A Conversation With Renard Skutels of Chatsmart
Want a little glimpse of the future? About halfway into this conversation, Renards Skutels describes a recent experience that his agency Chatsmart engineered for a client. The client's customers engaged live with a WhatsApp GenAI chat agent — the example Renards gives is “I have dry skin in the winter.” The chat agent sent the customer a catalog of applicable products to solve the problem, and the customer purchased — all within the WhatsApp app.
In some countries — most particularly, China/WeChat — a complete in-app transaction cycle like this is commonplace. It's pretty cutting-edge for the EU, though. While WhatsApp appears to have the user-preference edge, Meta is playing catch-up to WeChat on the supporting technologies required.
For North America, it's like a peek into a multiverse future, where the winning reality isn't set yet. Is Renard's story an example of
How Amazon will function in a few years?
How Canadians — and perhaps Americans — will use WhatsApp in the near future?
Or — wildcard — how RCS might seize the pocket as Apple and Android play cyber-detente / cold-war?
What does this have to do with email? Well...everything. Email isn't going away, but it's less and less the first-habit communication channel. Chatsmart is working on the front lines of app marketing in the EU market(s). Market dynamics and culture are different there, to be sure, but ask yourself this...do you check your messages or your email first? Which do you look at immediately, and which later?
Fun and insightful conversation with a very sharp young entrepreneur.
A Conversation With Renard Skutels of Chatsmart
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[00:00:09] Matthew Dunn: Good morning. This is Dr. Matthew Dunn, host of the Future of Email. My guest today, Reynard Skutels. Did I pronounce that correctly, Reynard?
[00:00:17] Renard Skutels: Yeah, absolutely.
[00:00:18] Matthew Dunn: First guest from Latvia. And Reynard runs, uh, Chatsmart International and helps customers, um, market effectively on WhatsApp. Fair summary?
[00:00:31] Renard Skutels: Yeah, absolutely.
[00:00:33] Matthew Dunn: Phil, uh, fill people in on the short version of your agency first. Tell me who you work with and what you do for them.
[00:00:41] Renard Skutels: Yeah, so I, I can give a little introduction of how it all started and how we came to WhatsApp marketing essentially. So, uh, we started with my partner in 2020, four years ago, exactly. And originally we didn't start it as a WhatsApp marketing agency.
[00:00:57] Renard Skutels: Cause that's something absolutely [00:01:00] rare nowadays. We started as a normal agency focusing on media buying, which was mostly Google ads, uh, Facebook. But yeah, at that time, so we were working with e commerce brands and we do still now. But we see this, we saw this, uh, customer acquisition crisis, what many experts say right nowadays, which is that media buying is, was becoming less and less effective.
[00:01:28] Renard Skutels: We were working with many clients and, uh, pretty huge clients. I'm talking about seven, eight figure brands. And, um, We were really in trouble at that time, especially after iOS 14 came in 2021. So at that time we were already playing with chatbots with different tools. Many people know, uh, many chat at that time was popular.
[00:01:49] Renard Skutels: Yeah.
[00:01:50] Matthew Dunn: Yeah.
[00:01:50] Renard Skutels: So we were already like trying different stuff for customer retention, including email marketing as well. And, um, we had a one client at that [00:02:00] time who was really struggling with, uh, high cart abandonment and we just couldn't make, couldn't break even on their ads. Uh, so one late evening we decided to try, um, a new strategy to implement WhatsApp since we saw that all of their clients are from Europe.
[00:02:18] Renard Skutels: It's a European brand and, uh, we thought this could work very well. So basically what we did is we set up the WhatsApp, uh, flows for this client, which is card abandonment, other flows as well with, uh, personalized voice messages. So we hired a voiceover actress from UK who recorded personalized voice messages for all the people.
[00:02:43] Renard Skutels: And we set up this automation on many chat at that time. And just forgot about that. And I remember right now that after two weeks, when we were checking this account, the results were like absolutely crazy. So just in [00:03:00] two weeks, we generated around 155, 000 euros, just purely from those automations for this client.
[00:03:09] Renard Skutels: And, uh, yeah, that's when we thought this is, this is the way, like we saw all those conversations going, we saw how people are actually engaging with WhatsApp, that it actually performs. And, uh, we saw the increase actually in average order value. And, uh, from that time we went all in on, uh, WhatsApp marketing and started working with, uh, many brands since then.
[00:03:33] Matthew Dunn: So let's, let's go backwards and pull your example apart a little bit, because I got to tell you, one of the working assumptions I've got for this conversation is that the probably predominantly US audience for this You may not realize the role Whatsapp plays in, in people's lives in most of the EU countries.
[00:03:55] Matthew Dunn: The shopping cart, abandoned cart, um, thing that [00:04:00] set you off down this pathway. You're saying that if I were. You know, a customer somewhere for that e commerce brand and I went and I started shopping and then I'm like, changed my mind, forgot about it or left or something like that, that I would then get a WhatsApp message with Mary Poppins telling me I left something in the cart, basically.
[00:04:21] Renard Skutels: Yeah. Voice message.
[00:04:23] Matthew Dunn: And a voice message is not a text message.
[00:04:26] Renard Skutels: Yeah, voice message on WhatsApp, which feels really personalized.
[00:04:29] Matthew Dunn: Yeah, it feels really personalized. Now, uh, quick side, side jaunt, personalization. She didn't record every name in Europe. How personalized was it?
[00:04:43] Renard Skutels: Yeah, of course she couldn't record their name.
[00:04:46] Renard Skutels: I think nowadays it's already possible with AI.
[00:04:49] Matthew Dunn: Yeah.
[00:04:49] Renard Skutels: Um, but, uh, yeah, still it feels really personalized, like seducing that. The customer. But, um, yeah, it performed really well.
[00:04:58] Matthew Dunn: Wow. Wow. [00:05:00] Was there that? I mean, we'll get into why that would be such a startling experience here in a little bit. But was first question.
[00:05:08] Matthew Dunn: Was there any any negative response to balance the, like, success of that? Did anyone say, wait a minute, you're bothering me. I didn't ask for it.
[00:05:20] Renard Skutels: Yeah, of course. There are always some, uh, exceptions to, to all the flows that we do. There is relatively small unsubscribe rate, but, uh, what we noticed for the, like, past three years after working with many clients, that unsubscribe rate is actually pretty low on WhatsApp.
