Claus Lauter [00:00:00]:
Welcome to the ecommerce Coffee Break podcast. Today we revisit the episode with Arjun Paul, CEO and co founder of zoko.io., where we discussed how Shopify brands can use WhatsApp for ecommerce. So let's dive right into it.
Voice over [00:00:16]:
This is the e commerce Coffee Break, a top rated Shopify growth podcast dedicated to Shopify merchants and business owners looking to grow their online stores. Learn how to survive in the fast changing e commerce world with your host Claus Lauter, and get marketing advice you can't find on Google. Welcome, welcome to the show.
Claus Lauter [00:00:42]:
Welcome to another episode of the e commerce Coffee Break podcast. Today we want to talk about how WhatsApp can help you for commerce. Now, WhatsApp is around for a long time, I think I had a bit of a slow start when it comes to e commerce, but that's going to change now. So with me on the show, I have Arjun Paul. He is the CEO and co founder of Zoko IO. He is a former bridge engineer turned project manager and tech founder of a startup with unique technology that seamlessly integrates WhatsApp commerce tools, generative AI and Shopify to help brands make millions on WhatsApp. Arjuna has an extensive experience on using WhatsApp for commerce. He began by assisting his mom with her home based fashion business on WhatsApp, eventually serving over 200,000 customers.
Claus Lauter [00:01:24]:
Now with Zoko , a Y combinator funded startup, he serves thousands of brands across 43 countries. So lets welcome him to the show.
Arjun Paul [00:01:32]:
Hey Claus, thanks for having me.
Claus Lauter [00:01:33]:
As mentioned, WhatsApp, I think thats my impression, had a bit of a slow start when it comes to e commerce. Some versions use it for customer support, but then a long time nothing really happened. But that has changed. And I think there are specific countries where WhatsApp really has picked up. Tell me a little bit on how you got into this whole area of WhatsApp.
Arjun Paul [00:01:52]:
Yep, definitely. So I started helping my mom. She had a Facebook page. So her and a friend's wife, they were in business together. They would stitch clothes, post pictures of it, Facebook page and the local ladies would message them, you know, ask them hey, what's the price? And then basically buy from them over the Facebook page.
Arjun Paul [00:02:12]:
Right.
Arjun Paul [00:02:13]:
And then the business started to grow and she wanted to reach more people, which meant running ads on the Facebook page. So that's how I got roped into helper on ads, which are still pretty complex for a regular person to run ads on Facebook. Right. And so then one of the things I noticed on the, on the Facebook page, the interactions is that conversations would almost always move organically to WhatsApp because people would comment, and then at some point, a WhatsApp number will get shared, and then conversation will move there, right? So, and then the, so next week, when she had new stuff to post, what she'll do is instead of, she started sharing it on WhatsApp groups, instead of posting on Facebook, she'll post on Facebook, but also share on WhatsApp groups. But then notice that organically, there's more response on WhatsApp, right? So then the business slowly shifted towards WhatsApp. And at one point, we were sending 250,000 messages across 500 WhatsApp groups. And, folks, manually, there's no API at that point, right? And we were making like, $80,000 a year doing that. So no website, no payment system.
Arjun Paul [00:03:25]:
Everything was cash on delivery, and, like, no accounting system. As long as we made more money than we were spending, we're like, okay, this is working out great. So. But it kind of shows you the power of WhatsApp, right? Because my mom, or a lot of people, their first introduction to the Internet was through WhatsApp. So they don't see these limitations of, oh, there's no checkout, there's no payment. Who asked for all these things? Like, and they were actually doing a lot of business there, right? And so that's how I. So at that time, I had quit my job and wanted to start something on my own. Uh, but it was like, I'm a bridge engineer by trade, so it was about buying a company and running it.
Arjun Paul [00:04:06]:
But then this kind of caught my attention. Like, there's a huge potential here. Uh, you know, this could be a business. And funny thing is, uh, even at the time, I wasn't thinking about it as business, but other businesses started reaching out to us, asking, hey, how are you reaching, um, all these people on WhatsApp?
Arjun Paul [00:04:24]:
Right?
Arjun Paul [00:04:25]:
So what, what happened there was my, my co founder, now Arumel, who's also a neighbor, and he's a brilliant engineer. So he came and saw what we were doing, and he said, how stupid can you be to manually message 250,000 people? We had to reformat phones after every broadcast because it would fill up with images. So he built an unofficial API on WhatsApp to automate this whole process. Thats how we were doing it consistently every week. Then other businesses said, hey, can you help us do that? And, well, pay you to do that. So then we started charging dollar 500 a month for unlimited WhatsApp here. Two businesses, and we got, like, quite a few customers, and we're making quite a lot of money at that point doing this. So we realized this could be a business.
