“It is expensive”, “It is not worth it”, “It is only for large companies” — CEOs have such thoughts before connecting WhatsApp Business API. ROI calculation will help put aside hesitations and decide whether the funds are going to recoup. This Article describes situations when your investments are going to return and when you’d better limit yourself to usual WhatsApp.
Some Figures and Facts
WhatsApp is the most popular messenger in the world. According to Statista company it is used by 2 billion people across the globe.
A company can use WhatsApp in two ways.
Free WhatsApp Connection
It is a standard process. You buy a SIM card and activate a WhatsApp account. Then you connect to an aggregator and communicate with customers. A private connection price does not exceed several thousand roubles per month depending on a specific service and cost.
WhatsApp Business API Connection
WhatsApp Business API is a corporate platform of Facebook* Inc. The service can be connected via official providers only at a price of 25 to 300 thousand roubles. Depending on the traffic, the monthly fee is 15 thousand to several million roubles.
If you use Chat2Desk, WhatsApp Business API is connected for free and the monthly fee starts from 8.5 thousand roubles.
A company faces a choice. Should it use free WhatsApp or connect paid WhatsApp Business API with additional capabilities and tools for business? It is important to compare the advantages and disadvantages of both options at this stage.
| Parameters | Private (Personal) WhatsApp | WhatsApp Business API |
| Official account verification (a green tick) | No | Yes |
| Connection cost | Free | Free |
| Monthly fee | RUR 0 to 2,500 per month | RUR 8,500 to several millions |
| Capacity | Low Several thousand messages per day | High Several million messages per day |
| Write First option | No WhatsApp blocks the account for outgoing messages to new customers | Yes You can use the Write First option with approved HSM message templates only. |
| Attachment delivery quality | Low Attachments may be lost at mass messaging or if they are heavy | High A good WhatsApp provider guarantees that all attachments will be delivered |
| Call answering | Yes An operator can answer a call to a phone with WhatsApp | No And will probably never be available |
| Number blocking | Yes The private account attached to your number remains in the possession of WhatsApp which can block it without limitation | Minimum An account approved by WhatsApp can hardly be blocked |
| WhatsApp number on physical media | No It is absolutely not recommended to place the number on physical media (flyers, leaflets, etc.) due to potential number blocking and replacement | Yes A WhatsApp number may be indicated anywhere. A customer will always be able to send a message to this number |
| Message cost | Free If a dialogue with a customer has already started, the further communication is free | Paid In order to initiate communication with a customer, it is required to send an HSM** template. Such messages cost RUR 3.8. |
| Obligatory approval of templates sent to customers as first messages. HSM** templates | No The number does not require approval | Yes A request for WhatsApp Business API connection may be rejected without explanation if the company’s activities or scope are not approved |
| Quick changing of templates sent to customers as first messages | Yes Texts can be changed anytime at your discretion | No Every HSM** template shall be approved by WhatsApp |
** An example of a HSM template which requires approval
“Good afternoon,_A1_! We would like to inform you that Order No._A2_has been sent. Please contact our manager_A3_for additional information. We, _A4_, are always available!”
A1, A2, A3, and A4 are variables which shall be replaced with values before sending the message to a customer.
ROI Calculation for WhatsApp Business API
Let us take an average company and calculate the efficiency of WhatsApp and WhatsApp Business API.
| Parameter | Value | Note | |||||||||||||||
| Customer’s Initial Data | |||||||||||||||||
| Number of leads who write to the company / to whom the company writes (per month) | 500 / 200 | A lead is a potential customer with whom communication has started. Some leads will not become paying customers. | |||||||||||||||
| Paying customers attracted via WhatsApp | 120 | Number of new paying customers communicated with in WhatsApp (per month) | |||||||||||||||
| Number of WhatsApp messages in one chat with a customer (per month) | 30 | Total number of messages for a standard customer (during the first month) | |||||||||||||||
| New Leads and LTV | |||||||||||||||||
| Increase in new leads | 30% | 40% is an increase through extended capabilities | |||||||||||||||
| Customer’s LTV | $40 | Profit gained from a new customer during their entire life cycle in the company. | |||||||||||||||
| Traffic | |||||||||||||||||
| Total traffic per month | 21,000 | ||||||||||||||||
| Number of HSM templates | 1,000 | Required to initiate communication with a new customer in WhatsApp | |||||||||||||||
| WhatsApp Account Cost | |||||||||||||||||
| |||||||||||||||||
| Additional revenue through transition to WhatsApp Business API | $1440 | For the entire customer’s life cycle. It is not profit yet. We have to subtract additional expenses for WhatsApp Business API for one (first) month. | |||||||||||||||
| Profit gained from transition to a WhatsApp Business API account | $1272 | An additional LTV new customers will bring every month. This is not additional customer’s payments in the first month because the entire customer’s life cycle is taken into account. | |||||||||||||||
| The countings and prices are from April 2020 | |||||||||||||||||
In their feedback, our customers frequently describe how functions offered by Chat2Desk have helped increase their profits. One of our customers in Almaty described how it managed to build a business via instant answers in WhatsApp Business API. The company caught leads on its website, sent commercial offers, and received payments. And that company was faster than its competitors. As a result, one type of printed products available on the Almaty market was covered by it to the extent of 40%.The table provides approximate data. But a company can achieve these results under favourable conditions.
When is usual WhatsApp more beneficial for a company?
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A company checks whether the new customer communication channel is efficient. A private WhatsApp connection is quite suitable for this purpose.
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As for start-ups, WhatsApp is more beneficial in terms of finance. But as the number of leads and the volume of traffic are increasing, the extended functions of WhatsApp Business API are worth to be considered.
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A company would like to use the functions of WhatsApp unavailable in WhatsApp Business API. For example, processing of calls or frequent changing of templates which do not require external approval.
Conclusion
Both WhatsApp and WhatsApp Business API have their pros and cons. However, the capabilities of the latter take an advantage over the usual messenger. If the ROI calculation for WhatsApp Business API is positive, the connection will be reasonable. The platform fee will not hit your budget. On the contrary, it will lead to a larger customer base and more profit. Chat2Desk will help you along the way. Write to us via a widget in the right corner and start to communicate with customers in the world’s most popular messenger.