[00:05:39] Renard Skutels: It's. a little bit higher than on email. It's around 1. 5, sorry, 0. 5, 0. 6 percent.
[00:05:48] Matthew Dunn: Um, in that same example, e commerce brand, did the customers who got the, you know, the flow response about the abandoned cart, would they [00:06:00] have had to have opted in for WhatsApp communication from that brand somewhere prior to the flow happening?
[00:06:09] Renard Skutels: Yeah. Uh, so they were opting, opting in through different pop ups, uh, chat widget on a website, but a card abandonment flow, it's triggered, uh, the customer should not be necessarily opted in, uh, beforehand. So once they entered their phone number and checkout, they just, uh, add the tick, uh, tick that box.
[00:06:31] Matthew Dunn: Uh,
[00:06:31] Renard Skutels: And we'll see you that they are okay with receiving promotional messages.
[00:06:34] Renard Skutels: And we'll discuss that later about the GDPR and all of those problems. Yeah. Yeah. And in two hours, the flow was triggered.
[00:06:43] Matthew Dunn: Wow. Wow. Okay. That's, uh, here's the, here's the back, here's the background to some of my reaction and you, you probably know this stuff, but it's just some, to some extent, repeating this for the audience's benefit for some interesting and fun historical reasons, US [00:07:00] Canadian market, very text centric.
[00:07:05] Matthew Dunn: And because of the, uh, schism in the market between Apple and Android on mobile, which I know is, you know, schism in other markets, that plus texting is a, is this as a sort of central, uh, habit in the U. S. Canadian markets. People aren't used to rich, interactive messages coming in a chat channel. We use pretty dumb messaging here, at least for the moment, right?
[00:07:34] Matthew Dunn: Most of the, most of the texts I get are actually ASCII text. And if they're going to be any richer than that, they're going to tend to be from friends who are using the same platform I use in my case, um, uh, iPhone and iMessage, not how things work in your neck of the woods, right?
[00:07:55] Renard Skutels: Right. But what about the Facebook messenger?
[00:07:58] Renard Skutels: In the U. S. it's quite popular. [00:08:00]
[00:08:00] Matthew Dunn: Yes. And no, it's a, it's Jen. That's a generational behavior here. Um, I'm older than you are obviously. And I, I, I'm not a big Facebook fan. Never have never run Facebook messenger in my life. We'll probably never run a Facebook messenger in my life, but, uh, my sons who are ballpark your age.
[00:08:21] Matthew Dunn: Uh, both said, yo, yeah, because I use them to keep up with the world, right? I'm like, okay, Facebook Messenger. Yeah, for some stuff, right? The band, you know, the band will communicate via Facebook Messenger. And then I've got friend group that does that. And then I've got other friends where it's a long running, uh, Apple messages, chat or text chat or something like that.
[00:08:40] Matthew Dunn: Um, in your markets with your relationships, do most things tend to happen on WhatsApp?
[00:08:49] Renard Skutels: Absolutely. In Europe, WhatsApp is, uh, the most popular channel. It depends, of course, in the region. Um, Germany dark region is the strongest, [00:09:00] the highest penetration of WhatsApp. Okay. Um, but yeah, I would say all the Europe is using WhatsApp.
[00:09:05] Renard Skutels: Yeah.
[00:09:06] Matthew Dunn: All user. And, and you said something. About in, in your description of opt in that's actually surprisingly important here, giving you a, providing a phone number gives me the identity link to WhatsApp, correct? Yeah. Yeah. Big deal, right? Because U. S. market, Facebook Messenger, as you mentioned, someone would actually have to know or either know my Facebook ID or probably be friends on Facebook.
[00:09:36] Matthew Dunn: Like I said, I've never used it. But. As opposed to that, I've already got his, I've already got his phone number, her phone number. That's all I need to connect on that channel. Surprisingly big difference.
[00:09:48] Renard Skutels: Yeah. The difference is absolutely enormous. And, uh, we also tried Facebook messenger when we were just starting.
[00:09:56] Renard Skutels: It was really complicated. So the person have to sign into [00:10:00] Facebook, then they should open the messenger, then they should confirm, like, Like multiple buttons that, that, that was really inconvenient.
[00:10:09] Matthew Dunn: Yeah. Yeah. And, and inconvenient just doesn't cut it for marketing, for notifications, for things like what you're doing.
[00:10:16] Matthew Dunn: So, fair description, the sort of ubiquity of, of WhatsApp as a, as a platform and as a habit is, is the landscape that you're really helping customers, um, use to communicate, connect, market and so on?
[00:10:34] Renard Skutels: Yeah, absolutely.
[00:10:35] Matthew Dunn: Yeah. Yeah. Wow. That's, uh. It's fascinating. It's, it's, it's fun to hear the differences. And one of the reasons I'm particularly intrigued by this, um, in the U.
[00:10:45] Matthew Dunn: S. Canadian market, at least, I'm kind of sitting watching to see just what Apple does with their relatively recently announced pending support for RCS, Rich Communication [00:11:00] System, which is the theoretical successor to texting. If Apple really, uh, really embraces what RCS could do. What we may see in the U.
[00:11:11] Matthew Dunn: S. market, U. S. Canadian market is the text habit becoming a rich messaging habit with things that are much more like the kind of rich experience that you're providing for your customers. That'll change the game a bunch. If it happens.
[00:11:30] Renard Skutels: Yeah, definitely. However, I recently was reading, uh, an absolutely, uh, different, uh, perspective that, um, yeah, I'm not doubting that, uh, Apple will, uh, add this feature, but, um, that WhatsApp is, uh, growing at, uh, quite a, quite a massive speed in the U S.
[00:11:50] Renard Skutels: Interesting.
[00:11:52] Matthew Dunn: Yeah. Yeah. I would, I wouldn't be entirely surprised, but I mean, sidebar again, for audience benefit, Facebook [00:12:00] also owns WhatsApp in addition to Facebook messenger. So it's a little, a little hard to escape the, a little hard to escape the octopus's grasp in, in that sense. And I'm, and I'm sure Facebook is watching penetration and habit numbers very carefully because they want as a company, they'd want you on one of their platforms, if not more than one.
[00:12:20] Matthew Dunn: Right. Wow.
[00:12:22] Renard Skutels: Yeah.
[00:12:23] Matthew Dunn: What's the, what's the most, so that's been three years that you've been on the, on the WhatsApp journey?
