Powered by artificial intelligence (AI), conversational chatbots are virtual agents designed to provide a human-like support experience, often to customers and consumers on a company’s website or social media.
Many enterprises are using chatbot technology to automate their customer communication channels to streamline queries and improve customer experience. A study into chatbots found that 53% of service organisations expect to use chatbots within 18 months, which is a 136% growth rate – suggesting a significant role for the technology in the near future.
“Currently, it is critical to have a data-driven way to analyse all feedback and unsolicited data available to a brand, and respond to customers quickly and efficiently,” says Pranav Desai, Chief Product Officer at Reputation.
“Chatbot technology is one way to answer this demand – allowing companies to receive personalised feedback in near real-time,” he adds.
Interestingly, Gartner predicted that the average person would have more conversations with chatbots than with their spouse, reinforcing the idea that this technology is going to explode, permeating nearly every online experience we encounter.
This comes as no surprise as chatbots have the capability to generate a high level of customer engagement through their human-like conversational behaviour, ability to provide instant 24/7 customer helpdesk function, and, in some cases, ability to generate leads for sales.
Desai believes the increased use of chatbots is primarily down to two key reasons. Firstly, because “consumers expect (and often demand) immediate responses to their questions and businesses don't have the manpower to meet those expectations”.
And secondly, he explains: “AI has become sophisticated enough to understand the context of customer inquiries and identify the right response automatically.”
“This allows a business to improve customer experience by providing an instant answer to the majority of customer questions, using human-to-human interactions only when necessary (if the chatbot can't identify an appropriate response to the customer inquiry),” continues Desai.
Incorporating AI into chatbot technology
The biggest consideration for enterprises when adopting this technology is undoubtedly the impact on the customer experience.
“When done right, virtual assistants are a rare type of technology that can improve the customer experience whilst radically reducing costs,” notes Michael Conway, Partner and AI & Analytics Practice Leader at IBM Consulting.
“Virtual assistants offer customers an instant response and greater convenience while freeing human staff from having to spend time on more mundane, repeatable enquiries. This capability is also infinitely scalable, whereas there are limits to how many staff a company can afford to have in a call centre,” he adds.
Thanks to advances in AI, chatbot technology has become a lot more sophisticated. Now, technologists can harness a large amount of data to improve a chatbot's quality of understanding and decision-making.
“Using AI, or natural language processing (NLP), companies can automate certain responses – for example, frequently asked questions – while routing more complicated queries directly to human agents who can provide a more personalised response,” comments Desai.
By consistently improving, chatbots seem like a perfect choice for many as they look to improve the customer experience, as Vijai Shankar, Vice President of Product & Growth Marketing at Uniphore, explains: “The technology allows customer service contact centres — many of which operate with limited resources — to easily hold a one-to-one conversation at scale, and to manage spikes in customer call volumes. Chatbots, in particular, can be used to help ‘triage’ calls and resolve low complexity issues, thus lowering costs of customer service.”
Complementing the customer journey with chatbots
There are, however, some concerns about this technology, as, despite the introduction of AI, chatbots cannot replicate human emotion or empathy – something that many customers crave, according to Accenture.
An Accenture report found 58% more customers prefer to solve urgent issues by calling for support rather than using other channels. The report also says having compassionate customer service can have a positive effect on brand perception and customer loyalty, which an AI-powered chatbot would struggle to provide.
AI-powered chatbots were first seen as a solution to some customer service challenges. Nevertheless, research suggests businesses are beginning to reconsider their automation strategies following shifts in consumer demands.
Now, businesses are seeing the value in prioritising empathetic, human-led strategies that can provide comfort, and the innate human skills that a transactional AI chatbot simply lacks.
“It’s true that consumers primarily like to speak to live agents, however, there are instances that the request is a simple one and a chatbot can direct the consumer to the right resources on a website, or send a text to the consumer that helps resolve an issue quickly (i.e. reset your modem, code to log in to an account), which helps accelerate the resolution of simple requests,” says Shankar.
Interestingly, Desai explains chatbots should never be used to replace a customer service team, instead, the technology should be a complementary tool and the business benefits are too immense to ignore.
“From a business perspective, the benefit comes from the technology freeing up agents from performing routine and transactional tasks so they can focus on more complex enquiries. If the nature of the enquiry is assessed and funnelled correctly, chatbots can be part of ensuring that a customer’s interaction with a business is a positive experience.”
Echoing this, Conway comments: “Ultimately, it’s about building an AI-led experience across the channels customers are using to provide what they need, where they are, when they need it.”
Stressing the importance of AI to the success of chatbot technology, he concludes: “We’re starting to also see virtual assistants proactively reaching out to help customers in real-time. For example, if your card gets declined in a supermarket, the assistant might ping you to check if it's really you and then suggest ways to solve the problem, such as moving money from your savings account to your current account.”