Zipcast Episode 18: CEO John Lauer Reacts to Findings From the 2020 State of Texting Report

Zipcast Podcast Episode with John Lauer

We just released the 2020 State of Texting report. As the creators of Texting for Business, Zipwhip publishes the State of Texting annually to help businesses keep pace with changes in the messaging landscape. This report provides an in-depth look at the texting trends, habits and preferences of more than 2,000 businesses and consumers across the country.

In this episode, chief marketing officer Scott Heimes invites Zipwhip CEO John Lauer to get his thoughts on what the report findings mean for businesses in 2020 and for the future of business texting.

You can check out the 2020 State of Texting report for yourself here.

Tune in each month for the latest episodes of Zipcast. Don’t forget to follow us on Apple Podcasts, Google Play and Spotify. If you have any suggestions for the show, feel free to text us at (347) 772-3529 or email zipcast@zipwhip.com.

Podcast transcript:

Scott Heimes: Welcome to the Zipcast, where we talk about the latest trends in texting for business, customer communication strategies and technology. I’m your host, Scott Heimes, chief marketing officer at Zipwhip. And thanks for tuning in.

Today we’re chatting with John Lauer, CEO and co-founder of Zipwhip. We’ll be diving into our recently released 2020 State of Texting report. This is an annual report we publish, that examines how businesses and consumers use texting to communicate. We’ll get John’s thoughts on what this data means for businesses in 2020 and beyond. Stick around to learn more.

Welcome to the Zipcast, John. It’s great to have you here.

John Lauer: It’s good to be here.

Scott Heimes: All right. So today we’re going to talk about some of the stats and insights from our new State of Texting report, which just came out into the market. But before we go there, tell us about the state of Zipwhip. What’s going on with Zipwhip?

John Lauer: Okay. Yeah. We just closed out a really great 2019. It was spectacular growth. We, of course, closed our Series D funding earlier in the year, $51.5 million. And boy, throughout the year, 23 awards that we won. It was a lot of fun. We announced a whole bunch of big products. We completed our SOC 2 Type 1 that’s really important for going into the enterprise space. And boy, we are on the verge of delivering a billion texts per month.

Scott Heimes: Oh. Astounding. So large, with a “B.” So we had lots of recognition to be sure, but a bunch of it was actually recognition that you received as CEO in 2019, including “Top 30 CEOs for Women” by Comparably, and “100 Most Intriguing Entrepreneurs” by Goldman Sachs. So congrats on that.

John Lauer: Thank you.

Scott Heimes: All right. So the State of Texting report, 2020 is a report that we put out every year. This is our second annual one. We publish it because we want to understand how businesses and consumers are texting each other and understand what kind of trends are happening in the market. We survey over a thousand consumers and over a thousand businesses to get to the dataset. And then we comb through all of that and present some of the most interesting findings and insights in our State of Texting report. Anybody can check this out. Just go to zipwhip.com/SOT2020 to download the full report. So John, what was your initial reaction when you come through it the first time? What’d you think?

John Lauer: I loved it. I mean, just reading through it, it’s like eating candy, because we put so much effort into this business and then to kind of see people’s response out there how much they’re loving texting still. I mean, years ago, we made the bet that texting stays huge because it just becomes a fundamental communication medium, and clearly the data showing in the State of Texting report that that is happening.

Scott Heimes: I can’t agree more. So I’ve collected some of the — what I think is — the most interesting stats are. And I think a lot of these might actually, ultimately, inform how businesses strive to text their customers and what informs their strategies. So let’s start with some of the data on how texting is growing as a popular communication form, the most popular. And in fact, 68% of businesses say they use some form of texting today. Now we’re going to talk more a little bit later about how they’re doing that and opportunities to improve.

Interestingly, 91% of consumers said they’ve received a text from a business in the last year. That’s a 20% year-over-year growth for that stat. And 35% of consumers say they text with businesses once a day or once a week, which is again, a big growth year-over-year. So what’s your take on that?

John Lauer: Totally not surprised. I mean, look, I think we all are seeing it in our daily lives. So we get these stats. I mean, you’re getting your texts from your dentist, you’re getting them from your chiropractor, your texting into the veterinarian clinic. You’re even getting texts from your insurance agent now. Actually, when I talk to folks, friends of mine, we’re hanging out, they don’t initially think they are. And then I ask them to open the phone and look, and they’re like, “Oh my God, I really am. I just didn’t even really realize it.”

