So what's the real deal with chatbots?

The marketing sector can be a complicated place as new marketing tools and techniques are launched, almost on a weekly basis. Powered by The Drum Network, this regular column invites The Drum Network's members to demystify the marketing trade and offer expert insight and opinion on what is happening in the marketing industry today that can help your business tomorrow.

Chatbots are well on their way to quite literally changing the digital world. They are helping to make our daily lives more efficient – from saving money, booking a flight, challenging a parking ticket and ordering your favourite pizza. And that’s just the start.

Basically, every service which can be automated by AI will most probably become a bot, scary right? If you don’t believe me, try out BBC Earth’s ‘Real Happiness’ bot. No matter what kind of day you are having, this example of artificial intelligence is bound to put a smile on your face!

Chatbots are an extension of search marketing as we know it. Rather than listing search results based on a query, your question is answered with solutions specifically relevant to you and your preferences. For the customer, this is hugely valuable because their time and money will be saved. Plus, businesses will now have the capability to hold engaging, human-like conversations to help increase customer conversations and loyalty.

Chatbots have proven to be incredibly valuable for customer insight and engagement, customer loyalty, and productivity. But there are downfalls in analytics and development. If you’re interested or thinking about investing in chatbots in the future, here’s how they can help bring value to your brand and your customers.

Insight

Chatbots have provided us with the capabilities to monitor and analyse customer conversations through their direct engagement and low-friction authentic experiences. This means that data being collected goes far beyond reaching sales goals. Brands should be utilising the rich and actionable conversational data to unlock more valued knowledge about their customers’ needs and experiences.

According to Aspect, half of consumers want interactions via chat because they are easy to use, time efficient and have a personality. Conversational data is so valuable because, as a brand, you can have your own questions answered in more detail than ever before. For instance, discovering and analysing why your customers haven’t purchased. This type of data provides value far beyond any other channel as it returns insight on products and experiences which have actually met the customer’s needs.

Engagement

Just Eat have been using their Facebook messenger chatbot as a way to connect to their customers daily through instant conversation. They have nailed the element of fun since users can use food emojis or specific keywords to search for their order. The chatbot then returns relevant or inspired dining options which are close to your location. This takeaway brand have utilised chatbot technology to continuously develop their offer. This led to a more conversational order process compared to their app, resulting in a 266% higher conversion rate than any social media activity.

Just Eat have also successfully rocketed their customer loyalty; the average user spends 1.53 minutes interacting with the bot, therefore they have seen huge 13.5% increase in retention. These stats are impressive and perfectly highlight how chatbots can add value to your marketing strategies, if your target audience are at the forefront of social innovation.

The extremely rich data collected from chatbots can also be utilised across different areas of business, through the knowledge gained about how your customers interact. This is a huge insight into how other areas of your business are performing.

Performance over entertainment

Interestingly, 48% of consumers would rather a chatbot resolve their issues than have personality, so business should focus on utility if they wish to successfully deploy chatbots in the future. Although the ‘fun’ personality element brings a huge amount of value and entertainment, it is important to note that 56% of consumers still prefer speaking to a human instead of receiving assistance from a chatbot, according a recent survey by LivePerson. If a brand nails this formula correctly it could lead to huge customer loyalty benefits.

Loyalty

The ability to focus on increasing retention and customer loyalty is a huge benefit for investing in a chatbot. Adidas’ Facebook Messenger chatbot is a great example of highlighting just how beneficial a chatbot can be if your target audience are early adopters of social innovation.

As part of their new female-focused community space, Adidas launched a chatbot used primarily as an interactive booking process. Due to the capability to hold ongoing conversations with personalised local data, Adidas received 2,000 sign ups with a 60% retention after the first week alone. Greater results than they had seen on their app. With the initial success, the chatbot is still live and is promoted across their website, merchandise, Facebook ads, in the studio, and on membership cards. Sarah Dower, managing editor at Adidas London Newsroom, also reported how they will continue to experiment with this technology and start implementing it across other parts of the business.

Although Adidas’ success is inspiring, it is a risky move to take while chatbots are still developing; if your chatbot continuously misunderstands customer questions and they are not passed onto a human being who can resolve their issues, it can lead to very negative customer experiences.

Productivity

Chatbots do not solely show benefits for B2C companies, they could also be well received in the B2B marketing space as a way of freeing up time to generate new ideas and produce more relevant content for prospects and customers.

With chatbots, customers will be able to successfully contact brands with their questions 24 hours a day, meaning certain employees, such as sales specialists, will be able to focus their time on alternative ways to generate leads etc.

When the advanced development of chatbots really takes off, they will be able to standardise certain business processes and create seamless customer experiences, including optimising specific marketing techniques to push customers towards content, product information, pricing, delivery, additional services, etc without needing the man-hours and staff to manage a messenger service.

Oracle reports that by 2020, 80% of companies will be using chatbots for customer interactions, so we can definitely expect to see huge transformative change across the B2B and B2C marketing space in the future.

Are chatbots worth investment?

Until recently, most users have experienced chatbots on Facebook Messenger and Slack. However, as Facebook begins to lose steam, there is a real need for further development.

Yes, chatbots are exciting and there has been lots of success stories. But with everything considered, chatbots are a long way away from producing a seamless service which satisfies customers’ needs and successfully solve problems. Without receiving a “I do not understand, try again later” message.

Just before Google’s I/O event on Wednesday 17 May, Google made a step towards offering chatbot developers this chance by launching a new service for chatbot developers called Chatbase. Chatbase will offer developers the ability to track key metrics like active users, sessions, retention, plus fix broken experiences by viewing "a prioritised list of user messages not handled well”.

This all sounds great of course, but until now Google has been left in the dark with chatbots, so Chatbase could be a way for Google to gain knowledge into chatbot conversations and engagements for future opportunities.

Nevertheless, chatbots could allegedly reach up to 2bn users by 2019, opening up big opportunities for brands. They are certainly an exciting emerging tech trend of 2017, however their move towards the mainstream is still in its primary stages. Yet, with the current success of certain brands, who knows what borders chatbots will break down.

Megan Wrafter is content and social executive at Harvest Digital.

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