[00:12:30] Renard Skutels: Yeah, three to four years. Yeah, three
[00:12:31] Matthew Dunn: to four years. What's the, what's the most recent, most interesting thing that you've done for a customer?
[00:12:40] Renard Skutels: Well, I could, uh, I could go into the Black Friday strategies that we did, uh, in 2023.
[00:12:47] Renard Skutels: So, um, yeah, so, uh, and on Black Friday, we, uh, we're doing, uh, WhatsApp marketing for, uh, huge brand from UK and, [00:13:00] uh, from the musical industry. And, uh, the goal was to avoid the standardized, just a big stale discounts that everybody's doing and, uh, create a community. So within just a couple of weeks, we pretty quickly collected a WhatsApp subscriber base.
[00:13:20] Renard Skutels: All 30, 000 subscribers on WhatsApp. So that's, if we think about that, that's a pretty solid amount. So when you collect 30, 000 subscribers in the WhatsApp, that's, that's actually a very profitable thing. Like for email marketing, that's considered a pretty small audience. 30, 000 subscribers. Most of them may be inactive, but for WhatsApp, that's a big deal.
[00:13:47] Renard Skutels: So, uh, we engage them with a giveaway. So the whole premise of that was giveaway and, uh, people were subscribing to WhatsApp. They should confirm [00:14:00] their interest in giveaway by subscribing to the brands. What's up. And, uh, then we were teasing this audience with that giveaways coming soon, that, uh, deadline for giveaways, closing, et cetera, et cetera.
[00:14:13] Renard Skutels: And, uh, then we, once we passed this, uh, warmup phase, we went straight to Which, uh, which we announced the winners and then we started giving the gift cards to everyone else for participation as a thank you gifts. And that was a very solid strategy. So that generated a lot of, a lot of sales because once the person receives the gift card, they are kind of like obligated to, to activate that until Christmas or until the new year.
[00:14:43] Renard Skutels: Yeah. So that's a lot of sales as well.
[00:14:46] Matthew Dunn: Interesting. That the word you used community. Intriguing. Would it be fair to say that the level of attention people pay to that particular [00:15:00] channel, WhatsApp, helps make that connection stronger, more emotional, more lively, more engaged, where email wouldn't necessarily do the same thing?
[00:15:12] Renard Skutels: Yeah, WhatsApp in Europe kind of feels like community and especially when you see the brand, when you see this is an official account of brand, you see this verified green checkmark in WhatsApp, which is right now, uh, also a big thing for a lot of brands that feels, uh, that feels engaging and that feels kind of like you are being treated as a VIP customer.
[00:15:34] Matthew Dunn: Okay. Interesting. Interesting. And because it would be hard to pull off, it would be hard to generate that, that same level engagement, um, and, and, and ultimately relationship in the email channel is that's, that's my read on it. What do you think?
[00:15:52] Renard Skutels: I agree with that. Yeah. So I always, uh, I always like to say that what's up is kind of like the perfect [00:16:00] overlap between SMS and email where email is a long firm.
[00:16:04] Renard Skutels: It's usually not a two way conversation. It's, uh, not that personal in most of the cases. Whereas SMS is a little bit too aggressive. It's too short form. You it's hard to actually make great copywriting and, uh, tell the whole idea on this mess. Whereas WhatsApp is rich media. You can go, uh, with longer texts and, uh, there are buttons, there are catalogs.
[00:16:31] Renard Skutels: You can directly send products right now on WhatsApp, by the way, that's a feature that, yeah, it's up and went to just a few months ago. You can just send a link to the, with a product directly on WhatsApp to the customer. So yeah.
[00:16:44] Matthew Dunn: And, and if you send a link with a product and they say, I want to buy this widget, do they do that within WhatsApp or does it end up ultimately on a website or an e commerce transaction?
[00:16:58] Renard Skutels: That could happen both. So in [00:17:00] some regions, WhatsApp payments are already available. They are not available yet in most of the Europe. So they're available in India and Brazil, which are main markets for WhatsApp right now.
[00:17:11] Matthew Dunn: Okay.
[00:17:12] Renard Skutels: But soon WhatsApp payments will be available, I believe so.
[00:17:16] Matthew Dunn: So, so in theory, that community of 30, 000 you talked about, you know, next step after the gift card could be, you know, this is on sale or special just for this community.
[00:17:27] Matthew Dunn: And someone could say, cool, I want it. I bought it and never leave WhatsApp.
[00:17:35] Renard Skutels: Sorry, what do you mean? Okay.
[00:17:36] Matthew Dunn: Is, is it possible that the entire chain from promotion through transaction could all take place within the WhatsApp
[00:17:45] Renard Skutels: client? Yeah, that is possible. With WhatsApp catalogs of products, that is possible.
[00:17:51] Matthew Dunn: Yeah.
[00:17:51] Renard Skutels: And I think, I think I'm kind of just predicting why it's happening. So, because if we take a look at China, [00:18:00]
[00:18:00] Matthew Dunn: Yeah.
[00:18:01] Renard Skutels: Uh, the, like all the commerce is happening in WeChat.
[00:18:04] Matthew Dunn: Is WeChat. Yeah. Like
[00:18:05] Renard Skutels: all the brands that are selling in China, they know this. So WeChat is really where they order food, they, uh, do the shopping, they pay the bills.
[00:18:16] Renard Skutels: It's just, everything is centralized in one messaging app.
[00:18:19] Matthew Dunn: Yes.
[00:18:20] Renard Skutels: And I kind of feel that just my personal feeling that WhatsApp is going in that direction. And in recent conference, also Mark Zuckerberg, uh, Sabbath. Uh, WhatsApp is really going to be the next big thing, especially for commerce. So they're really focusing on that.
[00:18:37] Renard Skutels: The
[00:18:42] Matthew Dunn: closest equivalent that I can think of in the U. S. market is probably how people who are very habitual Amazon customers tend to use the Amazon app. [00:19:00] Um, I've got a close friend who said just the other day, you know, 90 plus percent of the Things that I buy. I buy through Amazon, they just show up at the door.
[00:19:12] Matthew Dunn: Like, cause there's no transaction, there's no credit card, you know, the search, the catalog, obviously vast, uh, they know his address, all that other, like all of the friction points that you could take out of the way, aside from what is it you want, are taken out of the way. And he said, I, he said, maybe I could lower the price by shopping.
