Bonus: 26% of Brands Reply in Real Time: The Conversational SMS Playbook That Wins More Orders

0:00There's no reason not to be leaning into what's possible with SMS. There's this huge gap between what brands think's happening and what consumers are seeing. 25 %-ish of people who give up their phone number end up converting in the first 30 days. If you're trying to really maximize the opportunity, it's impossible not to think about the other 75 % of people who gave you their number, double opted in, and didn't buy anything in the first 30 days. The fact that people aren't using this direct channel to develop those relationships with their customers, which is like theoretically the whole entire reason we even have direct-to-consumer brands in the first place, it just like blows my mind.

0:40You already paid Meta for the traffic. Why not try to ask the question to drive the conversion?

0:53Mike Manheimer:Welcome to the D2C podcast. I'm back with Postscript's Michael Mannheimer. We co-authored a report with Postscript recently. You can find it, I believe, on our website. It's called The Conversational Report, a Consumer and Brand Survey on Texting Back. What a simple idea, texting back. What is going on in the world of SMS and why are more brands not texting people back? Yeah, it's a good question. It's sometimes in business, it's like the simple things are the things that we forget. Texting is a two-way channel by nature. This isn't a no reply at email address here. Like, you know, people can text back.

1:27And when you engage in the channel, you're kind of setting that expectation. But a shockingly large number of folks just do not engage with the channel that way. And I think that, you know, they're not only letting their customers down, but they're also missing out on amazing consumer insights and also lots of incremental revenue. Yeah.

1:47Mike Manheimer:So we surveyed, this was a cool report because we looked at it from both the brand side and the shopper side. You guys handled a bit of the shopper side. We surveyed over$840 million plus D2C brands. What was maybe one of the more alarming stats from your perspective? The stat that jumped out to me from the results was less than 40 % of brands thought that not answering questions resulted in people abandoning their purchasing decisions. So like among all of the things that could happen, they were like, yeah, answering questions is not that big of a deal. Like, you know, that maybe that's not driving abandonment.

2:26But like 85 % of consumers said, oh, yeah, I've abandoned a purchasing decision because I couldn't find the information that I needed dozens of times. And so there's this huge gap between what brands think is happening and what consumers really are seeing. And that gap is where tons and tons of lost sales are happening. And I think that there's tons of reasons for it, which I'm sure that we'll get into. But I think anywhere you see this gap between consumer expectations and what brands assume the answer is, in that gap, there's just tons of missed revenue.

3:04Mike Manheimer:It's kind of interesting because SMS is like – we've talked about it before on the last time we heard it. It's like the most intimate communication channel. You know, when you're texting someone, you're in a conversation, there's so much anticipation around those three dots coming up or whether it's been read. But it's like as soon as it goes to the commercial side of things, it's like all of those expectations are kind of abandoned in a way. I think it was only 26 % of brands respond to replies in real time, which is, again, like you say, a huge opportunity. It's because most people think of responding to their customers in support terms, in reactive terms.

3:39It's like a cost of doing business, but there's no revenue there and it's overhead. And so, yeah, bad customer interaction on the support side could make your brand look bad. But a good customer interaction on the support side, it doesn't usually drive incremental revenue or additional purchases or anything. And that's usually the surface area where people communicate with their customers. And I think there's bringing that mentality to it. But if you think about what's happening when most people are texting is they go to your site, they get hit with a pop-up to give up their email and SMS for an introductory offer.

4:16They haven't bought yet. And so the questions that they're asking are not reactive support decisions. They're purchasing questions. And so if you think about them, if you reframe it and say this is a sales opportunity rather than a support opportunity, I think brands would totally address the channel completely differently. But they're just bringing all that support baggage to this part of the conversation. And that, I think, causes them to misdiagnose what's really happening when someone who landed on your site yesterday and gave up their SMS number, when they text in, what are they really asking?

4:52They're not saying, hey, where's my order? They're saying, why should I buy this thing versus the 10 other things I'm comparing your product to on the side that you can't see? And that's your chance. That's your chance. but most brands are missing it.

5:05Mike Manheimer:Why? Why do you think most brands, it's funny, in our business, we've sort of, everyone on the executive team has read unreasonable hospitality. We talk a lot about what we can do as a brand to make, whether you're our advertiser or our reader, to make it as seamless, like over and above kind of experience as possible. What we're talking about isn't unreasonable at all. This is just reasonable, you know, communication. So what do you think, why do you think brands have trouble with real-time communication on SMS? Again, I think that they don't have people to handle these conversations. So what typically happens is when they do care enough to respond, they will simply set up like a forwarding from their SMS provider to Gorgeous or Zendesk or RichPanel or whatever customer service tool that they're using.