Scott Heimes: Yup. It’s just growing. It’s the fastest business communication channel in the market.

John Lauer: Absolutely.

Scott Heimes: That’s growing super-fast. So one of the things that was interesting too, is that it turns out that 88% of businesses that text their customers use a personal or a company cell phone to do it, which is surprising because there’s a lot of challenges and risks associated with using your personal phone to communicate with your customers via the text channel.

John Lauer: Yeah. I mean, look, in a way, I’m not surprised. You’ve got your iPhone sitting there in front of you, so of course you’re just going to go start using it, but it is a little bit weird. It’s like the business making you use your personal email account to conduct corporate business. And I think it’s just because people don’t know Zipwhip exists. They don’t know that there’s a better version of enterprise texting software out there. But as they’re discovering it, they adopt it.

Scott Heimes: So here’s a stat that you’ll like. We asked consumers about their most used messaging apps, and 77% of consumers said they use texting more than any other messaging tool.

John Lauer: I do love that stat. I mean, again that was this prediction we made years ago that it will be your built-in native tool you end up using the most because you know everyone else has it. And sure, I think there are use cases where you’ve got maybe more of an over-the-top tool, you’re using with a subset of friends, but broadly it’s the native tool that comes built-in on the phone you’re going to use. And that is why texting is the 100% ubiquitous medium, and it’s not going away anytime soon.

Scott Heimes: So John, on the thread of the conversation around what consumers are increasingly expecting from businesses in terms of communication, we saw an interesting trend in the report this year; that one in three consumers has tried to text a business and never received a response back, which indicates that they’re looking for a business that texts with them and they’re not on the other end.

John Lauer: Yeah. I mean, we’ve probably all experienced this. I experienced it this past weekend trying to text to a hotel to set up reservations and, of course, I got no response. And so, I am not surprised by the stat at all. In fact, I think we’re going to see that that stat will go even higher with people expecting it. I think that bodes really well for our industry and for the growth of Zipwhip, and the fact that businesses really do need texting software.

Scott Heimes: Alright, here’s another topic near and dear to your heart, chatbots, which I know you have a lot of point of view about. So 74% of consumers prefer to talk to a human over a chatbot when they need something. This is unchanged from a year ago. This is a strong trend. People have experienced with these chatbots and find it dissatisfying for a number of reasons.

John Lauer: Yeah. Look, I think chatbots still hold a lot of promise in the coming years. And so, of course, we’re going to keep looking at them. But I would tend to agree, I wasn’t surprised by that stat. I think that we’ve all tried different ones. It’s been a little bit disappointing. And then you’re trying to do the equivalent of hitting zero to get to a human like you do in the voice system, we’re sort of seeing early signs of that with the texting. Thank God Zipwhip is so focused on making sure that the human-to-human conversation is really great, plus all these APIs available to let chatbots interweave into it. I think that’s the right answer is this hybrid approach.

Scott Heimes: Yup. In fact, lots of stories in our customer base about the surprise and delight that customers experience when they receive a text from a business, they respond to it, and then it’s not actually a human that responds on the other side, right, instead of a chatbot.

John Lauer: Exactly. Again, I’m not surprised at that stat.

Scott Heimes: Okay. So as we look into the future a little bit, we asked a question around rich communication services or RCS. And the consumer awareness of RCS is actually growing. Thirty percent more people said they are somewhat or very familiar with RCS. This is just a new capability and functionality coming to the business texting world that we’re super excited about.

John Lauer: Yeah. I think especially on the Android side, I think that the media coverage on RCS has been growing, and so it’s creating awareness over there. For us, RCS is going to be part of your native app. And so I think a lot of consumers will just end up using it without realizing it. But I love that the awareness is growing. We know in the carrier community there’s a lot of momentum. We are going to be one of those first movers on RCS, too, because it makes this medium even richer for business-to-consumer communication.

Scott Heimes: Yeah. The advent of video and interactive experiences, e-commerce, publishing of maps, right? All of that is going to come with RCS inside the business texting experience.

John Lauer: Yeah. Totally. I mean, I’ve joked for years that I can’t wait until I can text order my pizza and pay for it. And RCS helps us get there even faster as an industry.

Scott Heimes: Yeah. It’s going to be exciting times. All right. So what surprised you the most about the data as you read through the report?

