Conversational Interfaces: Revenue Models

Kishor Nagula

It is often easier and less costly for CI providers to white label their conversational interface to a revenue partner rather than go direct to customer.

CIs can be broken into two business structures:

Business to customer [b2c]:

These CIs (i.e., PIA, extend access to basic financial services directly to customers without the support and backing of a more recognized brand. Because of that, CIs have to build their credibility directly with the customer through either word of mouth or through advertising ( radio, TV, or Facebook ads). Under this business model, the CI would generate revenue through either transaction or subscription fees: the customer would pay to send money or to access learning modules.

We suspect that operating a CI through this business structure makes it easier to get the conversational interface online and ready to use but considerably more difficult to gain traction among customers. Though it is relatively simple to construct a CI, it is quite to difficult to convince a user that the conversational interface can solve one of their pain points and is worth trying, let alone using routinely.

Business to business [b2b]:

Under this business structure, conversational interfaces (i.e., Juntos, Arifu) license their product directly to a partner, who then redesigns the interface under their brand and specifications. The partner markets the conversational interface under their brand to their customers through different analog [e.g., brick and mortar advertisements, billboards, radio, and television] and digital [e.g., Facebook page, company’s website] means. And as part of the licensing agreement, the CI provider will likely need to meet different key performance indicators—from usage to the number of new subscriptions purchased to capacity building—r to receive payment.

Under this business structure, the CI provider leverages the brand recognition of the third-party partner to reach customers. This is significantly easier and more efficient than trying to reach customers directly but requires not only educating a potential partner about conversational interfaces but convincing them of their value proposition and return on investment.

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