The Rise of the Chatbot

For years, firms doing business online have offered visitors to their websites options to chat, whether it’s a live chat with an operator or through a chatbot window. Short for ‘chat robot’, a chatbot is a text-based program that uses an algorithm to accurately and quickly respond to a human user. In recent years, increasing numbers of web users, particularly younger ones, have been choosing to talk to chatbot programmes in order to troubleshoot problems and demystify purchases.

Anyone doing business online knows that customers can be touchy when it comes to making that final purchase, and for many customers, knowing that their concerns can be addressed quickly is something that can convince them to convert. And the use of chatbots is increasing: according to a study conducted in 2017, an average of one in four web users interacts with a chatbot every day, and the figure is as high as 40% for millennials.

Let’s take a close look as what chatbots are, how popular they are, and how you can use them for your business.

What’s the appeal?

The appeal of a live chat is obvious: a human operator on one end is available to help customers and prospects on the other. A survey by Forrester Research found that not only did many customers want a live chat option while they were shopping, 44% of online customers said that having the option of talking to a live operator while shopping was the single most important feature that a website could offer.

The primary drawback is cost. Only large firms generally find it cost-effective to employ operators to help customers, and even outsourcing operators from a dedicated firm is prohibitively expensive for small- and medium-sized businesses.

In this regard, chatbots offer a clear advantage. A 2018 survey by Deloitte claims that chatbots are 15-90% cheaper than live operators, which is a reward that most firms doing business online will find attractive enough to be worth the trade-off.

In addition to cost, soliciting help from a chatbot is a lower-pressure prospect for many web users. A chatbot offers help without the commitment of talking to another person—it might be one thing to talk to a clerk in store, but a chatbot replicates the no-commitment experience that many web users are used to, while still being more intuitive than a drag-and-drop menu.

The same 2017 chatbot study shows that there are still problems with the technology: 71% of survey respondents who had interacted with a programme reported that it couldn’t solve their problem. However, according to one 2013 survey, about half of customer service calls in the United States went unresolved, so the benefits of a live operator aren’t as clear-cut as one might think.

Fortunately, advances in machine learning and automation are such that many existing problems are going to be worked out as time goes on and technology advances.

What can a chatbot really do today?

In fact, automation in this field has advanced to such a degree that experts now define automated customer-service chats according to distinct classifications, with ‘chatbots’ being the least advanced of three. A traditional chatbot relies on simple decision-tree logic, where a human inquiry will prompt one of several responses, ultimately providing use-value based on the quality of their programming.

While chatbots are the simplest programs, there are virtual assistants and virtual agents. Virtual assistants can handle more complicated tasks, like pulling up customer information and filing or retrieving simple data. Virtual agents are programs that can handle relatively complex tasks that would otherwise require a human operator on the other end.

A good virtual agent can understand a customer’s intent by parsing numerous variables within a single statement, replicating human understanding in a basic way that would have been unthinkable in a previous era. These more advanced programs are not science fiction, and they will be cheaper to implement and more accessible in the near future.

What’s in it for your business?

Live chat and chatbot technology are here to stay, so any marketer will be wondering how these can be used as part of a digital marketing programme. Here are some ways to start thinking about making a chatbot work for your marketing:

  • Personalisation. Web users love a personalised experience, and a chatbot can help with this. A small, non-intrusive window in the lower corner of a visitor’s browser, for instance, can offer several options in order to cater to more specific interests.
  • Customer satisfaction. Following a purchase, a chatbot can ask a customer to rate their experience, and then interacting with the customer to either remedy a problem or solidify the relationship. The chatbot could help solicit testimonials by allowing satisfied customers to choose their preferred ratings site and then providing them with a link.
  • New avenues. Many firms took advantage of what chatbots have to offer by devising a chatbot to be used through Facebook messages. A customer could use their Facebook chat window to describe specifications like size and price and then receive a response with products within that range. Pizza Hut even used a chatbot to let customers order pizza through Facebook!
  • Novelty. The experience of shopping through a chat window is new enough that many users will explore this new option just for the experience. The clothing retailer H&M used this functionality to sell clothes through a chatbot on Kik, a messaging service whose userbase is almost exclusively under 20 years of age. A firm that replicates the experience of shopping through an unexpected medium will attract young innovators and early adopters to at least try it.

These are a few ideas for how to use a chatbot for your marketing efforts. While there is plenty of contention over how much chatbots will be used for marketing in the future, knowing what they’re capable of today is the first step towards making them work you’re your brand. Of course, if you have more questions, we’re happy to help, although you can talk to an actual human!

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