WhatsApp is the most popular messaging app in the world with over 1 billion daily active users and is the no. 1 messaging app in 107 countries.
WhatsApp has recently ramped up its efforts to put users face-to-face with businesses as part of its strategy to monetize the platform, with the official announcement of WhatsApp Business Accounts.
With founders Jan Koum and Brian Acton on the record in their 2012 blog post 'Why we don't sell ads', there has been prolonged market speculation on how the $19 billion price tag paid by Facebook can be monetized without ads. One of the key elements of their strategy has now been laid down.
Bringing businesses to the platform is a natural evolution for WhatsApp, and one with its origin in existing demand. WhatsApp is already used unofficially by many businesses, but the move to support official accounts opens up the enterprise market - which is the real game changer here.
We want to apply what we've learned helping people connect with each other to helping people connect with businesses that are important to them. - WhatsApp Blog
With the move, WhatsApp has the potential to become the proactive and ubiquitous communication channel between businesses and consumers. This provides unique growth opportunities for the software companies that move to power these messaging experiences and, of course, WhatsApp themselves.
Introducing WhatsApp Business Accounts
"We're looking forward to making it possible for people to connect with businesses in a fast and personal way, and giving businesses the tools to make that easier to do" - Matt Idema, Chief Operating Officer, WhatsApp.
Within a closed pilot program, WhatsApp are testing a free WhatsApp Business app for small companies and an enterprise solution for bigger companies operating at a large scale with a global base of customers, like airlines, e-commerce sites, and banks. Businesses that have been linked to the program in recent press are: KLM Airlines, Net-a-Porter and in India; BookMyShow, Ola, Oyo and unnamed airlines.
How is WhatsApp's platform different?
WhatsApp has led messaging adoption through simplicity and ease of use, taking the familiar messaging paradigm of SMS, combining it with voice calls and bringing it to a global audience. It is this same simplicity WhatsApp are bringing to communications with businesses.
In the examples such as KLM, WhatsApp signals an emphasis on proactive messaging, instigated by businesses to consumers. Messages initiated by brands require strict controls to prevent abuse and spam which has led WhatsApp to manage access through a verified accounts process for businesses.
WhatsApp also requires rigorous customer opt in and, it seems, they will encourage brands to be granular with how they manage this. For example, KLM has implemented three tiers of opt in for their flight information service: one for booking confirmations, one for flight status updates and one to receive your boarding pass. This approach is designed to provide support for a broad range of use cases, while ensuring end users can block interaction for specific services without having to block all communications from a business.
Potential for disruption
With reach, ubiquity and simplicity WhatsApp has a potential business model that could unseat large portions of the A2P SMS market, disrupting players from telcos to cloud communications companies like Twilio.
With budgets already set aside by enterprises for SMS spend, WhatsApp could have the juice to take wallet share from existing budgets and save businesses money too.
What does it mean for businesses?
WhatsApp's approach to business messaging balances respect for the user while reflecting a belief that businesses have a role in determining the context and the needs of users when initiating communication. Key elements that support this are:
Technically, businesses will be able to manage their WhatsApp Business account the same way they manage other messaging profiles. Accounts are vetted and approved by WhatsApp, then verified with a green badge. Verified accounts are designed to protect consumers from spam (and support WhatsApp's business model).
Currently, customers have to opt in to proactive business notifications when providing their phone number in the business' website. Opt in mechanics are granular, enabling people to choose different types of communications, for example KLM has three separate consents, one for booking confirmations and check-in reminders, one for flight status updates, and one for boarding passes. Additional opt in methods outside of the web are likely to be introduced in the future.
Blocking a contact works to stop messaging from verified accounts in the same way that blocking works throughout WhatsApp.
Why it matters to software makers?
Business to consumer messaging is exploding. In a matter of weeks, two of the biggest potential players, Apple and WhatsApp have launched new initiatives. This reflects accelerating demand from business to talk to consumers wherever they are spending time.
Reach whole new markets
WhatsApp's entry into the market creates amazing opportunities for software makers to reach new regions and audiences. For example, 85% of all people in Brazil have WhatsApp installed on their device.
Messaging is encrypted between the business and the consumer
This supports a wider range of enterprise use cases opening up opportunities to manage data flows across jurisdictions and meet use cases for banks and those with strict privacy and security requirements.
Support for proactive messaging
Proactive messaging gives businesses a lot of power (and responsibility) to initiate communications, and with it comes the potential for WhatsApp to become a trusted notification channel, rivaling SMS and email for reach.
Specific opportunities for software makers
While it is unclear what form they will take, WhatsApp have signaled support for software via APIs on top of the enterprise product. "Some businesses may use service providers to manage their messages" - Matt Idema, Chief Operating Officer, WhatsApp.
What are the benefits for end users?
For people everywhere, messaging is becoming the preferred way to interact with businesses. With Business Accounts, WhatsApp is bringing businesses to the world's most popular messaging platform. This means direct, effective communication between people and businesses when, where and how people want it.
Long lived conversations between people and businesses means more context for interactions, better quality service and easier and more timely communication. The service has been developed to protect consumers and supported by clarity throughout the user experience.
Businesses will only be able to contact people who have provided their phone number and agreed to be contacted by the business over WhatsApp.
Conversations with businesses are securely encrypted and they can easily be blocked by the user. A green badge will indicate that the business phone has been verified by WhatsApp.
How do software companies and brands get on board?
WhatsApp's official announcement was made (softly) on September 5th. Business accounts are currently only available in a closed pilot program.
There is a survey you can take to register your business' interest, but participation is selective (and limited).
"If you're interested in testing our business tools, you can fill out this survey."
We are keeping up to date with developments through our relationships at WhatsApp, and will be keeping everyone in the loop as the program expands.
More demand, more channels, more opportunities
WhatsApp has the reach and engagement to dominate business to consumer messaging globally.
But ultimately it is consumers that decide where they want to be, and where they want to talk to businesses.
The proactive nature of engagement may be one of WhatsApp's strengths but they will need to protect customers from unwanted noise in their channel. The fight to own the business to consumer relationship is on: Apple's focus on discovery gives them the edge in expanding messaging to new audiences while the established ecosystems of Facebook Messenger, Line, WeChat, Telegram and others have a head start in innovation, particularly around bots, AI and their API's.
It is certainly hard to pick winners, but one thing is clear: for global software companies and the businesses they serve, the future of customer communication involves an increasing number of messaging channels.