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In the past, the most effective option for communicating with a retailer was to go directly to the store. Sometimes this required traveling long distances, perhaps standing in line, taking an appointment, and waiting. And in the worst case, if the person who could solve a problem was unavailable, it meant losing the trip.
In Latin America, this is still the day-to-day life of many customers. From finance to sales, customer service is causing companies to lose customers instead of attracting or retaining them. Especially when in 2022, 81% of consumers reported that their purchasing decisions are based on the service provided by retailers.
Customer service lines that once served the needs of both customers and businesses are now an ineffective medium for both parties. There are endless waiting times and a saturation that overwhelms both service providers and their customers, lowering the quality of their service.
Another factor is the digital transformation that drove the pandemic. Many practices have been digitized in favor of customers, and users demand communication solutions remotely and from anywhere. But as customers seek more of these methods, where are the companies to meet their needs?
The hyperconnectivity era
The digitalization triggered by the pandemic and the increase in the use of smartphones in the region has led Latin American users to become more immersed in social media. They use them to express their opinions and share their daily lives, and they have also used them, along with companies, for social commerce.
The fast and direct interactions provided by networks such as Instagram and Facebook have led companies to start selling their products and services through these media and to offer more instant customer service.
A leading platform in this type of digital communication is WhatsApp, which has been developing functions such as showing catalogs and even making purchases without leaving the chat. The appeal is that customers do not have to go to additional pages or explore unfamiliar territory to talk to businesses: they do everything from the convenience of an application they use daily.
Small and medium-sized businesses were among the first to take advantage of digital communications, usually because they started informally or simply preferred a more instantaneous means of commerce. It is the larger, more established companies that have been slow to adopt these types of interactions with their customers.
In a study we conducted at Mitto on communication between banks and users in Argentina, Colombia, Mexico, and Peru, most people responded that they still prefer to go to branches to resolve their concerns. But at the same time, they responded that only 31% of banks offer communication via WhatsApp. And if it were the case of opening a new bank account, 39% would do so only if the entity offered easy assistance by SMS or WhatsApp.
Digital communication through multiple channels (known as omnichannel communication) is a new territory in the region and can help bridge the gap between businesses and underserved customers. Two successful examples are Mercado Libre’s chat options and Falabella’s Paula chatbot [the former is a Mitto client], where thousands can find out about the shipment of their order, cancel it, or leave complaints and complaints.
There is an obvious link between improving customer service and increased profits for companies. This type of communication involves increasing the instantaneousness of resolving doubts and shaping the customer experience around better interactions with them. This achieves loyalty, greater retention, and, therefore, more demand for a company.
Fintech and digital communication in the region
In the wake of the pandemic, many customers have opted to stay home to shop while retailers have re-evaluated their online shopping experience.
E-commerce has also changed the needs of users. The more they shop online the more they expect safer payment processes. This represents a gain for the region’s fintech, whose presence has multiplied in the past year. Along with digital communications, fintech meet the new demands of online shopping.
The vast majority say they feel more comfortable making large purchases if their identity is confirmed by SMS before making them. Likewise, those who make payments through links report that it is easy and secure to do so.
Half of online purchases in Latin America were made through mobile phones. For this reason, users have begun to prefer the payment facilities of Apple Pay, QR, and PayPal, which represent a quick way to pay from mobile phones. This is where fintech companies stand out, teaming up with retailers to make way for these online payment methods.
Latin American customers are ready for less friction and faster service methods from merchants. And while some companies have begun to innovate in this area, there is still a long way to go. This is not for lack of available solutions, as sectors such as fintech and omnichannel communications are already a reality that has slowly been adopted.
For companies, the opportunities are now on their side of the court, whether to take advantage of them or not.
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