[00:19:35] Matthew Dunn: I don't even bother. That's a powerful position to have. Isn't it?
[00:19:40] Renard Skutels: Right. In Europe, Amazon is not that powerful as in the US. We don't have the same day delivery and, um, many other things. But yeah, Amazon is also a massive superpower.
[00:19:52] Matthew Dunn: Massive. Yeah. Massive superpower. And just as the risk, I gotta, I gotta tell you when, when you start seeing the same day delivery [00:20:00] things show up, um, strap on, it's a, it's a, astonishing behavior changer to have the world like go like this.
[00:20:12] Matthew Dunn: And my, my son ordered a saw blade the other day on a Saturday at five o'clock and was cutting a hole with it on Sunday from Amazon. What the heck, right? That's, uh, that's, uh, that's a big difference. Um, switch gears and, and, and think big picture for a second is what's your perspective about the.
[00:20:38] Matthew Dunn: attention and privacy trade off of having a platform in the case of your market, um, WhatsApp, uh, be that knit into our lives. All good, partially good, times you wish you could turn it off. What do you think?
[00:20:56] Renard Skutels: Yeah, until, until if the person is, [00:21:00] uh, subscribing and they agree to receive promotions, then it's absolutely fine to do this.
[00:21:07] Renard Skutels: I think there's no problem with that, but yeah, GDPR is always a problem. All brands are concerned with that, but, uh, we have strict procedures, how to stay compliant with GDPR. So first of all, the person should, uh, be informed and they should agree to receive promotions, obviously. As an email and SMS, of course, but, uh, a big thing here, the big difference between email, SMS, and WhatsApp is that WhatsApp is considered as social media platform.
[00:21:39] Renard Skutels: So that gives a little bit of advantage because in your privacy policy, you can state that Meta is the one responsible for, uh, for processing this data. So that's kind of like a difference here. .
[00:21:57] Matthew Dunn: Okay, so the the Met met [00:22:00] Meta parent company. Yeah. For the privacy compliance issues, fundamentally. You're just using their, you're using their platform, but you're not a platform of your own in that scenario.
[00:22:12] Renard Skutels: Yeah.
[00:22:12] Matthew Dunn: Yeah. Whereas if you're taking subscribers on your website for your email list, then you are the responsible party. Is that right?
[00:22:23] Renard Skutels: You are fully responsible in that case.
[00:22:25] Matthew Dunn: Okay. That's a, yeah, that's a, that's a fairly important distinction. Okay. Um, You do this for a living, so it wouldn't be fair to ask about your habits, but think in terms of, uh, of friends whose habits you know reasonably well.
[00:22:38] Matthew Dunn: How many Merchant commercial relationships on WhatsApp, would you expect them to have, you know, we're talking three to five, 10 to 20, you know, 50 to 100.
[00:22:53] Renard Skutels: That's a great question because it depends on the region. In Latvia, in Eastern Europe, [00:23:00] WhatsApp commerce is not that popular yet.
[00:23:04] Matthew Dunn: Okay.
[00:23:04] Renard Skutels: In Germany, the region.
[00:23:06] Renard Skutels: I guess every, every second, every third person is receiving promotional messages if they're doing shopping. In Germany, in Dach region, it's quite popular.
[00:23:17] Matthew Dunn: Okay.
[00:23:17] Renard Skutels: In UK too, I would say.
[00:23:20] Matthew Dunn: In UK as well. Not
[00:23:20] Renard Skutels: that popular as in Germany, but, uh, yeah. In Eastern Europe, it's, uh, less promotional messages, WhatsApp.
[00:23:27] Matthew Dunn: Do you expect it to grow?
[00:23:30] Renard Skutels: I'd say so, yeah. Yeah. I'd say so.
[00:23:32] Matthew Dunn: Yeah, I mean, if, if there's a Concerted push from Meta to really sort of back WhatsApp as the next, uh, as, as the next big wave for, for their product set. That's a, that's a mighty big backer to have. Um, interesting. Um, it's going to sound like dumb questions, but it's just, I would expect a lot of the U.
[00:23:52] Matthew Dunn: S. audience for this podcast not to necessarily spend much time in WhatsApp. How. How interruptive [00:24:00] is it if I've got, if I've got, if I use WhatsApp a lot and I've said to Merchant X, Yeah, I would love to hear what's, what's on promotion or what's going on there. Is it going to be bing, bing, ping, ping all day long?
[00:24:14] Matthew Dunn: Do I have control over that? Like, what's the experience like?
[00:24:18] Renard Skutels: So WhatsApp as an app itself is interruptive. Um, but, uh, we sent usually, and we recommend all of our clients sending not more than three to four campaigns per month on regular months. Of course, there are exceptions, such as black Friday, uh, product launches, some, uh, holidays, but on regular months.
[00:24:41] Renard Skutels: sending more than three to four campaigns. And I'm talking not flows, just card abandonment or something like that, but specific salesy promotional campaigns.
[00:24:51] Matthew Dunn: Yeah.
[00:24:52] Renard Skutels: That's too aggressive if you're sending more than three to four.
[00:24:56] Matthew Dunn: Okay. Okay. Interesting. That's a, that, that, [00:25:00] that's, that's more reasonable than what I see in the, some of the merchant texting practices here.
[00:25:07] Matthew Dunn: I subscribe to a couple of, um, uh, I've, I've subscribed to a couple of merchants for sure. Send me text about stuff just as a professional experiment. And, and when it, you know, when my, Uh, when my phone or my Mac goes ding and it's a yet another sale like, Oh God, I should just cancel this because it's annoying and I wasn't planning on buying it.
[00:25:32] Matthew Dunn: And this is a segue point. They are training me to wait for the sale on a lot of those. Like there's a, there's a golf merchant who I, I get texts from. And basically I've gotten enough of them where I'm like, if I need balls or whatever, I'm just going to wait. Cause they're going to put it on sale and I'll get a text about it sooner or later.
[00:25:55] Matthew Dunn: And I, I guess it pays off for them, but it's a, it's a funny thing to incent [00:26:00] your customer to wait for the sale instead of, you know, what, when they, when they need or what they need. You think the same thing would happen?
[00:26:08] Renard Skutels: Correct me if I'm wrong, but, uh, just my personal observation and feeling is that many merchants in the US are sort of like overusing SMS text messaging.
