize the experience because instead of assuming, the user has self-declared their identity or their interest or their demographics in one way or another in a very concrete way. You don’t have to design like some landing pages, you make those assumptions, you’re designing for the lowest common denominator among that audience, but with it in chat, you can really super granularly segment and customize you marketing according to those self-declared chat criteria.
Eric: Yeah. Right now, even if I look at CoSchedule, we’re trying to make the best assumption we can make because we’re asking our visitors to fill out a short form, to get something. They’re asking a couple of questions but it’s a one-way conversation, so we’re replacing some of those things with actual live dialogue instead of a static form.
Larry: The other thing that is really challenging with that form of marketing is that it’s extremely difficult to do any user segmentations after the fact. You captured maybe a few fields like their company name, their first and last name, maybe you ask them one or two questions on the form just to do a couple of segmentations, but it’s very difficult to follow-up with them and to update that profile, to learn more information about them. But with chat, it’s very fluid and it’s easy to ask and get questions answered after the fact. You know what I mean?
Eric: Yeah, I do. Let’s make it tangible for our listeners. Let’s talk about applications. One of the things that I’ve noticed, maybe the most common ones that I think people are starting to see at least if you bounce around from website to website, you’ll see the little chat notification popup on the bottom right side and they’re like, “Hey, how can I help you?” You go through a series, it’s almost like you’re talking with someone and they’re asking clarifying questions. They’re probably right. They’re trying to understand what you’re looking for and serve what you need.
I heard a quote that said, “The best bots harness the micro decisions consumers experience and ideally bases into the massive opportunity to help.” If you could, Larry, where do you feel like the chatbots are being used to the best ability? Where are there some case studies or some examples where you’ve seen some really great implementations of messengers or bots so that our listeners can go and say, “Yeah, I see that. This is why I will invest in building, time, and energy around something like that”?
Larry: Sure. There’s a whole use case of online advertising. This is restricted to Facebook. If you’re one of the five or six million companies that do Facebook ads, I would strongly consider using something called Click-to-Messenger Ads. The way that works is that when the user clicks on these ads, rather than sending them to a landing page where, what’s the typical conversion rates these days, 2% or 3%?
Eric: Yeah, at best.
Larry: 2% or 3% of people buy or fill out or sign up for whatever the heck you were hoping for them to sign up for, which is terrible because you’re usually paying $2 or $3 a click. That means you’re spending $200-$300 per lead. With Click-to-Messenger Ads, someone clicks on that button, what happens is they’re subscribing to messaging with your business. When you click that send-to-messenger button, you see one of my ads, then I get your first name, last name, location, language, time zone, gender, profile photo. I get all this information that you sent to me, the advertiser, and I get messaging permissions. This allows me to continue a dialogue with you through chat.
This is so much more valuable than capturing an email because the engagement rates are just so much higher. You can still ask the user for their email in the chat session. That’s fine. But I’m just saying, people should be thinking about doing this one because you get 100% of the people who click on the ad. You get their contact information and their messaging permissions. We do this for our own events and instead of paying $200-$300 a lead, we’re getting the leads at $2-$3.
Use case number one is just consider swapping out landing pages with these chatbots that accept ad traffic and try to conversationally convert users into either leads or sales. Any questions about that use case?
Eric: No, I don’t think so. This is totally anecdotal or subjective, but what are my preferred mediums of communication? If someone emails me, okay that’s fine, that’s not very intimate. If they’re texting me, okay now that’s a coveted space. Have you found any pushback with that messaging and ongoing communication after the initial communication? Do you reach out later? Is it a timing-based thing? How do you continue that conversation going after the initial chat?
Larry: First of all, users have the right to unsubscribe. Typically, you just type ‘stop,’ hit enter, and that will take you off of the setting list. The engagement rate is through the roof. It’s like 70%-80% open rates and 10%-20% click rates. If it’s so annoying and if it’s such an invasion of privacy or whatever, why are so many people engaging with it? You might say, “Oh, it’s because you tricked me into reading it.” Okay, fine. That could maybe explain the ridiculously high read rate, but what about the post-read engagement rate being 20 times higher than email? People are looking into this, they’re clicking all the buttons, they’re registering for stuff, add 10%-20%.