Arjun Paul [00:05:16]:
But then WhatsApp did not have an API. And it was always a constant battle between us and WhatsApp. Them trying to block us, us trying to find 50 other ways to keep sending the messages. And that's how we got into this business. And WhatsApp came out with their API. And that first month, we released our product and kind of went legit with the SaaS model, you know, usage based model, all that stuff. And we build a real business. And at one point, we got into Y combinator, and YC gave us the advice of, find 100 customers who love you.
Arjun Paul [00:05:52]:
You're making money, but it doesn't mean anything. But forget about monetization money and all that stuff. Find 100 customers who really love you guys. And we realized out of the customers that we had, that Shopify core was great because we were helping them do actually make money on WhatsApp, not just one way messaging or anything. They could make money. In fact, we scraped 1.5 million Shopify stores at that point and saw that close to 300,000 of them had the WhatsApp widget installed on their website. They could have had any world class product like Intercom or Zendesk or fresh desk, but they chose to put WhatsApp on their website. It could do nothing.
Arjun Paul [00:06:35]:
Your message, it come on somebody's phone, when you get 50 messages, you don't know who's messaging. What did they buy from me? Because we know that problem, right? We send out 250,000 messages. A lot of messages come back, we can't even check what it is. So we knew that problem intimately. So we were actually solving that for them. So first thing we did is we'll give you unlimited capacity to talk on WhatsApp. You'll never lose a message, everybody. So you have full control of your WhatsApp channel.
Arjun Paul [00:07:02]:
You can have 100 agents on one WhatsApp number talking to customers. In fact, we have quite a few customers who have over 100 agents on one WhatsApp number, talking to customers, helping them buy products. So that capacity is the first thing that we delivered to customers. So then as soon as you get control, customers will get ambitious. They'll say, okay, the whole point why I'm talking to customers is to actually sell them stuff. So give me this one, two, and three feature that will help me help product discovery, collect payments and all that stuff. So then they would think organically, think, hey, I'm sending out these emails and SMS, nobody's opening those. And can I move some of those communications to WhatsApp? So that is how this sales, marketing and customer support on WhatsApp evolved.
Arjun Paul [00:07:54]:
It kind of evolved to that point, that ambitious use of WhatsApp. And you'll see that in certain countries, what we call WhatsApp first countries, where if you are in a shopify merchant or any ecommerce merchant in these WhatsApp first countries, that is where 80% of most smartphones have WhatsApp on it, then you have no choice, right? You have to be on WhatsApp and you have to do business on WhatsApp. In fact, you can just test it out by if youre not using WhatsApp already, just to turn on cart recovery, one, just one feature card recovery on WhatsApp and just see that. Are you making at least five x more money than youre doing it on eBay? Very high bar, like 500% more on WhatsApp or not? If yes, you should look at products like us. Can you do more?
Arjun Paul [00:08:40]:
Right.
Arjun Paul [00:08:40]:
Once we get a customer on a demo, it's very easy for us to convert because, you know, it's very easy for us to show value and pure dollars without having a PhD. You can understand I'm making more money on wines than I'm spending on the product, so I should probably keep using this product. And it's not us, it's actually WhatsApp.
Claus Lauter [00:08:59]:
Right. Okay. I love the startup story that you basically found a problem and a niche and built a solution around it. And what I didn't know is that you really can have like hundreds of agents on one WhatsApp. I think that's a limitation that a lot of merchants have in their mind. It's like, yeah, I only have one phone and that would probably explode after a week. So there is a solution there. What I'm interested in is the automation part of it, with sales, with marketing, with customer support.
Claus Lauter [00:09:28]:
A lot of automation obviously comes in. How do you deal with that? How can you help merchants to make their life easier?
Arjun Paul [00:09:36]:
Earlier we as a company, we weren't focusing on automation like basic chatbots because we felt, because see, where did we come from? We were doing 250 or target. Customers didn't care much about automation.
Arjun Paul [00:09:50]:
Right?
Arjun Paul [00:09:50]:
In Europe, yes, people care a lot about automation because, simply because they don't have the people to talk. But in India, I think about what were those 300,000? Because there's one in five Shopify stores that we tested. Why did they have WhatsApp in the first place, what do you call automation? Is something they may have arrived at now, but initially they only want one. Low hanging fruit is I just want to be able to talk to my customers and I don't want to miss my customers. So that's where we started with. And till about six months ago, if you asked about chatbots, we'd say, no, we don't do chatbots. There are lots of other companies who do chatbots, because we personally haven't seen a chatbot that works really well, like incredibly well, or blows our mind somewhere, it will get stuck and ultimately end up with the agent itself.
