Chatbots allow for communication with a company or a person digitally, usually via text or messaging apps. As opposed to a customer service representative or agent, rules and artificial intelligence power chatbots. Chatbots are useful for any number of things ranging from functional to fun and for personal use or business interactions. They can function within any chat provider whether it be facebook messenger, Slack, or a live chat provider.
Chatbots date back to the 1960s with the creation of ELIZA, which functioned off a script that would recognize specific patterns and keywords to generate an appropriate response.
ELIZA inspired several other chatbot programs, including SmarterChild. In 2000, SmarterChild was developed and took advantage of the popularity of text messaging. In doing so, SmarterChild was able to process more casual, natural language and respond as such. SmarterChild paved the way for voice-based, virtual assistants like Siri and Alexa.
In early 2016, the first wave of chatbots powered by artificial intelligence (AI) technology entered the market. Social media, messaging, and chat platforms allowed developers to create a chatbot for their brand. By doing so, consumers can carry out some of their daily actions from within a messaging platform. The development of AI promises to allow the ways we communicate with brands to expand exponentially without driving up costs to the business as it scales.
Are Chatbots Worthy of Business Investments?
As online shopping and support continue to grow, contact centers are seeing an influx of questions and calls taxing the already limited resources. Chatbots promise to provide an automated and scalable way to grow contact centers without scaling costs. For the customers, chatbots provide an opportunity for them to see businesses capitalize on their robust web presence using innovative technology to provide real-time and personal engagement.
While most businesses see the promise and potential of chatbots, they have taken a “wait-and-see approach” to the technology. The results are in. Survey after survey shows that customers are comfortable communicating and buying from chatbots. As time passes, the numbers are continuing to grow. For example:
- 63% of customers are willing to interact with chatbots.
- 33% of customers prefer to use a chatbot for purchasing decisions.
- When customers purchase from a chatbot, they spend on average $55 in the US and $410 in the UK.
Now is the time for businesses to adopt the technology, while also being cognizant of potential risks.
What Are the Risks in Deploying a Chatbot?
While chatbots have been received well, there are risks. Like any customer service interaction, customers are looking for a positive experience and a trustworthy source of information.
Companies with poorly designed chatbots may do considerable damage to their bottom line by driving customers away from their brand. Customers have reported that they are more frustrated by chatbots that cannot answer their questions than they are by humans in the same situation. When customers perceive an experience as bad, 73% of customers report that they will not use the chatbot again.
Even well-designed chatbots max out at about 85% efficiency. In these situations, when a customer feels like they are not getting the answers they need with automated responses, they may perceive a company as cold or indifferent. This perception can damage a brand, customer trust, and loyalty.
Businesses that deploy a chatbot without total transparency run an even more siginificant risk of damaging a customer’s trust. The vast majority of consumers, 75%, report that they want to know when they are communicating with a chatbot and 48% of consumers considered it “creepy” when chatbots pretend to be human.
Customers can tell the difference between a human and a chatbot. They expect brands to be honest with them. While they do not expect chatbots to be perfect, they do want to know what it can and cannot do and that it is reliable. Transparency about successes and failures can build trust quickly.
When sensitive financial or health information is being discussed, businesses must build additional checks for transparency and security. Brands must immediately share that the user is chatting with a bot and what and how personal information is being used.
How Can Businesses Reduce the Risks?
First, businesses can enhance their chatbot content and reduce text by sending a video via chat. As opposed to preparing a text response to the most common and complex requests, businesses can create interactive video instructions that will visually walk customers through the necessary actions. Some video platforms will even embed links. This allows a customer to click on the video and be taken to the page shown as they follow along with the instructions.
Using video instead of text can reduce some of the design and efficiency risks posed by chatbots. It further reduces the risk of seeming cold or indifferent, as it creates greater interaction and adds a personal touch.
Another important step in reducing the risks posed by chatbots is by providing customers with an easy and seamless path to live, agent interaction. Just as with IVRs, there are times when customers simply want to talk with a person or they are not getting what they need from an automated system. When implementing a chatbot platform, it is imperative that businesses have a plan for customer escalation to cobrowse and/or voice and video chat. This not only reduces the risks associated with design and efficiency struggles, but it will also help build trust and provide agents an opportunity to directly improve the customer experience.
Increased rates of online shopping in combination with advancements in artificial intelligence and the proliferation of mobile browsing and messaging apps are fueling the development and adoption of chatbots in customer service. Chatbots promise to provide the scalable interaction customers demand without overtaxing business resources. However, this promise does not come without risks. Before diving headfirst into this trend, businesses must ensure that the chatbot experience is not substandard, lest they risk alienating customers. Furthermore, this automation should not be offered in isolation, but provide a seamless opportunity for it to be picked up by a human agent.