Latest / The DTC Marketing Podcast with Fexingo: Direct-to-Consumer Brands, Shopify, and E-Commerce Growth / How DTC Brands Are Using WhatsApp for Customer Acquisition
Transcript
- Lucas: Okay, let's talk about a channel that most DTC brands are barely touching but is quietly outperforming email and SMS in engagement: WhatsApp Business. Luna: I keep seeing this pop up — especially with brands selling internationally. But isn't WhatsApp just for texting friends? Lucas: That's exactly the perception gap. For years, WhatsApp was the family group chat app in the US. But globally, it's the dominant messaging platform — over 2 billion users. And because it's intimate, the open rate on a WhatsApp message is around 98 percent, compared to maybe 20 percent for email. Luna: Right, that's the same stat that drove SMS marketing. But SMS costs about a penny per message in the US. WhatsApp is significantly cheaper, isn't it? Lucas: Way cheaper. Depending on the market, WhatsApp Business API messages can cost as little as half a cent — or even less in countries like Brazil or India. For DTC brands with thin margins, that's a game changer. And unlike SMS, WhatsApp supports rich media: images, product catalogs, even quick-reply buttons. Luna: So what does the actual use case look like? Are brands sending cart abandonment messages? Lucas: Yes, but that's just the start. The most interesting use I've seen is from Mejuri, the direct to consumer jewelry brand. They use WhatsApp as a concierge channel — customers can message a stylist, send photos of outfits, and get personalized recommendations. It's not just transactional; it builds a relationship. Luna: That makes sense for high-consideration purchases like jewelry. But what about lower-ticket items? Can WhatsApp work for, say, a snack brand? Lucas: Absolutely. Take a brand like Natura, the Brazilian cosmetics giant — they use WhatsApp for order updates, but also for product education. They send short video tutorials on how to use a new moisturizer. The open rate is near 100 percent, and the click-through on those videos is something like 30 percent. Luna: And in Brazil, WhatsApp is basically the internet. That's the key: WhatsApp isn't just a channel; in many markets, it's the primary way people communicate online. Lucas: Exactly. Which is why DTC brands expanding into markets like India, Mexico, or Indonesia are prioritizing WhatsApp over email. In India, WhatsApp has over 400 million users — that's bigger than the entire US population. And these users are already comfortable with commerce on the app. Luna: But the US market is different. WhatsApp penetration here is lower. Are any domestic DTC brands using it successfully? Lucas: A few. There's a brand called Death Wish Coffee — they use WhatsApp for their wholesale orders. Restaurants can text them, get a quick response, and place an order without navigating a portal. It's B2B, but the same principle applies. Luna: So what about opt-in? With SMS, you need explicit consent. Is WhatsApp the same? Lucas: Yes, and in some ways stricter. Under WhatsApp's terms, you can only message customers who have opted in to receive messages from your business. And you have to provide a clear way to opt out. The upside is that the people who opt in are genuinely interested — your list is smaller but way more engaged. Luna: So the cost per message is lower, the open rate is higher, and the engagement is deeper. Why isn't every DTC brand doing this? Lucas: Two big reasons. First, the setup is more technical than email or SMS. You need to integrate the WhatsApp Business API through a provider like Twilio or MessageBird. It's not something you can just do from your phone. Luna: And the second reason? Lucas: Regulatory complexity. WhatsApp is owned by Meta, and they are very aggressive about enforcing their commerce policies. If you send too many promotional messages or get a spike in complaints, they can ban your number. And once you're banned, getting reinstated is a nightmare. Luna: So it's high risk, high reward. What's the best practice to avoid getting banned? Lucas: Start with transactional messages — order confirmations, shipping updates, delivery notifications. Then, once customers are used to hearing from you on WhatsApp, introduce promotional content slowly. And always include an opt-out option. Meta recommends keeping your message-to-opt-out ratio below 0.3 percent. Luna: That's a very specific metric. Is there a tool that tracks that? Lucas: Most API providers offer a dashboard. Twilio, for example, shows your quality rating — green, yellow, or red. If you hit red, you risk being blocked. So you need to monitor it daily. Luna: Let's talk about the actual messaging strategy. What kind of content works best on WhatsApp vs email or SMS? Lucas: Because WhatsApp is personal, the content should feel personal too. Typed messages from a real person — even if it's automated — perform better than polished marketing copy. For example, instead of 'Shop our summer collection,' you'd write 'Hey, our new summer dresses just dropped — here's a look:. Want me to send you a sizing guide?' Luna: It's conversational. That aligns with the broader trend toward conversational commerce — meeting customers where they are, in a chat they already have open. Lucas: Right. And WhatsApp supports end to end encryption, so some customers actually trust it more than email for sharing personal information. A few DTC brands use WhatsApp for loyalty program sign-ups or birthday rewards, because the customer feels like they're chatting with a friend. Luna: What about measurement? How do you track ROI on WhatsApp? Lucas: It's trickier than email, where you have open rates and click-through rates. WhatsApp offers read receipts, but you can't track opens the same way. Most brands use custom links with UTM parameters to attribute sales. But the real metric is customer lifetime value — WhatsApp users tend to be more loyal because the relationship feels more human. Luna: So the investment is more about building a channel than a quick conversion. That's a hard sell for some CMOs who want immediate ROAS. Lucas: It is. But the brands that have been doing it for a year or two report retention rates 20 to 30 percent higher than their email-only cohorts. That compounds over time. Luna: Speaking of that long-term thinking — you know, I think that's one reason this show doesn't run ads. We'd rather build a direct relationship with listeners over years, not chase a quick buck from a sponsor. Lucas: That's exactly it. And if you appreciate that approach — keeping these episodes ad-free — you can support the show at buy me a coffee dot com slash fexingo. No pressure, just if you've gotten value here. Luna: Yeah, it's a small way to keep us independent. Now, back to WhatsApp — let's talk about the future. What's coming next? Lucas: Big one: WhatsApp is testing in-app checkout in some markets, which means customers can complete a purchase without leaving the chat. That's huge for conversion rates. Imagine a customer asks about a product, you send a link, and they pay right there with Apple Pay. Luna: That would close the loop on conversational commerce. No more drop-off from chat to website. Lucas: Exactly. And Meta is also integrating WhatsApp with Facebook Shops, so DTC brands can manage their product catalog across both platforms. That's still rolling out, but the early tests show a 15 percent lift in average order value. Luna: So for a DTC brand listening right now, what's the first step? Lucas: Start with the WhatsApp Business app — it's free and lets you set up a profile with business hours, catalog, and automated replies. Use it for customer service for a month. If you see positive response, then move to the API for scalability. Luna: And don't forget the opt-in. You need to capture consent at checkout or via a click to whatsapp ad. Lucas: Right. The beauty is that WhatsApp is still underutilized in DTC. Early adopters are getting outsized returns. But that window won't stay open forever. Luna: Good reason to start experimenting now. Lucas: Absolutely. That's it for this episode. Next time, we'll look at how DTC brands are using audio-only channels like WhatsApp voice notes and Clubhouse for customer engagement.