Plivo: One Company That Changed Customer Engagement Forever
Who knew you could make 400 crores a year by sending OTPs?
How can a new business connect with customers? Social media: that’s the first thing that comes to mind today. However, while social media is a great tool for advertising to potential customers, it’s not so when businesses need to connect with existing customers.
For example, if Zomato needs to contact you regarding your delivery location, your Instagram DMs are probably not the best place. Similarly, if your Google Account needs two-step verification, Google won’t send you the OTP via Snapchat. Instead, these interactions happen mostly over the phone or via SMS.
In other words, a major chunk of companies’ interactions with their customers happens through mobile communications; which has led to the creation of an entire Communications Platform as a Service (CPaaS) industry.
In this edition of The Conquest Communiqué, let’s take a plunge into how customer interactions have evolved over the years, and the story of Plivo: an extraordinary company that carved a niche for itself in the global CPaaS market and went on to dominate the Indian market.
Inbound & Outbound Communications
The 2000s saw the rise of online-first businesses, which had little to no offline presence. Thus, neither could a customer walk into their store for support/complaints, nor could these companies have sales people persuading customers to buy their products in their physical stores.
Why do companies need to interact with their customers? Broadly speaking, all such interactions are either inbound or outbound.
Think of inbound communications as yourself reaching out to Google’s tech support because your account got locked, or you calling Swiggy’s support team because your order hasn’t arrived even after a couple of hours.
In outbound communications, on the other hand, a company initiates conversation for sales, marketing, market research or anything else. Think of OTP messages, or remember those frequent SMS texts saying “X brand has an exclusive 50% discount”?
Customer interactions for online-businesses had to take place through the internet; via email. However, this was an issue, especially for inbound communications, because a customer wants to speak to someone and get their issue resolved immediately, not wait for an email reply.
Thus, the first step for online businesses to enhance customer satisfaction by overhauling customer interactions would be to link calling and SMS to their websites/applications, so that customers could directly contact support.
Businesses Partner with Telecom Carriers
Take Uber, operating in the US. Uber wanted to give their app users the ability to call drivers (and vice versa) so that they could coordinate. Now, there would be two ways to do this:
Uber shares the driver’s phone number with the passenger, which the passenger copies into their phone’s dialler, and manually makes a call.
Uber’s application has a simple “call” button, with which the driver and passenger can speak to each other.
The second option is obviously better, as it respects individual privacy and is faster and more convenient.
But how does Uber implement this? First, they develop an in-house communications system that links their internet-based app to the mobile communications network; then, they partner up with all of America’s Telecom providers (AT&T, Verizon and the like) because their drivers and passengers may be on different networks.
This is clearly a cumbersome and lengthy process, and something not every business can do.
Communications Platform as a Service Emerges
The year 2008 saw the rise of a company called Twilio. Twilio had succeeded in creating a communications system that established a connection between HTTP (the internet’s protocol) and PSTN (Publicly Switched Telephone Network: the mobile phone protocol).
However, this was not something new. Companies like Uber were already doing this in-house. Twilio’s breakthrough lay in its communications API, which enabled any company to integrate Twilio’s services into its own website/application.
Twilio, and the other similar companies that subsequently emerged, also tied up with telecom carriers themselves, eliminating the need for their clients to do so.
Thus, now the same company, say Uber, could just pay Twilio a sum of money in return for managing their entire customer interaction system. This marks the emergence of the Communications Platform as a Service (CPaaS) industry.
Plivo Takes CPaaS by Storm
Even though CPaaS as an industry had solved several major problems for internet companies, not everything was smooth-sailing. First, companies still had to manually handle all those calls they received from customers, which was really cumbersome, especially as customer bases grew.
Remember the long waiting times for service calls a few years ago? Most customers still couldn't have their issues resolved on time, defeating the very purpose of moving to mobile communications.
Second, CPaaS companies charged clients huge sums of money. They took both a subscription fee and a per-minute conversation fee. This made CPaaS integration really expensive, especially for newer companies with limited cash flows.
Lastly, the technology itself wasn’t reliable either. There were sometimes hours of waiting times in sending OTPs, some messages wouldn’t even get sent and call quality was often poor.
Then entered Plivo in 2012. Just like Twilio, Plivo was also building a communications API for companies. However, Plivio’s deep market insights led to them taking a different approach.
Plivo Cracks the Technology
Simply put, Plivo’s systems were more reliable. Despite initial issues, the team worked very closely with its clients for quick resolution. Because they had started after Twilio, they knew what to improve upon. Additionally, Plivo open-sourced everything right from the beginning, which also led to independent developers helping them iron out bugs.
But in a nascent industry like this, just having better technology cannot be sustainable in the long run, because competitors may catch up anytime. Thus, Plivo’s real success lies in them using their market insights to solve for their clients’ pain points.
Plivo Eliminates Call Issues
Right from the beginning, Plivo had figured out most of a company’s calls were inbound support/complaint calls. More importantly, they realised that most inbound calls needn’t even have been made, because most of these issues could have been solved directly without a call.
On the customer-facing side, Plivo separated customer support into categories based on the most common issues. In Zomato’s case, this looks like—order not received, food spillage, incorrect order received, payment-related issues, etc.
Next, to ensure timely resolution of these issues, Plivo introduced the use of analytics. In simple terms, if Zomato sees that you order from them twice every week, they know that you’re probably right about you not having received your order, and hence, Zomato can immediately repeat the order for you without involving a call to anyone.
This way, Plivo has managed to eliminate close to an unbelievable 99% percent of such inbound calls for its clients.
Plivo Solves High Costs
Earlier, CPaaS providers like Twilio used to tie up with multiple telecom providers themselves. That’s because mobile communication often happens between two people using different telecom providers.
This is the same kind of tie-up which Uber had with telecom providers in the previous example. In such agreements, Twilio or Uber typically paid these telecom providers a sum of money in exchange for using their network.
Because so many companies had been partnering this way with telecom providers, this led to the rise of telecom intermediaries; basically companies whose sole job was too get these agreements between multiple telecom companies and Twilio-like companies signed.
Plivo, unlike others like Twilio, stayed away from these telecom intermediaries. Instead, they took a lot of time spending the next few years themselves forming partnerships with telecom companies across the world. This meant that due to no middlemen, they had to pay telecom companies less than their competition, which also translated to them charging less from their clients.
Additionally, Plivo didn’t force its clients to adopt the telecom intermediaries it had tied up with, and instead, allowed them to use their existing infrastructure and networks (if they’d developed them in-house earlier) integrated with Plivo’s services, meaning that it cost these companies much less than Plivo’s competitors.
Thus, Plivo has revolutionised the CPaaS space through continuous innovation. Despite entering the market four years after Twilio and at a time Twilio was the sole market leader, Plivo has already captured around 20% of the global CPaaS market.
In India, Plivo is already the major provider for big companies like Zomato, Uber and Accenture as well as most startups. Today, Plivo does over a whopping 400 crores in annual revenue.
The next time you get an OTP from Zomato, you know that it's actually Plivo making life easier for you behind the scenes!