5:54Those replies then go in as tickets to their support team who's probably already overloaded and who is not measured on driving incremental sales or handling sales conversations. They're measured on like ticket resolution. And so the one thing that I will empathize with brands about is like, if you don't have anybody to text back, if you have a list of size, you can generate a lot of responses if you're not careful, right? Some people are like, hey, they'll ask a question simply at the end of the text. And they might get a few thousand responses. And if you get a few thousand responses and you just send them in as tickets to your support team without giving them a heads up, they're mad.

6:34They're like, what are these? These are just clogging up my day-to-day job. I didn't ask for this. They probably just go bulk resolve them. if they don't go to the support team and they just land in postscript or whatever sms tool of choice and you know you get the flashing red notification you're the retention marketer the cmo and you're seeing thousands of replies you're like oh my god what did i just do i don't have time to respond to maintain thousands of text conversations at once and so i think the fact that we used to need humans to resolve these conversations or manage them appropriately made it so it was kind of like too high of a bar like most brands would just be like i'd rather like stick my head in the ground and have blinders on that there's these conversations that could be happening because I just don't have the resources to support them.

7:17I think that came up in some of the reports. Yeah, they said the biggest barrier to real-time replies is staffing. 60 % said staffing was the big issue. So that makes total sense actually. It's like D2C companies are not – they don't have thousands of people on staff here. Now, AI obviously totally changes that paradigm and I think makes the bar for responding well and in less than a minute, like table stakes, if you're using a top tier software platform. And that takes that whole entire objection off the table. Now there's really no reason for you not to be responding to these things and driving incremental revenue as a result.

7:58Mike Manheimer:Talk to me about just how it works. Talk to me on post. Is it just simply ChatGPT answering basic questions with a sales bent? How has Postscript built this to alleviate these concerns, essentially? Yeah. So I'm proud to say that what we have is not just an LLM wrapper that answers basic questions. We've actually been on this journey for a long time. Many years ago, we had this insight. SMS is a high converting channel. You know, there was like 25 % ish of people who give up their phone number end up converting in the first 30 days to a purchase. And that's why people continue to invest in SMS.

8:41It's high ROI and it's high converting. It breaks the noise. That's all good. But if you're trying to really maximize the opportunity, it's impossible not to think about the other 75 % of people who gave you their number, double opted in and didn't buy anything in the first 30 days. And so a few years ago, we set out to figure out what that was. And we built this thing called the e-commerce sales center in Phoenix, Arizona. We hired like 20 sales representatives to start texting back just to understand what was happening. And you can imagine what we found was very similar to what would happen if you walked into a retail store that you've never been in before.

9:21You're looking around and someone comes up to you and goes, like, can I help you shop today? Like, what are you looking for? The range of questions that would happen in that environment, those are happening digitally too, right? Like people are shopping. They're shopping digitally. So they're like, you know, where's the stuff that's my size? Is there anything on sale? Is this product useful for this thing versus this thing? What would work best for me? all the stuff that you're trying to answer with your PDP, right? It's just one page, so you can't do everything on the PDP. There's naturally questions that come up.

9:50People are asking those. So we developed that as a service, and we learned an unbelievable amount from texting back. We had literally hundreds of thousands of conversations, drove hundreds of millions of dollars in incremental revenue that way. So when AI started becoming commercially viable, we took all those learnings, and we built them into our software product. Yes, does it use LLM logic? Of course it does. But we've built a huge range of probabilistic models in addition to all of the sales playbooks that we developed over the last few years with the e-commerce sales center. And that culminates in a PostScript product that's called the Brand Center, where you can fine-tune your product portfolio.

10:31You can ingest all the Metafield data from Shopify. You can upload any voice and tone documents. We can read PDFs. We read all the PDPs. It basically gets us to develop like basically an LLM for your brand that understands not only what your products do, but also how your brand wants to show up. Once the brand center is fully developed, then we have a product called Shopper, which is our conversational sales agent that responds. And so anytime someone texts in, Shopper responds immediately. We do that in less than a minute. The conversations that we have are meant to be helpful. They're meant to educate consumers, but they're also meant to sell.

11:10And so selling and reactive support are completely different things, which is why sometimes if you turn on what people have gone on to these other chatbots, for example, they don't send links back. They're not trying to drive to a purchase. They're not trying to help someone make a decision. They're not navigating through the site. And so they don't drive any incremental revenue. And when they don't drive incremental revenue, they just turn out to be toys at best. And so we've really focused on how can we use conversational AI using everything that we've learned plus what the LLMs are capable of to drive incremental revenue for our brands.

11:45That's what Shopper plus Brand Center does for PostScript customers.

