Originating from the phone-tree style conversations of the 90s, chatbot technology has been steadily evolving over the last several years. Now, with artificial intelligence and machine learning technology advancing every day, chatbots are only continuing to grow in their usage and abilities.

This has lead experts to predict that by 2025 the global chatbot market will grow from a 190 million dollar industry to a 1.2 billion dollar market.

Currently chatbots are still in the early development stages and without the proper training they can often end up being more annoying than helpful. On the other hand, when done correctly, chatbots can increase conversions on your website and optimize the user’s experience.

With more customers than ever demanding an exceptional customer experience from the companies they interact with, there has never been a better time to invest in chatbot technology.

chatbots

Popularity of chatbots

While rudimentary chatbots have existed since 1966, it wasn’t until recently that they have become technologically advanced enough to engage with users the way we see today.

As chatbots have progressed, so has technology and consumer’s familiarity with various new systems. This combination has lead 80% of senior marketing and sales leaders to expect that they will be using chatbots for customer interaction by 2020.

Considering that more people are using chat services than social media, you can understand why there is a growing push for investment in chatbot technology. Customers will no longer have to seek out a company website or social media page when they can ask the brand directly for what they need.

Chatbots can help make the right first impression, one that will start customers on right track through the sales funnel to increased conversions. As businesses become larger and more complex, AI and machine learning will become even more necessary for facilitating these types customer relationships.

How chatbots benefit brands

While investment in chatbots is continuously rising, many are still unsure of how chatbots actually benefit their company. After all, it’s one thing to say it will work, it is another to actually put into practice. Chatbots can benefit your company by:

Making sales steps shorter: By shortening the distance between showing interest and making a purchase, chatbots can increase conversions by offering assistance throughout the sales process. Companies like AcadGlid have already taken advantage of this and were able to help some of their clients increase conversion rates by 240%!

Provide excellent customer service: With three out of four consumers believing it takes too long to reach a live customer service agent, there is an obvious need for better customer service. In fact, Forrester predicts that by 2020, customer experience will be the number one brand differentiator. Chatbots are one of the best solutions for this pressing issue.

Gain and utilize customer insights: As chatbots grow in sophistication, they can not only gain customer insights through engagement and interaction, but they can then utilize those insights to upsell and cross-sell to users. Whether it is simply offering a follow-up pitch to something more complex, Solocube and other creative agencies see chatbots as the solution to better user interactions that lead to higher conversion rates.

Best practices for implementing an effective chatbot

While a well thought-out chatbot program can do wonders, a poor program can turn customers off. In order to create the right program for your customers, stick to the following tried and true best practices for utilizing chatbots effectively.

Strive for consistency

Establishing consistent messaging, branding, and design across the board is vital to creating an exceptional user experience. The same is true when working with chatbots. By striving for consistency and cementing processes, users will know how to interact with your chatbot and better navigate the conversation.

For example, you should never set expectations that the chatbot cannot meet. A huge part of providing a sound customer experience is setting the right expectations and then meeting or exceeding them. If you promise too much, too soon, you will shoot yourself in the foot and end up with dissatisfied customers.

In fact, Facebook has been working hard to improve the consistency of their Messenger chatbots for this exact reason. When a customer feels like they understand how the program works and receive a consistent experience, they are more likely to return and use the service again.

Focus on small, well-defined tasks

Chatbots are built upon a foundation of well-defined rules and processes that allow them to learn and grow in order to take on more complex requests. Another best practice here is to start by focusing on these small, well-defined tasks to ensure that your chatbot can handle the basics before diving deeper.

Unless this foundation has been set and properly vetted, you will end up with confused and potentially upset customers. However, if you can nail down your program’s responses to basic tasks and procedures, you will have an easier time meeting customer needs as your chatbot evolves.

For instance, Mitsuku, a prize-winning chatbot technology, keeps things conversational while laying our clear and concise steps for users to take. Not only does this create a better user experience, but by breaking the process into smaller parts, it makes it easier for the chatbot to understand the user’s intentions and provide a suitable response.

Acknowledge limitations

Even if you have the best possible chatbot technology currently available, there will simply be times where the limitations of the technology catch up with you. This is completely normal and customers will not expect your chatbot to be capable of everything, but the way you respond to this is what will set your program apart.

