E186: Why Messenger Marketing is the Future: An Interview with ManyChat’s Mikael Yang
The avid listeners of this podcast would know that I don’t do interviews with people I don’t actually know in person, with the exception of one business-savvy MMA fighter.
As it turned out, the guest on this episode is another worthy exception.
The person I’m referring to is Mikael Yang, the co-founder of ManyChat. By some fated scheduling twist, Mikael and I ended up on the same call. After an awkward start, we finally figured things out.
Being a fan of the software, I was excited to have Mikael on the podcast and ask all those ManyChat questions I had tucked away. Here’s a preview of our discussion.
How did Manychat start?
ManyChat traces its roots back to a messaging platform called Telegram, one of the first messengers to open up their APIs. Mikael and his partners thought that people would want to use the platform to broadcast marketing messages.
By October 2015, ManyChat was already at 20K bots and enjoyed 50% growth on a month per month basis. In November, it was able to scale up to 30K bots. This steady growth led to the opportunity to join a startup accelerator program that helped the company scale and grow.
ManyChat for Facebook Messenger was launched on April 2016. Mikael and his co-founders had to make a very hard decision to migrate to Facebook since they were already getting good traction on Telegram. But they took the plunge. “And obviously if you wanna be the biggest and best marketing platform, you have to work the biggest social network.” , he explained.
Today there are 400K Facebook Business pages connected to ManyChat in over 100 countries worldwide, with 150 million subscribers to those pages.
Why is Facebook Messenger the “future” in terms of messenger marketing?
There are two billion people using messaging apps. Most of your clients are probably using one; it’s where all consumer communication is already happening.
Statistics indicate that 50% of people prefer text over other communication mediums like video or voice. If you’re serving a younger demographic (18-44 years old), the stats for text increases to about 61-62 %.
According to Mailchimp’s data, email open rates are about 20%, on average. For Messenger, it’s about 84% percent. Doing the math, you can say that “…there’s a 10x engagement on Messenger that makes it appealing as a channel…”
Tips for creating non-promotional messages that add value to your list.
- Do not include a link in the first message.
- Do not use words like “sale” and discounts”.
- Add an unsubscribe button to avoid being blocked or tagged as spam.
Businesses need to adapt and use the platforms that their customers are using. If you’re a marketer, you’d want to take advantage of this. It's where businesses are going to go to reach their consumers.
For those who want to start using ManyChat, you can get it here.
Connect with Mikael on Facebook and Twitter.
Listen to other podcasts about Facebook Messenger and ManyChat. Dave and I also talked at length about these topics on a recent webinar.
Registration to EcomCrew Premium is closed indefinitely. But, you can still learn from us through our suite of free courses. There’s a total of 20 videos covering ecommerce topics like Importing from China and Building a 7-Figure Business. Find more information on the link below.
As always, thanks for listening to this episode! If you enjoyed listening and think this episode has been useful to you, please take a moment to leave us a review on iTunes.
If you have any questions or comments, feel free to leave them below. Happy selling!
Full Audio Transcript
Intro: This is Mike and welcome to episode number 186 of the EcomCrew Podcast. As always, you can go to EcomCrew.com/186 to get to the show notes for this episode. And I have a feeling this episode might actually get some good comments because we have none other than Mikael Yang from ManyChat himself on the podcast today. It was a pleasure talking to him. I mentioned this at the beginning of the interview; it's kind of funny how some things happen. But he has a guy that helps him get scheduled on podcasts. And obviously Abby helps us deal with all that interference. We get people all the time looking to be on the podcast.
And the way that I made this easy as always just to say, just respond to them and say, unless I met the person, we're not going to have them on the podcast, because most of the stuff that comes through is just a waste of time. And luckily somehow Mikael got through this filter and but I almost blew it because it was on my calendar as the company that does the scheduling for him. And I thought there was another podcast that I was supposed to be on. So we get this really awkward. I wish I actually recorded because it would be pretty funny. But he gets on the line and you could tell he's waiting for me to interview him and I'm waiting for him to interview me. No one knew what was going on. It was pretty funny.
