The good, the bad, and the ugly of chatbots

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It’s amazing how rapidly the world of technology can turn commerce and customer service on its ear.

Transformational tech is completely revolutionizing the online sales experience. There’s only one hitch: what you don’t know about this topic can mean the difference between success and failure.

If you operate an online store, you can’t risk being left behind. Understanding the potential benefits is great, but knowing how to prevent things from turning ugly is paramount. It’s time for a chatbot education because it’s not all as promising as the headlines imply.

Technically, there are only two kinds of chatbots: those that function as “virtual assistants” and those designed to live within messaging apps. The virtual assistants, like Siri and Cortana, use machine learning to interact more effectively. On the other hand, chatbots in the messaging world are usually available from within Facebook Messenger, Slack, and WeChat. They simply follow pre-programmed rules.

This is just the beginning of the chatbot takeover; the technology is still in its infancy, and more is yet to come. That’s why it is essential to see chatbots in three groups: the good, the bad, and the ugly. They’re projected to become a billion-dollar industry within 10 years, and that’s impressive. After all, we’re all in business to make money.

The good

People are perfectly okay with using chatbot services. In fact, 63% are willing to communicate this way with various businesses and brands. It’s an easy way to get quick answers to simple questions.

33% actually prefer to use chatbots for purchasing decisions. As chatbots become more common, this number will likely rise. (And since there are more than 30,000 chatbots on Facebook, you might’ve used one, too — and didn’t even know it.)

37% of people are willing to make purchases through chatbots. In the US, these consumers spend an average of $55 per purchase. Potential is even greater in the UK, where people are willing to spend an average of $410 via chatbot. They are also open to a chatbot’s sales recommendations and product advice.

It’s worth noting that nearly half of all millennials will accept the advice and recommendations offered to them by chatbots.

The bad

Though chatbots seem to be well received, it’s not all a bed of roses. If the chatbot experience ends-up being negative in the customer’s eyes, nearly three quarters (73%) won’t use that chatbot again.

Companies with poorly-designed chatbots could injure their own bottom lines by driving people away due to bad chatbot interactions. Most people admit they’re more frustrated by chatbots that can’t answer their questions than they are by their human counterparts.

This is why it’s hugely important to ensure that there is no attempt to hide the fact that your company is using chatbots. Don’t try to blur the lines. 75% of people want to know when they are talking to a chatbot. Nearly half of them find it “disturbing” when a chatbot pretends to be a real-life human.

You don’t want to freak-out your customers.

Besides, more than half the people surveyed say they can tell the difference, so don’t try to fool them. (Reports suggest this won’t be the case by 2029, when chatbots are projected to be capable of meaningful conversations with human-like language abilities. But that still might not make the idea less creepy to half the populace.)

The ugly

Chatbots are not fully autonomous yet, and this makes them a potential liability. They can improve based on the amount of data provided, but there’s a point of diminishing returns that simply cannot be ignored.

In fact, chatbots max out at about 85% efficiency. And when consumers feel like they are getting nowhere with the automated responses, they will be inclined to believe that your company is cold and indifferent.

This can seriously damage your brand.

The whole idea behind utilizing chatbots in the customer service arena is to streamline processes and remove friction. But if your chatbots aren’t capable of top-tier customer service, they are counter-productive. Don’t think that AI or chatbots are your end-all-be-all. People still long for human interaction.

Remember that the chatbots you utilize are the “most literal digital personification of your presence and brand.” They leave an impression that will outlast your website or any of your brochures. When it’s all stripped away, a conversation is all that remains. If your chatbots aren’t up to par, they could cost you dearly.

There’s hope

We’re not saying that you should discontinue using chatbots. The ability to maintain an ongoing relationship with your customers 24/7 has enormous value. Additionally, chatbots provide consumers with quick answers and convenience.

However, it’s essential to integrate human contact at necessary intervals to maintain customer satisfaction. Here are some simple things you can do to ensure that chatbots don’t make your company look disconnected from the people that keep it in business:

  • Make sure all your phone numbers work
  • Answer calls in three rings or less
  • Hire a call center for 24/7 human access
  • Be active on social media
  • Respond quickly to posts and emails

Humans are conversational entities. When we feel that the conversation has fallen flat, or that our questions have not been answered, we get frustrated. Choosing to use chatbots can either help or hinder your company’s success. Be sure you have the best chatbot APIs available before setting them loose on your customer’s inquiries.

Monica Eaton-Cardone is the COO of Chargebacks911, the industry’s leading risk mitigation and chargeback management service provider.

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