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5 ways to utilize chatbots for a better customer experience

Article Originally Posted on smartinsights.com

An opted-in, highly engaged audience that enjoys real-time service from preferred brands will set the foundation for the ROI that businesses need to see.

There’s no denying that chatbots drew in a lot of attention last year. The tremendous hype around their capabilities fueled intrigue about how they were going to change consumer behavior and produce impressive results. However, creating any chatbot experience - let alone a great one - is a much harder task than expected.

When Facebook Messenger launched services for businesses in 2015, online retailer Everlane was quick to form a partnership. In spite of the company’s first-mover advantage, the chatbot struggled to produce real business value.

Everlane used its Messenger chatbot as an email alternative, sending messages such as order confirmations and shipping information. It fell victim to a rushed creation process and never had the time needed to generate real ROI because the holistic customer experience was not considered.

Ultimately, many of today’s chatbots see substantial investments only to end up suffering the same fate. Chatbots shouldn't be written off, though. With a strategic approach, they bring efficiency and ease to customer care solutions and give brands a new way to differentiate, strengthen loyalty, and increase revenue.

A challenging solution to build

In order to produce a superlative customer experience, chatbots require extensive capabilities and advanced natural language processing. Notifications are not enough. As a result, chatbots learn and adapt only after exposure to many different situations at a large volume. To be successful, it’s imperative for companies to get chatbot service right the first time because almost three-quarters of customers who have a negative experience won’t use the chatbot again.

It’s unrealistic to expect chatbots to solve all inquiries from the outset and even after processing huge quantities of data, research indicates that many reach a point of diminishing returns due to how they are built. While many chatbots languish in success rates, some of the best-equipped chatbots can accurately resolve 85% of inquiries, so it makes sense to maximize their effectiveness by pairing a chatbot with human personnel to resolve the remaining queries in collaboration.

Although many companies have struggled with internally developed chatbot solutions, leaders are pushing the boundaries beyond solving inbound inquiries and are now finding opportunities to proactively engage the customer and offer a more balanced blend of service, engagement and sales. This evolution is in its early stages and represents a significant leap ahead of the earliest chatbots.

Product recommendation chatbot

5 ways to deliver exceptional customer experiences with chatbots

By equipping chatbots with the ability to collect and analyze data in real time, such as customer profiles and the context of inquiries, companies are creating a better and more engaging customer experience across service and engagement. In order to implement this new kind of chatbot to create measurable results for your business, follow these five steps:

1. Start by offering utility value

Provide customers with purchase-related information and alerts to build an opted-in audience on conversational channels, such as SMS and Messenger. This audience can then be used for engagement and upsell efforts, so the larger it is, the better. According to a 2017 report from Ubisend, 40 percent of customers want chatbots to send them special offers and deal alerts. In addition to sending purchase incentives, remind customers about forgotten items in their shopping carts, and offer them value-added services.

2. Put Data at the Center

AI-driven chatbots must serve multiple channels of interaction across a broad range of services and the limiting factor to this is data. Data enables a highly accurate contextual understanding of the customer and what he or she needs. Forrester research suggests that major companies such as Nike and Target are moving away from email as a channel for customer service needs in favor of real-time communications, including chatbots.

This change reflects the evolution in customer expectations and behavior, but to make it a reality, a rich customer data profile is required to support real-time automated assistance. When considering an automated assistant initiative, look at how data in the current ecosystem can be shared with the chatbot's AI. Then, consider how all of the interactions and contextual understanding the AI has of a customer can be passed back into the existing data ecosystem. This roadmap will connect the dots regarding where data is and where it needs to go for chatbot success.

3. Understanding Context Is Key

The best chatbots resolve inquiries by using advanced AI to understand the context for each customer. In some iterations, chatbots are actually more accurate at answering questions than human employees and in all cases, they’re far more efficient. However, working to equip an automated assistant with the intelligence, data and capabilities required is a steep hill to climb and plenty of teams have tried and failed due to the challenges uncovered along the way.

Use industry-specialized AI to offer the customer more than a keyword-based, decision tree type of experience. Additionally, a chatbot initiative needs significant investment around planning the customer experience and offered services. In order to deliver on this vision without risks, utilize AI and related platforms that are proven and quick to deploy.

Membership replacement chatbot

4. Move Beyond the Decision Tree

Conversation flowcharts are incredibly limiting and they aren’t effective at engaging customers. A flowchart approach bases a chatbot’s response on keywords in a customer’s query. For example, a bot might send a shipping confirmation if a user’s request has the word “delivery” in it. Essentially, the bot is limited by the capacity of the developers to anticipate use cases that the bot will serve.

The best chatbot experiences today are powered by AI that has a contextual understanding of the customer and is equipped with a wealth of data and capabilities to serve specific situations. Use platforms that not only provide the required conversational management and natural language understanding but also understand the context of the customer. It is equally important to verify that existing sources of data are made available to the chatbot in real time because a nightly refresh of data is no longer adequate.

5. Think Outside the Chatbot Box

Chatbots aren’t just notification tools — they’re a brand’s automated assistant. Naturally, they need to have a broad range of capabilities, from pre-purchase assistance to post-purchase customer care. Make sure to include other functions such as marketing, upselling and offering value-added services to the customer that create the differentiation your brand needs to thrive.

One report predicts that 70% of chatbots will be retail-based in just five years thanks to their ability to upsell, detect and prevent cart abandonment, as well as market loyalty and rewards programs that lead to satisfied customers who return for another purchase.

While initial efforts might concentrate on one specific channel or platform, it is important for brands to recognize the compounding value of offering their branded assistant across many channels, such as SMS, chat apps, voice platforms and on-site live chat. In every channel, the assistant should be able to provide contextual assistance, make the most of that channel's potential and give the customer a seamless experience throughout the shopping lifecycle.

Chatbots have a long way to go before we see ubiquitous adoption, but researchers and developers are making it easier to launch and expand an automated assistant's capabilities. Using sophisticated chatbots is a significant opportunity that offers the potential to revolutionize the customer experience and deliver differentiating services that secure loyalty.

To get there, leaders need to focus on the five steps above in order to give customers what they're looking for. At the end of the day, an opted-in, highly engaged audience that enjoys real-time service from preferred brands will set the foundation for the ROI businesses need to see.


Fang Cheng is the CEO and co-founder of Linc Global, a customer care automation platform that helps brands differentiate with automated, value-added services and experiences across the channels shoppers prefer.

Fang Cheng
Fang Cheng
CEO, Linc Global Inc

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5 ways to utilize chatbots for a better customer experience

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