Chatbots

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What is a Chatbot?

The Ultimate Guide to Chatbots

What is a Chatbot?

A chatbot is a piece of software that uses artificial intelligence & natural language processing to understand what a human wants, and guides them through the customer experience.

To better understand what humans want, many chatbots use machine learning to automate the learning process and become increasingly accurate at predicting what someone is actually looking to achieve.

The adoption of chatbots was accelerated in 2016 when Facebook Messenger opened up its developer platform. Google also got in the game soon after with Google Assistant. Since then there have been a tremendous amount of chatbot apps built on websites, in applications, on social media, for customer support, and countless other examples.

How Do Chatbots Work?

There are three types of chatbots most consumers see today:

Rules-Based Chatbots

Rules-based chatbots execute pre-determined actions based on “playbooks” you set up on the back end of the user interface. Much like a virtual assistant, rules-based chatbot technology can act based on clicks actions, such as “Yes” vs. “No”, or by recognizing a particular keyword or group of keywords. For example, you could set up a rules-based chatbot to respond if someone selects “Red” or “Green” but also if they respond with “I want red shoes” and your target keyword is “red shoes”.

Below is an example of how a rules-based chatbot could behave based on the pre-determined actions that you design ahead of time.

AI Chatbots

A.I. chatbots use artificial intelligence & natural language processing technology to understand sentences structure, then process that information & progressively get better at answering the question at hand. Learn more about AI Chatbots here.

Instead of relying on a pre-determined outcome designed by a human, AI chatbots first understand what your question is:

ai chatbot natural language processing

Then once they understand your intent, they deliver an answer that they think is the right answer based on existing data. Over time, and by observing correct & incorrect answers, the machine gets better at understanding what the ‘right’ answer is (think Apple’s Siri, Google Assistant, Amazon’s Alexa) . This is why AI chatbots, although powerful, aren’t right for everyone because they require a training period, and generally require more effort to get started. However, once they understand your business well, they can be incredibly powerful.

 

Live Chat

Live Chat is a chat technology that sits on your website or product and acts as a window to your team for your customer. Live chat has some routing capability to assign real-time conversations, but overall it’s pretty simple. When someone wants to talk and your team is online, live chat connects someone from your team to help address that person’s issue. Learn more about Live Chat here.

The difference between Chatbots, AI chatbots & Live Chat can be summed up here:

 

How a chatbot works

 

How Are People Using Chatbots Today?

Here are some of the most useful and innovative ways we see chatbots being used today.

 

Use Chatbots to Convert More Website Traffic

The average conversion rate on a website generally sits in the ~1% range. That’s a lot of work to do for a lot of wasted traffic! One of the most effective ways we see bots being used is to help nudge leads who might not have converted without chat over the hump. Sometimes a quick question or a proactive offer to help can be the difference between average conversion rates, and filling your pipeline full of qualified leads.

These are especially useful on high intent pages, like a pricing page. As you can imagine, here at Drift we create a lot of bots, so we have created two separate pricing page bots to optimize the pricing experience:

  1. First Touch Pricing – Appears when you first visit the pricing page
  2. Return Visit Pricing – Appears when you return to the pricing page

 

Use Chatbots to Generate More Qualified Leads

Traditional landing pages have been in a state of stagnation for what seems like an eternity. One effective and creative way we’ve seen our customers use bots is to embed a bot right in the same view as a .pdf once a lead has given their email.

What this allows you to do is to start a conversation at any point while they’re reading your latest e-book. It’s a great way to take advantage of all the effort you put into creating content.

 

Sigstr Conversational Content

 

Use Chatbots to Automate Business Processes

Many chatbot software applications out there do just one thing – chat. However, a true conversational marketing platform that fully integrates into & automates your existing business processes is exactly what we’re building here.

 

screenshot of outreach sequences with the Drift integration

 

The reality is that it’s never enough to just have a conversation. Once the conversation is completed, there’s so many actions you can take to move the conversation further along. From scoring leads, to entering in conversation notes, to entering leads into a custom drip email sequence with one click (like below).

 

Drift conversational marketing allows you send automated emails

 

Use Chatbots to Elevate Customer Service

Today it’s not enough to just generate more leads & sales. Today consumer expects an all-around great customer experience, and the impact of those experiences, good or bad, is felt most heavily in customer support. The reality is that consumer expectations are only getting faster, so many customer support teams have struggled to match the “Amazon” style expectations.

One way we see modern Support teams adapting is to use chatbots as the first line of defense. Below you can see the chatbot pull help articles directly from the help article database. If this article answers the person’s question, the conversation is over and you’ve saved yourself a support call. If more help is needed, the bot can automatically route the conversation to a person for a more personal touch.

 

 

Need more inspiration? We have an extensive library of chatbot examples here.

