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Chatbots for business: which service definitely needs a chatbot?

Alex Pokatilo, founder at Nerdy Bot, co-founder at Nerdy Tutors, active investor in EdTech world about how businesses can benefit from chatbots in the context of UX.

Chatbots for business: which service definitely needs a chatbot?

Monday January 15, 2018,

9 min Read

The concept of a chatbot is not new. The Turing test in the 1950s, Moviefone interactive telephone service in 1979, and Smarterchild in 2000 are the fundamental milestones of chatbot evolution. Today 75% of internet users have one or more messaging apps at their disposal. There are 2 million apps in AppStore and 2 million apps for Android. Despite that abundance, people seem to be getting tired of downloading new applications, well, not as much as they used to. And it gives businesses something to think about, doesn't it? Let's take a look at our smartphones. Platforms and chatbots for each and every purpose. We talk to a bot when ordering food, we hired a personal nerd to cope with academic papers, the other bot kindly books tickets. So chatbots have become a tough business: they provide the chance to reach people where they already spend most of their time — in Messenger.


Why chatbots?

The growing popularity of chatbots is rooted in the ability to improve a number of aspects of a business. Entrepreneurs apply chatbots because of the following benefits:

Better customer experience. A chatbot can make product recommendations, provide instant customer service, and engage clients via marketing campaigns. People prefer chatbots to making telephone calls and talking to a representative, therefore, bots are less invasive. Automated acknowledgment of the customer.

Conversational commerce. AI is all about conversational commerce. It means making a purchase while talking to a chatbot. During the dialogue, the program learns and stores the data and the customer orders an item with a few simple steps, fewer than before. User experience changes from complicated apps and websites to a command-line interface.

Personal assistance. Local companies harness artificial intelligence in the form of personal assistant tools. Whether it is secretarial tasks, hotel reservations, or placing orders, it is much more practical to talk to friendly chatbot than to access different apps.

Project management. Managing projects and tasks through automated team communication and reporting, tracking time and expense. Bots manage to-do lists and send reminders.

Data accumulation and analysis. Apart from customer interaction, chatbots are used for gathering data which is analyzed afterward. This gives a chance for the business to tailor products and services on the basis of the customers' needs. AI is getting more sophisticated, and the power of analytics behind chatbots grows simultaneously.

What is a Chatbot? Opportunities for Enterprises

Basically, a chatbot is an AI program that mimics a real conversation with the customer. In order to get a better understanding of the technology and how exactly it works, it is essential to review specific use cases in different areas.

Education. Students are not the same: their skills, abilities, and interest vary. Effective education requires a personalized approach where content quality is targeted to a particular person. Chatbots appear to be the most logical and affordable tool available for one-on-one tutoring. For instance, Nerdy Bot offers students the option of forgetting Google and tons of irrelevant information, and helps with all kinds of academic tasks. All it takes to get the task done is texting a bot. The AI-powered platform gives the student an opportunity to hire a nerd based on specific task difficulty.

Marketing. Alongside customer care queries, chatbots can perfectly fit a business marketing strategy. A personalized experience is fulfilled via personalized shopping advice based on a customer's history and preferences. Chatbots uniqueness goes far beyond customer engagement, all the way to retaining them. Chatbots give larger engagement capacity via keeping the customers entertained much longer and sending relevant information. By reaching a virtually limitless audience, bots process huge amounts of data, analyze the feedback, and provide more insight. The brand becomes more proactive and social media presence remains fresh.

Retail. People really enjoy buying things online: convenience and swiftness attract more and more people and their number grows exponentially. Today 64% of consumers search online before making a purchase. This curious fact makes chatbots an important channel in a retail business. Bots ensure that customers receive a personalized experience. Let's take Shop Spring. In order to make a purchase the user needs to answer questions to narrow down the final choice options. Here comes the question: what advantage does a chatbot have over the marketplace? And the answer is — minimum number of clicks.

Insurance. Chatbots give easy and quick insurance information: customers have their request answered when they need it and where they need it. Insurance issues can be intimidating for young consumers, so the entire experience and making claims, in particular, is fulfilled in a user-friendly manner. PolicyPal, for example, provides comprehensive information on insurance 24/7. The bot imitates interaction with an insurer, including placing claims and renewing plans. Chatbots help with fraudulent claims and assist with customer onboarding. However, bots have to be regarded as a compliment to brokers, not a competitor; they can ease the access of information provided to brokers.

