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The Berlin-based company uses artificial intelligence to help its clients steer potential customers to final purchases via “conversational marketing.”
“People don’t want to navigate through a complicated website or get lost there,” Max Koziolek, co-founder and CEO of Spectrm, told Crunchbase News. “When you click on an ad, it is like opening up Facebook Messenger, and the conversation starts. At the end, you get a recommendation link that takes you to a site where you can purchase the item right away.”
The new funding brings Spectrm’s total investment raised to $4.5 million since its inception in 2015, according to Crunchbase data. The company has a small footprint in the United States and will use some of the funding to expand on that, Koziolek said. In addition, Spectrm will work on building out machine learning capabilities and rolling it out to customers, he said.
Social media users spend an average of two hours per day on eight social networks and messaging apps, according to Global WebIndex research. Facebook and Facebook Messenger lead the pack, with Facebook Messenger marketing having 10-80 times better engagement than email. As a result, Koziolek said conversational marketing is one of the most effective communication channels.
“Seventy percent of the questions businesses receive are prepurchase, meaning they are not a customer yet,” he said. “When people typically message a brand, it is customer service they are talking to instead of sales. Most are not asked if they want to buy something or provided a link to purchase the item they are asking about. Therefore, there is a big future in conversations, and it goes more to mirroring the social environment.”
Spectrm targets the e-commerce, retail, telecommunications and insurance sectors. In the past 12 months, the platform enabled an average of 6 million interactions per month between brands and their customers, Koziolek said.
Runa Capital Partner Dmitry Galperin said in a written statement that Spectrm’s solution is relevant across industries because it focuses on the channels that are already the most effective.
“Today businesses all over the world are facing the greatest challenge of how to attract and retain customers,” he said. “Instead of trying to cover all marketing communication channels, it is much more effective to direct efforts to those that generate the most customer insights and highest ROI.”
Illustration: Li-Anne Dias