Rich Rao of Meta – Messaging Growing Even More Important to SMBs for Building Relationships With Customers

There’s a lot of announcements coming out this week with it being National Small Business Week.  A number of them came from Meta, including things like:

Native Ad Creation: Businesses can now leverage native ad creation in WhatsApp Business App and no longer need to switch apps to complete them
Quote Request on Instagram: People can now request a quote from select businesses on Instagram, following a questionnaire that appears before starting a conversation.
Marketing Messages in MBS: Meta is testing a new capability that will allow businesses to send promotional message campaigns via Messenger to customers who opt-in
Unified Inbox Coming to WhatsApp: Meta is also testing the integration of WhatsApp to Inbox in Meta Business Suite, with the goal of making it easier for businesses to save time by managing their conversations with customers across Meta apps in one place and allowing multiple people at the business to manage messages from the same WhatsApp number on multiple devices

To get some additional insight into some of these announcements, I had a LinkedIn Live conversation earlier this week with Rich Rao, Vice President of Small Business for Meta.  Below is an edited transcript of a portion of our conversation.  Click on the embedded SoundCloud player to hear the full conversation.

Optimism despite challenging environment

Brent Leary: We haven’t talked in a year and a half. What’s been the thing that you’ve heard from your small business customers? The challenges that have been on their mind mostly over the last year and a half or so.

Rich Rao: Well, thanks for the opportunity to come on and chat. When we spoke December 2020, we were going through the pandemic. And in some ways there are still challenges that are different. We’re out of this acute phase of the pandemic but even as recently as January, the last time we ran our small business report, we saw that businesses were getting hit pretty hard.  But throughout the whole thing, I would say the most consistent part of the pandemic was that small businesses were optimistic. They’re optimistic about their ability to move forward, to maintain their customers, to grow their customers. And so that’s been just an amazing source of energy for us.

Here at Meta, we’ve been focused on trying to help small businesses with the tools we have and just make it easier for them to connect with their customers and for them to grow. Obviously, there’s economic challenges. More broadly, there’s been supply chain challenges brought on by the pandemic. There’s general employment, businesses trying to find people to work.  Inflation. But we are seeing digital technology is part of the way that businesses get more efficient and how they can realize more economics of scale. And we’ve been right at the forefront of helping small businesses through this whole two year period, I’d say.

NSBW announcements

Brent Leary: What does National Small Business Week mean to you? Because I know you’re a big, small business guy, but also what does it also mean to a Meta?

Rich Rao: This is the big week for small business.  So many things happening across the nation for Meta. We’ve got new programs that we’re launching, which includes trainings. And we’re excited to announce new products that we think can be transformational for how businesses connect with consumers.

Brent Leary: What are some of the things that you guys are rolling out?

Rich Rao: This is all focused on business messaging and lead generation. And just to give context around it, once upon a time the hallmark of a small business was about a friendly smile, walking into a store, a handshake, a relationship. And then with the pandemic, all of this started to shift online and we saw three quarters of SMBs adopting digital first business models. And so business messaging has been a top tool for bringing this hallmark of relationship-based sales online.

Now we’ve reached this critical point of scale. We have more than a billion users connecting with a business account across our messaging services every week. So this phenomenon has already happened and it’s continuing to grow. Businesses can use free tools, they can have a message… Send a message to me on my page or on my Instagram profile or WhatsApp. There’s also click to messaging ads and we’re extending a whole new set of capabilities so that businesses can do even more of it.

Brent Leary: It’s kind of hard to replicate the face to face, nice smile, the handshake, but it had to happen. When you couldn’t do those things, pretty much overnight, it caused businesses to have to figure out how do we replicate that? And so I’m guessing this is kind of the impetus for some of the things that we’re talking about here today.

Messaging more important than ever

Rich Rao: I think that’s exactly right, Brent. One of my key learnings is that what happened during the pandemic is it reinforced this notion that it’s about the relationship and connection between a business and a person, a real person at a small business and a real person who is buying a product, a service. And messaging has been the electronic, the digital mechanism for doing that. A website hasn’t done that, email hasn’t done that, but messaging has. So we’re extending it. I’m really excited about the potential for this to drive real business results.

