As Artificial Intelligence (AI) continues to infiltrate every aspect of our lives, we’re interacting with chatbots on a rapidly increasing scale, whether ordering a takeaway, buying clothes or booking a taxi.
In fact, according to Gartner, by 2020, the average person will have more conversations a day with bots than they do with their spouse!
Compared to when they were first introduced a decade or so ago, chatbots are now much more sophisticated and can offer a cost-effective solution for businesses. More and more, we’re seeing them introduced by businesses to improve their customer service. It’s predicted that chatbots will power 85 percent of all customer service interactions by 2020.
So what exactly is a chatbot?
The main goal of chatbots is to conduct conversations with humans in the same way that a real person would, taking on the personality of your brand, providing functionality to your customers and answering queries naturally in their native language. A decade ago, it would have been obvious when chatting to a bot online that you weren’t dealing with a human but today, thanks to more advanced AI, it is becoming harder to tell them apart.
The capability and scalability of chatbots is vast. At a very basic level, there are two ends of the scale.
At one end . . .
is a chatbot based on keyword recognition, designed to provide the most relevant answer to a user’s questions. The chatbot’s responses will have been pre-loaded which means there are limitations for users as it won’t be able to answer anything that hasn’t been identified as relevant when the bot was created.
Probably the most recognisable of these are Siri, Alexa and Google Assistant, and many would agree they’re not always 100 percent accurate.
At the other end of the scale . . .
is a chatbot which is much more advanced and uses Machine Learning (ML) and AI to understand the context of the question being asked by the user so as to provide a more tailored, and therefore appropriate, response.
Businesses such as Babylon Health and Dominos are great examples of those which are harnessing more sophisticated chatbots to significantly enhance their customers’ interaction with their brand.
What are the benefits of chatbots?
In this digital age where we’ve come to expect information at our fingertips, a chatbot can be a useful conduit to deliver answers to customers immediately and efficiently without the need for them to speak to someone, which can be more time-consuming or less convenient.
Chatbots can also save businesses money by diverting customers with simple enquiries away from their phonelines and instead drive them online, freeing up their call operators to deal with more complex customer problems.
Another plus is that chatbots can be relatively inexpensive to develop as they require no user app installation, generally hosted as a website chat window or embedded within existing messaging apps like Facebook Messenger and soon, WhatsApp. And what an opportunity chat apps provide - an entire generation fluent in conversing on these channels who you could encourage to interact with your brand through a bot. The latest Facebook Messenger figures show that in 2017/18 the platform had a staggering 1.3 billion global monthly active users and that open rates for push notifications received via Messenger are around 80 percent, which is incredibly high compared to traditional channels like email.
You could also say that chatbots offer a level of proactivity which might be less well received if it was carried out by a real person. For example, your bank’s chatbot notifying you about a new product or service or attempting to start a conversation with a piece of advice related to your spending habits would probably seem less intrusive than a call from a sales person aiming to deliver the same message.
When it comes to Machine Learning chatbots, these are constantly collecting user data in order to analyse it and improve their responses accordingly. Herein lies another advantage for businesses – you can use this collated data to learn about your customers and identify patterns to shape your business going forward. This can also feed into your digital marketing plans, making them more targeted and therefore more likely to generate results.
Chatbots v humans
However, despite the many benefits of chatbots, the general consensus at this point in time is that they cannot fully replace human interaction. While many chatbots are designed to immediately identify themselves as a bot, rather than pretending to be a human, and explain upfront what their capabilities are so as to set expectations for users, chatbots are not perfect and some customers can get frustrated in their dealings with them.
There are still people who would prefer to interact with a real person when trying to resolve an issue. Therefore, businesses using chatbots to communicate with customers should also ensure someone is available at the end of a phone line to mitigate the risk of losing customers.
What type of chatbot is best for my business?
To decide what type of chatbot is most appropriate for your business, consider what users of a chatbot would be hoping to get out of their interaction with you and this will help assess what type would be most valuable.
For example, if your sales team is often contacted with simple customer questions, could a straightforward chatbot pre-loaded with frequently asked questions introduce efficiencies for both your customers and your staff?
Talk to our CTO
At Merchant, our Chief Technology Officer, Dan Meineck, has extensive experience designing chatbots which address different business objectives. Just recently, he hosted an event with the Chartered Institute of Marketing (CIM), sharing his know-how with Marketing Directors and Managers across the South Coast.