Your customers are trying to text you something. Are you listening?

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US Americas

Multidisciplinary professional services organization

8 minute read 29 Mar 2018

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As chat apps take over devices, conversational commerce should be an essential element of ecommerce and customer experience strategy.

At the end of 2015, the three largest messaging platforms in the world – WeChat, WhatsApp and Viber – had a combined user base of more than 3 billion. That’s more than the total 2.5 billion users logged on to the world’s four largest social networks.

Imagine the value to be captured if your organization could successfully engage, serve and sell through those platforms? Enter the concept of “conversational commerce.”

What is conversational commerce?

Put simply, conversational commerce is using bots and other automated chat programs to engage with customers over these vast and rapidly growing online messaging platforms. It’s not far removed from automated phone systems, but as technology develops the experience is becoming exponentially easier for customers. It can be run via instant messaging systems, or by cell phone based text messages, or a combination of both.

What makes conversational commerce so powerful is that these services plug into the platforms that the target customers already use as a matter of course. While organizations can implement bespoke chat software infrastructures, this isn’t vital – and conversational commerce is usually more impactful if integrated with existing platforms where customers are already having conversations.

This is why bots and conversational commerce may ultimately represent a more fundamental change to the way brands and consumers interact than we’ve seen from the rise of downloadable apps, and certainly more so than with automated phone lines, which require multiple selections, at the pace of the computer, not the customer.

Bots are less intrusive than all of the above and don’t require users to make a conscious decision to engage with a brand via a dedicated portal. Yet they can still create curated brand experiences by bringing the brand to the users.

And, when bots struggle to deliver the service that customers demand, human beings can seamlessly take over the conversation to ensure the best possible customer service.

The critical cost-saving comes from organizations requiring less staff-time to be dedicated to 24/7 responses to standard queries and issues because the bots are able to take on much more of that routine customer engagement. That leaves the humans free to tackle the more complex service issues.

Where’s the value?

In addition to the operational value created by reducing or reallocating staff hours, conversational bots will create value by shifting the dynamics of consumer engagement in five key ways:

  1. Accessibility: Chatbots can aggregate huge ranges of services and information onto one intuitive platform. A chatbot for an airline, for instance, could check flight times, buy tickets, and books transport and accommodation all as part of one command, rather than consumers having to perform each function separately.
  2. Efficiency: According to data from Baymard, 69% of online transactions are abandoned in the shopping cart. That’s a huge opportunity going to waste. Chatbot shopping assistants could help drive those sales, and provide on-demand advice for customers confused or put off by lengthy checkout processes. Cutting down on intermediate steps and potential confusion can also help create positive customer experiences in other industries as well.
  3. Personal touch: Consumers know what they want and now thanks to the likes of Netflix and Spotify, it's easy for them to get it, with algorithmic recommendations pulling albums, films and even holidays in front of user's eyes with very little input necessary from the user. In a similar way, chatbots could learn users’ preferences, and evolve into something like a digital concierge, always anticipating and ready to serve a user’s needs. Which of course will drive higher sales of goods and services for preferred companies.
  4. Improved understanding of customers: Properly implemented, chat conversations can provide a wealth of data about customer preferences, and the nuances of what can transform a simple request for information into a sale. While tracking customer queries has long been used by businesses to improve their products and services, by turning this into a dynamic digital conversation, chat tools can provide far more detailed data for more rigorous analysis, tracking factors from level of detail through to tone of voice and speed of response, all of which could subtly impact on customers’ ultimate reactions. This in turn can be used to further optimize points 1-3, as well as feed into new product and service development.
  5. Greater consistency of brand experience: Bots are not prone to the inconsistency of humans, afflicted as we are by mood swings, fatigue and errors – be those factual, grammatical or typographic. It means that crucial elements of tone and brand language can be more accurately set to make sure that every customer gets the same high level of experience. It means average customer satisfaction levels should be higher, a sentiment which should contribute towards greater customer loyalty. But one important consideration here is for brands to consider how to make their chatbots (and therefore their brand’s tone of voice) sound as human as possible, and how to create differentiation in highly competitive consumer product or service markets. With the right tone and programming, your chatbot could help build consumer preference for your service over that of the competition.

