WhatsApp commerce: Impact of recent price changes on D2C businesses and ways to circumvent it

Meta recently introduced a pricing change for the usage of WhatsApp for commerce. While marketing conversations became more expensive, the cost for utility and service-based communication was slashed. With such a large base of companies in India that adopted WhatsApp as an integral channel for their marketing mix and customer support over the past few years, the impact of this pricing change could be significant.

However, with over 500 million users in India and two billion users worldwide, WhatsApp has the deepest market penetration, with no close alternative. Being the most engaging platform of communication, with the highest open rates in the industry (compared to email and SMS), it is most unlikely for businesses to exit the platform in the near future.

So then, how can they make the most of the platform without incurring higher costs due to the pricing change? What should be their strategy to circumvent the pricing impact on their marketing spends?

Let’s first deep dive into Meta’s announcement and decode what it means for businesses.

The old pricing model: Businesses were charged based on conversations, not individual messages.

A fee was applied per 24-hour conversation window, regardless of the message count.

New pricing model: Starting June 2023, WhatsApp Business has adopted a new pricing model that focusses on various conversation types.

It includes service-related interactions, marketing messages, notifications and enhanced features to deliver a superior experience.

Changes:

⦁ WhatsApp charges per 24-hour conversation window, not per message.

⦁ Businesses are only charged when sending a message.

⦁ The first 1,000 conversations per month are free for each WhatsApp Business API account.

⦁ Conversations initiated from ads (click-to-WhatsApp or Page CTAs) on Facebook are free.

⦁ Meta allows businesses to send more message types to users who opt in.

Different conversation categories

⦁ Utility conversations are business-initiated conversations that entail:

⦁ Purchase information

⦁ Confirmations

⦁ Post-purchase notifications

⦁ Opt in recurring billing statements

These conversations have become cheaper, at Rs 0.30.

⦁ Authentication conversations are those that prioritise security.

Businesses use these to verify user identities through OTPs, for login, verification and recovery.

Their price is expected to be lower than the existing rates.

⦁ Marketing conversations refer to business-initiated communication to send relevant offers, deals, product restocking information, and more.

Their rates have been increased to Rs 0.72.

⦁ Service conversations are typically user-initiated conversations aiming to resolve customer queries.

For instance, a conversation initiated by a customer for tracking their order, or to know more about a particular product or service offered by a business.

The fees for service conversations has been kept similar to the current user-initiated conversations.

Note:

If you begin a conversation to promote your products, it will fall under the marketing category and will entail a marketing conversation fee.

However, if you switch to a utility template, a new 24-hour window will begin and you’ll be charged as per the utility conversation fee structure.

Five hacks navigate through these changes with GoKwik’s new product offering, KwikChat.

⦁ Click-to-WhatsApp strategy

When running ads on various platforms, direct users to your business WhatsApp using a pre-filled text CTA.

Once a user clicks on a pre-filled text CTA and lands on your WhatsApp chat, it’s automatically counted as a user-initiated conversation and charged less.

Now, there are two ways to convert these users into leads.

Click-to-view automation

⦁ Allow users to click on pre-filled text ad CTA.

⦁ Start a conversation with a click-to-view automated menu.

⦁ Users can explore products/services and make decisions.

Talk to an agent

⦁ Enable users to click on pre-filled text ad CTA.

⦁ Welcome users with a message on chat.

⦁ Connect them to an agent for real-time conversation.

KwikChat provides intelligent automated chat support. When agent involvement is required, KwikChat assigns tickets to executives for faster response time.

⦁ Conversational messaging

Although marketing conversation prices have increased, businesses can’t ignore their importance.

Informing customers about sales, new products, etc., helps to raise awareness and reach the target audience.

However, you can convert marketing conversations into utility conversations to reduce costs.

For instance, during a cricket match, the men’s wear e-commerce brand:

⦁ Initiated polls among fans, encouraging them to predict the match winner.

⦁ Used CTA buttons to make predictions easier.

Post-match, the brand:

⦁ Offered discounts to the winners.

⦁ Offered exclusive discounts to fans.

⦁ Ran additional campaigns.

The brand saw 10x higher open rate, 3x higher reply rate and overall higher sales figures.

⦁ Abandoned checkout strategy

Even when users click on the abandoned cart recovery messages on WhatsApp, they land on the website to complete their purchase, and drop-offs happen.

WhatsApp categories abandoned cart recovery messages as marketing conversations, leading to increased spending.

KwikChat offers a smart solution that allows users to complete their purchase, including payment, directly on WhatsApp.

This means you can leverage the 24-hour window to convert more abandoned carts into confirmed orders.

⦁ Smart segmentation

Using KwikChat’s intuitive analytics dashboard, you can easily segment your audience base into different buckets.

You can then build different marketing strategies for each of the identified segments and run campaigns accordingly.

Here’s how:

Specific marketing promotions

To announce the launch of a men's grooming product, you have two options. First, send the promotional message to your entire men-specific database.

Alternatively, you can utilise KwikChat's analytics to target a specific age group of men, who have a higher interest in grooming products.

This targeted approach improves the likelihood of conversions.

Upsell/cross-sell

KwikChat's smart segmentation also opens opportunities for upselling/cross-selling.

For instance, if you sent the grooming product launch message to 1,000 men and 200 bought the product, they become a new segment.

Now, you can cross-sell related products, increasing the probability of additional purchases.

You can also target suggest quantities based on their purchase frequency, boosting upsells.

With KwikChat’s seamless checkout on WhatsApp, you can achieve all this, while reducing WhatsApp charges by targeting specific segments.

⦁ Engage throughout the customer life cycle.

To engage customers on WhatsApp, revamp your marketing strategy and establish communication from the moment they discover your brand.

For example, when a customer buys headphones from your website, initiate a WhatsApp conversation with an order confirmation.

Then, send delivery updates. Keep them informed throughout the process, from purchase to shipment to delivery.

After delivery, request feedback. Suggest relevant products based on their purchase. During a sale, offer a personalised discount.

Nurture the relationship, just like with a long-distance partner. By supporting customers throughout their journey, you gain their trust. This leads to higher conversions in the future.

KwikChat helps you build interactive workflows and optimise conversions for your D2C business on WhatsApp.

(Our guest author is Joyeeta Ghosal, director- Marketing at Gokwik)