Let’s Chat- Are Chatbots as Helpful as Companies Think?

In recent years, the usage of chatbots has drastically increased. Bots now account for more internet traffic than humans do. By 2025, the global chatbot market is expected to reach $1.23 billion, an annual growth rate of 24.3%.

Chatbots behave as little digital website assistants and can be used for a number of tasks. They are frequently used as a customer service tool, popping up in the corner of a website asking if you need assistance. They are also used as sales and marketing tools, personal assistants on a website, or as digital voice assistants (e.g. Alexa, Siri) Part of this growth has to do with the growth of social media with close to two thirds of tweeted links coming from automated bots.

Why Do Businesses Use Chatbots?

Chatbots provide a number of benefits for businesses. When a company has a good chatbot system with helpful communication, it can help build brand awareness and customer loyalty. They can also increase productivity by eliminating the need for employees to spend time answering the same question for customers. Employees can focus their time on more complex issues that the chatbot is not able to handle, and ultimately, provide a better customer experience.

Chatbots also help reduce costs. It is predicted that chatbots will save businesses an estimated $8 billion dollars per year by 2022. In addition to cost reduction, they also help companies with cost optimization, particularly in the customer service department. Because chatbots handle a large portion of customer service, they allow companies to refocus their customer service models to use their employees in ways that are more productive and beneficial.

Why Do Customers Like Chatbots?

There are many reasons why chatbots are great for customers. They provide 24/7 access to customer service with instant responses to questions. Chatbots can answer easy questions quickly with little to no hassle and are usually user-friendly. They can also help improve a company’s self-service, making it much easier to direct a customer to the resources they need without having to make a phone call. Chatbots can also streamline customer service. Directing customers to the proper resource and if needed, connect them with a live agent can be done all in one place.

Where Chatbots Fail

Although the chatbot market is growing and many customers report positive experiences using them, there are still downsides to this technology. Research shows that nearly 71% of US customers still prefer interacting with a human over a machine. Part of the problem is a company’s customer service model. If their model is already broken, adding a chatbot is not going to fix it. The company needs to fix its philosophy and then establish its chatbot system accordingly. A complaint a lot of customers have about chatbots is that they cannot always understand what a customer wants or needs in the way a human could. Tom Petrocelli writes in CSMWire about an experience he had with a Microsoft chatbot. The chatbot could not understand his question about his Microsoft 365 account and after being asked a series of frustrating questions by the chatbot, he finally asked for a human rep.

The Ideal Chatbot User: Millennials

Although there are issues with chatbots, recent research suggests that millennials are the ideal target customer for them. Millennials grew up with technology and easily understand how to interact with them. They also prefer the fast, easy communication chatbots can deliver.

70% of millennials report a preference for communicating and transacting via mobile messaging platforms. Chatbots are the ideal form of customer service for millennials who do not like making phone calls or sending emails. Millennials have used chatbots twice as often as Gen Xers and up to six times as often as Boomers. Overall, 70% of millennials that have used them rate them favorably.

Let’s Chat

Chatbots provide many benefits, both for businesses and for consumers. However, they are not perfect. Companies cannot rely on them to handle all of their customer service or fix communications problems. There needs to be a balance between human interaction and machine interaction. Chatbots can be incredibly useful for simple questions but often struggle with more complex requests. Businesses need to create seamless transfers from automated communication to human communication.

40% of customers don’t care whether a machine or a human helps them. As long as they are getting the help they need, they are satisfied. The most important thing for businesses to do is make sure that their chatbot technology is designed to be as easy and as helpful as possible for customers.

Categorized in: Blog, Customer Service, Technology

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