Let’s get deeper into their potential impact.
In our last blog, we talked about the humble beginnings of chatbots.
Where we see chatbots most, and their impact
One of the major areas you initially saw chatbots scale was recruiting and talent management functions. You can argue that bots shouldn’t necessarily be talking to candidates in the name of “candidate experience,” but bots are good at handling FAQ and application status, so logically it makes sense at scale.
Another common use is customer experience chatbots, which place orders and make appointments.
There are other industries where chatbots are common, notably e-commerce, HR functions, travel, and hospitality (largely to help cover different time zones), and even health care (bots can help patients pre-fill information to make the actual visit more efficient).
Customer experience and support is typically the main focus of a chatbot. 63% of customers typically stop dealing with a company after one poor experience, and 70% don’t want to wait more than two minutes for an answer they seek. Chatbots specifically address both of those concepts.
As for some of the core functions that chatbots can typically provide?
Here’s a partial list:
- Improving customer service: This means getting customers quick answers to FAQ, or reducing wait time, giving customers another option instead of waiting, etc.
- More effective shopping process: A customer sends specifications to the chatbot, and the chatbot can go into the inventory or contact the sales department directly — plus, preferences get saved, so the next time the customer returns, that information is pre-loaded.
Personalization: Instead of a customer having to navigate a website with potentially hundreds of different pages and navigation options, the chatbot creates a 1-to-1 conversation.
- Response rate: Chatbots can reply to 100% of messages, which humans often do not do (largely because of time being a finite resource). When responses are actually answered, you obviously have a better chance of converting a visitor to a buyer.
- The automation of repetitive tasks or questions: This saves your business time, and it keeps your customers happy. Who wants to wait forever for the answer to a simple question, when you can get it quickly from a chatbot?
All in all, the benefits of chatbots are pronounced both internally and externally:
- Internally (your processes): Save time, focus on more important things, retain and up-sell customers, and save money.
- Externally (your customers): Make your digital processes easier for them, save them time, keep them happy, and returning.
Is there a drawback to chatbots, then?
Sure, there are drawbacks, although as chatbots evolve, there are less and less. Probably the biggest disadvantage is that most simple, basic chatbots are designed to answer first-level questions only, as opposed to more complex queries — and that could potentially frustrate customers. Now, there are simple workarounds to that on the business side, including training chatbots to immediately route complicated questions to a live support person. But because chatbots operate from a specific database that could be limited in scope, they work best for FAQ and repetitive, automatable processes as opposed to deep conversations with customers.
That said, with increasing chatbot complexity, there is an increasing possibility for more complex conversations that involve full decision trees, including selecting vacation opens and then booking them. Those chatbots are less normative, but the field is evolving daily.
What percentage of companies are using chatbots right now?
About 40% of companies with 500+ employees currently deploy at least one chatbot or AI-driven assistant right now, and financial services are expected to automate up to 90% of consumer interactions with chatbots by EOY 2022. Gartner has predicted that 85% of customer interactions will be managed without humans by EOY 2021, and by the end of 2023, that could mean 2.5 billion customer service hours saved by companies. (That’s the equivalent of 285,388 years.)
Per Forrester and others, the chatbot industry has a compound annual growth rate (CAGR) of 27.9% and should be a $10 billion sector by 2024.
That’s a big sector. So, our next topic: should you build your own chatbot? It’s definitely possible, and there are platforms to allow you to do it. But is it a smart idea, or safer to use outsourced options?