The Importance of Perceived Performance in Sending Message

Sending Messages Is All About Speed

Technology has made consumers impatient. We don’t just want instant gratification for every click or tap—we expect it.

Retailers and e-commerce companies have been dealing with this for years. That’s why so much time is spent trying to make small, incremental improvements to page load speeds.

Even though you aren’t loading pages in your messaging experience, the demand for instant gratification remains. Users want messages sent at the speed of light—can you deliver?

Perception Is More Important than Reality with Message Send Speeds

Whether you’re using a social media app, a messaging app, or your sending standard text messages, you’ve probably experienced the agony of waiting for message delivery at least once. We take instant messaging for granted, but there are multiple factors that contribute to delayed delivery, including:

  • Poor Internet Connection: If a user has weak cell or WiFi connection, it doesn’t matter how great your messaging experience is—messages won’t send instantly. This is a problem between ISPs and consumers, but users will often blame the actual app they’re using instead.
  • Server Overload on Server Side: Your backend infrastructure has to be prepared to handle all of the messaging traffic from users. This is a constant challenge for messaging apps like WhatsApp, but it can cause minor delays for your own experience, too. Anything less than instant gratification can result in a diminished user experience and hurt your business.

These two high-level problems make it almost impossible to guarantee messages will be sent instantly 100% of the time. But that doesn’t mean you can’t create the perception of instant gratification.

Improving time to send messages is important, but even more important is showing messages in a conversation the instant users tap “send.” This is a simple visual hint, but it makes all the difference in your messaging customer experience.

Instant Gratification in Asynchronous Communication

One of the best benefits of messaging as a central communication channel is the fact that it’s reliably asynchronous. You don’t have to disrupt customers with phone calls and you don’t have to worry about emails getting lost in the shuffle.

It’s great to get back to messages when it’s most convenient, but we still want them to send instantly. Think about what this looks like for a company like BOOK A TIGER that creates direct connections between customers and cleaners. Customers want to send a message and know that it’s been delivered. If they had to sit and wait for a message to deliver over a poor internet connection, BOOK A TIGER would risk losing customers to competitors.

Delivering messages at the speed of light—or at least looking like you are—is a more important piece of the messaging experience than you might think. However, it’s still just one of many best practices to think about as you design customer conversations.

If you want to learn more about building the best possible messaging experience, check out our full Messaging Best Practices guide today.

Increase Engagement with Typing Indicators

Best practices around bringing this consumer social staple into your customer conversations

It doesn’t matter if you’re a hotel chain, a retailer, an airline, a financial services firm, or any other type of company—your digital experiences have to be sticky.

The shift away from brick-and-mortar, face-to-face business has made engagement more difficult. There were always specific strategies for increasing foot traffic and keeping customers in a store. But what happens when all it takes is one click for a user to abandon your mobile app or website?

Messaging is a great way to foster 1:1 relationships with customers and make digital experiences more engaging. However, there’s no one-size-fits-all approach to messaging.

If you dig a little deeper you can make subtle changes that positively impact engagement. This is where typing/activity indicators come in.

Making Asynchronous Communication More Engaging

By definition, asynchronous messaging doesn’t occur in real time. This is a great benefit for user experience because it doesn’t introduce the kind of friction that phone calls include. It’s also an engagement challenge because you give customers the freedom to disconnect from the experience as they please.

Just because you’re embracing asynchronous communication doesn’t mean you can’t engage users. With typing and activity indicators, you can add a real-time component to the asynchronous channel by making recipients aware that a message is coming soon.

The sense of anticipation that comes along with typing indicators increases engagement and makes your messaging stickier. And when you can keep customers engaged with the in-conversation experience, you can ensure faster message delivery times, faster replies, and close the communication loop more efficiently.

It may seem that the benefits of a typing indicator stop when customers leave the messaging experience. This might not be the case, though. Think about how Snapchat is changing the way people think about typing indicators in messaging.

With Snapchat’s messaging feature, users receive push notifications (more on these in a later post) when a friend is typing. Even when Snapchat users are outside of the conversation experience, they’re pulled back in and the messaging app becomes more engaging.

The Snapchat approach might not be the best idea for every situation, but it gives you something to think about as you implement typing indicators to improve engagement.

