Chatbots are a hot topic at the moment and nearly all the major tech companies worth their silicon, from Microsoft, Facebook and Google through to Amazon, IBM, Apple and Samsung, are all investing heavily in chatbot technology. I recently attended one of Steve Bartlett’s talks (CEO of Social Chain) and even he couldn’t help enthusing about them. They’re being implemented everywhere!
But what is a chatbot? A chatbot is a talkbot or also known as a chatterbot. In simple terms they are a computer program designed to simulate conversation with human users. They are used to assist with communication through websites, applications or instant messages – helping customers with queries to requests.
Chatbots come in two types, simple and smart. The simple type usually works off work based pre-written keywords. So, if a user asks for a question that does not use a single keyword, the chatbot will not understand the question and will usually respond with ‘I did not understand, sorry’. On the other hand, the smart type predominantly relies on artificial intelligence (AI). Instead of using pre-written answers, the chatbot can respond with ease to the user’s query, even able to provide further suggestions. All the conversation is then recorded and added for processing, so the AI can learn from this interaction and keep improving the experience.
One of the key advantages of chatbot technology is the way it has changed our customer journey for the better. Decades ago, if you needed help as a customer you would have had to call a sales representative, that progressed to emailing them and now we’re at the chatbots stage. Online chatbots are being embraced by businesses as they save time and effort by automating customer support. Gartner forecasts that by 2020, over 85% of customer interactions will be handled without a human.
It’s not just the millennials who are keen to interact with chatbots, and there is a range of reasons for their increase in popularity. These include:
- Productivity: Chatbots can provide information quickly and efficiently.
- Availability: They’re on hand to provide information 24 hours a day.
- Amusement: Chatbots can entertain people by providing funny tips.
- Social factors: People often treat chatbots like people and it’s been shown that Chatbots can even help with overcoming loneliness.
Due to the growing popularity of chatbots, there has been an upsurge of their use in many industries, both within startups and more established companies. They are applied to communication and customer sales processes to help improve many aspects such as:
Customer service. The infamous “We’re putting you on hold, your call is very important to us” has become the generational yawn and users don’t want to resort to searching dozens of pages in the FAQ section – a chatbot can resolve the problem instantly.
Shopping process. With commitment to user experience, many retail brands are innovating new ways to use chatbots. ASOS for example, launched Enki, the ‘fashionbot’, designed to help users discover their new style in a completely new way. If you see someone who is wearing something you like, all you need to do is take a picture of their clothes and send it to Enki who will discover similar items for you to buy. It doesn’t just end there, Enki will also prompt its users to take further action which will let you add items to a shortlist or even the ‘fashionbot’ providing you with more options you might like. The Enki chatbot creates a great user experience for its users, giving them access to a ‘personal shopper’ that actively searches for clothing on their behalf.
Personalised communication. It is important to keep any user’s attention by having the chatbot answer specific questions rather than just showing a long list of dull information. Even adding a ‘Have a good Thursday’ has shown positive feedback.
Response rate. A chatbot can respond to everyone instantly, leaving no questions unresolved. Even on Facebook business pages, up to 90% of questions that are sent there are left unanswered and overlooked, a chatbot would be able to answer 100% of messages and convert more of those users to paying customers.
Automating tasks. There are certain questions customers will ask almost every waking hour – What time are you open till? Where can I find you? Do you make overseas deliveries? By using a chatbot, who is awake 24 hours of the day, seven days a week, they’re able to answer those questions and thus employees’ workload can be reduced, and their energy used elsewhere.
However, not all consumers are ready to completely abandon human to human interactions. When it comes to more high stakes information, for example mortgage applications, or instances where detailed expert advice is required, most people still prefer to talk to a real person.
So what will the impact of chatbots be on our economy? In the UK, there are currently 6,200 customer service centres, employing approximately 1.3 million people (roughly 4% of the UK workforce). Going back just a few years, the call centre industry was in good shape. Now with more and more companies taking on chatbots, we’re starting to see a dynamic change in this workforce. For example, Marks & Spencer recently relocated 100 switchboard staff to different roles because chatbots had taken over their jobs. However, many organisations also believe that chatbots can help increase the productivity of their employees as they are moved into more added value roles.
With the continuous AI development that chatbots are going under, it is only a matter of time until they become expert marketers, with their ability to provide instant feedback to customers. They could even be used to support teachers in class or to assist GPs with medical diagnosis. How comfortable will we be with the phrase “Dr Chatbot will see you now”!