11:49Mike Manheimer:Back to the report, 65.7 people expected a response within one hour. That's an interesting one to me. Only 15.5 expected a reply in under one minute, which is kind of crazy to me. If I'm getting a text, like we say, it's the most immediate kind of communication channel you have. So, again, if only 15, 16 percent of people are expecting a reply in under one minute, what an opportunity you have to wow someone or to surprise them or delight them if you're responding more or less in real time. The bar is on the floor. And so for most brands, like you can show up in a way that will blow people's minds.

12:24Like one of the things we learned from the ESC when we were texting back manually, Dr. Squatch was one of the brands on PostScript that was using that service in the early days and they were exploring. And like they would develop these really interesting sort of like parasocial relationships with some of their customers once they figured out like, oh, you'll text back. This is really interesting. There was one guy who was an avid Dr. Squatch fan. He bought, you know, I think he was a subscriber and he bought all their drops. This guy was probably buying, spending 80 bucks on soap every single month.

12:56Like he was just a constant. Very clean. Very clean guy. But he started having these conversations with the folks on the other end. He would send a daily picture of his dog to the ESC. Like being like, hey guys, here's a picture of, I forget the dog's name. It's escaping me now. But there was a picture of the dog in the ESC because this guy was just like, it's me on the walk with the dog. Check him out. And it's like that person, you know, I'm not saying that everyone should be trying to solicit pictures of their customers' dogs. But when you think about the bar that you jump over and the relationship that you create with somebody when you're living in their most intimate, most responsive app, right?

13:36Their messaging app. That's where their family relationships and their friend relationships live. If you earn the right to be there and you respond regularly and you develop that type of relationship with the customer, the LTV on that particular person is like insane off the charts, right? And that's worth it. Like if you're in direct-to-consumer, theoretically, the reason why we do direct-to-consumer instead of the old business models is because you can use the direct relationship with the customer as a weapon to win in your category. So the fact that people aren't using this direct channel to develop those relationships with their customers, which is like theoretically the whole entire reason we even have direct-to-consumer brands in the first place, it just like blows my mind.

14:20And so we're trying to make it dead simple for people to use it because the revenue plus the insights that you get are just like unbelievable. You can't get them anywhere else. They do not exist on any other channel. So it's such a huge opportunity.

14:36Mike Manheimer:Yeah, you communicate different on text with your friends and family than you would communicate everywhere. You have higher expectations. What I'm wondering is, does it change the communication strategy a little bit? Like when you're operating from this two-way model or the third moment model, which we can get into a little bit, does it change the way you send that first text? like because most texts get sent out in this like broadcast sort of methodology where people some people might expect to be able to respond to that but a lot of people just be like okay this is a broadcast text from sms are there approaches that brands can take where that first text is more personable and invites a response essentially a hundred percent it's so funny i talk to people all the time and i'm you know i'm i'm in this all day long so i'm i'm i'm like oh yeah here's all the cool strategies you could do.

15:23And they're like, pause. I don't even believe you that people want to text my brand. So let's start from that. And I'm like, well, of course they don't. They don't think they can. Have you ever asked them a question? And they're like, no, like, why would I do that? But like, literally, if you just change, let's say you're welcome serious, right? It says, hey, thanks for joining the VIP club. Get your 20 % off code here. Shop your favorite styles link, right? If you simply just after the link say, are there any questions I can help you with? Question mark. That's it. If you just do that, you will get hundreds and hundreds of responses just by doing that.

16:07And when you think about like what's happening in the consumer world right now with AI, every single person is being trained to expect that when they type a message into a text box, they're going to get an instant and very good response back. Everyone is learning that is the behavior of a text box on the internet and it's completely changing. So yeah, only, you know, I forget what the stat was, uh, uh, 7%, uh, or, or only 24 % are responding under two minutes. That's like meeting consumer expectations. I think consumer expectations by like this time next year are going to be like, why did I have to wait 60 seconds for a response here right now?

16:45Now it's an opportunity, but I think a year from now, brands who don't invest in this are going to look like archaic from a consumer expectation point of view. And so, yeah, there's arbitrage here. You can be one of the ones that stands out massively for 2026, maybe a little bit of 2027. But do I expect as AI becomes a normal part of consumer life that these opportunities are just going to become baseline table stick expectations? expectations, 100 % they will. And so I am encouraging people to lean in now because if you don't, if you're like, yeah, that's a 2027 thing, you're going to be late to what consumers are expecting to happen when they text you.

17:27And they're going to be texting you. They really, really are. We're seeing messages to shopper going up double digit percentages every single month. So it's not, oh, we're growing messages on the platform 20 % a year. They're growing 30 % a month. They're going to millions and millions and millions of messages already. So this is happening, and you can either be caught flat-footed, or you can use this opportunity to be a leader into a messaging for consumers. And I will tell you they'll know the difference.