I’ll give you an example of one of the things that we’re launching. Imagine you and I are connected, you’re the business and I’m a consumer.  We are in a messaging conversation and perhaps I had bought something from you. We’re launching the capability for you to run a promotional campaign to me within the message thread. You can customize a whole campaign. You can select not just me, but a set of audiences who may be interested in what you have to offer. For example, a summer sale. It can come with a specific discount, a call to action, your creative content, you can upload an image. So you’re able to market yourself to a customer that you already have with this new capability. We’re excited about it, and so far the early testing has proven to be very positive.

I’ll give you an example of a business who was in our testing group. Her name is Stacy, and she runs a tattoo and piercing shop in Knoxville, Tennessee; So shout out to Knoxville. Her quote here shows you just how much better this is than other mechanisms. She says, “A lot of email blast through my current booking app are just dead ends. With Facebook, these are people who are already connected with and we’re talking to, and people can see it and we’ll see it and open it. It’s a live interaction versus just sitting and hoping.” We’re seeing a lot of really good feedback like that. And there’s a ton of stuff to come in this area. That’s one example of many capabilities we’re launching this week.

Growing importance of WhatsApp

Brent Leary: I just recently had a conversation with the CEO and founder of a company called FreshWorks. And one of the things that he said is, if you want to do business in India and Asia, you have to do everything through WhatsApp. Somebody orders something, you send them the order confirmation in WhatsApp. If they have a customer service need, it’s done via chat via WhatsApp. Marketing, you market through WhatsApp. Are you seeing that as well? And are you seeing WhatsApp also becoming pretty important to small businesses here in the states?

Rich Rao: Yes and yes. And that’s a really great example… Messaging has become this place where so many things are being done, as you mentioned. Customer support, sending the order confirmation, inquiry, sales, and shopping as well and promotions, and then eventually more and more shopping and commerce. And WhatsApp has been a key channel. You mentioned it in particular for depending upon the market, international markets in particular, WhatsApp is the defacto standard and the platform for business to consumer conversation and for commerce.

And so one of the things I’m excited about is that question you mentioned around our businesses in the US also getting interest on WhatsApp. The answer is yes. You can sell your products cross border and anywhere. And we’ve seen an emerging cross border business pattern happen. One of the things we’re additionally announcing is the ability to then message with anyone via the platform that they choose from within a unified inbox. You can see all the different messages you’ve gotten from Facebook Messenger, from Instagram Direct and from WhatsApp, and then you can respond, and the response will show up in the consumer’s product that they’re using. So that we think is going to be huge.

Evolution of Lead Generation

Brent Leary: Small businesses, they’re always challenged with trying to find more good customers. And I know they have websites still. They have lead forms, they’re doing social campaigns, but how has the need to do all those things differently, driven some of the announcements today and how do some of the announcements today address that need?

Rich Rao: I think all of the promotional campaign pieces that I talked about within Messenger is something that will help you grow. Once you’ve got that connection, you can do more sales. That changes the lifetime value of a customer, if you can re-market it to me and I’m buying more. That then allows you to do more customer acquisition because the revenue from that customer’s higher. We’re seeing businesses accelerate what they’re doing on their existing click to message ads because of that.

But there’s an additional piece here, you used the term, “lead generation.” Now most people, when you think about lead generation, you might think of a very traditional type of business, but really what’s happening is digital-first companies are using lead generation tools online. And we’re announcing a new capability that provides a whole host of functionality to bring lead generation to life with some capabilities. For example, the ability to create a custom lead form. So if you’re a salon, you can ask questions that are specific to the service you may provide around the type of haircut you’re looking for, if you want to get color, whatever it is. If you’re a professional services company and you’re trying to identify new clients, you can do that as well. I’ll give you an example of it. His name is Anand. He’s the owner of a company called Cake Mail and he trains home or professional bakers. It’s sort of a niche category, and customers oftentimes want to know exactly how it works, so they want to have a conversation.