This is why bots and conversational commerce may ultimately represent a more fundamental change to the way brands and consumers interact than we’ve seen from the rise of downloadable apps, and certainly more so than with automated phone lines, which require multiple selections, at the pace of the computer, not the customer.

The internal audience

The B2C space will see the first and most obvious instances of chatbot implementation, but there are also corporate applications for chatbots. Employee queries are often very predictable. Where do I find my e-payslip? When does pension enrolment start? How do I re-set my password?

All too often hunting down things like payroll information, or finding out how much holiday you have left, involves pursuing an enquiry down long and convoluted channels of communication, even when this information should be relatively easily available.

Chatbots could be an ideal way to overcome employee reluctance to take full advantage of corporate intranets, and reduce the amount of time wasted by IT and HR departments on routine and repetitive queries.

Risks and challenges

While conversational commerce may sound like an evolution of existing systems like Frequently Asked Questions pages, search boxes and customer service lines, the road to a full realization of its benefits is not entirely straightforward:

  1. It’s early days: while certainly perfectly functional, the technology as it stands is still in its infancy. Most bots currently operate on decision trees, where one response triggers an automatic range of responses – all of which need to be identified and programmed in advance. Full natural language recognition is also still years away, with bots potentially confused by colloquialisms and misspellings in ways humans are not. However, the rapid evolution of AI and machine-learning could soon make bots much more adept at intuiting what us humans probably want or mean.
  2. Death by spam: an oversaturation of marketing bots could also kill chat as a favored communication channel. One study cites the 98% open rate on text messages (five times that of emails) as a strength – but part of the reason emails are comparatively neglected is because so often they are unwanted marketing emails. Marketers need to be careful to make sure chatbots are things that consumers actually want to engage with, rather than things they actively avoid.
  3. Chat versus search: some things are already pretty easy to do via a search engine, and a chatbot doesn’t necessarily add that much of a gain in efficiency. In the case of simple tasks like ordering a pizza, typing out an order for a bot rather than just clicking buttons doesn’t necessarily offer sufficiently compelling efficiency savings to be worth the trouble of implementing, or to persuade customers to try the new system.
  4. Jobs: as with any other disruptive technology, this new technology could lead to job losses. The most obvious at-risk roles could be the thousands of people worldwide employed in call centers and other phone-based positions. Other workers whose roles could be at least partially taken over by automated chatbots include travel and estate agents, as well as certain business functions in HR and IT.

The true potential of chat

However, chatbots need not herald a total handover of control to the robots. The human element won't go away entirely. There are certain nuanced things that you can't predict before the facts.

For example, if someone is going to have a medical procedure, finding out how they need to prepare and the scheduling of that can all be done through a bot. But suppose they want to ask something more complicated, like “Can we combine medical procedures?” and ”If I reschedule the appointment how far do I have to travel?”

These kind of requests aren’t necessarily predictable and will need human interaction. This may a problem never entirely solved by bots alone.

The reason chat can be a better way to interact is not just because it can be more efficient and intuitive, but because it feels more personal. Algorithms working with databases of responses can provide a certain degree of personalization in a way that’s a vast improvement over static web pages.

But if you want to maintain and build customer loyalty, automation, algorithms and analytics can only take you so far. The best, most trusted relationships aren’t just built on conversation, but on a sense that your interests are being truly respected, and that your opinions matter.

Chatbots could be a hugely powerful tool for brands, but engagement is the key word to remember here, not displacement. Chatbots should reduce the friction that slows down a consumer getting to what they need by understanding and anticipating that particular user’s likely needs.

They should not be seen as a way to initiate a wholesale replacement of HR and customer service teams. When it really matters most, the truly personal touch will always trump automated personalization.

Summary

Chatbots could be a hugely powerful tool for brands. But to build customer loyalty, automation and analytics can only take you so far.

About this article

By

US Americas

Multidisciplinary professional services organization