Eric: It’s hard to argue with the numbers.
Larry: I think what it tells you is people probably would be annoyed to get random text from companies they don’t care about and that’s impossible to do even. You can’t just go to some email provider and ask for a list of chat contacts. That’s not how it works. You either have to manually opt-in to receiving these messages. But I think what the data is saying is that users are okay with and actually covet communications with the companies and brands that they care about through messaging. It’s overwhelming with very high rates.
Eric: Yeah. That’s great. I was hoping to glean from you there just the initial, is this how people want to be interactive? The numbers are certainly saying that absolutely they do. Again, it’s hard to argue with the data there. I’ll roll with you on that one. You said maybe there’s another use case that you’ve seen particularly working well for companies, too?
Larry: Yeah. You talked about website chat. That’s where you have that little box in the corner that pops up and then someone says, “Hi, can I help you?” A lot of companies have tried that. It’s not new. It’s been around for 25 years, at least, with those little things. Where those fail is that it’s a pain the ass. You have to have someone manning that chat session. There’s an expectation that someone will respond in a reasonable time frame because it’s supposed to be a chat thing. For a lot of medium-sized businesses, that’s hard to do to have someone on-call to be answering all the questions.
What a chatbot does, and you’re talking about this earlier, it can basically do tier one support. You can just configure that chat widget to be able to recognize certain types of questions and be able to respond with user-provided content. Typically, 80% of the questions are the same 20% of the questions that are asked over and over again like, “What’s your directions?” or, “What time do you close today?” or, “What’s the return policy?” You’re going to have the same business questions more or less.
What MobileMonkey does is it’s a little bit like AdWords where you can create chat content but also assign triggers like keywords. It’s kind of like in AdWords where you have an ad and you’re targeting keywords that will trigger that ad. What these chatbots do is they analyze, using natural language processing, what the user is asking for and then it tries to find a match within the content that you’ve created for your chatbot. You can kind of offload tier one support. Now I’m not suggesting that you’ll ever get to a million percent getting every question, but you could do a really good job at offloading 50%, 60%, 70% of the typical questions that a business gets in an automated way, freeing up time to focus on the more custom and specific questions.
A third use case, we’re seeing all sorts of really interesting things where you insert a chatbot into a web page. Say you’re selling surfboards. You have to choose a size and a length. You could just have a configurator where there’s a button that says, “Help me choose what size is right for me.” Clicking on that, that could pop up a chat dialogue that just ask you a couple of questions like, “What’s you weight? What’s your height? Okay, we think this is the right board for you.” It’s almost like automating the type of questions that you would normally ask a store clerk but having that interactive capability embedded into a web page.
I think that really helps build rapport with that customer, as strange as that sounds, and it doesn’t just answer their question. It’s makes them feel like you’re being helpful. There’s these psychological principles in marketing of reciprocal concessions. If the customer believes that I’m being very helpful to them, they’re more likely to buy from me kind of thing. There’s a lot of marketing that you can do that you used to not be able to do because of limitations to technology. This new medium is enabling very easily.
Eric: I love those. Those are three great use cases. Thank you for laying those on. It helps provide perspective and the nice thing is the application across different types of experiences with your customers in different areas. Thanks for doing that. Maybe one question as we start to wrap up here. With applications like MobileMonkey, the challenge isn’t so much building or a technical one because that’s where Mobile Monkey comes in and helps a marketer figure out a technical side, but I understand that it’s really a conversational challenge. How do you know what experiences or what information your customer is looking for?
There is again another stat that you included in your article. 73% of Americans said they wouldn’t use a company’s chatbot after a bad experience. What would you recommend or how do you help your customers figure out, “What do my customers want?” and, “How do I make sure this is a great experience with the chatbot,” you’re risking that experience with this bot, “so that it is a good one?” What recommendations you have there, Larry?
Larry: First of all, thanks for mentioning MobileMonkey. MobileMonkey is a platform that is used for creating all these dialogues. All these interaction flows between a customer and your business. It’s just a visual editor for creating these things. It’s kind of like a landing page software or an email marketing software because you’re building lists, you’re creating content to send to those list. It’s very simple to use and it’s not even expensive. It’s free to use forever and then if you want some advanced features, it’s $19 a month or something like that. Not prohibitively expensive and free to use forever. But basically, your just asking how do marketers figure out this new chat way of doing things? The problem is we have a lot of old habits as marketers that we need to move away from in order to fully embrace this new paradigm. Can I give you a couple of examples here?