Arjun Paul [00:10:37]:
Right.
Arjun Paul [00:10:38]:
But with chat GPT, things kind of changed. We turned believers into this automation thing and we started with an ambitious use case saying, stick with the money part, follow the money. Can we make a sale on WhatsApp? And we introduced a chat GPT driven bot, right? Basically, if a customer messages, it'll talk to you, it'll show you products from WhatsApp, it'll collect your address, it'll collect payment, send you a notification that it's done, and basically take money from you and put it in the bank. And it's possible today. So we released that on a major brands website, I mean, on a major brands site. And 2%, within 18 days, 2% of their orders was done by the chat GPT bot. Right, from start to finish. I'll send you a video right after this, just to see how it navigates all the questions.
Arjun Paul [00:11:32]:
Like, customer says, I don't want this product, can you do this other thing? Oh, can I change my address to this? It'll do everything, right. So then it is useful. And the funny thing is, the merchants like, because it's a big brand, there are lots of other people who are handling these conversation and all that stuff, they'll see these conversations saying, yeah, that's exactly how it's supposed to work. They don't care that there is AI or any of that stuff, right? So at that level, because there is automation, yeah. We think now this whole new thing will open up where fully automated order taking can take place inside WhatsApp. And if you spend a couple of days on it, support is like the lowest hanging fruit. You can easily automate a lot of the support, right? But we, as a company, we are a little bit more ambitious about what. What should we achieve? We'll start with the money first.
Arjun Paul [00:12:19]:
And because one thing we noticed, to be successful as a company, you have to be close to the revenue, right? Even if you're the world's best support system. You're still a cost center, so people will see you as a gossip. But if you start with the revenue being closer to revenue, they'll think twice about moving away from you because you are bringing in a lot of revenue, right? So our plan is to eventually address the support function, but we'll crack this sales thing first.
Claus Lauter [00:12:47]:
Hey Claus, here, just a quick one. If you like the content of this episode, subscribe to the weekly newsletter at newsletter Dot e commercecoffeebreak.com I score and create 50 news sources so you don't have to, saving your hours of research. Grow your revenue with ecommerce news, marketing strategies, tools, podcast interviews and more, all in a quick three minute read. So head over to newsletter dot e commercecoffeebreak.com to subscribe. As said, 100% free. Also, you will find the link in the show notes. And now back to the show. Yeah, not absolutely agree on that.
Claus Lauter [00:13:16]:
Sales first, revenue first. Otherwise you will not survive very long as a company. Now talk me through the process on how to implement Zoku IO into Shopify. And what's the process then going forward that you can really take orders on WhatsApp?
Arjun Paul [00:13:32]:
It's a relatively simple process. You have to install the or Shopify plugin, you have to have a Zobo account, and then Facebook makes you jump through a few hoops to get verified. Get activated on WhatsApp, you have to be in compliance with your commerce policy. For example, if you sell muscle supplements, you may not get approved to use the API. But if you are selling fashion or clothes, you are showing that if you're selling pets, you cannot be approved. But if you're selling pet food, you're okay there, right? So basically they'll review all that before they let you in. And so you have to go through those process. And as part of a sign up process, we take care of all that stuff, right? And then you have to install the Shopify plugin and then install a private app.
Arjun Paul [00:14:19]:
Private app is where a lot of our automations, you know, that's the thing. For example, if you place a cod order and we'll ask you for a reconfirmation automatically. If you confirm, we mark the shopify order as confirmed. Then when you return, we'll mark that. So all that requires that private app integration. So it'll take like ten minutes to do that. Basically input the keys and then you're set to go. So usually customers install these apps and then set up their order notifications first.
Arjun Paul [00:14:50]:
So anything you're sending communicating on email you'll start to communicate on WhatsApp. Then the second level is you'll set up your marketing automations like cart recovery, upselling, reselling, all that stuff. So money starts to come in. And then once you get a handle of that, you'll get ambitious about, okay, can I build Klaviyo like flows on WhatsApp? Can I send messages to a certain segment of people or all that? So depending on your level of advancement within the Shopify ecosystem, you will start to set up more and more automations and all that stuff. But immediately you can get control over WhatsApp. You can set up your basic notifications and your marketing money starts to come in. And then you can get more ambitious with that. Clavio, like thinking about email, you can bring that to WhatsApp and make more revenue.
