Why everyone loves chatbots

Are chatbots the future of customer service? The size of the chatbot market is growing exponentially and Gartner forecasts that by 2020, over 25% of customer service operations will be using them – up from only 2% in 2017.

But what exactly is a chatbot? It is simply a computer program that is designed to simulate a conversation with a human user. Chatbots are currently used primarily over the Internet for customer service purposes. They can save time and effort by automating customer support.

So who uses chatbots?

So whenever you click on Live Chat there is an increasing chance that at some point you will start interacting with a Chatbot. As well as customer service they are also currently being used in research, lead generation, collecting information about users, content distribution, affiliate marketing, helping to organise meetings and reducing overhead costs.

Some examples of current use are:

  • Allstate Insurance: uses an AI virtual assistant ABIE to handle questions from insurance agents and customers
  • Capital One Financial: uses a chatbot called ENO to communicate with their customers via text message
  • Marriott Hotels: uses a chatbot via is Facebook Messenger and other apps to enable Marriott Rewards members to handle travel arrangements.

There are also other generic chatbots available that are tailored for a specific industry or purpose but not limited to one particular company. For example:

  • Chatobook: for the restaurant industry
  • Apartment Ocean: for the property industry
  • Visabot: to help US immigrants obtain green cards
  • Woebot: trained in CBT (Cognitive Behavioural Therapy)

Plus various chatbots in the health industry

Why do people like them?

Consumers benefit from chatbots in a variety of ways. Recent research – State of Chatbots 2018 – by MyClever, Drift, Salesforce, and SurveyMonkey Audience found the following results:

As can be seen, in terms of 24 hours service, complaint handling and quick answers to both simple and complex questions, chatbots are leading the way.

Chatbots are of particular interest to the millennial generation, who also appreciate their ability to provide funny tips, help kill time, fuel conversions and enhance social experiences.

The varying attitudes of millennials vs baby boomers towards chatbots can be seen by breaking down the chatbot element of the above chart into these two generational groupings:

As can be seen, millennials rated the customer experience of chatbots more highly than baby boomers. This reinforces their interest in chatbots as a social experience. But interestingly, the baby boomers came out higher in terms of their satisfaction with complaint handling and answers to both simple and complex questions.

For all generations it has been found that chatbots are likely to make a positive contribution to building customer loyalty.

Advantages to business

We have already looked at some of the ways chatbots are being used in business and, depending on the nature of your business, you may want to consider using chatbots in any of the following areas:

  • To improve customer service
  • To streamline the purchasing process
  • To personalise communication
  • To improve your response rate
  • To automate repetitive tasks

Some of these areas are practical and can reduce repetitive tasks – and therefore save employee time and costs. But others are more customer-facing and could become integrated into your digital marketing strategy.

How to introduce a chatbot into your business

If you are interested in using a chatbot in some aspect of your business you need to consider the following stages:

  • Clearly define your goals ie what do you want your chatbot to do?
  • Select the best channel to use the chatbot eg website, mobile app or social media platform
  • Decide whether to use off the shelf chatbot software or to build a custom chatbot from scratch (either using a software development company or a chatbot builder platform).
  • You then need to create the chatbot and test it thoroughly before launch.

The importance of testing cannot be overstated. As we have probably all experienced, any new software launched too hastily can lead to all kinds of problems. So it is worth make absolutely sure your chatbot works effectively rather than be too keen to get it out there!

We are still in the relatively early days of chatbots and just beginning to understand what benefits they can bring. Whilst the technology is bound to improve over the next few years, now could be the time to seriously consider introducing a chatbot into your business and be part of this new innovation.

We will certainly watch developments in this area and will return to this topic here in the near future.