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Iris Nova’s Zak Normandin on scaling consumer brands using payments over text

  • Iris Nova's Dirty Lemon beverage brand pioneered conversational commerce in 2015.
  • Now the company is bringing in other brands to sell over text.
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Iris Nova’s Zak Normandin on scaling consumer brands using payments over text

The industry talks a lot about omnichannel payment experiences. Everyone wants to service the customer wherever he or she is. But what if that experience doesn’t look much like an experience at all. A channel that’s left pretty much unexplored is SMS. There’s one company, Iris Nova, that’s pioneered payment over text for its Dirty Lemon beverage brand. Customers pick up their phones, send an SMS to the brand, and order their products through a chat interface. Given how familiar SMS is to most people, there’s little visible architecture around the customer journey.

Iris Nova’s founder and CEO Zak Normandin joins us on the podcast to talk about payment over text and why he thinks in the future, most big brands will have just a website and a phone number. We discuss the challenges of doing conversational commerce well and how he’s positioning Iris Nova to be a future leader in food and beverage using SMS as a transaction channel.

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The following excerpts were edited for clarity.

Designing a transaction platform over SMS

We started with one brand in 2015 called Dirty Lemon. It’s probably our most notable brand. We’ve expanded to seven brands in the portfolio and we’re using technology as part of the direct to consumer platform we’ve developed.

When we launched, we were really focused on trying to connect directly with the consumer. I started exploring different ways to do that and I kept coming back to what was happening in Asia with WeChat, Line, and the messaging platforms that were also being used as payment gateways.

We built a platform that was enabled by SMS that allowed us to communicate with our consumers directly, process payments, and gather insights to make a better overall experience.

The SMS customer experience

It’s very simple. It’s all common language. When you want to place an order, you text the number of the brand. We have a combination of AI and human-assisted customer service. The order is processed in just a few text messages.

Our vision is that when you’re on your last bottle of your favorite beverage, we want consumers to pick up the phone and text the brand, saying ‘send me more’. We think that’s the way consumers want to purchase beverages — they just want to keep it stocked.

The challenges of getting SMS right

SMS has become a buzzword in marketing and brands are trying to exploit the channel as a way to sell more product. We’ve never used SMS in that way. It’s always been a tool. Logging in to a website to place an order or downloading an app is very inconvenient. SMS enables this in a frictionless way because it’s a communication platform everyone uses. You could order Dirty Lemon products with a flip phone if you wanted to.

The brands in our portfolio get all of the customer data that they wouldn’t get selling through Amazon. Right now, the only established platform to sell beverage products at scale is through Amazon. Now, we provide brands the same level of service and also to collect more data on customer behaviors and who they are. This means that they can just serve customers better.

Conversational commerce in the U.S.

To my knowledge, there aren’t any other brands that use SMS as a commerce channel. We were the first in 2015. If anything, we’re bringing on more brands to use the technology we created. We think in the future that every brand will have a website and a phone number. A website to look at photos and videos of products, but the majority of commerce will happen over messaging. If you look at other developed markets around the world, this is pretty standard and commonplace.

What it takes to do messaging well

Many brands think of conversational commerce as money left on the table. You have email, social media and they see SMS as another branch of outreach to customers. We’ve never used SMS in that way. We’ve never sent outbound promotional messages to our customers. That’s the one misconception around conversational commerce — it’s not money left on the table. It’s a fundamental change in the way you interact with your customers and the way you do business.

The voice behind conversational commerce

The tone was very important for the Dirty Lemon brand. Every brand should have a different voice. The way that we talk to a Dirty Lemon customers isn’t the way we talk to a Sonzo customer (another one of our brands). That’s something we have to train our team for. We have a pretty robust bot that handles a lot of common requests — all that copy has to be changed by brand depending on how they like to communicate with their customers.

Demographics of conversational commerce

When we launched Dirty Lemon, our intention was to target older Gen Z and younger Millennials. The reality is that the majority of our customers were actually in 30-50 year old range. It was very interesting. Now, the technology is ubiquitous. We have over 200,000 customers who message us and they range from young to old.

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