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Chatbots on the rise: why they're becoming the most important customer service channel
Gartner predicts that chatbots will become a primary customer service channel within five years. According to the provider of market research and analysis on IT developments, chatbots will become indispensable for about a quarter of companies. What's behind this?
In this post, you'll learn:
- What benefits chatbots bring you.
- What trends there are now and in the future.
- How your chatbot can evoke customer emotions.
- What you need to consider to use a bot successfully.
What benefits do chatbots bring your company?
Today you see chatbots in many areas. A chatbot is an application that uses artificial intelligence to talk with people in natural language.
Well-known examples include:
- The World Health Organization's coronavirus bot, which provides up-to-date information on the coronavirus quickly and reliably. The bot was built on WhatsApp and helps users choose different topics by entering keywords and commands. Users in Germany can alternatively ask the German Red Cross WhatsApp chatbot for advice.
- Delivery services such as HelloFresh, which delivers groceries among other things. According to the company, its chatbot Freddy led to a 47% increase in incoming messages. Response times were also shortened.
- The OMQ chatbot – since 2019, it has been taking the load off the customer service of well-known online stores such as Baby Walz and EMP.
- Travelers can try out KLM's BB (BlueBot) to find destinations, pack their suitcase and book flights. The bot was developed to relieve the airline's service staff of the rush they previously faced on Facebook.
What key features do the new chatbots have?
➡ It's clear that things are moving more and more toward human conversation. Button- and keyword-based chatbots are increasingly being replaced by helpful digital assistants that almost feel like you're chatting with someone you know.
Closed choices and predefined dialog paths are a thing of the past. Advanced AI models and natural language processing (NLP) enable AI chatbots to understand the intent and concern behind a statement or question while taking the conversation so far into account. We can assume that chatbots and their capabilities will keep improving, as AI research and development continues.
➡ We're also seeing new chatbots increasingly developed for on-the-go use in apps. In other words, much like live chat, which is now available in certain messaging apps, chatbots can accompany users wherever they are.
➡ Paying via chatbot is also on the rise. As a conversational interface for the company, the bot can not only give product advice but then guide customers through the entire payment process. That's very convenient for users: they don't have to switch to another application to buy the chosen product. Payment confirmations can be created this way too.
➡ Optimizing e-commerce processes is no longer a thing of the future – the chatbot can not only handle customers' payments but also conduct the entire post-purchase conversation. Along the way, it can, for example, inform customers about order updates and so contribute to a positive buying experience. This includes messages with order information such as shipping, tracking numbers or follow-up messages.
➡ Microsoft's "Cortana", Amazon's "Alexa" and Apple's "Siri" are also showing the way for chatbots – voice assistants influence bot development, and bots are likely to move more and more toward voice control. Juniper Research estimated the number of voice assistants used by consumers worldwide in 2023 at 8 billion, driven by the growing use of smartphones. So companies should keep an eye on this trend.
➡ Chatbots aren't just on the rise between customers and companies, making interaction easier by automating communication. They're also becoming more and more attractive for many companies internally. AI-driven chatbots can optimize numerous internal workflows.
Examples include:
- Chatbots that support the HR department, simplifying HR processes such as recruiting, onboarding and employee training.
- In IT support, a bot can take the load off employees because it's available around the clock, so its human colleagues can focus on their other tasks as well as possible.
- A sales and marketing chatbot can also answer prospects' inquiries at any time of day and schedule appointments at the same time.
- It's also smart to get familiar with AI chatbots when it comes to knowledge. Using one for content search gives you access to a large knowledge base, which saves an enormous amount of time.
Terms used as synonyms – do they always mean the same thing?
Sometimes it's a bit confusing – chatbots that support text input, voice input or both are also called virtual assistants and conversational agents.
There are some small differences, though:
- Classic chatbots tend to support simpler conversations and more individual tasks. One example is the weather report: the chatbot tells you whether it's going to rain tomorrow.
- A conversational agent is a bit cleverer: it could work out that what you actually want to know is whether you'll need an umbrella tomorrow.
- Both use natural language recognition to understand what users are saying. Artificial intelligence (AI) makes further lateral thinking possible. It draws on technologies that use machine learning to learn from certain interactions and improve the resulting recommendations and answers.
Chatbots can evoke customer emotions ❤
Used correctly and well thought out, chatbots can improve the customer experience and even trigger positive emotions in your customers in the long term. That's made possible by live interactions in which AI-driven bots can talk almost like humans.
➡ In January and February 2022, an online Gartner survey on customer service and support (CSS) was conducted with 50 respondents. It found that 54% of respondents use some form of chatbot, VCA or other conversational AI platform for customer-facing applications. According to Gartner Inc., chatbots will become the primary customer service channel for about a quarter of organizations by 2027.
However, there are some points to consider for the successful use of a chatbot:
If you're a leader who wants to effectively use and measure your chatbot's performance as part of your service and support channel strategy, you'll need to check some prerequisites before you can get going.
- First, it's important to create a suitable chatbot deployment strategy – based on use cases and the complexity of service interactions. Good planning is especially important here: start early enough and think about all the dependencies so you can be sure the necessary resources will be available.
- Your chatbot's usability should be a top priority: that reduces customer effort and the work behind it.
- You should identify the chatbot metrics most relevant to you, such as handling time, goal completion rate, abandonment rate, conversation steps, etc. That keeps you and your company unique and competitive.
- The desired chatbot metric performance level identified this way should then be adjusted so that the chatbot's design and complexity are implemented optimally.
- Check the chatbot metrics against the defined baseline. That shows you which strengths and opportunities already exist and which should be expanded.
Chatbots on the rise! 📈
No question – these clever bots are spreading more and more. A survey by the German digital association Bitkom from back in 2020 confirms this: according to it, 27 percent of companies in Germany were already using technical dialog systems with which you can "communicate via text input or speech".
As a Statista chart shows, 22 percent of the companies surveyed have already automated individual work steps, such as recognizing incoming documents and information. Another 26 percent plan to do so.
The chatbot market is expected to reach around $1.25 billion in 2025, a big increase from its 2016 market size of $190.8 million.
The AI market keeps growing
The overall AI market is much bigger than the chatbot market. The global AI software market was worth $9.51 billion in 2018 and is expected to grow to $118.6 billion by 2025. The AI market covers a wide range of applications such as natural language processing and robotic process automation. Many of the biggest names in tech, such as Microsoft, IBM, Google and Samsung, have invested heavily in AI-related research and development and have each filed thousands of AI patent applications.
On the receiving end, as of 2017 consumers had the highest acceptance of chatbots in online retail and the lowest acceptance of government services using AI technology.
Conclusion: chatbots will become more and more popular and, thanks to AI technology, gain new key features that will delight your customers!
Companies use chatbot technology to save labor, money and time. Today, most companies implement their chatbots in customer service.
However, given how fast AI technology is developing, it would almost be a waste to use a chatbot just to answer simple customer requests. Chatbots can already understand, for example, what's behind a statement or question.
You should especially consider using the chatbot internally in your company. AI-driven chatbots can optimize and simplify almost all internal workflows.
Used in a targeted way, it gives your employees and customers a positive feeling. Want to know more? https://melibo.de/en