And so lead ads, it’s a perfect strategy for non-defined clients because he can ask questions. He can provide content that helps nurture people along the way. He can then take all those leads because he can integrate it with his CRM system and then he can work with those really quickly and efficiently. We’re excited about new lead generation capabilities and we’ve seen good examples like with Anand and other companies even here in the States, even consumer companies, one called Beau and Belle, and they sell reusable baby swim diapers. And you would say, “Well how big is the market for…?” Well, they ran a campaign and they saw 692 leads from moms and grandparents and just eco-conscious parents who were interested, who wanted to know more about it, right. When you hear that, it kind of begs the question, tell me a little bit more about it.

So we’re excited about the lead generation capabilities that we’re building and launching and coming soon.

Integrating with CRM

Brent Leary: There’s a lot of good reasons for small businesses to use CRM. And the more they use it, the more data they create around deals and contacts and accounts and all that. But there’s still there’s a lot of great information and insights from all the interactions that are growing when they communicate with customers and prospects on Meta’s platforms.

How is Meta helping the small business customers that are using CRM to make the most of it while also using the Meta platform?

Rich Rao: I think CRM has been one of the hallmarks of more sophisticated businesses generally and I think what’s happened over the last few years has been CRM has become not just a tool for larger businesses, but for smaller businesses. They may not call it CRM. They may not think of it in the same way, but what it allows a small business to do is make the most of all of their customers and prospects.  And if you look at our marketing on the Meta platforms,  it integrates with key companies so that businesses can get the benefits of CRM. We are also, by the way, integrating so the lead generation capabilities I mentioned will integrate with CRMs as well.  So customers will be able to generate those leads which will be integrated with their CRM system and get the benefit of it.

The Privacy Challenge to Online Marketing

Brent Leary: Small businesses are being challenged by the privacy changes beginning to take place that are impacting their online marketing activities.  How is Meta looking to help them with these challenges?

Rich Rao: There have been significant changes to the ad’s advertising ecosystem over the last year, year and a half since we last talked, Brent. And for sure it is presenting real challenges for small businesses, particularly for those who benefit from personalized advertising that we talked about with business messaging, how the values in that personal connection – where consumers want to have that connection with businesses. And they’re opting in and in the same way personalized ads allow businesses to connect and find those new customers, again in a way that consumers really want and are seeking as well.

So there’s been some challenges presented. We are working on solutions. We’ve worked on solutions over the last year and a half, in a lot of ways preparing for this change. We’ve got a couple of things I’ll highlight. Number one is that the challenges have created a loss of what we would call is advertising signal. It’s hard to tell when conversions happen.  So we produced a new capability called the conversion API which allows with consumer consent the ability to connect those conversions. You can see when I run a campaign that it results in the actual conversion. And that integrates with some of the key e-commerce platforms; Shopify is one example. But if you run your own platform, you have the ability to integrate our conversion API directly as well.

That’s helped a number of businesses. We’ve seen really good results. We’ve seen some businesses do extremely well and then actually accelerate what they’re doing on our platforms. But people working through it were very much in the learning phase right now but we’re excited to really help businesses with this. The other piece that is launching soon is an updated version of our measurements capability.

Even if you have that connection, you have to have the ability to measure what happens. We’ve actually done a number of launches in Q4 of of 2021 but we’ve got some new capabilities coming this summer and I’m really excited about that. So those are two ways that we’re helping businesses through this challenging period of the advertiser ecosystem changes.

But in addition, I’ll go back to what we talked about for the majority of the time here, which is business messaging. Business messaging is resilient to those advertiser ecosystem changes, which is part of the reason why we think so many businesses have seen a new way to connect, to find new customers, to connect with them and now all these additional use cases are emerging off of it.  So business messaging will be a huge platform for the future as we continue to help advertisers with the existing signal and measurement solutions that they’ve been accustomed to using.


One-on-one interviews

This article, “Rich Rao of Meta – Messaging Growing Even More Important to SMBs for Building Relationships With Customers” was first published on Small Business Trends