I doubt you haven’t heard about some cases where chatbots failed miserably in having any actual business benefit. Our experience working with the biggest companies in the world like Elisa, Veon, and Swedbank has taught us some interesting things we are about to share in this article.
The benefits of a chatbot can vary depending on the industry, type of chatbot, and size of the organization, but commonly it saves time, money, and manpower. This article goes through the 8 most important benefits of chatbots that are essential for any organization that considers implementing one into the business.
A chatbot is something that most people have interacted with within their life or have heard, at least on the concept level.
In fact, it has become an essential part of many businesses that have customer service, especially if it is a mature industry with high customer expectations and big competition in the market.
In simple words, a chatbot is an artificial intelligence system that is able to mimic human conversation.
1. Is Available 24/7
You probably have no idea how many users are browsing your website off-hours with questions about the service or a product. It might be your existing customer that would want to cancel their subscription or a potential customer that makes online research on a service. Some companies hire additional people to serve customers at later hours. However, it still does not mean that customers are ready to wait for their requests to be handled. In some industries, even one minute can mean that you either turn the potential client into a paid customer, or you never see them again.
The intelligent chatbot does not have such issues as it can answer a big portion of customer inquiries. Natural language processing models allow chatbots to resolve customers’ inquiries with a high first contact resolution rate. These models truly perform the task for a client without any human assistance. Even if you have a call center and customers are turning to you during off-hours, AI chatbots are able to handle these requests by implementing additional components from a callbot solution. The speech recognition model transcribes the call in real-time, and the NLP classifier identifies the issue behind the request. If a chatbot has an answer and the customer agrees to continue the conversation in the chatbot, an SMS with a chatbot link is sent to the customer, allowing to resolve the issue without human assistance.
2. Creates a Personalized Experience
Another important chatbot benefit that sometimes is overlooked relates to customer personalization. As revealed in the Segment research, 71% of the consumers are not happy when their shopping experience is impersonal. A chatbot is able to process customers’ personal data while browsing, which allows the bot to make a personalized suggestion or give advice during the session should the customer experience a problem.
Intelligent chatbots have the possibility to integrate with the backend systems through an API connection. This makes customers’ experiences more personalized as the bot can instantly analyze relevant background information. It will solve issues based on personal data. For example, instead of providing generic information about invoices, the bot looks at the person’s invoice data and communicates that. It can also make transactions instead of giving generic instructions on how to do these. Corporate chatbot use cases give a good overview of the capabilities of such enhanced systems.
3. Detects Sales Opportunities
There are various ways how a chatbot can leverage sales revenue. One of these is the outbound chatbot that you probably have faced yourself on some websites. Such bots push messages with different options, e.g., time booking for a barber visit or purchase of a service that does not require human agent attention. These bots send messages while you are browsing a website or online store and allow integrating sales funnels with lead magnets and follow-up messages. Such chatbots are limited to a specific function and may sometimes annoy customers.
Some enhanced AI chatbots are able to detect sales opportunities and forward these to the appropriate agent or department. It is crucial for big enterprises with thousands of inquiries a day. With a long waiting time, some of the sales opportunities are lost, as customers are not willing to wait. For instance, Titan AI Chatbot software implemented at one of our customers from the telecommunication industry detects additionally around 5% of contacts with sales potential, 50% of which turn into paid customers. The AI chatbot can also automate the sales process if there is integration with the backend systems through an API and business decisions allow it.
4. Cuts Down Costs
Based on our experience and feedback from customers, on average cost per human customer service contact is EUR 3 to 5, depending on the market, the complexity of the questions, and the industry. The calculation can be performed by dividing the operational costs (OpEx) related to human agents by the number of contacts handled.
A truly intelligent chatbot can automate around 60% of all the customer contacts, out of which it can fully resolve around half. Depending on the case, the resolution rate can be increased even up to 70%. This means that with 5000 incoming customer inquiries per month and 60% bot automation, a company will save EUR 10,500 on costs. Of course, these numbers may vary depending on the industry, specifics of the implemented chatbot, and business operations of the company.
5. Improves Onboarding of New Customer Service Agents
Even the best AI chatbots automate only 60% to 80% of the incoming inquiries. Still, some of the requests require a human touch, for instance, questions regarding the termination of the contract or complicated technical issues. In big organizations like telecommunication companies or banks, there might be hundreds of different questions that crop up.
Knowing everything can be tricky, even for experienced employees. Especially considering the fact that answers are written in manuals that are updated from time to time. Also, businesses should keep in mind the fact that customer support agents do not work longer than 2 years in the same position, meaning that companies have to constantly onboard and train new employees.
Some enhanced chatbots have the possibility to forward specific clusters of questions to certain employees. This does not only increase the speed of staff onboarding but also the quality of the answer, as it is easier to become an expert in one question than dozens at the same time.
6. Turn Your CapEx into OpEx
Nowadays, many companies switch from traditional hardware and software ownership to using SaaS business models. This helps to optimize capital expenditures (CapEx) and increase the amount of free cash flow that can be reinvested into other parts of the business.
When it comes to customer service and an increasing amount of incoming customer contacts, the strategy of building additional customer contact centers and hiring new agents is not efficient. It will require a heavy investment into the building and the infrastructure. Besides, if you rely on outsourcing your customer service, it is more difficult to control the quality of the service. As the Covid crisis showed, some companies have had to completely restructure customer service within one day.
In contrast, chatbot software technologies allow scaling the business fast in case you have a sudden increase in contacts. You can turn your CapEx into OpEx, as you will pay only for the contacts handled.
7. Standardizes the Solutions and Creates a Knowledge Base
Human beings are predisposed to interpret an answer based on their personal understanding. In customer service, there are always people that give answers based on their feeling on what is right, as people tend to rely on their experience and are often overconfident. Even if most agents follow manuals, it will not guarantee that the customer will get the right answer, as sometimes manuals are outdated. Without a proper solution, customer agents will either give a wrong answer based on their personal interpretation of the manual or simply due to the fact that it has not been updated on time.
A chatbot allows standardizing the knowledge base across all the customer services. This almost fully eliminates the human error factor and guarantees meeting the expected SLA.
8. Give Customer Service Cases an Owner Who is Responsible for Results
When communication goes through many people (agent, customer service manager, and finally the person who deals with that part of the business), responsibility is shared. In this case, it becomes very complicated to understand what customers are actually asking and make improvements in the customer service procedures.
With chats, it’s easier for the final responsible person to review how the issue is handled and suggest or make improvements. This helps to standardize the process and ensure that provided information is up to date. For instance, Titan chatbot software uses solution flow management that allows product owners to be in charge of creating dialogues, to understand the customer’s reason to turn to customer support, and to eliminate unnecessary contacts in the future. This precludes confusion and shared responsibility and helps to focus on key goals in customer service.
Conclusion
The most important benefits of chatbots have been described in this article. Depending on the industry and specific use case, the biggest benefits from the business perspective come from the significant decrease in customer service cost, the ability to detect sales opportunities, and optimization of the employee onboarding process. From the client’s perspective, a chatbot improves the customer experience and matches their expectations better because the answers are instant, just like with Google. If companies do not start investing in automation, they will be left behind.
We recommend reading our article about truly automated customer service that will give you a deeper understanding of the way you can automate customer service with enhanced AI systems. If you are planning to implement a chatbot in the near future, please keep in mind that you cannot treat it as a regular IT project. We have seen cases where companies fail due to a wrong understanding of the process.
Also published on https://mindtitan.com/resources/gzuides/chatbot/benefits-of-chatbots/.