The Rise of the Chatbots and What They Mean for the Future of Customer Experience


Microsoft's talking about them. Facebook's talking about them. Oracle announced a new Virtual Agent 'chatbot' platform at their Oracle OpenWorld 2016 conference recently. 2016 has even been called "the year of conversational commerce" by the inventor of the hashtag, Chris Messina. It's safe to say that chatbots are a technology we can't ignore in the customer experience space. 


What are chatbots and who uses them?

Chatbots are programs designed to interact with humans either via text or voice. Techcrunch recently declared that voice is chat's next battleground, and voice-operated chatbots have been around for a while. Apple's Siri is one prominent example of a chatbot in the voice space — iPhone users are able to perform tasks on their phone by talking to Siri. Amazon's Echo device comes equipped with an intelligent personal assistant called Alexa who can set alarms, make to-do lists, play audio, and give traffic and weather information. 


And while they aren't new technology, the way companies are using chatbots — especially text-driven chatbots — is new. In the text space, platforms like Facebook Messenger, Kik, and Slack use chatbots within their software to interact with people and provide information. For example, you can use the Dominos bot for Messenger to order pizza from within the app. And one of the functions of Slack's slackbot is to automatically inform you when the person you are chatting to is away from their computer. 

Microsoft infamously launched an AI chatbot called Tay on Twitter in early 2016 that was meant to interact with and learn from humans; unfortunately, it started to put out controversial tweets after being manipulated by the Twitter community and had to be taken offline within a day.

Meanwhile, in a more positive example, the Royal Bank of Scotland (RBS) is testing an artificial intelligence (AI) bot called Luvo that is designed to answer questions from staff via web chat. If Luvo is unable to find an answer, it passes the query on to human advisors. RBS hopes Luvo will eventually be able to handle simple customer service tasks. 

Why use a chatbot?

Research firm Canvas8 has said chatbots can be a good alternative to the often unpopular IVR systems a lot of companies use to handle customer requests. And they may be especially useful for companies who want to respond more quickly to customers via existing social media accounts, where company representatives are already interacting with their customers.

Chatbots also have the potential to improve the customer experience for a wider audience. For example, older customers who have trouble using websites or apps may respond better to a simple messaging service. In the same vein, messaging apps are more widely used by people in the developing world, many of whom are not transacting online. 

In an article on Forbes, Daniel Newman identified the following benefits of chatbots:

  • Fully scalable customer service: Chatbots can be optimized so that staff only become involved in an interaction when necessary; small companies with limited resources may also benefit from using chatbots to handle customer requests
  • Improved customer intelligence: Companies can use the data points logged and stored by chatbots to personalize the purchasing experience and optimize product development
  • A different navigational experience: Chatbots can be used for conversation-based interfaces, meaning customers don't need to look for information via a search tab or drop-down menu
  • More personalized marketing and sales: The conversational nature of chatbots can help build a sense of connectedness and also loyalty to a brand 

While it is still early days for chatbots, they are a tool that organizations should consider adding to their customer experience channel suite. After all, in the push for flawless CX, every little bit helps.

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