The Simple Do and Don’t of Typing Indicators in Messaging

If you want to break the typing-indicator conversation down into two simple rules, keep these ideas in mind:

  • Do display a dynamic, in-app indicator when one user is typing so recipients can expect a message. If users are expecting a message, they’ll spend more time within your experience.
  • Don’t surprise recipients with messages that pop up out of no where—it’s a missed opportunity for engagement.

You’d be surprised how much of a difference these typing indicators can make for your messaging experience. But still, they’re just one piece of the conversation experience.

If you want to learn more about how you can design the most engaging messaging experience, check out our full Messaging Best Practices guide today.

Messaging Series: Managing History Access Properly

How to think about allowing users to manage their conversation history

No matter what changes in the world of digital customer experiences, one thing will always stay the same—the need for speed.

We’ve traditionally seen the need for in website development. Every second of loading time delay can result in lost revenue. In fact, 40% of web shoppers will abandon a website if it doesn’t load within 3 seconds.

You have to expect the need for speed to carry over into your branded messaging experience, too. One piece of a fast messaging experience is access to conversation history—manage it carefully.

The Two Approaches to Managing Messaging History Access

Just because you’ve organized your conversation list conveniently doesn’t mean users will never have to sort through past messages.

Think of all the times you’ve sat scrolling back through old text messages trying to find that address for an upcoming event. You fly past a collection of recent messages, the app pauses to load more, and you continue until you’ve discovered what you’re looking for.

You may take historical access to your messages for granted, but there’s actually a right and wrong way to offer this service for your own users. Consider how these two approaches impact speed (and overall messaging customer experience):

  • Load on Request—The Wrong Way to Offer Messaging History: Some messaging experiences only focus on the here-and-now. They wait for users to open a conversation and start scrolling back before loading historical messages. Fetching historical messages on demand may sound harmless, but it can add seconds of delay that degrade the customer experience and lead users to switch to your competitors.
  • Pre-Fetch Old Messages—The Best Way to Eliminate History Load Time: If you want to virtually eliminate the perceived time to load historical messages, you have to take advantage of local device storage. Storing a portion of messaging history on the user’s device lets you display those messages quickly rather than forcing users to stare at endless loading indicators. Local storage also gives users access to some conversation history when their devices are offline. We live in an always-connected world, but that doesn’t mean we don’t hit dead zones from time to time. Don’t let service dead zones hurt the customer experience.

Don’t Go Overboard with Local Messaging History Storage

The phrase “if some is good, more is better” doesn’t necessarily apply to conversation history access. You have to be careful how many messages you store locally as you strive to reduce friction in the messaging experience.

Store too few messages locally and you leave customers to wait for history to load. Store too many messages locally and you might start impacting app performance. Find the happy medium to make conversation viewing as seamless as possible.

However, finding the balance that ensures smooth historical access to messages is just a small part of making your messaging experience engaging for users. Taking the best approach to offer historical access won’t do much good if the messaging experience as a whole is flawed.

If you want to learn more about what goes into a high-quality, branded messaging experience, check out our full Messaging Best Practices Guide.

An Open Letter to Retail

Yes, retail can be saved

Retail, You Have a Problem. I’m worried about you, retail.

One of the first jobs I ever had was at Best Buy. I was just 16 years old and a much quieter individual at the time. Having to educate customers about new technologies really taught me how to have meaningful and empathetic conversations with people. It’s a valuable lesson I’ve never forgotten as my career has shifted toward tech startups and that human connection is one of the reasons why I love retail so much.

You used to be the ones in charge, but now a $350 billion bully is taking your lunch money.

Traditional big box retailers have watched their revenues decline slowly over the past 10 years—holidays are bringing less and less foot traffic, cost per good sold is increasing, and margins are wasting away.

Now, you’re facing a do-or-die moment. It’s sad to say, but you have to change. Don’t worry, though. Change can be difficult, but it also brings an opportunity—the chance to monumentally alter the way people purchase goods (for the better).

Every retailer has two options. Are you going to be the company with the Circuit City five-year plan? Or are you going to be the retailer that embraces digital and thrives in a 20+ year future?