Arjun Paul [00:15:37]:
So that's the. And we helped all these customers kind of onboard them for the first 30 days. And our onboarding team's goal is you have to make end of 30 days, you have to make three times more money than you spend on Zoku. Then we know then it will take a lot of convincing for them to leave us. So that. So we hand hold them for the first 30 days to hit this target. And then on an as needed basis, we give them support.
Claus Lauter [00:15:59]:
Okay. In regards of messaging the customer, what's your experience? Because obviously there's a difference if you're sending SMS messages out, people are more sensitive and receiving the number of messages on SMS compared to email. What's your stance there on how often should you message?
Arjun Paul [00:16:17]:
It depends on the type of notifications and also depends on the market you're in. For example, if my mom was late by a day on sending her updates, people would message her and ask, why haven't I seen any updates from. So that's India. So it's very, very different behavior there, right? But yet. But in Germany, I wouldn't think, you know, I wouldn't dare send unsolicited messages to anybody there. So it's very different on the market. So you have to be aware of that. What we call which geography, in which market, you have to know your customer, right? So that's one.
Arjun Paul [00:16:52]:
But then it's always good to have proper opt in, right? So proper opt in. And customers should know that you are collecting the WhatsApp in order to send you these kind of messages, right? So a good foot in the door is to start with the order notifications, which everybody will appreciate. They'll actively give you their number, right? So start by having pop ups with WhatsApp numbers being collected instead of email. And then on the checkout process make sure they know that if your number exists on WhatsApp we'll send you updates on WhatsApp.
Arjun Paul [00:17:26]:
Right.
Arjun Paul [00:17:26]:
So that's a good stepping stone into this. So then once they are okay with that, ask them for opt in to receive marketing messages, right, which our system handles all that like get opt in, we'll tag you as opt in. Then if you send a marketing broadcast we'll auto opt out people who have opt out. So then you don't have to worry about it. So if anybody clicked opt out at some point it will not go to them. So you don't have to worry about.
Arjun Paul [00:17:50]:
Right.
Arjun Paul [00:17:51]:
So start sending that out.
Arjun Paul [00:17:52]:
Right.
Arjun Paul [00:17:53]:
So as you see, one thing I can tell you is we work with about 2000 stores and we already have access to the entire buying population of India's WhatsApp numbers within a year. So this will scale very quickly like much more than you think.
Arjun Paul [00:18:10]:
Right.
Arjun Paul [00:18:11]:
So but initially you should be patient and say don't try to become like the world's best marketing company on day one. So slowly as you collect, your list will be clean, better double opted in and you'll start to make money eventually. So that's what we recommend and that's what we help as part of the onboarding process, kind of set these expectations, know what to do because the initial reaction is just blast it out. Just blast it out on WhatsApp and you will make money. But what left, you will also see that the health of your account goes down.
Arjun Paul [00:18:43]:
Right.
Arjun Paul [00:18:44]:
WhatsApp is a very good process actually. So what they do is on day one they don't let you go crazy. They'll put you on what's called a limited tier of 1000 messages. So then if you hit your tier and your health is green, they'll automatically upgrade you to 10,000. And then if you hit that limit and your health is still green, that means people are not blocking you, you're not going crazy then hundred thousand and then unlimited after that. So if you behave well, you can literally send one click of a button. You can reach entire India's population.
Arjun Paul [00:19:14]:
One click.
Arjun Paul [00:19:15]:
But you have to as long as you're sending the right kind of messages.
Claus Lauter [00:19:19]:
I like this process that keeps every marketer within their boundaries and not going crazy. And I think it's very important as you said, to have a clean list and to have happy customers instead of building up a reputation as a spammer. That doesn't definitely help your business there. Now tell me a little bit about the pricing. How does that work?
Arjun Paul [00:19:40]:
So we have a few tiers. We started like $35 a month and it can go up to $400 a month. And then depending on, let's say, if you have more than 5000 conversations a month, you have to upgrade to the next plan. So we have a stepped plan which will let you upgrade to the higher plans. Then one advantage from a price point for us is that we don't mark up WhatsApp's rates. So a lot of companies, what they do is they'll add their own markup on WhatsApp rate. So you pay a lot for your mistake. So with us, it's easier for you to get an ROI on your WhatsApp marketing and we charge you a subscription fee for giving you this agent platforms, the ability to segment run automated rules, these advanced automations, we have exposed the entire Shopify API in a visual manner.
