It may not look quite like a scene from Terminator, Ex Machina or I, Robot, but the rise of the bots is already well underway – or at least, the rise of the chatbot.

Nowhere has this growth in prominence been more evident than in customer experience (CX) and consumer communications. The number of companies using chatbots powered by AI (artificial intelligence) to provide support and service has been steadily growing – and is set to skyrocket in the coming years.

Not convinced? Just take a look at these stats:

  • As of 2023, 800 million+ people in over 190 countries use chatbots to perform tasks (CNBC).
  • 68% of users enjoy the efficiency and rapid pathway-to-solution provided by chatbots (Userlike).
  • Chatbots handle approximately 70% of interactions from start to finish (Comm100).
  • Almost nine-in-ten consumers report a positive or satisfactory experience when dealing with a chatbot (Drift).

Perhaps most strikingly, Gartner estimate that – as of 2020 – the average person (whether they know it or not) has more conversations with bots than they do with their spouse! (Gartner.)

Indeed, AI-powered web chat functionality is now seen as a hallmark of modern communications software such as our VCC.

But what is a chatbot, and how will it inform the experience of user interactions, support and customer service? And, more pressingly – how can you ensure your organisation gets it right, and what are the dangers to look out for?

What Exactly is a Chatbot?

At a top level, a chatbot is a tech system that can mimic a human interaction, either with voice-simulation software or through text-based messaging.

In the context of customer support and service, chatbots represent the latest innovation in self-service tools. In effect, they give users a channel where answers and solutions can be found – fast.

And in the era of digital communications, where time is at a premium and efficiency is king, that is certainly not something to be sniffed at.

Chatbots improve customer relationships, loyalty and retention by delivering meaningful answers and solutions 24/7; and, by working autonomously and around the clock, they release human agents from lower-value interactions (such as routine question-and-answer queries).

This, in turn, allows your human workforce to be realigned to tasks where emotional intelligence and humanism is genuinely required for value-adding activities.

How chatbots work

Chatbots have a history and development stretching back to the 1960s. In their most rudimentary form, they work like a document-retrieval system: by analysing input information, and returning relevant items from a database.

“Out of the pool of problems your customers have, there are some that are best suited for a talk with a human. But that’s not something as common as ‘reset my password.’ Agents’ time is precious, so save them for the complex stuff … Let the chatbot take care of the simpler jobs.”

Greg Bennet, Lead User Researcher, Salesforce

But it’s with the introduction of AI that things get really interesting.

Artificial intelligence, along with branch technology like machine learning, have incredible processing powers and data handling capacity, the likes of which we’ve never seen before.

This power means the chatbot experience becomes dramatically more rewarding, personalised and efficient.

The quality of understanding and decision-making a bot demonstrates is greatly elevated by automation technology, and NLP (natural language processing) ability.

In practice, this results in a streamlined, sophisticated and highly-responsive customer experience. Users receive a tailored service, in good time – anytime – that allows companies to re-allocate staff to more value-adding activities.

The Efficiency-Driving Benefits of Chatbots in Customer Experience

The integration of chatbots and customer experience is a win-win situation.

Customers get better, faster support services, a chance to offer feedback in an accelerated way, and an expedited journey that sees their questions answered and issues resolved in a format that is genuinely helpful.

In the case of businesses using chatbots, things are equally positive. Customer queries are routed and dealt with as effectively as possible; agents are given the freedom to work on priority tasks; and brand and/or marketing efforts are maximised without the need to increase demand on resources.

All of this adds up to one thing: communication efficiency. For your brand or business, this is absolutely crucial in securing growth and improving operations.

Increased customer convenienceChatbots can give your consumers what they want, when they want it, without the need for a time-consuming back-and-forth. They’re also available to use at the moment your users need them, on a variety of devices.
Maximisation of FCRFCR (first-contact resolution) is music to the ears of contact centre operators. Where automation and self-service tools allow your users to receive the support they need without the need for your team to be involved, profitability is maximised.
High-speed, 24/7 supportTime is one area where chatbots really shine. Not only do they deliver accelerated service, they do it at any time, on any day. Moreover, a chatbot doesn’t ever need to take a break or go on vacation – it can work all of the time.
Effortlessly personalised serviceDue to its sophisticated software, chatbots are armed with unique customer information as soon as your users get in touch. Name, address, shopping preferences, previous purchases and more are all instantly available to a chatbot delivering customer service.
More efficient redirects and routingSometimes your customers need to wait in a queue. This is frustrating, so the more you can minimise this, the better. Bots can welcome and instantly direct users to the department or resources they need, so downtime is reduced considerably.
Lead generation potentialInitial support interactions can explore new business potential for your sales team or human agents to pick up once the lead has been qualified. Your chatbot can get all the vital information and establish intent, ready for down-funnel marketing.