Acknowledge the limitations of the system and never be afraid to have your chatbot say “I don’t know” when faced with a difficult task. This can be the perfect time to transition the conversation to a human customer service rep.

By establishing a certain threshold where the handoff can be made, you can still offer a seamless experience that doesn’t waste customer’s time with a chatbot out of its depth. Instead, put in place a question from the chatbot such as “I am not sure about that, would you like to speak with a human?” More often than not your customers will be happy to oblige, while saving both of you time and frustration.

If you need help figuring out the right balance of limitations and the chatbot-to-human handoff, Microsoft has put together a useful guide to help you nail down this process.

Putting chatbots to the test

In order to see for ourselves how effective chatbots are today, we put them to the test to see how well they did at responding to prompts ranging from setting up an account to transferring the conversation to a customer service rep.

What we found was that of the 20 chatbots we interacted with across multiple different industries, hardly any of them could respond to anything outside of their scripts. Some even gave us completely wrong information. According to a study by Layer.com, this isn’t unusual and Facebook Messenger bots like those we tested fail around 70% of requests made by users.

As you can see from this pie chart, only one of the brands we spoke with was able to take the prompt of ‘Create an Account’ and actually navigate us to a helpful link. The other 19 failed, with only 14 of those 19 offering a customer service rep when things went wrong.

It became pretty clear, even with our small experiment, that the majority of brands using chatbots aren’t doing so well. When 40% of consumers do not care whether a chatbot or a real human helps them, as long as they are getting the help they need, brands may want to consider avoiding chatbots until they can provide equally effective customer service as they already do with their trained support staff.

Brands doing chatbots well

While there are brands that are not using chatbots well, there are those who understand their end-users and have figured out how to use chatbots in order to improve the customer experience. For instance, Monster.com’s Jobr chatbot has been able to answer 80% of inquires brought to it with no problem.

WayBlazer

The first chatbot we will look at that has proven itself to convert 19% higher for travel brands is WayBlazer. Labelled as ‘conversational commerce,’ WayBlazer uses a Facebook messenger chatbot to lead helpful conversations with users who are trying to plan out their trips.

Through the use of collecting customer insights and providing instantaneous, personalized customer service, WayBlazer has been able to boost conversions and increase sales for travel brands around the world.

Expensify

The next chatbot comes from the company Expensify, which seeks to help streamline and automate expense reports and travel arrangements for companies across various industries. Their latest product is known as “Concierge,” a chatbot that takes users step-by-step through the process.   

“You don’t want to talk to the chatbot, you want something to happen with the minimum amount of interaction.” CEO of Expensify, David Barrett.

Not only can Concierge help customers proactively troubleshoot issues with their account, but it can provide real-time travel pricing to ensure users are getting the best value. According to CEO David Barrett, Concierge has helped reduce banking problems by 75%, showing just how impactful their program has been.

Chatbot use cases

It’s clear that when you take the time to create a chatbot that meets the needs of your users, you can have incredible results. That being said, unless you meet the specific requirements that the aforementioned examples touched on, you may still be unsure of how a chatbot can help you.

Let’s take a closer look at a few chatbot use cases to see the full potential of adding an automated assistant to your organization’s marketing plan.

Welcome users to your site

One of the most basic functions of a chatbot can be to simply welcome users to your site. While this seems like a minor thing, Leadpages discovered the power of greeting customers recently when they began adding a welcome message to their chatbot. Not only did questions asked to the chatbot increase by 267%, but conversions went up by 36%!

This all came about when they realized that there was a much bigger opportunity to encourage conversations that lead to conversions by simply adding a welcome message. LeadPages CMO Dustin Robertson said, “Site visitors ask questions through Drift as they consider purchasing our software. But there’s more to Drift than just chat. We can proactively reach out to visitors.” This small shift in approach had huge positive effects on their business and user experience.

Provide users with a ‘self-service’ option

Chatbots can offer more than just a welcome to visitors. More advanced chatbot technology that incorporates AI learning can provide users with a ‘self-service’ option, where they are able to complete their transaction from beginning to end without the need for a customer service rep.

Amtrak was able to take advantage of this when they implemented their chatbot ‘Julie’ back in 2012. The goal of the project was to turn Julie into the best possible customer service rep for Amtrak, helping customers buy tickets and plan trips through a simple conversation. The results blew predictions out of the water.