But luckily, within a minute, we kind of figured it out. I'm like, well, I'd be happy to interview for sure, man. I use ManyChat every single day in our business. It's made a massive impact. And since it's something that I use day in and day out, I don't need any prep. And I can turn this microphone on and do the interview right now. I know questions I've always wanted to ask you. And I also know the questions that we get asked a lot from our audience, both from podcast episodes we've done about ManyChat and now that we have a ManyChat course, the things that are coming out of that, the questions from that.
So I think the interview went pretty well, especially for the lack of prep that was there, and I think you guys are going to enjoy it. So right after this intro, we're going to jump right into it. Hope you guys enjoy it.
Mike: Hey Mikael. Welcome to the EcomCrew Podcast.
Mikael: Hey there, thanks for having me.
Mike: Of course yeah, it was pretty funny conversation here to start with before we hit the record button. It was who scheduled who to talk? There was kind of a mix up behind the scenes. And as our audience knows, we typically don't interview someone that I haven't met in person or had a relationship with. So when we first started talking, I was just like, I don't really know who you are or how you got on my calendar. It was kind of funny, but right before we agreed that it was a mistake and almost hung up, it turns out that you're the founder of ManyChat, which is something that we've talked about extensively on this podcast. And I don't know how it happened but I'm happy to have you on here man.
Mikael: Hey. Yeah, I'm glad to be here and I’m glad that we've got some mentions of details to make it interesting.
Mike: For sure, for sure. So I guess to start with because I'm fascinated with how ManyChat came to be. I remember when I first heard about it, I was speaking at Ezra Firestone’s event in Austin last year, Ecommerce All Stars and there was a lot of chatter there about ManyChat. That’s a year and two months ago or something like that. And that's when I had first heard about Facebook bots and marketing with Facebook Messenger and everything.
And when I first heard about ManyChat I went right back to the office and started playing around with it. I mean just amazing tool that's really helped change our business quite a bit. But I'm curious going back before that before I even knew about you guys, when did you guys get started, why did you start it and all that good stuff?
Mikael: Yeah, it's a great question. Actually, we started on Telegram. I don’t know if your listeners know about this messaging platform, but Telegram was one of the first Western Messengers to open up their API's. And so when we saw that happening, we thought, hey, people would want to do broadcast on Messenger, people would want to do newsletters, and we wanted to build like something like a MailChimp for Telegram. And it all quickly evolved into this comprehensive marketing automation and doing marketing sales and support to messaging apps idea.
So we actually build the prototype in about a week and after some problems with the initial growth, started to grow virally, and reached 20,000 bots in just three months. So, in October 2015 we were already 20,000 bots and we were growing like 50% month for a month. So in November, we were already 30,000 bots. And that's what got us into 500 startups. It's like an accelerator program that helps new companies to scale and grow. And yeah, it was a really fun ride, because almost like nine months later, in April, Facebook announced that they are opening their platform.
And we had to make a really hard decision because we had all this traction on Telegram to start working with this new platform which is much bigger. And obviously if you want to be the biggest and the best Messenger marketing platform, we have to work with the biggest social network. So we actually made that decision and that's when we launched ManyChat for Facebook Messenger in May 2016. And we've been growing ever since.
Mike: Very cool. Yeah, I mean like I said, it's been an amazing tool for us and it's cool to hear how things got started back then. So fast forward now to October 2018, how many different companies do you have using the platform?
Mikael: So now we have over 400,000 Facebook pages, business pages connected with ManyChat. It's in over 100 countries around the world, and they have over 150 million subscribers. So it's 400,000 pages and 150 million subscribers to those pages.
Mike: Awesome.
Mikael: And that's been amazing to see how the market reacted to this technology.
Mike: Yeah, for sure. So I mean we've done at least five episodes talking about Facebook Messenger and ManyChat over 180 plus we've done to this point. And I'm out there constantly preaching about why I think that this is the future but I'd love to hear from your point of view, someone who is probably way more connected to this than even I am, why you think Facebook Messenger is the future and why people need to be hopping on board now.
Mikael: Yeah, I think that the answer to that, there is several layers to that. The first one is that the fact that there are 2 billion people who are using messaging apps and that number is growing exponentially. So most like probably most of your customers and clients are using either iMessage or the Android Messengers or Facebook Messenger or WhatsApp, or any other messaging app. And this is actually where all the B2C communication or excuse me all the consumer communication is already happening.