Amazon—The Ever-Growing Giant

Let’s talk about the 800-pound gorilla that is Amazon. Ever since the introduction of Amazon Prime in 2005, the looming giant has been chipping away at retail market share and converting it to e-Commerce. It’s been more than a decade of dominance that can’t be denied.

Hindsight is 20/20, but what if retail started taking action against Amazon early on? You certainly would have if you had lost 50% of your market share in just one year (instead of 10). But for more than 10 years, Amazon has slowly beaten retail at its own game.

Amazon offers the same products at the same (or better) prices as big box retailers—all with better accessibility and free two-day shipping. Consumers are like lightning. They’ll always find the path of least resistance and Amazon has provided just that.

You could try to go head-to-head against Amazon with the same game you’ve always played—the one Amazon has stolen from your hands. To some extent, this is what Best Buy is doing with its “New Blue” strategy for digital transformation. However, incremental differences are exactly what will keep Amazon in control.

Instead, you have to focus on creating monumental differentiation. This means playing a new game that capitalizes on Amazon’s weakness.

The Problem with Reviews and the Chink in Amazon’s Armor

We all know that when the options are fast, good, and cheap, you can only choose two. And while Amazon may seem like the exception to so many rules, this one reveals a weakness that you can exploit to change the retail game.

One thing missing from Amazon’s business is a support staff that can advise customers on informed purchase decisions. No one is going to spend $2,000 on a new television without doing some research. However, Amazon can’t possibly staff product experts for every item it sells. Instead, Amazon has relied solely on customer reviews.

If you’ve ever sifted through thousands of Amazon reviews for a product you’re interested in, you’ve probably noticed that the system is far from perfect. First of all, it’s becoming increasingly difficult to ignore the growing volume of fake (or paid) product reviews.

More importantly, there’s a fundamental flaw in consumer product reviews—they’re based on someone else’s specific needs, not yours. One person’s five-star review might be a one-star review for you. Everyone thinks they want a 75-inch television and the one you choose on Amazon might have five stars—but who’s going to tell you that a television that big will be a waste of money if you’re putting it in an eight-foot by eight-foot room?

In the wake of less-than-trustworthy Amazon reviews, we’ve seen the rise of the professional reviewer. Someone like Marques Brownlee can give you high-quality, professional reviews of popular products. The production quality is great and the information is valuable when you’re researching certain products.

However, there’s still something missing with professional reviewers—a focus on the specific products you’re considering. This leaves us with a service gap between professional reviewers who have limited portfolios and the millions of consumer reviewers who don’t have your needs in mind.

Here’s your opportunity to change the retail game. For years, retail hasn’t valued human connection as much as it should. Your employees can fill the reviewer gap and act as product experts for customers.

Digital Transformation Should Start with the Employee Experience

In most industries, digital transformation starts with a focus on the customer experience. But when Amazon is your competition, you can’t just maintain the status quo. Instead of starting with the customer experience, enabling your employees to have valuable conversations with consumers is the key to executing digital transformation in retail.

Even after I stopped working at Best Buy, I used to go to the brick-and-mortar locations for my tech needs. I realized one day that every time I go into the store, I end up spending a lot of time talking to an employee about anything from home theater systems to computers and beyond.

The people working at Best Buy aren’t just knowledgeable about products (when the company brings manufacturers in to train and educate the staff, this isn’t surprising), they’re enthusiastic about them. At a time when availability of goods is commoditized by Amazon, your core product isn’t what’s on the shelves—it’s the employees you’ve trained to make empathetic connections with customers.

Right now, the conversation in retail is all about how you can increase foot traffic at brick-and-mortar stores as Amazon continues to grow. Instead, you should be asking yourself how you empower employees with the tools and processes necessary to connect with customers—both in-store and online.

Returning Retail to Its Former Glory

When I reflect on my retail roots, I realize that the human connection has always been the foundation of my passion for the industry. How can big box retailers like Best Buy, Babies”R”Us, and others take advantage of technology to get back to that former glory?

Saving retail is all about making mobile and customer connectivity part of employee DNA. You already have the infrastructure in place to match Amazon’s distribution (you have more storefronts and product experts out there than Amazon could ever match in the next five years). Now, you need to start facilitating meaningful conversations between your product experts and the consumers who are always researching potential purchases.

