Now we’re talking: How humans have learned to love chatbots

In a matter of decades, talking to a computer has gone from a digital parlour trick for academics to emerge as a central part of the regular user experience for consumers and businesses.

Alan Turing’s eponymous test in the 1950s started the process, a scientific attempt to discover whether humans could be convinced they were talking to an intelligent agent, not a series of bits and bytes processing simple if/then statements. 

Progress was rapid, but went largely unreported in the broader media until Siri, Google Now, Alexa, and Cortana joined the conversation. At the same time, software chatbots spread like wildfire across the World Wide Web in an attempt to present unloved FAQ resources in a more user-friendly environment via machine learning and expert systems.

Today, the global chatbot market is forecast to reach around US$1.25bn by 2025. This may represent a fraction of the global AI market – forecast to grow to US$118.6 billion in the same period – but human nature means we can expect significant growth in the conversational AI (CAI) space, say experts. 

“It doesn’t matter how impressive a product is or how clean a website looks,” says Colin Crowley, Senior Director of Customer Success at Freshworks. “If a customer can’t get simple queries answered, updates on orders, or speedy resolutions to their issues, they will leave feeling frustrated and disappointed with the brand.”

Chatbots are ideal for offering instant solutions, giving customers everything they need to make their purchase, whilst also freeing up support staff to focus on the most complex tasks, says Crowley. “The old adage that it takes months to win a customer and seconds to lose them has never been more true in the digital age, where customers expect instant gratification and fast responses.”

Great things come in threes for chatbots

There are three main reasons for a company to use a chatbot, says Raffaele Ferrara, Product Marketing Manager, Odigo. “Firstly, improving customer satisfaction: chatbots can reduce – and, in some cases, eliminate – wait times, offer support 24/7 and simplify interactions, so customers have a smoother, faster customer experience.”

Chatbots also improve agent satisfaction by supporting simpler tasks through automation, enabling agents to interact with higher-added value. “Also, specialised agents can focus their time on supporting customers with specific requests,” says Ferrara. 

“Finally, chatbots improve enterprise operational efficiency. Through lower contact drop-out rates and increased agent efficiency, organisations can deliver a modern and innovative customer experience,” he says. “This enables them to remain ahead of the competition and increase customer retention and attraction.”

A common myth is that customers only want to talk to real-life human beings and would prefer to avoid interacting with a chatbot, but this simply isn’t true, explains Noam Fine, Head of AI, Vonage. “The majority of people reaching out to customer support want to solve a problem as efficiently as possible. With chatbots, customers can avoid meaningless chit-chat and arrive at a resolution to their query far faster than with a customer service agent.”

Chatbots are well suited to repetitive tasks, says Fine. “Whether this is on a purely customer service level or not, they do not suffer the wear and tear of the 9-5 day as humans do. Even within different vertical sectors that may require human interaction – such as sales – the retention of attention span is indefinite, instead of a human, who tires and gets frustrated.”

Conversational artificial intelligence calls on human help 

A positive example of conversational AI in use today can be found at AGCO Corporation, the American agricultural machinery manufacturer that implemented advanced chatbot technology to deal with the many customer enquiries it receives on a daily basis, explains Soeren Bech, AVP, Persistent Systems. 

“The CAI bot can not only answer questions about which component is required for a certain use case and the stock levels of those parts, but it can also elevate the conversation to include a call to action, asking customers, ‘Do you now want to order this part?’ before processing sales requests,” says Bech. “And, for anything the bot can’t handle, a seamless transition from AI to a real human elevates the experience way beyond the rudimentary chatbot solutions of the past.”

The size of the chatbot market is forecast to reach around US$1.25bn in 2025, a great increase from the market size in 2016, which stood at just over US$190mn, says Magnus Falk, CIO Advisor, Zoom, which indicates the chatbot industry will become one of the driving forces of business communications. 

“Technology such as sentiment analysis and predictive analytics will become more mainstream in chatbots,” says Falk. “This will help them become more conversational, adopt more human-like capabilities, and more intelligently understand the conversations and the intent of the queries.

“With the help of sentiment analysis, chatbots will be able to understand whether a conversation is going well and respond to customer emotions accordingly, improving effective communication and user experience.”

Video chatbots will also become more mainstream in the near future, according to Falk. “Today’s consumers demand a seamless service, with 59% of customers believing companies should offer cutting-edge digital experiences. One communication channel that continues to be in demand is video, or visual engagement, and video chatbots provide a way of maximising this opportunity for more engaging customer service.”