So people are using messaging apps more than any other communication channel right now, and more than SMS, more than email, the message volume is so big. And actually Mary Meeker who is looking after the internet trends has said that they are the most downloaded, and the most frequently opened apps on our phones. So it's like the central potential for customers. So businesses always follow customer attention. Businesses always need to adapt and they always need to use the platforms that their customers are using.
And that's why we believe that Messenger is like all businesses actually will use Messengers as their communication channel, customer communication channel in the next 5, 10 years like just an inevitable wave of communication transformation that is happening right now. So if you're a marketer who's thinking about why you need to do this is because all the consumers are using it, and that's where business they are going to go to talk to those consumers.
The other thing is that people just prefer text. If you ask people like what's the best type of communication that they prefer either text, voice, video, or other, 50% say text. So divide that by age groups, you'll see that voice drops from 60% to 20%. So over time, the younger generations they prefer text much higher to voice, and text grows from 20% to 60% to actually 62%. So actually, if you are serving the younger demographic, from 18 to 44, then your preference for text is actually 61, 62%.
So not only people are using messaging apps, they love them, and this is what gets us to the actual results. And the actual results are the fact that email open rates by MailChimp’s data are at about 20% average email open rates. The Messenger open rate on average is 84%. So it's four times higher open rates than email. But the thing that businesses are usually looking for is not just for the person to read the message, it's actually for the person to take action to either click the message or type something in the response.
And the click rates on email are 2.4% and that's analyzed across like billions of emails by MailChimp and the data is recent like it's from March 2018. So 2.4% average click through rate on Messenger, average click rates are 20 to 30%, anywhere from like 15 to 30% is what would be considered normal. Some people go beyond 30%, they get 40 and 50% click rates which is crazy, because for email those are the open rates.
Mike: Yeah, exactly.
Mikael: Which is very crazy, but anyway yeah it's the fact that there is a 10x engagement rate on Messenger that makes it appealing as a channel.
Mike: So a couple of follow up things to the stuff you said there, three things actually. First off, I see this in society where people that are younger just prefer text. You can go out to any restaurant, especially in Asia; you see it more over there. But people aren't even talking to each other. They might even be texting each from other across the table. They're like, just their eyes are in their phone. And I think we're going to create another generation, one or two down the road where people don't even — can't even speak anymore. It's kind of crazy. But it's obvious that that the trend is heading that way.
And speaking of Asia, point number two, because we spend so much time over there and I've talked about this before in the podcast, and also when I go talk at events. I mean, I think I'm fortunate in this case enough to be able to spend time in Asia, and you just see how WeChat has become so ubiquitous and how things are. And I think they are a couple of years ahead of us over there. And I think that without question as you said, I mean, the word that you use was inevitable like that. And you probably just got a Facebook message right there.
I just heard that Facebook Messenger is going to kind of be the thing that businesses are going to realize that they need to jump onto their, so makes a lot of sense. And also to reiterate, I mean we see the same thing. Our click through rate is higher than our open rate on email. We have really high engagement on email. So I mean it's been crazy.
Mikael: Yeah, I totally agree. Yeah the things that are happening on WeChat, they're just like reaching out that a year ago I came across this article that talks about a blogger on WeChat that she has sold hundreds mini Coopers cars in five minutes once we were running with some kind of a promotion. So, think about this, an influencer selling hundred cars in five minutes on a messaging app.
Mike: Yeah I mean that's mind boggling but not surprising. I mean I think…
Mikael: Yeah for you, for a person who has been — you've been using ManyChat, right?
Mike: Yeah.
Mikael: So you're familiar with how the Messenger marketing works and how people are responsive and engaged with. I think that for the most part or for the broader audience, it's going to sound crazy that people are buying cars through chat apps. But as Paul Graham says, and I like to quote him like the future is already here. It's just not evenly distributed. We have already people who are using ManyChat and like doing $20,000 deals or $30,000 deals through chat. They have like — we had a conference a week ago. And a guy came up to me and said, we have this record that be keep, what's the highest — how high of a deal can you do without talking to a person on the phone just to like message chat? And their record was like $50,000 or something.
