iNovia Finds Value in Chatbots for Business
iNovia analyst Sarah Marion on how startups are helping businesses handle customers who want to interact by instant messaging and chat.

Over the past year, there has been a surge of excitement around the consumer platform shift towards messaging, and its implications for business.

Last month, I built and launched a chatbot over Facebook Messenger. At the time, I explained that Sarahbot’s sole purpose was to further engage with entrepreneurs and provide another avenue for startup founders to share their company’s vision with iNovia.

Sarah Bot messenger

Today, I’m excited to announce a second motive behind building Sarahbot: I was doing due diligence on Smooch, our newest portfolio company. Smooch is powering great conversations between businesses and their customers across multiple messaging platforms, and I used the tool to power Sarahbot’s conversations with entrepreneurs.

Over-the-Top (OTT) messaging apps have begun to eclipse SMS, and have now surpassed social networks in the number of active users. OTT messaging services have also surpassed SMS as the messaging channel of choice – Facebook Messenger and WhatsApp alone process 60 billion messages a day, three times the global volume of SMS messages.

Coupled with advances in narrow artificial intelligence and early support by messaging platforms such as Facebook Messenger and Kik, conversational commerce, using chat, messaging, or other natural language interfaces to facilitate bidirectional, asynchronous interaction between consumers and brands, services and/or bots has emerged as a dominant trend in 2016.

When I wrote about my experience building Sarahbot, I described myself as platform-impartial, firmly in favour of rich text, and a passionate advocate for the expansion of messaging into the commercial realm – three ideas that are core to iNovia’s view of conversational commerce.

To succeed in this space, businesses will follow three core principles:

  1. interface with external and/or offline products and services.
  2. facilitate a high degree of personalization.
  3. retain information across sessions.

All three allow the business to effectively create a valuable, unique, and lasting relationship with individual users.

Sarah Marion

Sarah Marion. Photo: iNovia

At iNovia, we believe that cross-platform conversational interoperability will be crucial and businesses should be able to engage with consumers not only across multiple platforms, but also transition between those platforms within each conversation. Conversational commerce will be part of an omnichannel offering, supporting rather than replacing brick-and-mortar and e-commerce operations.

This interconnectivity requires seamless integrations into existing business software and workflows. Finally, we anticipate that leveraging AI to create predictive and autonomous bots will remain a significant trend, but business communication will take the form of hybrid labour for the foreseeable future.

Ultimately, these opinions informed our iNovia’s decision to invest in Smooch. Smooch is leading the emerging B2C omnichannel messaging and conversation space with its unified messaging platform, the Smooch ‘Conversation Cloud’SM.

This Conversation CloudSM consolidates customer communication data into one truth of record and is a centralized hub for syncing, storing, and mining customer interactions across a variety of communication platforms (SMS, email, web and in-app chat, and OTT messaging services) to internal business process tools.

Smooch’s ultimate vision is to drive and support messaging as it transitions into the primary way that businesses and customers interact, by simplifying business adoption and enabling the best enriched customer experience across all messaging channels. Smooch has integrated with dozens of business software makers, already delivered millions of messages for its customers, and opened offices in Montreal and San Francisco.

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Smooch is the second conversational commerce investment iNovia has made out of our new investment fund. The first is a conversational commerce platform that allows retailers to provide highly personalized shopping experiences, customer insights and revenue optimization tools (and is currently in stealth mode).

Today, over 65 percent of consumers want to message with businesses, and we’re excited to be supporting two companies that are committed to satisfying this desire.

 

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