Mike Gozzo’s latest startup was born, in part, from disillusionment with his previous one. Back in 2011, the Montreal-based product developer co-founded a platform that allowed companies with little technical know-how to create their own apps in less than a minute.
During those heady days of app proliferation, Gozzo thought he was pursuing a great opportunity. But there was a drawback. “I realized that we were contributing to app fatigue,” he says.
Fuelled by the growing of smartphones, the skyrocketing popularity of apps seems to be stalling, as what’s known as “app fatigue” sets in. People are simply tired of having to download (and search their phones for) hundreds of apps to access services like online shopping, ordering food or booking travel. Now Gozzo’s latest venture, Smooch, is cutting through the noise of an over-apped world to allow businesses and customers to communicate in the simplest way possible: text message.
Indeed, the text message is proving to be a potent source of innovation for startups looking to deliver new services, and for established companies that need an effective way to reach customers. Ivey Business School professor JP Vergne says consumers still read text messages—studies suggest more than 90% are opened within minutes. “It’s more personal, [and] it’s more immediate,” Vergne says.
Compare that to trends in smartphone usage. Research from digital marketing agency Catalyst Canada found the number of apps Canadians have on their phones declined from an average of 26 in 2014 to less than 19 last year. And there was a 53% drop in average monthly downloads during the same time period.
Gozzo is taking note. Smooch, where he serves as head of product, creates systems that allow customers and companies to correspond using whatever channel they prefer, whether that be through Facebook messaging, app or text. For example, using Smooch, a dentist can set up a phone number for patients to text, and configure those texts to show up at the office as emails. A receptionist can reply over email—but the patient receives the response as a text.
The key, says Gozzo, is working with whatever system a business already has in place. “We don’t want to have to retrain your staff,” he says. Text messaging is proving enormously popular. “What we’ve seen is that more and more businesses want to communicate with their customers over text messaging,” says Gozzo.
Other startups are taking advantage of the efficiency of texting, too. The U.S. company Magic raised eyebrows when it launched in February 2015, offering a phone number that users can text with any (legal) request they want fulfilled. Operators on the other end of the line arrange everything from pepperoni pizza deliveries at 6 a.m. to international airline travel.
Digit offers clients an automatic savings service they can access by texting—a message requesting a transfer is all it takes to move money around. Intuit’s Tada tax service asks users a series of questions it then uses to complete their tax return forms, all by text message. Home cleaning services, airlines and even exterminators are all expanding their ability to communicate with customers through texts.
The Thompson Toronto hotel is an early adopter of the technology. Director of rooms Theo Kolovos says the boutique hotel connected with customer engagement solutions company GuestDriven (which, in turn, works with Smooch) in 2014 in search of a platform to make it easier to communicate with patrons. Now, guests can contact the hotel through text, email or an app, and their messages arrive in the hotel’s pre-existing communications system. A text asking for an upgrade, room service dinner or any other request automatically funnels to the appropriate department.
“We don’t have to add any more technology; it uses our existing technology platforms,” says Kolovos. Likewise, it also enables the hotel to contact guests. “We have a lot of nightlife and restaurants throughout our facility and many times we have special events going on, so we’re able to send them a text and say, ‘Hey, join us in the lobby bar or on the rooftop for a cocktail this afternoon.’” The service has helped boost Thompson’s quality scores and online rankings.
Texting-based services seem poised to grow. Digit, for example, is planning expansions to Canada and beyond. Developing countries such as China and Brazil are using text-based services at unprecedented levels for daily tasks like booking medical appointments and travel—a development that seems likely to spread around the world.
“We know this trend is here to stay because it’s the way customers want to talk to businesses,” Gozzo says. “And up until now, there’s been no great solution that helps businesses really use all the systems they already have in place.”
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