So, they're like, yeah, we get the thing with WeChat, but like it's already happening here. And I'm like, yeah for you for like right now it's a really small percentage, but in a few years it's going to become so seamless. You're going to be going to a Starbucks or you're going to be going to like a store and you're going to be buying a few cups of coffee and events and just getting them and not waiting in line. You're going to be paying for your subscription for your gym and getting notifications about like your workouts through Messenger. It's going to be the chat is a very natural interface because it's really organic to talk to someone, ask questions, figure out what's right for you and then make a purchase. This is the natural thing to do. So, I think it works much better than other non interactive channels.
Mike: Yeah, I couldn't agree more. So one of the things that we get asked about, we actually just released a Facebook Messenger course which features ManyChat, and the things, the early questions we've been getting from that course have been — obviously no one knows what the future holds. But people are asking, like, what does the future hold here? Like do you think that there's a risk in having an asset on another platform? Do you think it's going to get more expensive or restrictive in the future? Because what we're basically advocating people to go do is to start building their list now, because I think it's never going to be cheaper than it is right now to start building this list. But what do you see as some of the negatives, or how to deal with that or what are your thoughts on some of the stuff I just mentioned there?
Mikael: So I do think that it's never going to be cheaper, start building that list right now. I do think that Facebook is going to put restrictions around it because they don't want like people just running around and if right now, the messaging functionality should be used only for non promotional messages. And some people are not honoring that policy which I think is not a good way to go about things. But I think that Facebook wants to build the highest value platform so that businesses and customers communicate through Messenger and actually make transactions through Messenger. And they are going to make sure to make it in a way that businesses and consumers are all getting value.
And what I mean by that is for Facebook, the number one priority is the end user experience. That's what they care about. That's number one thing. If something hurts the end user experience, then it probably shouldn't be on the platform. But then they also care about the business, and they want the business to achieve results. So I'm confident that they are going to put some mechanisms and the price is going to increase. But the prices for Facebook ads have steadily increased for like years now, and does it make Facebook ads less effective? Like no, you just you better targeting, you just do better ads.
The reason that the prices increase is because so many people want to use them. It's not because Facebook increases the prices, it's the market that increases the prices because they want it so much.
Mike: Yeah, that's also demand.
Mikael: Yes. So I think the same thing is going to happen to Facebook Messenger and Messenger marketing. It's going to be like it's only going to go up. That's what I think. And the reason that it's only going to go up is because marketers like yourself, people who are interested in the platform, they're going to be more wanting to use the platform one more. And the consumer bandwidth is not internet. There's only so much business messages that a person will be receptive to.
So Facebook will [inaudible 00:20:18] for their experience just the same as news feed you have a certain amount number of ad slots and placements that you can do before the consumer experience hurts. So this is I think where this is all going. This is a channel that is going to trump email in a few years because of the engagement rate. And yes, it's going to become more expensive but only because it works so well.
Mike: Yeah, and I think it will be a much more controlled experience even long term than email ever has been. So I think that it's going to continue to remain incredibly valuable for businesses and even the consumer. I mean hopefully what will happen is you'll be getting Facebook messages from people that you actually want to versus email which is kind of completely gotten out of control.
Mikael: Yeah it's true. The fact that it’s controlled by a platform, that's the reason I think it's not going to become like email. That's the reason I think because Facebook is looking after the — again after the consumer experience, and email right now is just like pretty crazy, which you get into your inbox. The amount of messages that you actually care about is very, very low and Facebook doesn't want to turn Messenger into that. And it's better for everyone because like when you have a free for all like email, you get the numbers that you get from email marketing basically the 2.4%.
Mike: Exactly yeah. Cool. So we got about 10 minutes left, we try to keep these to around 30 minutes. So I had two more things I want to go over before we run out of time. One of them you already kind of mentioned a little bit but I want to expand upon which is you’re only really supposed to send non promotional messages. And we actually put together an entire module about this in our course because I think it's so important and we've actually personally gotten a hand slapped a couple times by Facebook by not complying with this rule, not on purpose, where we were trying to do everything we could to read the terms and conditions and fully understand it.
And I feel like I have a much better grasp of it now that we've sent out hundreds of thousands of messages on Facebook message. But the rule is you can't send out “promotional message” to people if it's the 24 plus one rule. Obviously you can do it one time afterwards. But talking about the standard broadcast here, in your words like what is deemed non promotional and what are some ways if you can maybe give two to five tips of ways to send out messages and the types of things that you can say in them that would not be deemed promotional, and would not want people to unsubscribe would actually add value to your list.