I believe messaging technology is the best way to maximize the potential of human connections in retail. Mobile chat has become the universal experience, giving retail employees a chance to have simple, rich, and dynamic conversations with customers.

The combination of chatbots for simple question/answer situations and human interaction for more complicated inquiries can help you design a high-quality customer experience. When product experts can guide consumers through the buying process and make sure their specific needs are met, you’ll start to build trust with customers—the one thing that will help you thrive in a retail world overtaken by Amazon.

So here we are at a fork in the road, retail. You can remain romantic about your past successes and go the way of Circuit City, Kmart, and others. Or you can play a new retail game and return to glory.

We’re trending back toward commerce done at the distance of a handshake and it’s time to get on board.

Creating Cohesive Mobile Experiences that Drive Conversions Across Channels [Free Webinar with Branch and Layer]

The Opportunity for Higher-Converting Mobile Experiences

Mobile has been on the radar of businesses for over a decade. And yet, so many companies are struggling to deliver seamless digital experiences.

The problem is that as consumers, we spend so much time bouncing from device to device, channel to channel, and platform to platform. Businesses have adopted each of these devices, channels, and platforms—but they’ve fragmented digital footprints to the point that mobile experiences often leave much to be desired.

There’s a silver lining to the digital experience challenges facing today’s businesses—the opportunity to create a cohesive mobile experience that drives multi-channel conversions.

On Wednesday June, 21, Branch and Layer are partnering to host a webinar that will teach you how to capitalize on this opportunity. Sign up today and find out how to put the pieces of your fragmented mobile experience together.

What to Look Forward to in the Webinar

The upcoming webinar, Creating Cohesive Mobile Experiences that Drive Conversions Across Channels, will be hosted by Branch co-founder Mada Seghete and Layer CEO Ron Palmeri.

As experienced mobile customer experience pros, these two business leaders will lead you through an engaging conversation that covers topics such as:

  • The current state of platform fragmentation and the less-than-perfect digital customer journey
  • Common pitfalls for customer experiences and the keys to success—minimal friction and continuity of intention across platforms
  • How messaging and linking infrastructure create a foundation for your cross-platform digital experience
  • And more

After speaking together at Collision, Mada and Ron saw that they were both trying to solve the mobile experience challenge but from different angles. Their fireside chat will give you a good sneak preview of the topic.

However, if you want to dig deep into the best practices for unifying your many customer experience channels (and start converting more customers in the process), the upcoming webinar is an event you won’t want to miss.

Sign up for the webinar today!


About Mada Seghete

Mada is the co-founder at Branch and leads all Community and Developer marketing initiatives. With over 22,000 members in 53 cities globally, Branch has grown the largest Mobile Growth community in the world. Mada has worked extensively with app marketers and developers to help them grow a successful mobile business. She studied Computer Science at Cornell and has an MS and MBA from Stanford.

About Ron Palmeri

Ron Palmeri is a serial company founder. Before founding and acting as the Layer CEO, he started companies such as MkII Ventures and Prism Skylabs. He is consistently focused on using the internet to disrupt the status quo, evident in his involvement in starting companies like Grand Central (now Google Voice), OpenDNS (now part of Cisco), Scout Labs, Swivel and more.

How dubizzle Drives Mobile Transactions with Messaging

What Is dubizzle?

Founded in 2005 by J.C. Butler and Sim Whatley, dubizzle is a classifieds platform focused on the United Arab Emirates (UAE).

As part of the OLX classifieds company, dubizzle has grown to include over 200 employees. These employees have been tasked with supporting the majority of users on mobile – 70% of the user base.

With the rise of mobile, dubizzle started looking for ways to boost engagement with digital classifieds. To improve the user experience and increase mobile transactions, dubizzle turned to messaging to connect its users.

The Problem: Not All Digital Experiences Are Created Equal

Unlike the United States, the emerging market dubizzle serves essentially skipped the PC era. Rather than moving from desktop browsing to laptops and slowly shifting toward mobile, emerging markets now dominate mobile browsing.  

