Making a complaint no longer requires sending a letter: consumers are now turning to social media to vent their frustrations. Jason Hesse explores how Conversocial is helping brands to manage the flow.
Social media is growing as a customer service channel. Many customers now tweet and post comments on Facebook when they want to complain about a brand.
Yet customer service departments are slow to react, fearful of stoking the fires of social media mob mentality. Research shows that 58 per cent of people on Twitter who tweet about a bad experience never receive a response from the offending company.
While 55 per cent of consumers expect a response the same day to an online complaint, only 29 per cent receive one.
Conversocial helps companies to tackle customer service over social networks. Its software is a real-time social media management system that allows customer service representatives to manage and respond to comments from customers via Facebook and Twitter.
There are many social media management tools in the market – such as CoTweet, Hootsuite or Tweetdeck – but most are focused on marketing or general management, says Conversocial co-founder and chief executive Joshua March: ”We are the only service that is 100 per cent customer service-focused. Established customer service software vendors don’t understand social, and social media management tools do not approach customer service in the right way.”
Just 10 to 20 per cent of Facebook and Twitter “chatter” between consumers and businesses is a customer service issue, which Conversocial’s software helps brands to pick out. The company uses natural language processing, automatic keyword searches and it analyses previous interaction with the user to automatically identify whether a comment might be a customer service issue.
“Most comments are general chat, so raising a ticket for each Facebook comment is complete overkill,” explains March. “It’s also a waste of time for a customer service team to spend hours each day fishing complaints. Our workflow allows them to process matters more quickly by prioritising and filtering out the comments related to customer service.”
While the social customer service market is still in its infancy, social customer relationship management is growing fast. Facebook recently launched a new feature for business pages that allows users to send long-form private messages to brands. Forty-seven per cent of consumers would like to see brands use social media for customer service.
“Big retail brands are starting to pay attention to this,” says March. “And that’s our bet. Social will become one of the biggest customer service channels.”
Conversocial was founded by Joshua March and Dan Lester, who are the company’s chief executive officer and chief operating officer, respectively.
This is not March and Lester’s first business. Their first venture was iPlatform, one of Britain’s first Facebook application development agencies, founded in 2008. Conversocial was originally created as a product within iPlatform, but the pair decided to spin it out and run it as a separate business in 2009.
Prior to iPlatform, March had set up two other businesses, including the Facebook Developer Garage London, which runs monthly events for London-based developers, and an e-commerce business he launched while studying for a law degree.
Lester has a background in financial software. He worked in the City for five years before spending the summer of 2007 in San Francisco building Facebook apps.
Conversocial employs 15 people, split between commercial and development roles, but the company is looking to hire five more staff to focus on sales and account management.
Conversocial’s core is built in Python and Django, while its database system is a mix of MySQL and MongoDB. “We changed to MongoDB five months ago as it is more suitable for us than MySQL. It allows us to scale more easily,” explains March. “It allows us to store larger amounts of data that customers can access from different locations and different accounts.”
The company has always taken an open source approach to development, and regularly releases code to others.
Conversocial uses Amazon Web Services for its servers, which are based on the east coast of the US. This gives the software a quicker response when plugging into Facebook and Twitter’s servers, says March. An additional benefit is that AWS is under the EU’s safe-harbour agreement, so there are no data privacy issues for companies to worry about.
One of Conversocial’s biggest technology challenges is dealing with Facebook and Twitter’s “complex, challenging and often unreliable” systems: “When there are issues on their end, it has immediate repercussions on our system. Customers usually don’t know if it’s a problem with Facebook or Twitter. As far as they’re concerned, it’s Conversocial that isn’t working,” explains March.
The company has had to build a system to try and make up for the social networks’ API failures. “Reliability is super important, so we need to respond to problems quickly. Social networks change their APIs on an almost-weekly basis, and it’s our job to keep on top of those changes and update our software accordingly.”
Planned features include a real-time dashboard focused on customer service metrics, which can integrate with other CRM systems to provide a single view of the customer. “We are widening the platform to provide a hard-core customer service functionality. As our product becomes a serious part of customer service, we want to scale it to offer the best possible service to brands.”
Conversocial processes a large volume of content on behalf of its customers. Each week, the company’s databases process more than four million comments from Facebook and Twitter, and since the end of 2011, the number of Facebook and Twitter accounts managed by Conversocial has doubled to 8,000.
The company has more than 100 paying customers on its books, including household brands such as Tesco, Groupon, Net-a-Porter, ITV, B&Q, River Island and Odeon.
Quarterly revenue has increased by almost 50 per cent since Q4 2011, and March says he expects revenue to double again by June and double again by the end of 2012.
This strong growth is coming from three sources, he explains. First, Conversocial is signing up more new customers; second, current customers are increasing their number of fans and are spending more money on marketing; finally, more people are using social media to engage with customer service generally.
Conversocial sells a “seat-based” license to its customers, based on how many customer service representatives use the software. “As the volume of comments on social media increases, brands need to add more seats to deal with customer service queries. The more people they have on the social customer service team, the more value they get out of it,” says March.
The company’s main challenge has been to educate the market about the importance of social customer service. “We’re starting to see a shift. Companies are waking up to the problem. Last year, we worked with the early adopters, but now a much wider range of brands are building their customer service proposition around social networks.”
As a result, March is looking to double his sales team this quarter. “We need to get out and see as many brands as possible,” he explains.
The company is not yet profitable. Conversocial raised $2.4 million in a Series A round led by DFJ Esprit last summer, in order to increase the rate of growth. He expects to raise a Series B round before the end of 2012.
A lot of the firm’s future growth depends on how it fares in the US, which is March’s current priority. The company has already signed up its first large retail customer there (he won’t disclose who), and is close to signing other large deals.
“We’re getting a beachhead in retail. Getting the first few customers is the most difficult part. The more you get in the market, the more aggressive you can be,” he explains.
While some of Conversocial’s staff already work on US hours for sales and support, a big milestone for the company will be establishing an office in the US. This is planned for the third quarter and will enable the company to “grab as much market share as possible”.