[00:26:21] Matthew Dunn: Um, from the conversations I've had with both companies in that text messaging channel, like one of the first guests I had was from, uh, Kenneth, Kenneth Burke from, I'll come with the text request. Um, it's. It's a costly channel here, very costly channel in the UK, texting specifically. Um, people are not as willing to turn loose of their mobile number for texting as they are email address or emails.
[00:26:58] Matthew Dunn: Um, [00:27:00] but once merchants get it, if they're on board with the texting, they do, to your point, seem to just hammer it. I've unsubscribed from a bunch because I think this is where you're going. It's like, shut up. You're annoying me. Like, stop doing that. Uh, three or four a month? That, that I could take. You know, one every other day, which at least one of those merchants that I subscribe to does.
[00:27:25] Matthew Dunn: I just want to kick them. But I guess I'm, I'm doing the professional experiment to see how long I'll put up with it. Yeah, that's a lot. And it's costing them a lot to do that. a lot.
[00:27:37] Renard Skutels: So what are those rates on average?
[00:27:41] Matthew Dunn: You know, I don't know what they, I don't know what they pencil out to in bulk, but if you were, you know, if you were tiptoeing into text messaging in the US, um, you might go with Tatango or TextRequest, which are [00:28:00] platforms specifically for marketing use of text.
[00:28:03] Matthew Dunn: Um, or if you're a geek, you might roll your own with Twilio. Um, but you're looking at like a penny a message, which doesn't sound like much, but you know, you start sending out 30, 000 and getting an X percent response rate. It's an expensive hobby.
[00:28:22] Renard Skutels: Yeah. So we can talk about WhatsApp calls right now. That's, that's also an issue that, um, we are trying to minimize those calls for our brands, but WhatsApp is usually more expensive than SMS.
[00:28:41] Renard Skutels: However, SMS in Europe, I believe is way more expensive than in the U. S.
[00:28:45] Matthew Dunn: Yeah.
[00:28:46] Renard Skutels: It is.
[00:28:47] Matthew Dunn: It is.
[00:28:47] Renard Skutels: So that's why, that's why I believe WhatsApp is dominating here. That's one of the reasons.
[00:28:53] Matthew Dunn: It's because
[00:28:54] Renard Skutels: the cost
[00:28:55] Matthew Dunn: is substantially lower cost and it gets equal if not higher attention, basically. [00:29:00]
[00:29:00] Renard Skutels: Yeah.
[00:29:01] Matthew Dunn: Okay. Right.
[00:29:02] Renard Skutels: So speaking about the cost of WhatsApp, many people, many, many people, Brands, uh, that never had experience with WhatsApp, they think it's free.
[00:29:11] Renard Skutels: So WhatsApp business app is free. Of course, you can just download that and app store, but, um, it's, it's, of course, we don't use that for, uh, marketing purposes. We're not sending, uh, campaigns from WhatsApp, uh, app. So there's, um, for many, many of the audience, uh, don't know this probably, There is a free business app on WhatsApp, which is for like very small businesses.
[00:29:38] Renard Skutels: It's limited up to 250 conversations only actually per month. So that's for small restaurants for some, I don't know, some just local stores. And then there is WhatsApp business API, which is now called WhatsApp business platform. So that's for, uh, huge brands for enterprises that we are using right [00:30:00] now.
[00:30:01] Renard Skutels: And that allows you to send basically unlimited amount of WhatsApp messages. You can scale that to 100, 000 per day. You can scale that to unlimited amounts. Is the cost per message? No, per conversation. And by conversation, meta means The conversation that's happening between you and the customer in 24 hour window.
[00:30:27] Matthew Dunn: So if you and I go, if a merchant and I go back and forth and back and forth a few times, that's one conversation.
[00:30:34] Renard Skutels: Yeah. If that's, if the 24 hour window doesn't pass when there's absolutely no response, neither from you, not from customer, then this window passes. And once you send the next message or campaign, you have to pay.
[00:30:49] Matthew Dunn: So, uh, A WhatsApp message to someone who's not paying attention costs the same as a WhatsApp message to someone who's really engaged, [00:31:00] fundamentally.
[00:31:02] Renard Skutels: The rates are, uh, are the, just, uh, generalized for a country. So there is, uh, no difference if the customer is engaged or not engaged.
[00:31:13] Matthew Dunn: Yeah. Okay. Okay. So now by engaged, I mean, if, if it's by, by putting a window on it, a time window on it.
[00:31:21] Matthew Dunn: If there's additional back and forth, which you'd want, it doesn't cost you more for the additional back and forth within that window, right?
[00:31:29] Renard Skutels: Yeah.
[00:31:30] Matthew Dunn: Yeah. Uh, yeah. How interactive is the, how interactive is WhatsApp as a channel? You know, if, if I said you abandoned the cart, should I be expecting a human being on the other end if I've got questions about what I left in the cart?
[00:31:49] Renard Skutels: Do you mean the customer?
[00:31:51] Matthew Dunn: No, if I'm the customer, I left a widget in the cart. I get a WhatsApp message. Mary Poppins saying you left something in the cart. And I [00:32:00] want to say, well, hang on. Yeah, I wanted to know if you had this size or this color or something like that. How often does it, how often does that message lead to an actual back and forth live interaction with someone on the merchant side, merchant to customer?
[00:32:15] Renard Skutels: Pretty often, actually. So here we come to another point again, uh, which is, uh, uh, WhatsApp, uh, gives, uh, Problem and an opportunity at one, at one, uh, at once. So unlike email and SMS, many people actually, uh, do conversations on WhatsApp.
[00:32:33] Matthew Dunn: And
[00:32:33] Renard Skutels: I would say around 20 to 30 percent of people, they actually respond.
[00:32:37] Matthew Dunn: Wow.
[00:32:38] Renard Skutels: And they continue those conversations. So. That's also part of my job is to assign to a brand, uh, trained customer support agent who will be managing those WhatsApp messages, conversations.
[00:32:53] Matthew Dunn: Okay. And
[00:32:53] Renard Skutels: that's a really great practice. There are some brands who prefer just leaving this without customer agent.
[00:32:59] Renard Skutels: That's [00:33:00] not a great idea. You can set up this automated message, which says, Uh, in case you have any questions, please send an email to contact. Yeah. But that, that's a bad practice because people, they actually expect to continue conversation on the channel that they started.
[00:33:18] Matthew Dunn: Yeah. No, that, that, that, that, that seems fair.
