In-app chat and messaging planning guide: Use cases and best practices

We began the first two chapters of in-app chat planning guide with chat platform fundamentals and characteristics of chat and messaging. This article will cover the third chapter of in-app chat and messaging planning guide: in-app chat use cases and best practices.

In-app chat and messaging planning guide

1. Chat platform fundamentals
2. Characteristics of chat and messaging
3. In-app chat use cases and best practices
4. Implementation scenarios
5. Operational scenarios
6. Tracking performance
7. Design guidelines and suggestions

In the past two years, Sendbird grew from 40 applications to over 6,000 live applications installed with Sendbird SDK. Today, we help facilitate thousands of exciting and practical conversational experiences. In the early days of Sendbird, conversational experience inside one’s own service was a very new concept. Today, with conversational interface rising as the new frontier of opportunity, in-app chat is a part of the building block for most scalable services. The difficult question is how to effectively and efficiently implement conversational interface into your service.

On a planning and development perspective, in-app chat use cases can be defined in two different blocks, chat as a core building block or an augmenting building block. Many times, if chat works too well, an augmenting block would often be confused as a core block. Luckily, there is a very simple way of looking at it. Do you need in-app chat to launch your service? If you do, in-app chat is a core building block for you and if not, it is an augmenting building block (regardless of the stage of the product iteration you decide to implement in-app chat).

Below, we will share how varying service categories use in-app chat and what we have learned from our customers.

In-app chat and messaging as an augmenting building block

Primary use cases occur for categories including on-demand (O2O), E-commerce (conversational commerce), customer service, video streaming, media (content distribution), business collaboration, eSports, banking (fintech), healthcare amongst others.

On-demand (O2O):

• Communication between:
  • User and service provider
• Our takeaway: In-app chat and on-demand is a natural fit. Our customers have deployed in-app chat to achieve the following. (1) Reduce information gap. On-demand services, by its nature, have varying details between different service providers and often require the customer to communicate with the service provider. Providing a readily available communication channel helps bridge the gap. (2) Contain communication in-app. There are many alternatives (e.g. call, text) users can choose to contact the service provider, but the user experience is much smoother when it can be done without having to switch back and forth between multiple applications. (3) Take ownership of the communicated data. Inquiry from a user will most likely be highly useful data. A new product opportunity, hints of improvements and user needs will be inside the conversation between the user and the service provider. Access to such data will not be available should the conversation occur outside of the application. (4) Reduce cost. If SMS is a method of notifying users of an order being prepared, a package arriving, and etc the cost will be immense. IP messaging is a lot more affordable on a large scale.

E-commerce (conversational commerce) & marketplace:

• Communication between:
  • Buyer and seller
  • Buyer to buyer
  • Seller to seller
• Our takeaway: Along with the rise of conversational commerce, online stores and marketplaces have been striving to increase online shopping experience to a whole new level. Conversational commerce has enabled our customers to implement the following. (1) Reduce uncertainties. Before conversational commerce, data teams, marketers, and merchandisers had to guess user behaviors and needs but now sellers can chat to users who are on the site or in-app to help search for exactly what users want. (2) Lower marketing cost and increase visual representation. Why send an expensive do-not-reply SMS when you can send a beautifully designed multi-media cached in-app message (basically free in comparison) and have the user respond right then? (3) Increase customer support availability. With chat based customer support, users can chat with agents at any place and time, and agents can handle multiple requests simultaneously. Chat history tracking is easier than the nearly impossible call history tracking (especially on what the call was about). (4) Change the way buyers shop online. Some customers have even gone as far as to provide chat amongst sellers and buyers so that sellers can collaborate and buyers can shop together (while chatting on the site). (5) Check out the chat bots. Chat bots are on the rise, but in reality, success case may still be a few months down the road. We understand lots of market participants are on the lookout for a stellar chat bot and a benchmarkable operational application. However, whether successful players are keeping things quiet or chat bots are still not ready for commercial applicability, we have yet to see a chat bot cast its spell.

Live video streaming / eSports:

• Communication between:
  • Audience to audience
  • Audience and broadcaster
  • Audience and moderator (admin)
• Our takeaway: In-app chat has completely changed the way live video streaming works (apologize for the generalization, at least for our customers it has). Previously, live video streaming was still a one-way communication with the advantages and disadvantages of being a live video. Today, live video streaming service providers are opening multiple horizons for their users with in-app communication. (1) Engage (literally) the audience with the live stream. The audience now engages with each other and sometimes even the broadcaster, driving the show to extremely high engagement levels and to unexpected endings. (2) Maintain control through moderators. With moderation tools to communicate with the audience through the chat room (apart from the broadcasting jockey), moderators help guide the audience real time. (3) Study the conversational data and improve the show. Studios can take live chat data to analyze how successful the show has been and study audience reactions to sharpen the edge.

Content / Media:

• Communication between:
  • User to user
• Our takeaway: User engagement, retention and community building are key metrics our customers in the Content / Media industry pay attention to. Most product managers would have tried implementing variations and A/B testing of commenting, social sharing, like buttons, and a bundle of other features. Chat, will help the Content / Media participants to achieve the following. (1) Enhance formation of community within. If commenting, social share buttons and like buttons have not done the job yet, chat will be the feature that lets you unleash the potential with a growing audience within your service. (2) Increase user engagement. Chat is perhaps the easiest feature for any user to use due to already accustomed daily usage from messenger services and SMS. (3) Increase retention. Studies have shown in-app chat as a tool product managers can wield to help delay the attrition of acquired users.