Mikael: Yeah, I think that's a great question and I think it's a question that's actually even Facebook possibly have a great answer to because we've asked them a lot of times about this. And so it depends on the reviewer and it depends, obviously you cannot sell things in the message that you're sending out. You cannot just tell them hey, here's this card or hey, here is the thing. It's you have to talk about confidence [ph] and things that people ask you about and that people actually requested.
And if they start the conversation, then you get the 24 plus one situation where you can actually start to talk about anything else, and you can sell things, you can give out discount code etc. But the things that you send out beyond the 24 hours plus one, that's the thing that shouldn't be non promotional.
Mike: Yeah. And so I mean, the way that we've handled this to this point, and we've had really good luck the last four months of sending messages is to kind of follow some internal guidelines. One of them is to just absolutely not include any link of any kind in that initial message. I think that that seems to helps significantly where an algorithm or someone could never deem it to be promotional.
We don't ever use the word sale or discount, or anything like that, or even try to skate around that. And it's more just an open ended question of are you interested in X, Y, Z or whatever, and asking open ended question which unfortunately adds a lot to our support load because we have like 50,000 people total across all of our brands now. So when someone has to sit there and answer those, it's a pain in the rear end, but we haven't had any more problems since then.
Mikael: Yes. So I think that's great advice not using any words that like would be deemed promotional, not using external links because even though those links might not be promotional, that could get like there's nobody knows like, obviously, nobody is checking the 10 billion messages that Facebook is sending out every month. But obviously, there is an algorithm that thinks about like what people should check. I think the algorithm gets triggered not only by the contents of the message, but also the algorithm gets triggered by the block rate.
So if you send out messages to your people and you get a lot of either negative feedback, bad ratings for your bot or people delete the conversation or block the messages, or mute the messages, I would think that the algorithm takes that as a signal to look at what's been happening.
Mike: Yeah, I think that's dead on. I mean, that's what we've been trying to prevent, with all the message we send now is to try and prevent those negative signals. And the other thing I didn’t mention, one of the key ways that we've been doing that is by putting an unsubscribe button in every message we send out. So it's typically, we'll send out a question, do you like this? Yes or no? And there'll be a button yes, no, or just unsubscribe. And by having that button, it's painful seeing people unsubscribe, but it's reduced our spam and block and mute rate to almost nothing.
Mikael: Yes, yeah because it's much easier to unsubscribe in that message than to go into like figure out how to do that in some other ways. So I think you're doing a great job there and I will definitely take this suggestion and implement it, and if I was doing a Messenger marketing strategy.
Mike: Cool. Well, speaking of Messenger marketing strategy, I mentioned there were two things that I wanted to ask. I just asked about these promotional messages. But the thing I'm really hoping to get, it'll be cool here. I mean, this is an e-commerce focus podcast. So I mean, what have you seen been working really well? I mean, like what can people do to actually make money in their business, not just do something that's new and cool, what can people do in their e-commerce businesses with Facebook Messenger to move the needle as far as sales go?
Mikael: Yeah, there have been several e-commerce strategies that I think work very well starting from like the most popular ones and like abandoned carts and giving out discounts. And so just trying to convert your website visitors into Messenger subscribers and some of the people were actually doing things that bypass the website altogether. So people that do Facebook ads, direct traffic directly into the bot and fell right through the bot. So, we have a Stripe integration and you can actually sell your product without people leaving the Messenger experience. So those are the things that I think people should try out and experiment with.
Mike: Yeah, I saw the Stripe integration came out; I guess it was earlier this year. It feels like it was early this year, maybe it was late last year. Things move so quickly in technology, it's hard to keep it straight.
Mikael: It's true.
Mike: It's something that we have…
Mikael: I think it was last year.
Mike: Was it last year? Okay.
Mikael: I think we released it more broadly like beginning of this year.
Mike: Yeah, I feel like it was around the beginning of this year. But we just — it's been almost six or eight months since that came out and we still haven't done that yet. I mean I feel like this is probably something we've missed on. I mean what have you seen as far as results of people running Facebook ads directly into Facebook Messenger? Has that funnel been converting better at a higher rate or more profitably than sending people from Facebook Messenger to a Shopify store? Is it converting better right in Messenger?