Arjun Paul [00:20:28]:
So you can kind of build the craziest flows you want. So you get a lot of those advantages. And we charge you, if you build a flow, we'll charge you like $5 a month for a flow. So what happens is even the smallest customers, they can actually use it. And if you, once you start to see revenue and you want to kind of jack up your marketing, you have to upgrade to the biggest plan. But even in the biggest plan, you only pay $400. Even if you send a billion messages, you have a predictable cost next month.
Arjun Paul [00:20:56]:
Right.
Arjun Paul [00:20:56]:
You only spend this.
Claus Lauter [00:20:58]:
Okay, notice that's very important. Before we come to the end of our coffee break today, is there anything that you want to share with our listeners that we haven't covered yet?
Arjun Paul [00:21:05]:
Yeah.
Arjun Paul [00:21:06]:
So what do you call this? The. If you're not using WhatsApp in a WhatsApp market, you should start using WhatsApp, right. And it's not either or. It's, I think everybody sold on this now. It's omnichannel, right? You have to be on email, basically. You have to be on. Customers will choose what they like, right? So there will be a good chunk of customers who like WhatsApp. So you should ignore them.
Arjun Paul [00:21:30]:
You should be on WhatsApp. So that's the first stepping stone, right? Especially if you're not doing cart recovery. Please do cart recovery on WhatsApp. It's free money just sitting there like clockwork. One in five cards get recovered. It's free money flowing in. You don't have to do anything, you just turn it on and money will start coming in.
Arjun Paul [00:21:47]:
Right.
Arjun Paul [00:21:47]:
So that you have to do, whether you do it through Zoku or anybody else. You should be doing that on WhatsApp, right? But there are certain types of businesses that are great fits for WhatsApp as a channel. Great fits for two way communication. So if your product requires a lot of attention, for example, premium watches, custom made clothes, even cosmetics, we have seen because women are super careful about what they put on their face, theyll spend a lot of effort into buying the right product. And once they find it, theyll stick to that. Thats great process to happen on WhatsApp because theyll have a question, theyll have a follow up question. You can answer it. You can show them products.
Arjun Paul [00:22:25]:
So once that customer is there, then it's a customer for life.
Arjun Paul [00:22:28]:
Right?
Arjun Paul [00:22:29]:
So kind of think about the nature of your product and the nature of your customers and see if WhatsApp is a great fit. If it is, you're sitting on gold there. Competition cannot beat you. You'll have these customers for life. So it's great for that. So kind of think about whether your product or the nature of your customers is a great fit for WhatsApp.
Arjun Paul [00:22:47]:
Right.
Arjun Paul [00:22:47]:
This two way communication, which you can't have on email, you can't have on SMS. It only can happen on WhatsApp.
Arjun Paul [00:22:53]:
Right?
Arjun Paul [00:22:53]:
So think about that. Everything else, you kind of have to discover it. But these are like the low hanging fruits that don't think tomorrow, think, just do it. But other than that, you have to kind of discover the gold inside WhatsApp as a channel.
Arjun Paul [00:23:08]:
Yeah.
Claus Lauter [00:23:08]:
I think you're 100% right. A golden side. That's, I think, in a nutshell, what WhatsApp is. I think it's a channel that is very personal to people, has a high opening rate and not as saturated as email. And I think you're much more flexible than doing SMS marketing with WhatsApp. So I think it's a great, great channel and I love to see that really growing. Where can people find out more about you guys?
Arjun Paul [00:23:32]:
Yep.
Arjun Paul [00:23:32]:
So our website, zoco IO, so that's the best place to reach us. And we have a WhatsApp button there. So just message us on WhatsApp. We all, for all customers, we do live demos, get all your questions answered and all that. So that'll be the best place to find out about us.
Claus Lauter [00:23:48]:
Thanks for giving us an overview about WhatsApp. I said before, I think it's a very strong marketing channel and sales channel, and every merchant out there should definitely look into it. Thanks so much for your time today.
Arjun Paul [00:23:59]:
Thank you. Great speaking to you.
Claus Lauter [00:24:02]:
Hey, Claus here. Thanks for joining me on another episode of the ecommerce Coffee Break podcast. Before you go, I'd like to ask two things from you. First, please help me with the algorithm so I can bring more impactful guests on the show. It will make it also easier for others to discover the podcast, simply like comment and subscribe in the app you're using to listen to the podcast, and even better, if you could leave a rating. Thanks again and I'll catch you in the next episode. Have a good one.