John Lauer: In a way, a lot of it didn’t surprise me; it’s stuff that I thought was happening, but it was really nice to have the data backing up what we were kind of feeling intuitively every day here at Zipwhip. People are still loving texting. People do want to talk to more businesses. It’s just it makes their lives easier. People don’t want to go install an app for every business that they interact with. They’d rather just text with them. And that they don’t mind it. You’re seeing signs, too, that they don’t want spam. They don’t want the messaging medium overly used for things that are low priority. They want the high-priority interactions.

Scott Heimes: One of the things that surprised me a little bit was that there was some preference for receiving marketing and promotions via text, which was something that we care passionately about here. We do have a lot of what I would consider to be marketing and promotion usage across our platform. But we want to be really smart about the purity of the channel itself, and make sure that it doesn’t get polluted with things that would be considered spam. And that’s why it’s so important for our customers to use best practices around opting in for texting and selecting ways that customers can communicate with them via this important channel. What are your thoughts about texting as a marketing medium?

John Lauer: Yeah. I do think that people have some really strong relationships with the brands and businesses out there. And in those cases, they do want the communication happening over the high-priority medium, like texting. But I think you have to always watch it. I think we have to always try and help convey these best practices because we could end up with people overly communicating.

But I would also say we’ve helped that by making sure that the consumer can opt out of any conversation inside of Zipwhip. And then you could even gather those metrics to find out, “Oh. Maybe I’m overdoing it over here.” And so I think we are striking the right balance here with the way that we built our software and with the help that we’re giving our customers.

Scott Heimes: So John, you’ve been in the texting business for a long time now, and you’ve gotten pretty good at making some predictions. So given what you’re seeing in the business texting universe and new insights from this report, what are some of your predictions and big picture takeaways for the coming year?

John Lauer: Okay. Well, broadly, I predict that this just keeps getting more and more popular as an industry. I think most businesses are not aware that business texting software exists. That’s why I think the data is showing us in this report that they’re still using their personal phone. And so I think that that gets more awareness, and thus our industry grows. I also think that there’s a compliance side of this industry. Texting is an open communication medium, and it actually has some regulatory oversight in the United States. We have the TCPA law on the books, for instance.

John Lauer: And so I think that compliance actually drives more businesses to try to separate out personal cell phone use from business texting. And even that drives our industry. I also predict that we’re going to get more functionality into our platform from third parties, which actually adds even more value to the overall ecosystem, which is more reason why businesses will benefit from this. And so likewise, you’re going to start seeing it in more and more areas of your life. Almost every phone number you see in the coming years, you will eventually be able to text into it. And that will be the norm, and it still really isn’t today.

Scott Heimes: Yeah. We still got a ways to go. What about the idea of business identity in the texting world? That has a lot of potential as the rollout of RCS happens and we start to see different ways that we can identify who the businesses are texting us.

John Lauer: Yeah. This one’s really close to my heart, actually. I find it a little bit sad that in our industry phone numbers are anonymous still. In any modern social network, there is identity attached to your social network profile. Your picture is there. Your name is there. It’s even vetted. I think this is why a lot of social networks have done really well. And yet in the social network “of texting”, you get this anonymous phone number. And it’s our job as an industry to solve this. Nobody else is going to solve it. It’s partly our responsibility at Zipwhip to help solve it. So I think you’re going to start to see a logo and a business name verified, attached to that text conversation so that you know it’s legit.

John Lauer: You don’t think, “Oh God. Was this really my bank texting me, or is this a scammer texting me?” And so we can help stamp that out through making sure business identity is way better. But it’s not just us doing it, it’s the whole ecosystem. It’s the carriers, it’s the handset manufacturers, but we are working closely with all of them to try to help solve this. And you’re going to see some progress this year.

Scott Heimes: 2020 is going to be a great year, and a lot of interesting stuff is going to evolve in the business texting world for sure.

Well, it’s been fascinating to spend some time with you today, John. Thanks very much, and we’ll talk to you soon on the Zipcast.

John Lauer: All right. Thanks, Scott. It’s been fun.

Scott Heimes: Thanks for joining us. Now if you’re like me, you enjoy nerding out on texting data and industry predictions. So go ahead and download our new 2020 State of Texting report. You can find this at zipwhip.com/SOT2020. And make sure you subscribe to the Zipcast on Apple podcasts or wherever you listen, so you get the latest episodes. And feel free to text us with topics you’d like to hear about or other feedback for the show. Just send a text to (347) 772-3529. Until next time.

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