Julie has not only been able to answer 5 million questions every year, but the chatbot brought an 800% return on investment, increased bookings by 25%, and generated 30% more revenue than bookings made through non-chatbot avenues.

Generate and qualify leads

Now, not all sales processes are as cut and dry as something like buying Amtrak tickets, but chatbots can still help to generate leads. Take RapidMiner’s CMO Tom Wentworth, who wanted to use a chatbot to help increase lead generation for his organization:

“People who come to our website aren’t coming there because they want to surf our site, they’re coming there because they have a specific problem, whether it’s a question about our product or what it does, whether it’s some technical support they need, or whether it’s they want to talk to someone in sales.”

Tom decided to use chatbots to circumvent a messy or lengthy lead generation process by having the chatbot qualify the leads for them. By replacing all of their lead generation forms with Drift’s Leadbot, RapidMiner was able to generate over 4,000 qualified leads, accounting for 25% of their sales pipeline. Tom went on to say that adding a chatbot was “the most productive thing he has done in marketing.”

How to start your own chatbot

As we have seen, while there has been heavy investment in chatbot services, in practice there is much more work to be done. The best way to avoid a failed chatbot is to have clear goals and objectives in mind before you begin programming.

According to Chatbot magazine, identifying the opportunities for a chatbot and understanding the goals of the program are essential first steps. However, once these goals are clear and laid out, you will still need the right tools to take your chatbot from an idea into a reality.

Choosing the right chatbot framework or tool

Unless you have the technical expertise required to put together your own chatbot program, we recommend finding a platform or framework that can do the heavy lifting for you. Thankfully, there are plenty of options to choose from, all with their own unique offerings and helpful features.

Chatfuel: For anyone looking to get started with their first chatbot, Chatfuel makes it easy with no coding required. Chatfuel has tools for making customer interaction easy, allowing customers to actually chat instead of just select items from a list. On top of that, they use AI to recognize patterns and provide appropriate responses.

Botsify: Another popular chatbot platform, Botsify, uses drag-and-drop templates for ease of use when creating your bot program. Additionally, there are plenty of integrations that come with Botsify, as well as the ability to seamlessly transition from bot to human if the need arises, something we mentioned earlier as necessary in creating a successful bot.

Flow XO: The last platform we will take a in depth look at is Flow XO, the only chatbot framework with 100+ integrations. With pre-built templates and the ability to move bots across different platforms, Flow XO provides an excellent user experience for both their clients and the end users from start to finish.

While there are plenty of other tools and platforms out there, these three are often cited as the most reliable and easy to use for new creators. Once you begin to work with these tools, in order to actually get them to convert and make a difference, there is still some work to be done.

Gathering data from chatbots

The final piece of the puzzle when it comes to optimizing your chatbot for increased conversions comes from gathering data and using the insights you glean from that data to continuously enhance your chatbot. But what data should you be collecting? In order to answer this, it helps to understand exactly how chatbots work.

Chatbots operate off of pattern recognition, meaning that they don’t necessarily understand what you are saying, but they recognize enough to provide an answer based on preset triggers. Often the greatest source of valuable insight will come from the 3 Vs: the variety of ways in which users ask questions, the volume of questions asked, and the velocity in which the questions are asked.

How to use data for continuous success

Once you have collected this data, you will need to analyze it and look for unanswered questions and unrecognized patterns. Then, you can develop new triggers based upon the questions your chatbot wasn’t able to answer.

Over time, as users continue to ask questions, you will be able to fill the gaps in your chatbots capabilities and ensure that no matter the request, you will be able to provide them with what they need. In the meantime, one should program any unanswered questions to be redirected to a human customer service rep.

Conclusion

As we have seen, setting up a functioning chatbot for your company is not an easy task. That being said, if you are able to work with a reliable chatbot framework and follow the best practices laid out above, you can put yourself in the best position to revolutionize your user’s experience and increase conversions online.

Our final piece of advice is to get started now. Chatbot technology is only going to become more efficient and cost effective, lowering the barrier of entry into the space. If you can beat the rush on gaining that competitive advantage, you will be giving yourself a head start in the race for chatbot dominance.