[00:33:21] Matthew Dunn: Do you expect, uh, do you expect, or have you already started, uh, finding a role for AI in the front end of those conversations?
[00:33:30] Renard Skutels: Yeah, we did. We did. So, uh, we were, uh, testing a lot with, uh, GPT. We were training this for WhatsApp and implementing this for a couple of clients in summer. But, um, it actually was more expensive than we thought.
[00:33:49] Renard Skutels: So GPT is consuming a lot of tokens and, uh, that's right now more expensive actually than sustaining a customer support agent.
[00:33:59] Matthew Dunn: [00:34:00] Interesting. Yeah. When a machine customer support agent, like a lot of chat channels, customer support agent can handle more than one conversation at a time fundamentally, right?
[00:34:10] Renard Skutels: Yeah. It's, it's pretty easy to handle conversations on WhatsApp. Yeah. We've been playing with a GPT. We've been actually implementing this for a huge brand with over 1 million monthly visitors. So that was a, quite a big deal, but it was extremely costly. Like, uh, open AI tokens. They, they are just expiring so quickly when you're having tens of thousands of conversations every day.
[00:34:36] Renard Skutels: And we, the customer experience is absolutely amazing. Like for, I'm going to give you an example. For example, the, um, uh, the consumer is asking, okay, I have, um, dry skin. It's winter right now. What would you recommend to me?
[00:34:54] Matthew Dunn: Yeah.
[00:34:54] Renard Skutels: And, uh, the AI understands the question exactly. They [00:35:00] give their recommendation that we train them and sends the product from the catalog and WhatsApp.
[00:35:06] Renard Skutels: So the customer experience is absolutely out of this world.
[00:35:09] Matthew Dunn: That's cool. That's scary, but that's cool.
[00:35:13] Renard Skutels: Yeah. And, uh, when we were showing this to founders, they were absolutely, absolutely inspired by this. But in the long term, that's still more costly than, um, actually having a, even a team of customer support agents, I would say.
[00:35:30] Matthew Dunn: Wow. One second. I got to jot that down. That's, uh, That's a great glimpse into the future. It really is. And we could probably go off and speculate what that future will look like, but we get off topic really fast. Wow. Fascinating. Um, yeah. Fascinating. We, we ended up a lot of conversations about AI in, in email, you know, email groups and other professional groups that [00:36:00] I'm involved in.
[00:36:01] Matthew Dunn: But so much of it is still hand waving and to hear a concrete example where you found use and the use is valid, but the cost equation didn't pencil out, at least not now, is, is fascinating because I, I have to assume like most digital things, the cost part of the equation will drop over time. So the, the viability of that will, uh, will come back, you know, like you'll re you'll probably revive that experiment and keep it in place at some point in the future.
[00:36:33] Renard Skutels: Absolutely. The experiment was very successful. I believe the cost should definitely go down once the computing costs are just going down.
[00:36:45] Matthew Dunn: Yeah. I'll try to remember to send you a link. There's a very, very long explanation by Steven Wolfram about what a GPT, like a chat GPT. is doing, and it [00:37:00] gives you some idea why it's so cotton picking expensive for now.
[00:37:04] Matthew Dunn: Um, but, you know, uh, digital innovation tends to go at an astonishing pace. I'm with you. I think, I think the cost will come down. It's what really, what really, uh, intrigues me about the example you gave is the merry over into the rich, uh, richer aspects. of the channel. It's not just a text recommendation saying, you know, use lanolin on your dry skin.
[00:37:34] Matthew Dunn: It's here's the catalog. Go ahead and buy it if you want it like much more seamless experience, at least commercial sense, much more seamless experience all the way through potentially to the transaction. Like, Whoa, you just gave me a good idea what the Amazon app is going to look like in five years.
[00:37:58] Matthew Dunn: Wow.
[00:37:59] Renard Skutels: Yeah, [00:38:00] it'll be crazy. Yeah.
[00:38:00] Matthew Dunn: Tell me, tell me a bit, we're gonna go off, we're gonna go off the reservation for a second here. Tell me a bit about, um, tell me a bit about Latvia and, um, you mentioned the differences in the, the, in the market there to some extent, but give me, uh, your experiences in, because I think you've, you've got a base in Berlin is right as well, right?
[00:38:20] Matthew Dunn: Your company. Cause you mentioned Germany. No, we
[00:38:23] Renard Skutels: have a team, we have a remote team in Berlin, but um,
[00:38:27] Matthew Dunn: yeah, you're completely laughing.
[00:38:30] Renard Skutels: Yeah, I'm completely in Latvia, but a lot of our team members are in Berlin because a lot of our clients are in Berlin. A lot of clients there.
[00:38:38] Matthew Dunn: What are some of the differences you see in, um, the commercial landscape, in marketing, in, I don't know, WhatsApp use between, let's say, Latvia and Germany?
[00:38:51] Renard Skutels: I think the differences are major. Uh, first of all, Latvia is a very small country. There's actually one [00:39:00] million internet users. So there's really not happening a lot of commerce here. There's very few brands that we could work with. We have some clients from Latvia, but the market is very small here. In terms of WhatsApp, in terms of marketing, yeah, again, I think the size of the market, again, there's a lot of brands in Germany that are already implementing.
[00:39:27] Renard Skutels: all different sorts of, uh, strategies of WhatsApp and AI. Uh, in Latvia, there's, um, really not that many brands.
[00:39:36] Matthew Dunn: Not that many. Okay. And yet, and yet you stay.
[00:39:42] Renard Skutels: Yeah.
[00:39:42] Matthew Dunn: It's home.
[00:39:45] Renard Skutels: Yeah. I just, uh, just love Latvia. So, yeah,
[00:39:49] Matthew Dunn: that's cool. And I mean, I, I admire the, let's call it what it is, international conglomerate that you and your team have, uh, have [00:40:00] created, right?
[00:40:00] Matthew Dunn: Who says you can't figure out how to make something work in another country? You obviously have.
[00:40:06] Renard Skutels: Yeah, right now everything is, uh, remotely anyways. So I, I don't actually see the advantages of, uh, moving somewhere. Well, probably meeting clients in person. Sure. Through some events or conferences. I guess that's, that's a major advantage.
[00:40:22] Renard Skutels: Yeah. But besides that, um, I don't see any actual advantages. Probably I'm wrong.
