Why are chatbots important?

Nick Millward, VP, Europe at mGage, takes a look at the rise and rise of chatbots. 

Surprisingly Chatbots are nothing new, having first been introduced in the 1960s in the form of a computer programme called ELIZA. This programme laid the framework for what chatbots would become, a computerised conversational tool.

Today, chatbots are much more common. For many organisations, the chatbot has become a crucial part of their customer service function to deliver an advanced customer experience. A report by Juniper research showed that chatbots will be involved in 85 per cent of all types of business related interaction.

What is a chatbot?
A chatbot is an application that replicates written or spoken human speech for the purposes of creating an interaction with a real person. They are identified as a conversational agent.

Chatbots can be through text or voice and can be deployed on your websites, applications and messaging apps like SMS, RCS, WhatsApp, Apple Business Chat and more.

Why are Chatbots important to organisations?
1. Automation Enables Operational Efficiency
According to a report by IBM, chatbots could handle 80 per cent of routine customer questions. Customer service is an essential but costly function for businesses, which is why having an automated tool like a text chatbot is vital, as it can provide customer service 24/7.

By implementing an automated chatbot, this can enable businesses to easily answer routine customer service inquiries or issues swiftly thereby reducing incoming call volumes and human interaction. In fact, it’s reported by IBM that integration of chatbots can lead to a 30 per cent decrease in operational costs.

2. Invest to Enhance Customer Experience
Today’s customer requires quick and timely responses to their inquiries and a delayed response can often be the basis for a negative review or cancelled service. A report from Forrester Research found that 63 per cent of customers will leave a company after just one poor experience, and almost two-thirds will no longer wait more than two minutes for assistance. By integrating a chatbot, a brand can provide the immediate and time sensitive responses consumers expect from brands. This is reflected in research by Chatbot Magazine that shows 69 per cent of consumers prefer chatbots because of their ability to provide quick replies to simple questions.

Today’s smartphone users have access to a variety of channels, including SMS, RCS, Facebook, WhatsApp and more. In a digital era, businesses no longer operate on a set time, as websites and social apps are always available meaning that customer engagement is a constant. This is where chatbots become essential to support this level of engagement.

3. Smarter Messaging Delivers Customer Satisfaction
Conversational messaging is transforming the messaging landscape as it speaks to the desire for customers to receive more personalised, relevant and engaging messaging. By integrating chatbots, a conversational technology, businesses can have automated assistants that can support customers with their unique requests and interests simply and swiftly. Furthermore, businesses can enhance the conversational experience as we see the increasing popularity of NLP (natural language processor). NLP chatbots utilise AI technology to be more natural and pick up on the context of a customer request to be in effect more “human” therefore offering a better customer experience.

Also, with the growing demand amongst the younger generation, brands need to ensure they meet their needs in terms of how they want to engage with brands. The desire for sending a message versus picking up the phone is certainly changing with the millennials and next gen group. A recent study by mGage revealed that 61 per cent of 25-34 year olds and 56 per cent of 18-24 year olds favoured a messaging service or chatbot over picking up the phone to contact a business.

Final thoughts
Chatbots have been here for a long time and will continue to be an essential part of any business, particularly given the technological advances in making this more “human”. Historically, customers may not have liked automated and artificial customer service but the convenience and rapid service they provide has enhanced the customer experience and more importantly allows businesses to keep up with the requirements of operating within an ever-evolving digital era. Chatbots over messaging apps like SMS and RCS should not be ignored as a recent study conducted by mGage revealed that 97 per cent of consumers use some form of messaging. It’s a widely used channel by consumers therefore the reach is remarkable.

To learn more about how you can utilise chatbots within your messaging get in touch with mGage today!