What was once a trend primarily used by major companies like Facebook who were trying to answer FAQs from customers faster, or The Jetsons who had a robot assistant, Rosie, chatbots are now creatively integrated into brands and businesses across industries.
Similar to instant messaging and alerts we receive on our phones, chatbots satiate the instant gratification we seemingly want and need. The difference between our phone alerts and chatbots is that chatbots answer questions and are reactionary. They are essentially anthropomorphized instant messages with a personal, “human” touch. Often, companies use a person’s name, sometimes even a photo, and use words and expressions that feel like a natural, casual, human conversation.
What exactly are chatbots & their benefits?
According to Freshdesk.com, ”Chatbots are a type of messaging software that interacts with customers and website visitors to gather information and provide help.” Expanding on this, this software creates conversation through auditory or textual modes in a human-like way using Natural Language Processing (NLP).
- TIME IS MONEY: According to Forrester, “your customers just want an accurate, relevant, and complete answer to their question upon first contact so they can get back to what they were doing before the issue arose. (Our) data backs this up: 53% of US online adults are likely to abandon their online purchase if they can’t find a quick answer to their question; 73% say that valuing their time is the most important thing a company can do to provide them with good online customer service.”
- 24/7/365: Chatbots provide immediate, real-time answers without waiting on hold for a human to answer an inquiry with a fumbled response. All interaction occurs without phone calls 24 hours a day, 7 days a week, 365 days a year. This also means customers get answers in writing, whereby you can screenshot or copy/paste for later reference.
- PHONE ANXIETY IS REAL: Those who do not like person-to-person interaction enjoy the ease and comfort of chatbots. According to Forbes, this might include customers who have grown up in an information age and prefer a text or email, (or, ahem, chatbot).
- JUST FOR YOU: Chatbots are reported to cut operational costs up to 30%.
Automation vs AI
When discussing chatbots, it’s important to understand the difference between Automation and Artificial Intelligence. Similar to but not defined as AI, chatbots fall into the category of Automation (AI). They cannot evolve in intelligence and human thinking simulation like AI. Instead, they are preprogrammed, automated responses.
AI runs deeper, focusing on understanding, not just pre-programmed responses. According to techopedia, Artificial intelligence (AI) is an area of computer science that emphasizes the creation of intelligent machines that work and react like humans. Examples include:
- Speech recognition
- Problem solving
That being said, it is possible, and potentially beneficial, to integrate AI into chatbots to more profoundly understand and predict customer behavior. Using AI to fine-tune chatbots can improve interactions with customers (and potential customers), revealing a goldmine of data.
Types of chatbots
- Rule-Based Chatbots: Chatbot software tools that directly follow the pre-programmed rules. An example is a Support Chatbot, programmed with if/then statements that trigger responses based on words and phrases used by customers.
- Machine-Learning Chatbots: This software integrates “machine learning,” a type of data analysis that uses algorithms, patterns, and mathematical models with statistical assumptions to perform tasks without rules. This means chatbots can evolve and improve over time by “learning” customer behavior, similar to AI, while also having the capability to reference older conversations to formulate better and more robust answers.
Examples of successful brand chatbots
Banking, healthcare, education, dating, gaming, and ecommerce are examples of verticals successfully using chatbots to level-up their customer service, driving increased sales and customer retention. Here are three top brands that have mastered chatbot integration:
SEPHORA: This veteran beauty retailer has developed chatbot tools, including the Sephora Reservation Assistant (make appointments with specialists) and Sephora Color Match, (augmented reality to help customers pick a color) through Facebook Messenger and kik.
STARBUCKS: The coffee giant uses the MyBarista app to allow customers to place orders and pay / tip ahead of time to avoid wait lines using Amazon Alexa voice or text messaging. The bot notifies customers when orders are ready. The Starbucks chatbot can learn preferences and habits over time in order to provide customized recommendations for future orders.
DOMINOS: Dominos created an endearing chatbot named Dom. Dom takes orders through Facebook Messenger for anyone craving pizza, whether they have a Dominos account or not, all directly via Facebook. Customers can order from the entire menu, avoiding noisy phone calls. Win-win for all!
Chatbots can be an effective way to save time and money while creating a seamless and enjoyable, online journey for customers.
Looking to get chatty? Check out this 2020 list of the best chatbot builders.