Chatbots - Opportunity or Hype?

Having experienced a significant increase in popularity within the last few years, the question is whether chatbots can live up to the promise they deliver.

by Valerie Kolling

Potential value of chatbots

Gartner projects that over 85% of customer interactions will be managed without a human by 2020. Surrounding this development (among others) the chatbot concept becomes an interesting one. Promising opportunity or overrated hype? We will take a brief look at current use cases and the potential behind the use of chatbots.

A chatbot in general terms is a messaging application designed to help an user get information about a specific topic or to complete a specific task. Bots are designed to sound and type like human beings and continuously learn and develop through AI. This goes as far as implementing delayed replies to simulate a human typing the answer. Possible use cases are endless: The Chinese messaging app WeChat is using chatbots to help users schedule doctor appointments, shop for shoes, play games or send money to friends. Similar utilization can be seen by KiK, Slack, Telegram or Facebook.

While many platforms promote the implementation of chatbots, the number of businesses using them has been relatively low in the past. The deciding factor that pushes businesses to endorse chatbots is the value that can be delivered through usage. And while there are limitations, there are also various levels on which benefits can be generated. First, let's talk about the later.

Chatbots for users

Convenience! There is a low barrier for interaction. No need to download - chatbots take seconds to install as they are often a natural part of existing platforms. And they are similarly fast in replying. The experience for customers with a brand becomes enjoyable as requests are prompted immediately. Time is not an issue either. You can be halfway across the world and ask a question in the middle of the night. Providing better customer service than your competitors is key to building strong customer relationships and being available an important factor of that. Reaction time to contact requests can be kept continuously low with the support of chatbots.

As messaging becomes the most used way of communication for users - not only for private communication - brands get rewarded that go where their customers are. The threshold of contacting a business becomes incredibly low. Opening a messaging window is intuitive, takes little effort from a customer side and meets them in their wish for convenience. Additionally, communication within messaging fosters informal and personalized interactions. Again an important factor that contributes towards stronger customer relationships and the capability to differentiate from competitors. The mapped data can be tracked and used by a brand for more advanced personalization.

Chatbots for businesses

Most importantly for businesses: time and money can be saved. Chatbots can be scaled to whichever degree needed, regardless of how many requests come in per minute. Automation means less manpower for answering requests and faster responses mean quicker problem handling. However true this might be in theory, in practical terms it proves to be a little more complicated than thought.

As chatbots offer various benefits, there are also limitations. Many let chatbots operate like automated phone assistants, this limits purpose and value that users are looking for. They primarily answer simple and quick-response needs with a limited degree of complexity, so that service employees can take care of more comprehensive requests. As the gateway to customer interaction, they enable businesses to engage on a more personal level. Still, after that gateway is crossed there still needs to be human effort to keep customers happy. Service bot and personal are thought to complement each other. Thus, resource requirements should not be underestimated. Businesses will always need extra teams to manage out of the box requests.

Should chatbots not be capable of providing extra value as each and every requests needs to be handled by service workforce, their usage seems obsolete. Providing value through chatbots is currently the main challenge. Bots are - status quo - only as intelligent as the human that trains them.

Individual use cases for chatbot adaptation

It is important to note that - applicable to many business tools - one size does not fit all. Chatbots can deliver valuable benefits that save money and time while likewise improving processes, fostering great customer relationships and establishing data learnings. Still, they need to be adapted to the businesses processes and structures in order to actually deliver those benefits. While a chatbot may be extremely useful to one business, it may cause problems for another. They are not necessarily suitable for every business but their implications towards messaging and a new way of organizing communication should not be ignored regardless of industry. Customers expectations are shaped according to the availability and way of communication that becomes a commodity.

Valerie Kolling
Valerie is part of Mesaic's communication and marketing team.

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