[00:40:29] Matthew Dunn: No, I don't, I don't, I don't think you're wrong, particularly post pandemic, right? Like, thank you, right? World jumped 10 years forward and a lot of habits have changed that I'm not sure are ever going to shift back to their, to their previous position.
[00:40:46] Matthew Dunn: Um, I mean, I, I do the same thing on more, on more local sense, you know, I live in a remote part. Of the U. S. because I like it here and there's a drag factor of, I don't, I'm not [00:41:00] going to meet clients here. They're not going to be here. It's, it's more of a pain to travel to things, but tough bananas. I like it here.
[00:41:08] Matthew Dunn: Right. I'll make it work from here. And Texans almost speak the same language I do. So sometimes that works pretty well. That was a throwaway joke about Texans, by the way.
[00:41:20] Renard Skutels: Do you enjoy working remotely?
[00:41:23] Matthew Dunn: I've worked remotely for about as many years as you've been alive. So yeah, um, I do, but I had a, I had a team.
[00:41:33] Matthew Dunn: I ran a, I ran a startup in music technology of all things in 05, 06, that was fully remote. We had people in Vermont, Washington, Texas, California, multiple parts of California. And about a third of the people on that team that was productive, or sorry, about a third of them, it really didn't [00:42:00] work. There was one, one of the people on the team that thought she was going to love it and went bananas, went nuts.
[00:42:09] Matthew Dunn: within a couple of weeks, she would, she was East Coast. She would pounce on us. We used Skype as a channel back then for that company. She would pounce on people the minute they showed up, you know, online on Skype because she was really eager for social contact. We eventually rented a desk at, in an office in her town so she could go work around humans because for her, that office interaction, that live interaction, not being in her life just didn't, just didn't suit her, didn't make her happy.
[00:42:39] Matthew Dunn: Um, and I think, I think there are people for whom that's still true. You work completely remotely yourself. Or do you go physically where your team is?
[00:42:48] Renard Skutels: Yeah. Uh, previously I've been working from a co working spaces, but, uh, I actually enjoy, uh, working remotely way more.
[00:42:56] Matthew Dunn: Yeah. Okay. Interesting. Do you think generationally [00:43:00] that's going, that's going to be normal?
[00:43:06] Renard Skutels: I, I think, uh, yeah, that's definitely a massive trend, but, uh, I think it will be remote work with some occasional meetups between the members.
[00:43:18] Matthew Dunn: Yeah, the bonding relationship, familiarization, trust. To me, that's the more important part of the face to face. It's not necessarily, let's go there so we can sit at our laptops and do the same thing we would do remotely.
[00:43:34] Matthew Dunn: Break bread, uh, oyster beer, whatever it is you do with people to actually get to know them. Um, that's a big change. I mean, I'm looking at it the other side. having spent a lot of years working when that was very unusual. I had years where trying to work remotely was extremely, extremely hard.
[00:43:58] Matthew Dunn: Videoconferencing, I got to [00:44:00] tell you this, I'm curious your reaction to it, but my lens on it is that we actually lucked out massively on the timing of the COVID pandemic. If it had happened even five years earlier, the network infrastructure and application infrastructure really wasn't there. You could in theory video conference in 2015 in practice, almost no one would do it, knew how to do it.
[00:44:30] Matthew Dunn: And a video conference was painful. It was 15 minutes of tech support and 10 minutes of conversation. Seriously, it was that awful.
[00:44:39] Renard Skutels: Do you mean by Skype?
[00:44:42] Matthew Dunn: Skype had gotten decent penetration, and I was using Skype way back when, when it was a peer to peer app. Um, but no one had a camera, almost no one had a camera.
[00:44:55] Matthew Dunn: Even though I supported that relatively early on, people [00:45:00] wouldn't have it or wouldn't have it plugged in. Or like, it just wasn't, it wasn't the kind of easy thing. You and I just hopped on this Zoom conversation. You're in Latvia, I'm in the U. S. We just hopped on this Zoom conversation. as normal as meeting in the street and shaking hands, right?
[00:45:17] Renard Skutels: Right. You still want to see the person. Otherwise it's just like the same as just talking via phones.
[00:45:23] Matthew Dunn: Yeah. Yeah. Which I know nobody does anymore, but yeah. Yeah. So the, the timing where Zoom in particular as a company benefited from it, but the timing where broadband was ubiquitous enough. Smartphones were advanced enough.
[00:45:41] Matthew Dunn: Internet infrastructure in a lot of countries was advanced enough to go. I guess we should work remotely and look. We can far better than we thought if we tried that experiment five years earlier. I think it would have been considerably more painful. Um, and there's old generation of, [00:46:00] you know, your generation, much more digital native, you're like, Oh, okay, fine.
[00:46:04] Matthew Dunn: I've got to, you know, communicate or work on a device. That's fine. And I can do that. Um, that we, we, we lucked out in a funny, in a funny sense, I think.
[00:46:14] Renard Skutels: Yeah, that's an interesting take. So basically you're saying that, uh, the solutions to remote, uh, meetings, so the zoom and everything just, uh, Evolved when the demand, was there.
[00:46:28] Matthew Dunn: They had evolved, I had gone through probably four or five different video conferencing solutions. In the four or five years prior to the pandemic, trying to find the one that would cost me the least friction in working with people doing 15 minutes of helping someone figure out how to install the app, run the app, make it talk to their camera below would blow the productivity of a remote meeting, and I had [00:47:00] adopted zoom.
[00:47:01] Matthew Dunn: Maybe by coincidence. I'm an early adopter, right? I'd adopted zoom maybe a year before the pandemic. It was relatively new. It was relatively young. The guy who founded Zoom was ex, um, ex Cisco, I believe. Cisco had acquired one of the previous predominant video conferencing platforms that was not nearly as easy.
[00:47:22] Matthew Dunn: And he said, wait a minute, I think I can make this whole video conferencing thing easier, better, more performative, less lag, all of that stuff. And Zoom was, Zoom was a couple years old when the pandemic hit. It was fairly new. So, yeah, the platforms had evolved almost just in time for our need for them. So when I say we got lucky, I mean, we really kind of got lucky.
[00:47:47] Matthew Dunn: If it had happened in 2010, it'd have been a meltdown. No flipping way. So there you go. Did, uh, did the pandemic make for a boost in what people did with WhatsApp [00:48:00] specifically?