Mikael: I've actually, I have the data on this and I think anyone who – it’s going to be different for different audiences, for different products like higher ticket or lower ticket products. But I do think that there was people who had great results by driving Facebook ads into the Messenger bot as just as a funnel, just as a way to get new people into the messenger bot. They were using a combination of like a Facebook ad with a Messenger objective and using a keyword. So, they would send — Facebook would send a welcome message with a quick reply and that quick reply would be set up as a keyword inside ManyChat.
I think that was one of the setups that people are finding massive. And so, you can find that I think that there should be some materials on our blog about that. It's now becoming a popular strategy.
Mike: Cool. Yeah, we're going to give that a try on one of our e-commerce stores and then report back to you, maybe have you back on the show.
Mikael: Sure.
Mike: Cool. So I want to be respectful of your time, so I want to just real quick let people know how they can find you. You can go to — and I'll do this for you since I'm a big fan boy of ManyChat. You can go to ManyChat.com, M-A-N-Ychat.com. And the cool thing that I think about the way that you guys have set this up is it's free to start with you guys. You can start off with a free account. So if you know nothing about Facebook Messenger and want to do some testing, you can start with a free account. And then from there, there's a pro membership which is like 10 bucks, which is extremely cheap to get unlock all the features and then from there, it's scale.
So as your list gets bigger, you just end up paying more, which I think is a very fair way to do it. And also for people who are on a shoestring budget, which I think a lot of e-commerce stores are these days, there's no huge feat, just get started and then if you forget about it in your business, it ends up costing you money, or angsting your business month in and month out. It's a pretty fair pricing strategy. We're spending 100 and something or 200 and something dollars a month now because our list has gotten bigger, but it's well worth it. I mean, it drives four to five figures a month in revenue for us which is well worth the cost. So is there anything I missed there?
Mikael: You're paying 100 or $200 for ManyChat and it drives you five figures in sales?
Mike: Something like that yeah, mid to high four figures, sometimes five figures. If we send out like a broadcast for like Black Friday, which we did last year, that's a big day for us for sure. I mean, like you said, people just can't ignore it. I mean, what we'll do is we use that for our plus one. So we save our 24 plus one, the plus one there for something like Black Friday. So on Black Friday, we’ll send out 30, 40,000 messages that will be promotional. That will be allowed because we save our plus one for that.
Mikael: Yeah, you're doing it perfectly.
Mike: Yeah. Cool. So if someone wants to contact you personally, are you on Twitter or there's an email or some way for people to get you?
Mikael: Yeah, you can find me on either.
Mike: Well perfect.
Mikael: Just I think my name will be somewhere around the podcast.
Mike: Okay, we will make sure we do that for you.
Mikael: They can just search for it on Messenger.
Mike: Excellent. Well, again, I want to thank you so much for your time and coming on. And I apologize for the confusion at the outset. But it's been awesome, a pleasure and honor speaking to you. You've definitely made a big positive impact on our business. I want to thank you for that.
Mikael: Thank you. Thank you for having me. It’s been a pleasure for me too.
Mike: Thank you.
And that's a wrap folks. I hope you guys enjoyed this interview with Mikael Yang. I hope I'm pronouncing his name right there. Again, I want to thank him so much for coming on the EcomCrew Podcast. It was definitely awesome to have him on the show and breaking our rule of someone that I have not met in person. But I feel like I know him considering how much stuff we do with ManyChat and I hope to be able to meet him in person some point in the future.
Just as a reminder, you can go to EcomCrew.com/186 to get to the show notes and comments for this episode. If you have any questions you want him to answer or for me to answer or Dave, go over there, leave those comments, we’ll be happy to help you out with that. Guys, if there's one thing that you're going to do in your business with like a newfound technology or something that's taking your eye off the ball a little bit; I do think this is something that you're going to want to take seriously going into 2019 and beyond.
I just see the performance we've gotten from Messenger, we're still figuring out the best ways to really move the needle in our business. But it's definitely just a great piece of software that both ManyChat and Facebook Messenger, and I think it's something that you're going to want to be thinking about. So without further ado, that's going to do it for the end of this episode. I want to thank you guys again for supporting the EcomCrew Podcast. If you have a chance to go over to iTunes and leave us a review, that's always appreciated. And until the next episode everybody happy selling, and we'll talk to you then.
