Chatbots: Your New #BFF?
Jun 14, 2023
In a span of a few decades, the world has been transformed tremendously with an unstoppable wave of technological advancements. From the rise of the internet to the dawn of AI, change has become the only constant.
How we engage with brands is rapidly changing. We now expect brands to be accessible anytime, anywhere. To meet the demands of today’s consumers, brands are adopting conversational engagement technology solutions like chatbots to enhance productivity and accessibility. Though chatbots are not yet fully equipped to address every inquiry or issue, advancements in intelligent algorithms and internet-connected devices are making them increasingly human-like. By leveraging data, chatbots can deliver personalized and contextualized engagement, enabling brands to better connect with their customers. According to Google Trends, traction for chatbots has grown 4 times over the last decade.
But how do chatbots know so much about us?
As per research by Intercom, engaging in a chat conversation with website visitors increases the likelihood of them converting to customers by a significant 82%. Chatbots are multi-talented. They could be your financial advisors, your trainers, your tutors, your fashion stylists, and whatnot. But how? There is no rocket science but just data, mass amounts of data. Chatbots acquire user information through direct input, profiles, cookies, tracking, integration with external systems, and data analytics. Users provide details, create profiles, and share data willingly. Cookies track website behaviour, while integration enables access to external databases like CRM. Data analytics uncover patterns and insights from interactions. However, chatbots must handle data responsibly, ensuring privacy compliance and user control.
The utilization of data is driving AI and empowering chatbots to remain a lasting and impactful technology for brands. By leveraging chatbots, brands can facilitate more personalized and context-driven engagements with their consumers. Chatbots have become our go-to digital assistants, from scheduling doctor’s appointments and checking account balances to connecting with brands and submitting service requests. With their ability to respond instantaneously, they are quickly becoming our trusted digital companions.
Types of Chatbots
Before proceeding, here’s a quick fact, 41.3% of consumers deploy conversational marketing tools to make purchases.
1. Rule-Based Chatbots: These chatbots operate based on predefined rules and follow a specific flow of conversation. They respond to user inputs using predetermined patterns and keywords. Rule-based chatbots are typically used for simple, straightforward tasks and have less flexibility in understanding natural language. Eg- Axis Bank’s AXAA, FAQ chatbots, Appointment scheduling chatbots.
1.1 FAQ Chatbots: These chatbots are designed to answer frequently asked questions based on pre-defined rules and predefined responses. They are commonly used on websites and customer support platforms to provide quick and automated responses to common queries.
2. AI-Powered Chatbots: Also known as conversational or intelligent chatbots or virtual assistants, these chatbots use artificial intelligence (AI) and natural language processing (NLP) techniques to understand and respond to user inputs. They can learn from conversations and improve their responses over time. Eg- Snapchat’s My AI, Amazon Alexa, Siri, Chat GPT.
2.1 Apple Siri: Apple’s voice-activated virtual assistant, available on iPhones and other Apple devices, helps users perform tasks, answer questions, and interact with their devices using natural language.
Chatbots: The Game-Changer in Customer Service
Chatbots have the potential to reduce customer service costs by more than 30% (source: IBM). Brands have started deploying chatbots across marketing, support, and commerce. Businesses are fabricating integrated customer engagement journeys using digital tools because of the consumers and the repeat business value they bring. Is it not what gravitas is? Businesses form strategies keeping consumers at the centre of decision-making. Second, AI-enabled chatbots are being used to deep dive into consumer behaviour. Consumers are shapeshifting, and so are brands to stay adaptable to the constantly evolving marketing dynamics.
Customer care executives’ availability often fails to align with customers’ needs, causing inconvenience and frustration. Chatbots offer a solution by being available 24/7, eliminating concerns of missed sales and ensuring prompt customer service. Therefore, brands have the amazing benefit to customise chatbots that best fit their business mode and mantra, and literally craft a chatbot that reflects the tone of their brand and makes customers feel like they’re talking to real people. They just need the appropriate programming that incorporates the brand’s unique personality and be taught the conduction of specific tasks based on the business needs.
That’s not all, chatbots tend to learn from past interactions with customers, to better understand them which ultimately provides better solutions and increases efficiency over time.
The efficiency of chatbots in retail and marketing
AI retail services are projected to mount from $5 billion to over $31 billion by 2028. Therefore, retail businesses must underscore both profit and productivity to remain emulous in the global economy.
1. Customer Data Collection and Analysis: Chatbots can gather valuable customer data during interactions, such as preferences, purchase history, or feedback. This data can be utilized for targeted marketing campaigns, personalized recommendations, data-driven decision-making, product development or service enhancements.
2. Automated Marketing Campaigns: Chatbot can assist in delivering targeted marketing messages, such as tailored product recommendations, promotions, or event notifications, based on user preferences and behaviour. They can automate marketing campaigns, ensuring timely and relevant communication with customers.
3. Lead Generation and Qualification: Chatbot can engage with website visitors or social media users, asking qualifying questions and collecting information. They can help identify potential leads and gather valuable data for marketing purposes.
4. Personalized Recommendations: By analysing customer preferences and purchase history, chatbot can offer personalized product recommendations. They can suggest relevant items, promotions, or upsell/cross-sell opportunities, enhancing the customer shopping experience.
5. Order Management: Chatbot can assist customers in placing orders, modifying, or cancelling orders, and tracking shipments. They streamline the ordering process, reduce human error, and provide real-time updates on order status.
6. Virtual Shopping Assistants: Chatbot can guide customers through their shopping journey, acting as virtual assistants. They can help customers find products, provide detailed product information, and offer comparisons, ensuring a seamless and informative shopping experience.
7. Cost and Time Efficiency: Chatbot streamline marketing processes by automating repetitive tasks and providing instant responses. They reduce the need for manual intervention, saving time and resources for marketing teams.
Everlasting Evolution of Automated Conversations
In today’s technological era, chatbots are here to stay and revolutionise how industries function. As a market research company with an all-embracing expertise of over 23 years, we are aware of the increasing use of this tool in market research, be it for valuable insights in a scalable manner, customer segmentation, sentiment analysis, surveys and feedback collection, or consumer behaviour analysis, the list goes on. We have been proactive in our approach to delivering the best-customised solutions to our clients to stay competitive and thriving.