[00:48:02] Renard Skutels: Actually, what's up been there for a while right now. So before pandemics, it was also very popular. But I believe Yeah, if we should take a look at statistics, probably, but I believe that, yeah, what's up, users grew very rapidly during the pandemic.
[00:48:18] Matthew Dunn: Yeah, I wouldn't be I wouldn't would not be surprised. Um, I mean, we had to find ways to connect, communicate, arrange things, all of that stuff. And why not it, it you certainly paint a compelling picture. Of how WhatsApp as a channel, um, is likely to evolve and become even more important in people's lives.
[00:48:42] Matthew Dunn: That's really, that's really darn interesting insight.
[00:48:46] Renard Skutels: Where do you, uh Yeah. Go ahead. Yeah. What you just, uh, described about the, uh, communication apps, which is zoom and Skype and, uh, everything pretty same thing is for WhatsApp in [00:49:00] terms of commerce. So all the commerce and WhatsApp, and I'm talking about WhatsApp payments, catalogs, uh, everything evolved really during the pandemic, which is 2020, 2021.
[00:49:12] Renard Skutels: And, uh, before that, if I was doing WhatsApp marketing. There was really no, no ways to do that before pandemic, it was just too buggy. There was no real commerce happening. So yeah, it's, it's quite new.
[00:49:27] Matthew Dunn: Quite new. Yeah. I'm curious your reaction to something else, since nominally we're supposed to talk about email at least a little bit.
[00:49:35] Matthew Dunn: I don't see email going away. But the technical mechanisms required to do things like catalogs and transactions simply aren't there in, in the set of protocols that make email work, it's, it's not going to happen. [00:50:00] And I suspect as a result that even more, um, I, I suspected the other, the other channels are going to find new uses and email will sort of be.
[00:50:16] Matthew Dunn: continue to do what it's done for a decade already. What do you think?
[00:50:23] Renard Skutels: Absolutely. I'm a big fan, an advocate of email marketing, and, uh, I absolutely think that it's not going anywhere. And, uh, I know why many people are saying that, that it's going, uh, somewhere because that's, that's a great hook for marketing and many people in the chatbot space and also in my space and WhatsApp marketing, they're saying that email is that email is that they've been saying this for a while.
[00:50:52] Renard Skutels: Yeah, five or 10 years already, but, um, no, we find perfect, perfect, uh, [00:51:00] collaboration of email and what's up, so to say. So we're also partnering with email agencies. And, um, you just can't provide that much value through WhatsApp as you could through email. So they were hand in hand. I would say they're definitely meant to work together.
[00:51:21] Matthew Dunn: Okay, cool. Last, last question. We should probably wrap up. Where, uh, where do you want to, where do you want to take ChatSmart as a, as a business?
[00:51:34] Renard Skutels: I have, uh, huge plans for this. But, um, right now we're working as an agency with brands. So, I would like to evolve this further. But later I see myself, uh, transitioning into the software industry. And I know particularly that will be also in WhatsApp. I see this as a massive opportunity right now. [00:52:00] So, yeah.
[00:52:02] Matthew Dunn: Oh, that makes sense. You understand the space and you probably have a keen appreciation of what is missing in the space.
[00:52:11] Renard Skutels: Yeah.
[00:52:11] Matthew Dunn: Yeah. Cool. Well, you know, it's been a, it's been an exceptionally fun conversation. I don't, I don't know if you'd appreciate how exciting the insights you've shared are because the, the perspective, And, uh, the difference in the market you're working in, like, you're a few years ahead of us.
[00:52:36] Matthew Dunn: Honestly.
[00:52:38] Renard Skutels: Do you mean the, the Europe? Or?
[00:52:44] Matthew Dunn: I'll say this as carefully as I can. Um, for a lot of quirky historical reasons, and this tends to happen over and over, um, the U. S. is a regulation last [00:53:00] market. whether it's electricity or radio or digital platforms or whatever, we'll tend to get this sort of explosion of many solutions and they'll kind of jockey around for position.
[00:53:16] Matthew Dunn: And the winner's not always the best. They just happened to have won the fact that texting and like Apple messages and Android messages is sort of the, uh, de facto standard chat channel in the U S. It's like, it's a bit accidental, but it is like my friends, my friends and colleagues and family will do most of their stuff via texting and Apple messages, closed ecosystem, right?
[00:53:47] Matthew Dunn: So we don't, I've never had the kind of rich experience you described of getting a catalog and transacting on a digital channel, aside from the Amazon app that I mentioned. [00:54:00] Um, I do think it'll evolve in this market. But on that particular experience, because WhatsApp is a channel in Europe or WeChat, which you mentioned in China, gut traction became a habit for those markets earlier, differently.
[00:54:17] Matthew Dunn: The experience is ahead, which is
[00:54:21] Renard Skutels: cool. I would say the experience is ahead in China. Yeah. Specifically, not in Europe yet. Europe, uh, is, uh, hasn't yet adopted WhatsApp, uh, in its full capacity. Okay. Not even close to that. Okay. It's still relatively new. Mm Okay. China is definitely ahead of us all in terms of customer experience, I believe.
[00:54:38] Matthew Dunn: Well, it helps when you have someone telling you that's what you have to use. Like, you can get ahead when that happens, right? Well, yeah. That's awesome. You know what? Yeah. I don't know how I'll make it happen, but getting a guest on this and having a conversation, guest from China and having a conversation about WeChat would be pretty darned interesting.
[00:54:58] Matthew Dunn: I don't know how to get there, [00:55:00] but wouldn't that be a gas?
[00:55:03] Renard Skutels: That would be really interesting.
[00:55:05] Matthew Dunn: That's cool. Well, thank you so much for making the time to connect. What time is it where you are, by the way?
[00:55:12] Renard Skutels: For me, it's, uh, 9 p. m. right now. It's 9 p. m.
[00:55:16] Matthew Dunn: You sat up late to talk with me. I appreciate it. Um, where does someone find you if they listen to this and says, say, oh, we really need to talk to chat smart.
[00:55:25] Matthew Dunn: Where's the best place for them to reach you?
[00:55:28] Renard Skutels: Yeah, I'm available on LinkedIn, but, um, they can reach me on Chatsmart. org.
[00:55:34] Matthew Dunn: Chatsmart. org. So that's my website. Reynard Skucho, thank you so much for making the time.
[00:55:39] Renard Skutels: Thank you for having me.
[00:55:41] Matthew Dunn: We're out.
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