Chatbots are key in improving customer engagement, retention and experience

Fancy a chat?

Chatbots are proving a fantastic tool for customer retention and improving time on certain websites (engagement).

As the technology behind the bots is advancing, their functionality is improving and they are now able to sort low-level issues out quickly. Importantly, as we will discuss, the human element is still needed when handling more serious issues — for a variety of reasons.

What we’ll learn is that chatbots have an important role to play in the customer experience — which is so important in today’s digital economy, where customer’s are more than willing to change providers or a service at the drop of a hat. However, we’ll also find that chatbot technology is still in its relative infancy, and has a long way to go before the human can be purely used in an oversight capacity.

This is the first of many articles in which we will explore chatbots as part of our Automation Month.

How can you measure the impact of your chatbot? Monitor how long the customer chatted with it, and which question or answer disengaged the user

Retention and engagement

Helping Information Age dissect the impact of chatbots on customer service is Peter Watson, MD and co-founder of Distract, one of the fastest-growing marketing agencies in the East Midlands.

He says: “As we see the rise of chatbots on every level, we’re experiencing some interesting results within this for clients. As the tech continues to develop, what we feel is working best at the moment is that they are very effective in terms of customer retention and are increasing the time potential customers spend on a website. If a customer spends time on your website and is engaged enough to talk to a chatbot, they then enter a very specific audience that can be marketed to more effectively. In effect, these customers are already more identifiable and can be engaged with quickly. This skips several steps of the much-used sales/leads funnel utilised by a majority of businesses online.

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“Using chatbots also means that you are able to directly feed key messages to customers immediately. This can also be supported by the level of insight that is offered by chatbots. If a key message is delivered, read and then disengages a chat, then we know that the key messaging needs to be changed or adapted to further ensure an ongoing touchpoint with the customer. We can also measure whether an answer to a question closes a sale or repels a customer into disengaging.”

Peter Watson sees the value in chatbots.
Peter Watson sees the value in chatbots.

The human element

Low-level enquiries, such as customer service queries can be dealt with very effectively by chatbots. However, it is still necessary to have a human element with more serious issues.

This is because (see, I told you), at this stage of the chatbot, “the technology simply cannot replace the level of interaction that comes with a service advisor, but it is bridging the gap between the availability of advisors and customer satisfaction,” continues Watson. “This will only continue to grow as the technology improves.

At present, we still have account managers monitoring customer service queries, and this will continue for the foreseeable future.”

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Chatbot morality

One of the issues predicted to have an effect in the future is one of morality, according to Watson.

“Do we, for example, address the issue of transparency? Does the customer know they aren’t speaking to a human being? Do we need to inform them? These are ethical and trust issues that at the moment aren’t having an impact, but if chatbots become more intelligent and capable, then it could start to impact on customer experience and retention if this is perceived as a negative.

An ethical conundrum: The issue of transparency, does the customer know it isn’t speaking to a human being? Do we need to inform them?

“Another thing we’re noticing increasingly is the overall integration of chatbots. For example, does every website need one? A recent survey suggested that just 15% of people have used one in the last 12 months, so is this going to grow? We feel as the technology improves, so will take up. It’s a fascinating tool that we predict will be huge.”

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Nick Ismail

Nick Ismail is a former editor for Information Age (from 2018 to 2022) before moving on to become Global Head of Brand Journalism at HCLTech. He has a particular interest in smart technologies, AI and...

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