Despite the differences between developed and emerging markets, OLX co-founder Alec Oxenford once said, “It’s rational to believe you know local markets, but people are always the same in each country. They think the same way. They have different priorities, but they all want to progress in life and that’s what drives internet behavior.”

dubizzle and other OLX classifieds platforms want to facilitate this progress, but they must remove friction from the user experience to do so. At first, this meant using phone calls, SMS messages, and emails to connect dubizzle users with each other. However, there were a few flaws in this approach:

  • Buyers sent emails to sellers but failed to continue the conversation, as the sellers won’t respond
  • Phone numbers proved hard for sellers to keep track of (especially when receiving multiple calls from many buyers).
  • Leaving the dubizzle platform to interact with buyers/sellers led to a limited usage of the platform

Moving to a chat-based platform was the answer to dubizzle’s need to keep interactions within the app.

However, after spending 2 years developing code to make a chat platform vendor’s APIs and SDKs work for their messaging needs, maintenance became overwhelming. After a referral from friends at Shedd, the dubizzle team moved their messaging infrastructure to Layer to simplify their implementation and free up their engineering team.

The Solution: Eliminating User Experience Friction with Layer Messaging

The challenges dubizzle faced with infrastructure maintenance started to hurt the user experience. Solving this problem with Layer meant rethinking the interactions between users.

While the majority of user conversations start with item availability, it’s equally important for dubizzle to move transactions through price negotiation and item pickup. Contrary from the e-commerce platforms, dubizzle transactions happen offline, therefore being able to share location was critical for the overall experience. This requirement added complexity with the original chat platform, but Layer made the backend infrastructure far easier to manage.

“Layer was quick to implement, is easy to maintain, and provides a great conversation experience for our users,” said Mireia Mujika, Senior Product Manager at dubizzle.

The dubizzle mobile app went live in January 2017 with mobile web and desktop support following in April. And within a month, all user- experience complaints stopped and mobile transactions on dubizzle witnessed an increase.

The key takeaway in dubizzle’s story is that creating a messaging-based user conversation can’t improve digital experiences if you spend all your time trying to maintain the backend infrastructure.

If you want to learn how you can implement messaging without backend headaches, contact us today for a free demo of the Layer user conversation platform.  

How Messaging Helps Move e-Commerce Beyond the Shopping Cart

 The Outdated e-Commerce Shopping Cart

Shopping cart experiences have always formed the bedrock of e-commerce. Customers spend time finding products on the merchant’s website or app, add those products to a digital shopping cart, and then follow the payment flow to check out.

As the newcomer in retail in the 1990s, e-commerce needed to use the shopping cart and checkout metaphors from traditional brick-and-mortar commerce to help consumers understand the transaction process. This skeuomorphism has defined e-Commerce ever since.

For more than 20 years, product teams have obsessed over nuances such as button placement, field behavior, and credit card entry in an effort to make the purchasing process as painless as possible.

But times have changed.

With the advent of mobile, the ever-rising expectations of customers, and the complete lack of patience for e-commerce friction, the shopping cart metaphor is losing its effectiveness. Just as retailers were starting to get the hang of traditional e-commerce checkout processes, the market seems ready to move beyond the shopping cart.

Mobile Giants Are Moving Beyond the Shopping Cart

Amazon has perfected the shopping cart. The design might not be flashy, but after years of testing, feedback and improvement, it’s an elegant and reliable workhorse. However, Amazon is doing more than just making iterative changes to the shopping cart.

In dutifully managing and leveraging all of the information at its fingertips, such as shipping addresses and cards on file, Amazon has not only perfected the cart, but moved beyond it.

To understand how Amazon is ending the shopping cart era, we have to go way back to 1999.  Right before the turn of the century, Amazon patented its “one click to buy” concept. In many ways, Amazon didn’t need to patent this technology—nobody has built a logistics infrastructure strong enough to match the e-commerce giant’s ability to deliver goods in a reasonable amount of time and at a reasonable (read: free) price the way Amazon Prime can.

So, for many household items or impulse purchases, Amazon lets you skip the shopping cart entirely and buy with the help of all the context it already has about you. Amazon has even taken the one-click concept a step further by turning the digital “buy” button into the physical Amazon Dash button.

The one-click patent was always meant to streamline the checkout experience. However, this frictionless experience becomes even more important on mobile as you have less screen real estate and ever-impatient customers has better things to do and better places to be than navigating a complex checkout process on their phones.