Fintech. Progressive banks use chatbots to simplify the overall banking experience. The transactions are made via the preferred messaging platform. Banking bot is used to view recent activities, transferring amounts or checking balance in a matter of seconds. Using a bot as a personal financial advisor can detect and prevent fraud, which is critical in banking. Personalized support is provided 24/7 and a bot resolves issues instantaneously. Normally banks offer a wide range of products and services. Depending on a customer's profile the data chatbot makes personalized offers. The bot gathers data concerning client's needs and pain(pressure?) points.

Healthcare. This area is similar to fintech when it comes to security standards. The client's confidentiality along with HIPAA compliance is crucial. Chatbots can book doctor appointments, pay service invoices, track and store medical cases and payments. HealthTap is a medical bot used to connect patients and doctors via a medical staff database of 100,000 physicians from 140 specialties. Woebot is trained in cognitive-behavioral therapy (CBT) and is used to treat depression. This magic bot tracks mood fluctuations and talks to a user about his or her mental health and wellness in the form of brief conversations. It also sends useful content based on current mood and needs.

Restaurants and delivery. When we want food, we want it ASAP. In this respect chatbot will win: the service is always online and receives an order in the blink of an eye. Pizza Hut bot saves their favorite basket, which can be ordered next time. Restaurant chatbots help customers order their favorite food, reserve the table in a restaurant, and there is huge potential ahead. Bots help food providers to reduce costs, human errors, and enhance the customer experience in general. Moreover, some bots have an excellent sense of humor.

So, it looks like chatbots, regardless of the domain they are applied in, change the form of brand-to-customer communication. Bearing in mind all the aspects chatbots deal with, both — users and businesses — benefit from this technology.

Chatbots in business: Trends for 2018

2017 has been the year of voice interfaces with Smart Speakers being pushed forward by Amazon and Google. Voice bot builders like Storyline and PullString came to the market to create voice-based chatbots. So voice experiences are going mainstream and this trend is expected to continue in 2018. However, table developers have a number of challenges to solve before taking UI to the mainstream.

Hyper-growth of the cryptocurrency market has changed the technology landscape, and some AI products do not hesitate to toy with the blockchain technology. For instance, Kik messenger developers launched their own crypto-token called KIP and managed to raise $100 million to build their virtual economy. Sensay company is another example of high hopes pinned on the blockchain. Sensey token was launched to provide a human network with the incentive to use chatbots. It inspires to turn to the bot for advice or for finding dank memes. Anyway, obviously, chatbot companies will extensively take the advantage of cryptocurrency in order to strengthen their value proposition.

2018 will see more enterprises adopting new technologies for app management improvement. Chatbots will help customers multitask via native messaging solutions, working on several tasks at one time. This option seems to be appealing to people as it gives a chance to finally cut down on signups, installations, passwords — many things we have to do during occasional app usage. AI-driven technology and NLP-powering tasks will help the enterprise optimize resources and time to lower costs and provide quality service at greater speed.

As per the recent report by Grand View Research, the chatbot market across the globe will reach $1.23 billion by 2025. Until that time companies will work on weaving AI into their daily operations. Yes, chatbots are not as smart as we want them to be, but they are evolving very quickly. Bots do offer much potential for businesses in many areas. It does not matter whether a business is small or large: by using technology business is forward-thinking and it makes tech-savvy customers happy.

When does your business need a chatbot?

Chatbots are as smart as the words you feed them. When the input is poor, the behavior of chatbots evolves accordingly. Alongside being a social and cultural experiment, chatbots are a technically complex undertaking, and it takes careful planning and investment. An AI chatbot will not transform a business overnight. So what are the cases when the business really needs to apply a chatbot?

• Chatbots are a powerful tool for scaling up business operations. As a compliment to the human task force, chatbots can boost business needs to enter new markets.

• Chatbots off-load from the customer support team. After first point contact is made, chatbots redirect calls when required.

• Help selecting the right product. In case business has a range of similar products, chatbots can assist in making the choice of the right product or service.

 Selling to millennials. This generation is far from being impulsive buyers: they like to search and compare before making a purchase. In case millennials are the target audience, a chatbot is a prudent investment.

• Running e-commerce. Chatbot is an interactive marketing platform, which gives a chance to reach out to more people at once due to integration in Messenger.

 Driving up organizational efficiency. Chatbots can become a way out if your business burns too many resources in the context of backend support. Rather than employing new people for routine tasks, implementing chatbots would be a reasonable approach.

These points are the major criteria for businesses to take into account before thinking of chatbots. Using automation through business processes ultimately increases profitability, product quality, and market presence. Technology hits our shores, and chatbots are here to stay. Remember that.