18:01Mike Manheimer:I think you mentioned this, but 82.4 % have abandoned a purchase because they couldn't find an answer to a product or question. That makes sense. And then 81 % say they'd be more likely to buy if they could text back and forth in a real conversation. Like that's really all you need to know. What do you see on the brand side in terms of like incremental revenue that's generated by these kind of conversations? Yeah. So the shopper stats are very, very compelling. One is because when people are texting back, they buy more and they unsubscribe less. the unsubscribe less, the subscriber LTV lift. So the lifetime value of people who are texting with your brand is 1.5 X greater than those who do not.

18:47So like just fundamentally getting someone who you have their number to text you and you text them back, that relationship will increase their lifetime value to one and a half X of someone who did not. People who engage with conversations are 22 % more likely to engage with the rest of your marketing. And the median shopper ROI right now, because obviously the messages cost money when you text back and forth, just like they cost money when you're doing promotional texts. But the median ROI on shopper conversations is over 20x right now. And so it is extremely high performing. It is like putting money in the bank for the future because these people go from becoming like, I kind of like this brand to becoming fans, maybe mega fans, maybe VIPs in the future.

19:36And they're buying more stuff over time. And so the economics, like, obviously, it feels good to text back somebody and get a good little conversation going. But this isn't just about the qualitative side of it, although that's really important. There's an economic reason to do this as well, which is you will drive more incremental revenue. The stat that we show when people are like, should I or should I not do this is if you add conversational strategies into your existing flows, you'll get somewhere between 5 % and 15 % better performance. And we're talking about flows like welcome series where you might be driving, if you're a nine-figure brand, you might be driving$10 million,$15 million a year in welcome series revenue from SMS.

20:20Yes, we're talking about a 5%, 10%, 15 % increase in that revenue if you just simply start having two-way conversations with people who are confused about what they're seeing on the site. Your PDP can be so good, the best PDP ever seen. There is no way it can answer every single person's question clearly. And the anecdotes I see about just stuff you wouldn't expect that shopper can handle, they're happening all day long. There's just no way you could put every single objection onto a PDP and make it the perfect thing. And that's where shopper can kind of back clean up and handle all those objections and drive those incremental sales because people are getting answers to questions that they're not sure about.

21:07Mike Manheimer:And it's the way you described it as the minimum bar of thinking of it like a sales associative, like, hey, is there anything I can help you with? Like asking that question, like it must, I think about back to my retail days as a sales associate, like the amount of times I'd, I'd, I'd ask that and they wouldn't, there'd be sale, sale placards all over the store of this big sale we're having. And they'd have, they would have no, they would not have registered that at all for whatever reason they're in their own head about whatever. So it's hard to, uh, underestimate, you know, what, what the shoppers have going on to the point where they might not realize things that are immediately obvious to you.

21:40Mike Manheimer:Totally. And I think like, you don't know, So you don't know what you don't know until you start getting texts back. I'll give you a good example of something that we saw that has always just stuck out to me. Jones Road Beauty is one of our customers. Cody and crew are world-class operators. Cody really cares about his PDPs being really good. In fact, I was just talking to him the other day, and he let me know that he's logged over 80 hours on Claude Code trying to build the perfect landing pages. So his PDPs are good. But when we turned on Shopper for Jones Road and someone was texting in about Miracle Bomb, the question that this woman asked, she was like, hey, I'm pretty sure I know my shade, but I've never used this product before.

22:23Here's my question. I live in a warm climate year round and I garden every single day. I tend to get sweaty when I'm gardening. Will Miracle Balm stand up to the sweat from when I'm gardening? And for how long? If your PDP has to handle every single edge case question, it's not possible. But shoppers like, hey, here's how you should think about sweat and moisture associated with Miracle Balm because it knows everything there is to know about that particular skew. And it's like going back and forth with this woman about, it's not even about the product. She wants to know how the product performs in her geography with her hobby.

23:04And that's like the type of thing that because sometimes people get very precious about what's on their PDP. They're like, no, it's the perfect thing. And when you really start to see the types of questions that come in, I think you're instantly struck with like, oh, there are so many angles, personal angles to why someone would or wouldn't buy our product. And if we don't address those angles in real time with Shopper or with some conversational AI, like there's no easy way to navigate the site and get an instant answer to that question. And so if you're not addressing it with kind of conversational strategy, you're leaving it up to chance.

23:41And not every single person is going to spend the time going through your FAQs or using your search capabilities on the site or waiting for the perfect email sequence to come through where it's like, oh, that's my question. They're impulsive. They clicked a meta ad. They landed on the site. They had a question. They didn't see the answer. They bounced. And we can recover that with text if you simply ask what stopped them from buying. And that's really how simple it is to get that started. And then are you doing a good job on the back end? There's lots of nuances there, but that's for the software companies like Postgres to figure out.