Now, the one-click patent is coming to an end and Amazon’s cart-less efforts are evolving yet again with Alexa. With Alexa, customers can have an ongoing conversation with a virtual assistant who never forgets and knows all of the relevant details for your shopping needs—not just your credit card and shipping info, but your past preferences and purchase history.

The voice-enabled shopping experience further shrinks the purchase funnel into an immediate fulfillment of customer intent. And as the shopping cart metaphor disappears from e-commerce, Amazon is even experimenting with this concept in its physical Amazon Go grocery stores. Once customers are authenticated at the door, they can just walk out with merchandise and be billed accordingly without standing in line or waiting for checkout.

It’s important to note that Amazon isn’t the only company moving away from the traditional shopping cart. Uber is another example of the magical cart-less experience. You don’t think about paying for your Uber. You order it, you take the ride, and you just get out of the car. The card on file removes all friction from the process.

There’s even been stories of people getting so accustomed to this experience that they’ll accidentally get out of standard cabs without paying. We can’t dismiss these instances as anomalies—they’re indicative of shifting consumer preferences and e-commerce companies have a chance to get ahead.

Trunk Club Redefines the e-Commerce Shopping Cart with Messaging

One of our customers, Trunk Club, has innovated away the shopping cart both in terms of its business model and in terms of the interface that forms the basis of its customer experience—rich messaging.

After signing up for Trunk Club, you’re matched with a stylist who proposes a personalized “trunk” of clothing that meets your stated tastes and needs. After you collaborate with the stylist—removing things that you don’t want, requesting recommendations for other things that didn’t show up the first time—you verbally OK the trunk to be sent out to you.

Once the trunk has been shipped to you, you’re able to try the clothes on, see how they feel, and send back anything you don’t want. Your card is only billed after you decide to keep items from the trunk.

After you enter your card and delivery info the first time, you never have to think about the shopping cart or checkout process again. You don’t even have to think about whether you’ll want to keep everything in a trunk—just say “yes,” “yup,” “good to go!” or whatever chat confirmation you prefer to say you’re ready for a trunk and the personal stylist will ship it to you. This is a frictionless experience that gets beyond your typical e-commerce shopping cart and creates higher-value customer interactions.

The key here is that rather than focusing on conversion rate optimization for an outdated shopping cart metaphor, Trunk Club is basing its business model and interface on conversation. And in a mobile-first world, that means messaging.

Your e-commerce business isn’t just a series of transactions hindered by cart abandonment. Today, e-commerce is a relationship—a personal service that you provide to customers by talking to them and understanding their needs. From this relationship, purchases will flow naturally.

If you’re ready to step away from the aging shopping cart metaphor and buy into a more conversational e-commerce experience, contact us today to find out how the Layer customer conversation platform can help.

Introduction to the Conversational Economy Series

Discover the Conversational Economy

The Conversational Economy series will explore the trends in business and technology that are taking us back to a relationship-based economy, where customers are treated as individuals, and where businesses no longer need to guess as to what their customers want.

Commerce Rebooted

Commerce used to be personal. We used to have close relationships with the businesses we patronized. They used to treat us like human beings. The “market” was really a function of the conversations comprising it, and as such, these “conversations of value” represented the center of the customer relationship. Without conversation, there was no market. So what happened?

With the rise of mass-marketing and mass-retail, the personal, relationship aspect of business waned. It survived almost entirely in the extremely high-end, out of reach for most consumers. What most of us got was advertising and big-box merchandising, not personal service.

Customers Are the Heart of Commerce

In this first installment of our new Conversational Economy series, I take a look at the convergence of two major trends: the rising power of the customer and the importance of the customer experience, and the preeminence of messaging as the dominant user-interface metaphor for mobile.

We explore the concept of the “one-to-one future” of marketing and customer relationship management pioneered by Don Peppers and Martha Rogers, and connect their 1993 predictions to the current reality of the mobile era.

Rich messaging, as the preferred user interface for mobile, forms the anchor for a new kind of customer relationship. One that companies like Trunk Club and Staples are leading the way with, and one that will become table stakes for businesses moving forward.

You can read the first installment on Medium here

The new unbundlers

The new unbundlers

I’ve always loved the Jim Barksdale quote from the Netscape IPO roadshow: “There’s only two ways I know of to make money: bundling and unbundling” — mainly for its simplicity and truth that has stood the test of time and markets.

