31 October 2018

Decoding the trends: Is a Chatbot right for my business?

Rob Croxall
Written by Rob Croxall

Rob Croxall is Regional Director for The Marketing Centre and specialises in working with small and mid-size businesses. He has over 30 years’ experience working in the media, engineering and charity sectors, focussing on UK as well as global markets.

Chatbots - artificial intelligence systems that interact with people via text, speech or instant messaging apps - have been on the up for a while now. Today, the global chatbot market takes in marketing, payments, processing and technical support, and according to a report by Grand View Research, approximately 45% of customers prefer chatbots as a mode of communication for customer services.

According to LivePerson, only 19% of customers actually dislike chatbots; most are indifferent, as long as their issues are resolved. In a recent Oracle survey, 80% of C-level marketing, sales and strategy execs said they already used chatbots or planned to use them by 2020.

It’s tempting to follow suit, but, as with most tools, chatbots aren’t right for everyone. How do you know if your business needs a chatbot - and if it does, how do you tell when it’s the right time to buy in?

Invest in chatbots if...

You have high volumes of customer service queries

Some customers want to speak to a human to sort out their problems - but many frequently asked questions can be answered perfectly well by a chatbot, without sinking a person’s time into answering the same simple question for the two hundredth time that day. For companies swamped with routine customer queries - like Manchester-based events firm TickX, which automates searches for cheap event tickets - chatbots are a great time-saving option.

Your customers are asking non-technical questions

Chatbots lend themselves well to answering superficial questions with simple answers - “what is your address?”, “what are the postage costs?”, “what date does the product ship?” and so on. More complex product and service questions, especially in a highly technical sector or around a bespoke service, are outside their remit - but chatbots can still collect basic information for human operators to use in answering the question. Sometimes bots can even make basic suggestions if all that’s needed is working through a list of options - the US florist 1-800 Flowers has created a chatbot for ordering a bouquet online, which suggests popular choices for particular occasions.

You're trying to reach a younger audience

More and more people are using messenger services - in fact, 70% of 18-34 year olds use two or more different services every month. Regular instant messenger users expect media richness, with GIFs (animated images), videos and emojis all standard in their daily discourse. Pure text messaging doesn't grab them. Millennial customers want a quick solution, engagement with technology, and a feeling of connection: a chatbot provides all three.

Competitive advantage is a concern in the short term

According to Gartner, chatbots will power 85% of all customer service interactions by the year 2020. As they become standard practice, more and more businesses will invest, simply to avoid being left behind. If your business meets the criteria above, there’s a limited window for you to see the benefit - leave it too long and you’ll be catching up with the competition.

Leave chatbots alone if...

You have small numbers of high-value clients

The personal touch is much more important when you’re targeting a small number of high-value clients. Account-based marketing and sales should not be left to a bot, no matter how smart they purport to be. Strategic level conversations are right out; bots can process data and recommend decisions, but they can’t account for qualitative factors.

You're not prepared to invest in a good user experience

Out of the box solutions are more commonplace than ever, but the bot is still an extension of your brand. Generic chatbots look and feel generic, losing your business’ differentiation from the competition. A chatbot which is actively frustrating to use, like the weather chatbot Poncho which loses track of your input after more than a few seconds? That’s even worse. If your bot can’t understand that “is there a sale on this weekend?” and “what products are on sale this weekend?” are different questions that need different answers, it’s making your business look bad.

You don't have a great copywriter

Again, the chatbot is an extension of your brand. It needs to have the same tone of voice as your marketing material, and treat customers the same way your customer service team does. If you’re a serious financial business, you don’t want a chatbot saying “oopsie-daisies” and “soz ;)” - so if you don’t have a copywriter on hand who understands your tone of voice you need to sort that out first.

If you have no in-house data monitoring team

Setting and forgetting a chatbot is a dangerous game. You need to closely monitor analytics, customer feedback and responses within the chat app your bot uses. Microsoft’s Twitter chatbot ‘Tay’ was designed to develop a ‘personality’ through analysing and mimicking what human users said to it, and within 24 hours had become a Hitler-praising, Holocaust-denying out-and-out racist.

We’re not suggesting anything that bad will happen to you, especially since machine learning bots are outside the reach of most businesses. But if customers are annoyed, frustrated or deterred from doing business because of something as simple as a phrase your bot doesn’t recognise, you need people on the team who can comb through the chatlogs and find out what’s bothering them.

You don't understand it

Taking someone’s word for the benefits of chatbots can lead to a world of trouble. A little education goes a long way. Do some heavy research into chatbots before investing. Demand a demo. If you’re having one built for you from scratch, demand regular demos during the process. Find out and list your most common customer queries, get them built in - and see how it handles them. And above all, have it tested by people who aren’t tech-savvy. You need to know how your bot handles “you stupid bloody robot” - and whether it’ll cut its losses and pass the customer on to the human they need to settle them down.

Chatbots are probably the future of customer service, but that doesn’t mean every business needs one right here, right now. Invest in a chatbot if your business has a high volume of straightforward, frequently asked questions, if you’re trying to reach a younger demographic who are accustomed to instant messaging, and if you have the copywriting, design and monitoring talent to make sure it works. If not; steer clear.

The Marketing 360 can help you take stock of what your business needs, and guide you toward the technologies, techniques and appropriate investments to build your business further.


Image Credit: (CC) Michele M F, via Flickr.

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