Insight August 21, 2018

Conversational Commerce and the Rise of the Chatbot


Chatbots were around before the internet, in one form or another. From ELIZA and A.L.I.C.E to SmarterChild and Siri, humans have been interacting with chatbots since the 1960s. Recently, however, marketers have been exploring the potential of chatbots to automate customer service via conversational commerce.

Simply put, conversational commerce is an automated technology that enables online shoppers and brands to interact via chat and voice interfaces. It takes the long tradition of using conversation to facilitate the sales process and automates it, such that a human being is no longer needed to add value for the customer. Instead of asking a store owner for a recommendation or calling customer service to process a return, your customer would be able to quickly and easily get a response from a chatbot.

Why should you use a chatbot?

Reach more customers. Marketers are always looking for ways to provide value to customers where they already spend their time. According to a study by Business Insider, messaging apps have 20 percent more monthly active users than social networks. For the first time, people are using messaging apps more than social media — and that means businesses that have a chatbot will be able to access a huge audience.

What’s more, research from TechCrunch indicates that while 85 percent of time on smartphones is spent in apps, only five apps see heavy use. The old model of creating your own smartphone app to streamline the mobile shopping process is much less effective than it once was — and businesses are turning to chatbots to bridge the gap.

Cut labor costs. There’s no question that customer support is a critical part of any business. Salesforce reports that 74 percent of customers will likely switch brands if they find the purchasing process too difficult. Traditionally, businesses have needed to hire and train customer service agents to help customers navigate the purchasing process or invest in creating a cross-platform app. However, a chatbot can be a less expensive and, overall, better alternative.

Some research suggests that chatbots can help reduce customer service calls by 30 percent — simply by automating 30 percent of the tasks performed by call center staff. Employing chatbots in your sales or customer service process can help you save labor costs, as well as time.

More importantly, small businesses can offer 24/7 customer service with the help of a chatbot, which might otherwise be prohibitively expensive.

Increase customer satisfaction. Research from Econsultancy shows that 83 percent of shoppers need support when shopping online. As chatbots continue to grow in sophistication, they can provide a customer experience that is similar to shopping in a store. Chatbots will replace the search window. Rather than visiting a website and browsing your products and services for what they need, customers can have a conversation with the chatbot.

According to one survey, more than half of customers say that they prefer texting a customer service agent. So, in addition to being more natural than performing a database query, interacting with a chatbot can provide a better experience for customers.

Plus, the more you integrate user data into the chatbot experience, the quicker your chatbot will be able to find the right product or service for your customer.

Imagine if your chatbot already knew about customers’ past purchasing behaviors — what products they bought, when they typically reorder, and what shipping or service features they chose. Your chatbot would even be able to serve up the correct items faster or proactively prod customers with reminders to reorder when they are running low on a product.

There is still a great deal of room for growth, but as machine learning and natural language processing capabilities continue to develop, chatbots will become one of the top tools in the digital marketer’s toolbox. Now is the time for businesses to start thinking about how a chatbot can be integrated into the customer journey.

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