Larry: Example number one, when you post stuff to your Twitter or to your Facebook, they’re just blog posts or they’re typically declarative in nature like, “New blog post. Blah-blah-blah.” In the chat medium, we need to take into consideration the fact that we can now auto respond privately to those posts. If you post something on Facebook now using chatbots, if someone posts a comment on that post, the chatbot can then reply privately through messenger to that user. This means that what you should be thinking about is not just posting declarative stuff. Do you know anything by declarative? It’s just an announcement. You should be posting conversation starters. You should be posting questions, “What do you think about X, Y, Z?” because you can then continue that dialogue privately at scale using a chatbot.
Another example is ads. It’s the same idea. With ads on Facebook, you’re trying to basically sell something because you have one second. How many seconds do they spend on their scroll? You have one or two or three seconds to make an impression. They’re trying to make that sale really quickly. With chatbots and they send the messenger ads, all you’re trying to do is start a story. You can continue the story, the journey, through this chat experience but you just need them to make that initial engagement step.
All sorts of different technologies and opportunities just means that we need to think about our fundamental marketing practices and revisit some of these, given that there’s now a new layer of interactivity that you can use that wasn’t available previously.
Eric: Yeah. It’s a huge mindset shift. I think you’re right. I love that example of declaratory posting stuff that spark conversation, dialogue, and allowing the chatbox to have those individual personalized conversations at scale. I think it’s a big shift. The podcast is only half an hour but I feel like this is a topic that we can go on a long time about.
You mentioned MobileMonkey. If my listeners want to learn more about your Facebook Messenger platform, or they want to just learn more about chatbots, where do you recommend they go? Where can they get all they can on this topic?
Larry: Just got to my website, mobilemonkey.com. On the top menu, if you go to the learn section, we’ve created a video training series. It’s about nine or ten videos on everything you ever need to know about chat marketing and how it works. Bottom line, your customers are already overwhelmingly preferring to use messaging platforms over email for communications.
There was a leak two weeks ago that Facebook was integrating WhatsApp, Messenger, and Instagram. Did you see that?
Eric: I did, yeah.
Larry: We’re talking 2-3 billion very active users on chat platforms. I think it’s crazy that most of the people listening to this podcast, 99% of them are not able to engage with this enormous organic audience at scale. I think that’s crazy. I think you should be thinking about doing this soon because that’s where people are and I don’t see the trend reversing. Email sucks. The open rate is worse and worse every month.
Eric: Yeah. It’s the one medium marketers have always clung to because it’s still continuing to be a good ROI generator but I definitely see based on our conversation there. Landscape is shifting, there will be new opportunity, it’s already here, it’s just how do you start to enable that.
Can I assume then that if we go to MobileMonkey, a big part of this is just kind of see a chatbot in action and experience? Are we able to interact with that on your site so that as a marketer, I’m experiencing what it might be an end-consumer and what that might feel like if it was on my site or through Facebook? Is that something as part of your experience on your site as well or somebody could go to experience that?
Larry: Of course. Just start chatting with the chatbot on the bottom corner. But what will also happen is that as soon as they chat with that bot, they will be added to various sequences, various autoresponders sequences. You’ll receive those replies and you’ll start to see light bulbs start to go off. You’ll be like, “Oh, I see how I can do this.” You see what I’m saying?
Eric: Yeah. If a lot of marketers feel like me just going through that experience as if my own prospects or customers or any, is a good thing. If listeners go out there, go to MobileMonkey, try it out, I think it will be great. I plan on doing it myself as well. Larry, thanks so much for your time. This extremely fascinating thing’s just a really interesting topic and I love your take on a lot of it. I appreciate your time being on the show. Hopefully, we can have you come back in a little while once I know this is going to blow up for you.
Larry: Awesome. Thanks so much, Eric, and I’m happy to be there.
Eric: Sounds good. Take care.
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