Banking (fintech):

• Communication between:
  • User and service provider
  • User to user
• Our takeaway: Conversational interface in finance has been gaining traction. Fintech firms that had technology lay the grounds to its existence embraced in-app chat early on. However, even traditional banking firms have caught on to the wave of new technologies, with conversational interface being one of them. We have seen three main drivers behind finance’s move towards conversational (1) Improve user experience and upgrade outdated administrative process consumers had to be a part of. Now, online transfer is just as easy as handing cash to a friend. You don’t need to walk over to a retail branch to get a loan. (2) Reduce offline overhead and improve operational efficiency. As you would imagine, maintaining a retail branch in every corner of the block is extremely costly. In addition, customers feel less and less value from visiting a retail branch if all can be done online. Of course, offline experience might be easier since it may not require deciphering weird user interfaces, but what if the same is available online? (3) Acquire cheap and readily available marketing channel. As much as consumers gain easy access to agents (online or offline), for the company it is a precious marketing channel where multiple products can be introduced per context.

Healthcare:

• Communication between:
  • User and service provider
  • User to user
• Our takeaway: In healthcare, conversational interface has been used most often to deliver the service content. Truly, a lot of automated services that help you track your biometric performance, advise you on your next steps, collect your psychological state of the mind, provide you feedback on your mental health and others have emerged and enlightened us with how future healthcare may be shaped. (1) Improve non-human to human interaction and off-site support. Healthcare services have brought the non-human to human interaction to a new era by providing a conversational interface for users to engage with bots. The traditional fill in your forms and read the output has transformed into engaging and ever easier experience. (2) Provide community support. Patient to physician relationship is not all of healthcare Some symptoms require a lot of sharing of information and feelings among patients. However, due to the nature of the relationship, patient to patient, users prefer to contain the communication in-app and not to a personal communication method (e.g. messenger, phone calls, and etc).

Business collaboration:

• Communication between:
  • User to user
  • User and business
• Our takeaway: Business collaboration is an unfamiliar category with most people due to the nature of the service (in fact, the classification is quite internal that you may not realize that your service falls in to this category). This is a category where collaboration within a business or collaboration between businesses consists majority of the service such as corporate messenger, expert discovery, and others. The primary motivation to have an internalized in-app chat for business collaboration comes on three fronts. (1) Enhance branding. White labeling. For business collaboration, the task is quite clear on the point that choosing external applications as a means of communication works okay. Users will not leave because they had to text or call while using the service. However, for many businesses, branding is critical and most prefer the brand focus stay with the service provider. Therefore, white labeling at times is a must. (2) Customization. Especially for our larger customers, there are unique characteristics that pre-built solutions cannot satiate. For business collaboration services, we realized that is a lot more frequent. Whether it be the color of the interface, looks of the chat bubbles, the structure of the internal directory, customization will be needed and already made end solutions will not be able to satisfy 100% of the needs.

In-app chat and messaging as a core building block

Primary use cases where chat is a core building block usually belongs to games, dating apps, and messengers.

Game:

• Communication between:
  • Clan chat
  • Lobby chat
  • User to user chat
  • Admin to user chat
• Our takeaway: Chat is a core building block for most games, even if it is not a necessary tool in the game play. However, we noticed two inherent difficulties in most of the users realizing there is a chat function inside a game. The first is that the entry point can be very tricky and/or conditional (e.g. you must achieve XYZ to chat with other users). Last is the traffic to chat ratio, which we internally call chat to MAU. Often chat to MAU sits in the range of 1% – 5% (better than paying to free ratio!).

Dating apps:

• Communication between:
  • User to user
  • Lobby chat
• Our takeaway: Chat for dating apps are quite straight forward, it is a requirement, it needs to work well, and it needs to look beautiful. One interesting recent trend we have noticed is the focus on retention and session time of dating apps. Previously, dating apps main goal was to gain a large pool of profiles, optimize on the matching algorithm, increase match volume and quality, and repeat. However, today we hear a lot more focus on retaining users and having users to continuously come back to the service, which is inherently difficult given that the better matching volume and quality, higher likelihood the app will be erased from a user’s phone. One way dating app developers have been tackling retention is to provide top notch in-app communication, whether chat, voice or video so that post matching, user communication would stay in-app.

Adding on…

• The window of opportunity to take advantage of conversational interface is widening: As it did with digitalization, services are aggressively pursuing conversational interface driven initiatives to cultivate new business opportunities. Operational and cost efficiency of conversational interface have helped product managers, CTOs, and planners to kick off new initiatives and now the value creative end of conversational interface and the fear of missing out is amassing C-level attention.
• Business to customer communication is quickly evolving: As you may have noticed, any of the above cases are primarily business to customer driven chat and messaging where services seek to enhance or create new lines of business. From a birds-eye view, we are observing three evolutionary stages of business to customer communication: customer service, sales, and marketing. From answering customer’s questions, agents (whether human or bots) begin to offer solutions, and ultimately the already existing conversational interface (in-app) becomes a channel for businesses to reach out to customers. Traditionally these three stages have been covered off-line, on the phone, through e-mails, texts, and other re-marketing tools. Now, with your own conversational interface (or communication platform to your customer), you can own, manage, study and act upon all data you have on your customers at an extremely low cost.
• The quality expectation of in-app communication is rising: User expectations for in-app messaging and chat are extremely high and still rapidly rising. Plan ahead for the update and maintenance required. With communication dynamics rapidly changing with messenger apps at the forefront of evolution, even keeping up to the standard will be a heavy lift.