Best Practices for Implementing Chatbots: How to Get It Right

AI-powered chatbots are an incredibly powerful tool, but smart execution is essential. Their success as a solution largely comes down to the way they are implemented, monitored, and improved as one component of a wider operation.

By far, the best way to ensure your chatbot project is a successful one is to implement modern and specially-designed customer communications software, such as our VCC. Aside from AI-powered chatbot functionality, the Virtual Contact Centre offers email, SMS, IVR, VoIP and social media modules, in a truly omnichannel customer support platform. Contact our team to learn more.

Set clear goals

As with any process improvement strategy, it’s important to get absolutely clear on the central goals and objectives, right from the get-go.

Do you want chatbots to navigate users through an entire sales process, for instance, or put them in touch with agents from a specific region? Does your business consider AI chat forums appropriate for upselling or recommending a new product, and if so, how pushy will you allow the bot to be? Are you planning to implement chatbots on your site, on social media platforms, or other spaces?

Asking these types of questions will help you establish exactly what you’re looking to achieve.

Train your bots

Think of your chatbots as members of your digital workforce. Just as you can improve the value of your human team by upskilling, you can ‘train’ bots to do what they do, better and faster.

It may even be possible to expand chatbot capabilities in response to breakthroughs in technology.

In any case, it would be a mistake to implement chatbots and consider it job done, forever and always. Yes, the technology can work independently and effectively – but equally, it’s your responsibility to perform due diligence, routine maintenance, and optimisations.

Machine learning, for instance, needs data in order to perform decision-making. The more information it has access to, the better the decisions it arrives at – so you’ll want to ensure that ML-enabled applications have access to up-to-date databases.

Integrate with other channels

Let’s say you’re a finance and banking organisation, and you install a chatbot on your site.

In and of itself, this will represent efficiency and value: you’ll be able to route customers to correct departments swiftly, provide secure bank account details for customer queries, and deliver a tailored journey.

But why stop there? You could go on and activate a connection between your site chatbot and other brand experience channels.

Perhaps you link your site and social media chatbots, and allow information to be securely shared between them, so consumers can seamlessly switch between your site and Facebook (which has over 400,000 active chatbots and counting, by the way, according to SocialPilot) on their journey.

Or, you set up your site chatbot to provide a unique reference number, allowing users to verify their identity with IVR the next time they need to pick up the phone.

However you decide to do it, connections are key. For a truly omnichannel solution, link your various communication spaces, and watch as your brand or support journey becomes markedly more streamlined.

Avoid These Common Pitfalls

With this all said, there are a few dangers, or risks, that could result from chatbots – if you don’t execute the plan in the right way.

As in all areas of the retail industry and telecommunications, it’s possible to do a good thing badly – and poor application might mean your chatbots and customer experience prove to be a disastrously ineffective match.

To avoid this unwelcome scenario, be sure to avoid these common mistakes with chatbots:

  • Over reliance on chatbots
  • Poor chatbot design
  • Ineffective bot performance
  • Security breaches
  • Isolated/siloed bots
  • Neglecting to utilise AI
  • Not following brand guidelines in interactions
  • Failing to test chatbots

Following our best practices will allow you to sidestep these pitfalls and ensure that your chatbot is aligned with your wider business goals, contributing to growth and eliminating efficiency issues.

Reach New Levels of Customer Communication

Research has indicated that the most successful companies are 2.1x more likely to be utilising chatbots than low-performing organisations (Salesforce), and that over 75% of consumers believe that chatbots will transform or have already transformed their expectations of brands.

When it comes to chatbots and customer experience, this AI-powered technology is set to revolutionise digital consumer communications; indeed, the process has already begun.

In order to stay at the forefront of your industry and deliver the most efficient, profit-driving service and/or support possible, now is a wise time to invest some thought and resources into chatbot software.

Doing so can massively improve your processes, increase the value of your agent team, and cement your position in the industry with unbeatable services. Indeed, implementing a chatbot might just be the best thing you do – for the people on both sides of the sales process.

Our VCC is designed with a range of future-proof tech tools on top of chatbot functionality, including IVR, VoIP, email and SMS messaging. Book a free demo today and discover how it could maximise your retail communications.