Facebook recently dropped $19 billion (thats a nineteen followed by nine zeros) to acquire WhatsApp, a popular instant messaging service.
The WhatsApp purchase left many industry watchers scratching their heads, until they realized that the service reaches approximately 450 million active users (with about a million new users being added every day), with the greater portion of those users located outside of the United States.
If you do the math on cost per user, you see that the $19 billion spent for the 450 million Whatsapp users isn’t all that much when compared to other acquisitions.
This is especially true when the acquisition means that Facebook is getting their hands on nearly half a billion new customers’ worth of user information. After all, in the modern business world, consumer data is a highly sought-after commodity. And if that data comes from previously untapped demographics—such as those in large sections of Eastern Europe and Asia where Facebook isn’t as often used but WhatsApp is — then it makes that much more sense from a global domination standpoint.
Of course, part of what makes WhatsApp so popular is that up until this point, it has never collected unnecessary user information or attempted to capitalize on its captive audience by advertising towards them.
WhatsApp co-founder Jan Koum has repeatedly attempted to reassure users that these policies aren’t going to change, that any user information that WhatsApp may have will not be shared with Facebook. If you're skeptical that Zuckerberg won't touch that data, you're not alone.
With the near ubiquity of text and SMS-based communication, will we ever reach a point, as we have with email, where we are being constantly marketed to on text messages and other messaging services?
I realize that text messages have been used for marketing for years now and we’ve all received the occasional text message informing us about some upcoming promotional deal, followed by the reminder that if we’re not interested in receiving similar texts in the future, we can simply reply with a text with the word “STOP.”
In this case, can a company like Facebook ultimately sell our data so marketers can contact us via text and services like WhatsApp?
Before you say "No, never" let's remind ourselves how Facebook slowly changed up privacy expectations on the social newtork. Despite initial protests against Facebook updates that infringed on user privacy -- news feed, Beacon, privacy settings, Sponsored Stories -- those features all but elicit shoulder shrugs from users now.
Sure, text marketing is already yesterday’s news, and they may well be right. However, the same thing that makes text messaging uninteresting and commonplace, also indicates that it will be a part of our interpersonal communication for years—or perhaps even decades—to come, because the truth is that most everyone texts or uses SMS services such as Snapchat and Kik.
In 2010, a study performed by the Pew Research Center discovered that 72% of adult cellphone users in the United States regularly send and receive text messages (I would be very surprised if that number hadn’t increased since then). Additionally, text messages have a 98% chance of being opened and read within minutes of their arrival, which is an open rate well above email (13.2%) and conventional mail (3.4%).
If text messaging is a better way of increasing engagement then marketers will do their best to get in front of consumers.
And WhatsApp is just the beginning. You heard it here first, don't be surprised that more SMS services such as Line, Facebook Messenger, and Snapchat are acquired and used for 1:1 marketing purposes.
Then what's stopping marketers and salespeople from really pulling out all of the stops and focusing on SMS as the next big frontier of customer acquisition?
Well, it's against the law. It should come as no surprise that people are protective of what they consider to be their private space, and that includes virtual space where text messages live. When advertisements start to show up in inboxes and on SMS services, users have a tendency to get very vocal, very quickly.
Not just that, but there’s also that fact that not every person with a mobile phone has a plan that includes unlimited free texting, so unwanted messages can ultimately end up costing them big money.
As such, the FCC and the TCPA have laid down some rules regarding telecommunications and advertising. What it basically all comes down to is that in order for a business to contact you via text regarding offers or solicitations, you need to give them express written consent, and they need to give you the option to opt out at any time.
This all basically means that if a company wants to sell you something via email, telephone, or text message, you first need to contact the company and give them your permission to do so. Should the organization choose to go ahead and try to sell to you without your permission, they can face some fairly steep penalties.
However, getting that permission isn’t nearly as difficult as some might assume. Sometimes it’s as easy as asking loyal customers whether they would like news and special offers sent directly to their mobile device (because if someone regularly shops with a particular business and plans on doing more shopping in the future, then why wouldn’t they take advantage of special discounts?).
Other times you might be enticed to give our your information in a tradeoff, such as the offer of a free item in exchange for consent. The point is, that it is still possible to interact with potential customers via SMS, and more than that, the current system ensures that you won’t be wasting time with customers who aren’t interested.
So, that finally brings us to sales. With 50 billion messages exchanged a day on WhatsApp, the service is clearly one that offers an engaging experience, but will text messaging or a service like WhatsApp ever be used in the sales process?
The short answer is yes, but the question isn't if you can, but whether you should.
The sales process is one in which building a relationship with the prospective customer is extremely important. With it's limited character count, reputation as a more social tool, and smiley faces, text messages and SMS services aren't channels that are typically known for closing a sales deal.
That said, if you have good judgement and follow these guidelines, perhaps you can leverage SMS successfully in your sales:
Technology Usage: Make sure that the prospect actually uses the technology to communicate. This not only applies to texts, SMS, WhatsApp or Snapchat, but for any method of communication. The last thing you want to happen is to send a message that they the prospect doesn't know how to retrieve because they don't use it on a regular basis.
Solid Relationship: Use good judgement here. Ensure that the relationship you have with the prospect is on solid ground, that it prospect understands who you are - enough where a text message wouldn't seem out of the ordinary. Basically, a text message should only be used when you have an established relationship.
Strong Rationale: The first step in text sales is confidence in the your relationship with your prospect. Even with that, you should have a strong reason why you are sharing that information via text message -- an example of this is sending a smartphone photo of a whiteboard after a brainstorming session with the prospect.
Timely Communication: Sometimes the quickest way to contact a prospect may be through non-traditional sales communication. If you're trying to reach your potential client that often utilizes SMS, and you need to send time-sensitive information urgently -- you know a text message will get to them as long as their mobile phone is in their pocket.
If it’s possible to complete a sale over the telephone, then it’s just as likely that a few well-chosen lines of text could occasionally be enough to turn a lead into a customer and close the sale.
Perhaps the better question is will this kind of sales approach ever become common place?
That one is a bit more difficult to answer. There is definitely a large market for it. After all, in a survey by MarketingCharts.com, it was reported that 50 percent of those surveyed have responded to a text offer at one time or another.
How much more likely will people be to respond favorably to text advertisement if they can have all of their questions answered in real time by trained professionals? And again, given that these will only be users who have opted into receiving texts from the company, then the likelihood of completing the sale increases dramatically.
On the other hand, given that one of the practices currently outlawed by the FCC is the use of automated dialing software, every sales-related text will have to be sent out by a live person, one customer at a time, which means that the ROI will have to be pretty high to make up for the lost man hours.
Of course, that particular issue also exists in telemarketing, and that practice exists still so it must have a positive ROI.
Facebook was interested enough to invest nearly 20 billion dollars on an instant messaging service to acquire a good one, so that move alone tells us that Whatsapp will be monetized in some way.
Even if Facebook lives up to their promise and doesn’t butcher WhatsApp to get to the tender marketing prospects contained inside, that doesn’t necessarily mean WhatsApp, or SMS won’t play a significant role in sales in the near future.