Just about every business website has some form of chatbot now, though their level of usefulness does vary. The right chatbot can give your customers a great experience and improve your operational efficiency. But the wrong ones may frustrate customers and cost you business.
The key? Make sure you’re aware of your options and the user experience before committing to any solution.
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The origins of the chatbot
The proliferation of chatbots over the last decade may give the impression that they are only a product of the internet. In truth, though, the roots go all the way back to 1966 when Joseph Weizenbaum a German computer scientist and Professor at Massachusetts Institute of Technology developed a program, he called ELIZA.
The all caps make it look like an acronym, but ELIZA doesn’t stand for anything. Instead, as explained in the original Stanford article about it: “Its name was chosen to emphasize that it may be incrementally improved by its users, since its language abilities may be continually improved by a ‘teacher.’”
The reference there was to the character of Eliza in George Bernard Shaw’s Pygmalion (more likely recognized by people today as the character in the musical version My Fair Lady).
Eliza was hoping to convince others that she was something she was not – a well-bred lady. Likewise, the program was designed to come across as a human therapist and convince users “that they were having a conversation with a real human being.”
While ELIZA definitely counts as the first chatterbot, the term was only born decades later. In 1994 Michael Maudlin invented a program he named Julia and called the function of a chattering robot “ChatterBot,” and the term soon got shortened to chatbot.
While users enjoyed their conversations with those early chatbots, most of us would not mistake them for actual people. But today’s chatbots are a different story.
They’re able to carry on much more natural-sounding conversations thanks to the application of machine learning, artificial intelligence, and natural language processing. Adding in ML and AI enables them to learn by identifying data patterns and then to apply their knowledge to answer questions and carry out tasks without any human intervention.
Their greater functionality translates into far more use by businesses and their customers. Today businesses use bots for a range of communication needs, ranging from customer service to product suggestion, scheduling, and various forms of marketing designed to engage the audience.
But the biggest area of growth for chatbots may be in sales. In Chatbots: Vendor Opportunities & Market Forecasts 2020-2024, Juniper Research anticipates that consumer retail spend over chatbots will hit $142 billion by 2024, quite a jump from the $2.8 billion we had in 2019.
Juniper also predicts that by 2024, more than half of retail chatbot interactions will go through automatically and that “80% of global consumer spend over chatbots will be attributable to discrete chatbots” that are used through a mobile app rather than a browser. On that basis, the report “urges retailers to implement chatbots as part of a wider omnichannel retail strategy in order to maximize their presence on a number of key retail channels.”
Examples of chatbot successes
For businesses who are looking for inspiration of great applications of chatbots in 2020, there are six standout examples assembled by Discover.bot:
- WHO – Understandably, 2020 created a great demand for information on COVID-19. That prompted the WHO to put out a chatbot on WhatsApp to provide “fast, reliable information related to the pandemic and combat the spread of misinformation.”
- National Geographic Genius – This was a Facebook Messenger chatbot to promote its Genius series. The bot’s interactions varied according to the featured figure.
For example, when it was up to the Einstein episode, they got the experience of interacting with the quirky personality of the scientist. “The result was six-to-eight minute average conversations, 11 turns per conversation, 50% user re-engagement, and an engaged community of followers,” reports Discover.bot.
- Duolingo – It’s a native chatbot built with the freemium language learning app to encourage users to practice through a gamified experience. It’s not one-size-fits-all but offers different style tutoring bots to appeal to different types of learning styles.
- Erica – Back to female names with Erica from Bank of America, a financial assistant who goes beyond just offering account information. She is equipped to not just carry out basic transactions like paying bills but to offer budgeting advice.
The numbers tell the story of the success. It boasts over 7 million users who have completed over 50 million transactions with it. Users appreciate the ease of discovering the bank’s services with her and the helpful reminders to do things like cancel subscriptions.
- Madi – That a cool and apt name for Madison Reed’s hair color bot. For those who need help visualizing what color will work for them, this is the perfect solution.
All they need to do is upload a photo. Madi does the analysis of the hair through image recognition and also asks the right questions about what they would like.
As Discover.bot notes, it removes the pain of waiting to get a colorist appointment (something that may not have even been possible for months during 2020-2021). The payoff was huge: “the bot has boosted engagement by 400% with a 21% click-through rate to the company’s website.”
- Julie – She’s the friendly and capable voice of Amtrak’s customer service. In truth, Julie is older than she looks. The voice is named for the voice talent lent by Julie Stinneford since April 2001. Read up on that in For a machine, Amtrak’s Julie is really sweet.
That means Julie has a successful track record of nearly two complete decades, which is quite an accomplishment for a chatbot. She also saved Amtrak $1 million in customer service cost and boosted revenue by 30% automated bookings.
More reasons to get on board
Chatbots.org lists a full dozen types of functions for chatbots and shares the statistics on their ROI for businesses:
- Consumers are 63% more likely to return to a website that has a chatbot.
- 71% of people are willing to use messaging apps to get customer assistance. People want their problems solved, fast.
- Web page engagement rates increase by 3x on average after adding a chatbot.
- Chatbots increase conversions on your website by 45%.
- 53% of consumers are more likely to shop with businesses that they can message.
The site also offers information about the various chatbots in the market with rankings, so businesses can find the ones that fit their needs and budget. With the right chatbot, your business can scale up marketing and sales with great efficiency and deliver real value for your investment.
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