Today, Amazon has emerged as the Apex Predator of bundlers.

Amazon & Apex Predator of bundlers

It’s been bundling pretty much everything since it started selling books online as in 1995. The scope of that bundling couldn’t be more clear than when Jeff Bezos told Walt Mossberg in 2016 “when we win a Golden Globe, it helps us sell more shoes in a very direct way.” Or when the totally plausible rumor that Amazon was acquiring Capital One circulated earlier this year. For Amazon, which probably holds more credit cards on file than anyone, becoming a bank seems inevitable. The fact that the rumor didn’t take the market by surprise only further makes the point.

There are plenty of companies that have figured out how to compete with Amazon:  Bonobos, Warby Parker, Trunk Club, Apple, Tesla. These companies have built differentiated products, but importantly, they offer differentiated experiences to their customers which allow them to thrive in today’s climate.

So basically, everyone other than Amazon is an unbundler, whether they like it or not.

Read more on Mobile, Brands and Customer Experience on LinkedIn >>

Algorithms Are Not Enough in Financial Services

Algorithms Are Not Enough in Financial Services

For every article you see about the advantages of emerging artificial intelligence (AI) technology, it seems like there are 3 or 4 discussing how machines are going to take all our jobs.

Finance has been one industry where employees are already experiencing significant displacement. However, financial services firms shouldn’t get carried away with automation.

The most successful firms will be those that can master a hybrid approach to financial management. Computers give you algorithms—but humans facilitate the experiences customers need.

Using Computers for What They Do Best

At times, the outcry about computers displacing human workers goes too far. There’s nothing wrong with automation, but companies have to find the appropriate use cases.

The hallmark case study for computers overtaking humans in financial services is at Goldman Sachs. Back in 2000, Goldman employed about 600 cash equities traders who worked with the firm’s largest clients to buy and sell stocks. As of early 2017 automation has taken hold—only 2 of the 600 traders remain.

According to CFO (and former CIO) Martin Chavez, this is only the beginning of automation at Goldman Sachs. In a recent speech, he explained that “everything we do is underpinned by math and a lot of software.”

The business benefits of automation are clear. Rather than paying high six-figure salaries for 600 traders, the firm only has to pay the 200 computer engineers that have taken their place in that division. When the trades include pricing analysis for things that easily are determined on the market, complex trading algorithms remove the margin for human error.

And Goldman is even starting to implement algorithms for investment trading processes that have typically relied on salesmanship and relationship-building skills. It’s clear that these types of efficiency gains will only increase.

If you take Goldman Sachs as the example, you might think that they’re on a collision course with total human displacement. However, if you look at Goldman’s venture into online retail banking (GS Bank), you start to see the value of balancing computer algorithms with human experiences.

Hybrid Financial Management: Balancing Automation with Human Experience

Streamlining operations with automation has given Goldman Sachs more freedom to pursue other markets. And in early 2016, the firm set its sights on the millennial market by entering the growing online banking sector.

By avoiding the costs of brick-and-mortar retail banking locations, Goldman can keep its delivery costs down and compete with direct banks like Ally, Discover Bank, and Capital One 360 by offering attractive interest rates.

The only problem is that technology can be commoditized and other digital disruptors will always be able to rival Goldman’s product offerings. This is why financial services firms have to balance automation with human interaction—because the customer experience is your key differentiator today.

Despite its aggressive product offerings, GS Bank has seen complications in terms of customer experience. A reliance on IVR systems and the absence of branch offices have showcased the dangers of eliminating human interaction from banking.

While you embrace automation to drive your financial services business forward, you have to make sure you never lose sight of the fact that your human employees are the ones that create customer experiences. If you can create a hybrid financial management platform—one that can automate trading while giving access to humans for greater personalization and service.

Basing your hybrid financial management platform on a universal messaging experience can give you the best of these two worlds. Automation and intelligence can work harmoniously to scale personal human interaction, while delivering value to customers for whom high-touch service would previously have been too expensive.

If you want to learn more about designing a customer experience that lets computers and humans each do what they do best, contact us today for a free demo of the Layer customer conversation platform.