Convincing a company they need a chatbot because it’s “the next big thing” or because they want to be at the “forefront of technology” isn’t going to cut it anymore.
Show them how it will provide great value, and they’ll be begging you for it.
If you want to convince someone to pay you to build a chatbot for them, then you need to understand what they value. I’ve seen that the two most important factors for businesses are reputation and finances.
The reputation of a company is a complex topic. This can be affected by a huge range of things from initial contact, the sales process, all the way through to after-sales care and much more.
Chatbots can help a company’s reputation by targeting any or all of these areas. A system that improves reputation needs to be able to increase a user’s enjoyment (or reduce the frustration) of the process it replaces or aids.
We can improve the user experience by doing processes better and faster than the old system, by making things easier for the user, or by providing new features.
Unsurprisingly, money is a very important factor for any company. How can a chatbot help increase a company’s profits?
There are two ways to increase the profitability of the business:
- increase income, or
- decrease costs.
It’s as simple as that!
Where does that leave us?
Knowing that most companies will value reputation and profit, we can validate some common chatbot models.
This is one of the most common types of chatbot out there because they’re easy to build and can be tailored very specifically to a company. So let’s test it against our two criteria.
Does it increase their profit? Short answer — No
Having an FAQ chatbot on your website isn’t going to sell more products or get more money and you aren’t saving money by taking users away from the FAQ page. It could reduce the contact to the call centres but the difference is likely to be minimal.
Does it increase their reputation? Maybe.
You could argue that having an FAQ chatbot on your site makes it easier for users to find the information, but this isn’t a strong argument.
All in all, FAQ chatbots aren’t very viable as a product on their own. Where they can be used very effectively is as an add-on to another chatbot. A customer service chatbot that can also answer the normal FAQ questions is definitely superior to one that can’t.
However, FAQ chatbots bring ease-of-access to information. They can also be integrated into other channels (such as Facebook Messenger). This can give users a new platform through which to find this information.
Customer Service Chatbot
This type of chatbot is similar to an FAQ bot. But it is designed to stop users needing to talk to customer service staff, or for gathering information about the user so the staff can help them more quickly.
It will usually be able to do tasks such as tracking orders, sorting returns and providing a tailored experience based on the customer’s purchases.
Does it increase their profits? Yes
While it probably won’t increase sales, customer service bots can decrease costs. Having a customer service worker handle a single request can cost on average £3.50. Every time that the chatbot tells the user where their order is, or sorts a return for them, that is money saved for the company.
You may think that saving £3.50 isn’t very much. But lots of retailers are getting over 20,000 contacts a month. If your chatbot can only deflect 10% of these requests then that’s £7,000 savings per month! That’s not even counting the time saved by the staff with the extra information they get from the bot.
Does it increase their reputation? Yes
Waiting in a call queue or message queue for half an hour is one of those things that we all hate but have come to expect when contacting a bank or retailer. With chatbots, we can massively reduce this time.
If your chatbot can solve 20% of the contacts, then that means 20% of the people are going to have no wait time at all. Brilliant, this means that the queue is 20% shorter.
As the chatbot gathers a lot of the user information before they chat with an agent, the issue can be resolved quicker, further reducing the time spent on hold. This decrease in wait time will decrease everyone’s frustration and therefore increase the company reputation.
A company is launching a new product and you click the advert on Facebook. This opens a chat in Messenger where you can choose your exact product and pay for it without ever leaving Messenger. That’s much easier than having to download the company’s app or visit their website.
Sales chatbots can now be used to buy products using a text interface directly in Facebook Messenger or via most other messaging services.
Does it increase profit? Yes
Being able to buy a newly launched product directly in Messenger is going to be quicker and easier than going to a company website. Being able to go through the checkout process in a conversational way can feel less monotonous. This can increase the number of sales of your product.
Sales bots on Facebook Messenger are also great as they have access to a huge range of people and you can harness the power of Facebook ads. This allows you to target very specific groups of people who are more likely to want your product, therefore increasing your chance of a sale.
Does it increase their reputation? Maybe.
Whilst it might be ‘cool’ buying something over Messenger, if you have a good purchase process already, this isn’t going to be a big improvement. If your customers currently have to install your app and sign up before they can buy anything, this will be a massive simplification, decreasing the customer frustration and increasing your reputation.
Service chatbots are usually completely custom chatbots built for a company to use to perform medial tasks, freeing up the staff to do more important work. These bots could provide links to commonly used sites, fill out paperwork by asking a few questions or through a smart device such as an Alexa device.
At the company that I work for, we’re implementing chatbots like this and integrating them into Slack. This allows us to access to resources, restart servers, run build scripts and getting stats all from Slack. Some of these save 15 seconds, other can save about 5 minutes. Built up over a day we can save 10–30 minutes each a day, that’s about 85 hours a year or 2 full weeks.
Does it increase profits? Yes
With staff spending less time doing these simple tasks, they have more time to spend on the more difficult work. Based on the UK average wage of £27,000 and saving 10 minutes a day (or 41 hours per year), that’s saving over £500 a year per person.
Does it increase reputation? No
This isn’t customer facing but it might make your staff happier that they don’t have to waste their time on those boring tasks any more. It’s always good to have happy staff.
Want a reminder before your favourite team plays? Want to know when that item comes back into stock? Want to know when your delivery driver is on their way?
This is where a notification chatbot can be really useful. It can be linked into a system and then notify the users on almost anything. Because you want the user to see the notification, these bots are best integrated into common messaging platforms such as Facebook Messenger, Slack or you could even text the user.
Does it increase profits? Probably not
People might buy something if you tell them its back in stock but they were probably going to buy it anyway.
Does it increase their reputation? Yes
This type of chatbot provides value by providing a boost to customer engagement. Being kept up to date with the progress of a delivery or being reminded that you’ve got something coming up is really helpful. Any company that proactively helps their users out is probably one that has a good reputation.
Thanks for reading my analysis of commercially viable chatbots. If you have any other great chatbot ideas then let me know in the comments.
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