At Helpshift, we encounter many companies who are wed to the idea of texting for customer support and communication. It’s a strong divide in the industry: Lyft uses texting to alert customers of a driver’s approach, while Uber uses push and in-app notifications. We are devoted to the idea of in-app messaging and push as the most convenient form of communication, but there is an argument to be made for both sides.
“Forget The Poor, Build It For The 1%”
This is the (inflammatory) title of Anshu Sharma, Venture Partner at Storm Venture’s latest post. He argues that building products that only an elite few can afford is actually an intelligent product strategy. The Apple iPhone, for instance, went from being extremely prestigious to being the de facto phone in many companies and for many individuals. Sharma predicts this will also happen to Tesla, as electric cars become more ubiquitous. Similarly, we argue that as mobile service and data plans improve and become more affordable, texting will become an unpopular communication method between companies and their customers. Already, WhatsApp has eclipsed text messaging by 50% with over 30 billion messages sent per day.
Pew did an in-depth analysis of the state of mobile in which they found:
– 7% of Americans own a smartphone but have neither traditional broadband service at home, nor easily available alternatives for going online other than their cell phone.
– 64% of American adults now own a smartphone of some kind, up from 35% in the spring of 2011.
– Some 13% of Americans with an annual household income of less than $30,000 per year are smartphone-dependent.
– 30% of smartphone-dependent Americans say that they “frequently” reach the maximum amount of data that they are allowed to consume as part of their cell phone plan, and 51% say that this happens to them at least occasionally.
In other words, Americans are becoming increasingly smartphone reliant, especially Americans in lower income brackets. These smartphone dependent users are also frequently having to shut off their data plans.
Without data, you have texting. In a recent conversation with Charles Myers of Beepi, he explained that texting is an important part of his communication with this customers because many of them are in locations with bad data, or simply don’t have data.
Who Are You Selling To?
A significant percentage of smartphone dependent users are in lower income brackets and regularly run out of data. However, SMS is an inherently fragmented experience: the user is taken out of the app and confronted, not with your brand, but with an anonymous number. Furthermore, you lose the ability to communicate with interactive content (emojis, video, photos, screenshots), which detracts from the user experience. The interaction loses the context and communicative abilities of in-app messaging.
So you’re faced with a choice: do you cater to the best possible user experience, or do you cater to the least common denominator?
We Choose: The Best Possible User Experience
We decided to create a product for the future, not the lowest common denominator. This does not mean we don’t think people with bad data plans shouldn’t have access to our product or our customers’ products. It means we think everyone should have good data plans: that’s what the future holds.
The U.S. is already a mature mobile market– the market is served by a range of products for a variety of budgets, there is mass awareness of the benefits of mobile, and there is mass penetration of the retail market. However, 64.4% of the global market is still unserved. This means two things:
- The U.S. mobile market will change only insofar as usage, not acquisition. I.e. consumers will become better mobile users, and companies will cater to that, not to selling smartphones to non-smartphone users.
- There is a large global population not served by a mature mobile market. This means there is huge growth potential for mobile.
The mobile market has skyrocketed, and it won’t be long before most of the world has data plans. In fact, even the homeless in San Francisco get free cell phones already. The model for mobile growth follows a pattern: simple cell phones with texting and calling capabilities, smartphones for the elite, smartphones for the entire population, comprehensive data plans for the elite, and finally comprehensive data plans for the entire population. We are about two thirds of the way through the mobile growth model. SMS is still a prevalent form of communication simply because good data plans have not yet hit every cellphone user. But we predict that that time is not far away.
It’s great that there are services like Lyft that do cater to those without data. But soon that will no longer be a competitive advantage, it will just be a nuisance. Just as Elon Musk predicted that we are less than 2 years away from self-driving cars, we are looking towards a future with full mobile coverage for the world. And that future is also less than two years away.
If you are communicating with your customers via text message you are speaking to the past, not the future. And those customers who have already hit the mature market point don’t appreciate this lowest common denominator approach: they want cutting edge technology that adheres to the ways in which they use mobile. They want seamless in-app experiences that don’t disrupt their mobile preferences. True visionaries create the best possible product with the intention of it trickling down to the layman.