Rise of chatbots: Changing the shape of customer relationships

“You should message a business just the way you would message a friend” — Mark Zuckerberg at Facebook F8 where he launched a chatbot store for Facebook’s messenger platform.

Karthik
Karthik
Aug 28, 2017 · 4 min read
Photo by Alex Knight on Unsplash

According to a recent study conducted by Juniper research, chatbots are set to save industries close to $8 billion annually by the year 2022. This holds good for businesses where there is a large volume of human interaction involved.Even though the rate of successful enquiry resolution by bots is low currently, Juniper forecasts predict that they will reach phenomenal numbers (close to 90%) by 2022.

Chatbots are essentially simple software programs with a messaging interface for user interaction. They are the electronic equivalent of your helper at the shoe store or your barista at the local cafe. One of the biggest advantages of using these bots are that they are built with the ability to learn. Most of these bots are built using programming techniques such as NLP(Neuro-Linguistic Programming) and Machine Learning. With the help of these techniques, the bots can ‘evolve’ in the literal sense of the word, during every interaction. This, of course is based on the user’s response to the bot’s message. One of the most well known examples of a chatbot is Apple’s SIRI.

Chatbots are projected to be the next stage in customer support services. In 2007–08, India went through what is now known as the BPO boom (Business Process Outsourcing). This was possible because of the availability of affordable/educated labor. The whole purpose of a call center was to either address customer complaints or to advertise new products. Now, slowly the call centers are shutting shop and we are moving into the era of digital marketing and artificial intelligence. Digital marketing via social media is now used in order to advertise, inform and let people know about a product. AI is used to interact directly with the customer and to gather information about the user’s behavior on the internet with the help of machine learning.

Earlier a customer had to physically visit a store to buy something. In case of damage or complaints, he had to again visit the store to return/get a refund. In this stage, there was a physical conversation between the customer and the store worker.Then came the era of online shopping. In this stage, the customer could order a product without stepping out of his house.The returns were a bit complicated in the earlier stages, people had to make calls to customer support as the entire process was still in the offline stage.Today, the entire process is automated. Chatbots come into the picture even before a customer places an order. Chatbots provide product suggestions, price comparisons and product details. They even help place an order by redirecting to the order site/section. In case of complaints/returns, the user can access the site’s chatbot to gain more details and initiate the returns process. In doing so, chatbots provide an indisputable method of analyzing the digital customer.

Given a choice, most of the companies would prefer a chatbot over a customer support executive.This is because chatbots are cheaper to train, often provide better customer service and they can be worked 24/7. A single chatbot can be trained to excel in several domains such as hotel/flight bookings, taxi services etc, whereas the respective human effort is comparatively more prone to error. Another reason why companies are heading towards the chatbot route is to capitalize on the vastly unexplored potential of the mobile messaging user volume. Between Whatsapp and FB Messenger, there are a total of approximately 2 billion active users daily. Moreover today’s customer prefers to text instead of dialling a number, being kept on hold and then explaining their issue to customer service. Based on this study by Ubisend, 64% of consumers believe that a business should be contactable via messaging applications.

The evolution of chatbots in the software industry has led to an increase in companies/individuals building newer and more efficient chatbots. There are several companies which have a chatbot as their sole product. Developing a chatbot is quite simple, contrary to popular opinion. Follow this guide to gain insight into the different steps/options that are available to develop a chatbot from scratch.

Microsoft CEO Satya Nadella in one of his interviews sums it up quite accurately. “People-to-people conversations, people-to-digital assistants, people-to-bots … that’s the world you’re going to get to see in the years to come,” he said. While the current chapter in AI and chatbot technology is certainly heading in an interesting direction, it remains to be seen if companies can harness the vast potential of these chatbots. It is important for them to focus on providing a human element, while delivering machine like precision.

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