 

Why are Chatbots Important?

There’s no denying the hype that’s been surrounding chatbots over the past few years. Whether you view the technology as a passing fad, or believe that chat bots will revolutionize how people communicate and interact, the impact chatbots are having on online experiences is real…and it’s measurable.

To help shed light on how chatbots are reshaping online experiences today, the teams at Drift, SurveyMonkey Audience, Salesforce, and myclever have come together to create a data-backed report based on a survey of 1,000+ adults, ages 18-64, which was conducted in the United States between October 30 to November 6, 2017 using SurveyMonkey Audience. The sample was balanced by age and gender according to the US Census and is representative of the adult online population.

Want to dive into the full study? Check out the full deck below:

 

Here are the most interesting bits of the study:

The Problems With Traditional Online Customer Experiences

Just like any emerging technology, chatbots will only become widely adopted if it’s shown that they can solve real problems. Otherwise, the novelty will eventually wear off.

So in order to better understand where the opportunity lies for chatbots, we asked our 1,000+ survey participants to think about the online services they use today, such as search engines, messaging apps, product/service websites, and mobile apps.

Then we asked them: What frustrations have you experienced with these online services in the past month?

Chatbot report - business communication channels

The most common frustrations reported by consumers included:

  1. Websites being hard to navigate (34%)
  2. Not being able to get answers to simple questions (31%)
  3. Basic details about a business — like address, hours of operations, and phone number — being hard to find (28%).

The takeaway: The online experiences businesses are providing no longer match the way people prefer to buy.

In the on-demand, real-time world we live in, where everything seems to be just one click away, consumers expect to be able to find the information they’re looking for quickly and easily. When they can’t, they get frustrated, and could end up turning to competitors who are providing the type of online experience they’re looking for.

Predicted Uses and Potential Benefits

Now that we understand the main problems consumers have with traditional online experiences, let’s look at if (and how) chatbots can actually solve these problems.

In our survey, we provided a brief description of how chat bots work and the types of tasks brands and businesses use them for.

Then we asked our participants: What do you predict you would use a chatbot for?

chatbots-report-use-cases

The most common predicted uses for chatbots that consumers reported included:

  1. Getting quick answers to questions in an emergency (37%)
  2. Resolving a complaint or problem (35%)
  3. Getting detailed answers or explanations (35%)

It’s also worth noting that 34% of consumers predicted that they’d use chatbots as a means to having a human conversation & human interaction.

The takeaway: There’s alignment between consumers’ frustrations and their predicted use cases for chatbots. Consumers want to be able to use chatbots to surface information and get answers quickly and easily. And if a chatbot doesn’t have all the answers, consumers would like that chatbot to be able to connect them with a human.

Blockers to Wider Chatbot Adoption

Despite the many uses and benefits that consumers predict chatbots will be able to provide, the mass adoption of chatbots isn’t a foregone conclusion.
Especially when you consider how new the technology is, it’s understandable that consumers would have some concerns.

So, we felt it was important for us to ask our survey participants the following question: What would stop you from using a chatbot?

chatbots-report-blockers

The most common potential blockers to using chatbots that consumers reported included:

  1. Preferring to deal with a human instead (43%)
  2. Worrying about the chatbot making a mistake, such as during a purchase or while making a reservation (30%)
  3. Being locked into using chatbots only through messaging platforms like Facebook Messenger (27%)

However, it’s also worth noting that 15% of consumers said nothing would stop them from using chatbots. And that figure was consistent across all age groups.

The takeaway: Not all consumers are ready to abandon human-to-human interactions entirely, and some aren’t sure they trust the technology to perform certain tasks without making mistakes. Also, if consumers could only access a chatbot through a specific social network, that could be a deterrent to adoption.

But here’s the thing: As a business, it doesn’t have to be either/or. You can use chatbot platforms where they make sense (e.g. for providing quick answers to simple questions) and then have humans step in when they’re needed.

What’s more, you don’t have to rely on Facebook Messenger bots in order to provide customers and potential customers with access to a chatbot. These days, you can have chatbots operating directly on your website, and you can use hyperlinks to make it easy for people to trigger chatbot conversations from any social network.

Chatbots vs. Other Communication Channels

While not all consumers are ready to trust chatbots entirely, most still acknowledge that chatbots are poised to provide several benefits that can enhance their online experiences. And it’s clear that one of the major benefits consumers see when it comes to using chatbots is speed: They believe that chatbots & conversational AI will be able to respond to their inquiries more quickly.

From a business perspective, there’s a massive upside to providing speedy response times. As research from InsideSales and the Harvard Business Review shows, even if you wait just five minutes to respond after a lead first reaches out, there’s a 10x decrease in your odds of actually getting in touch with that lead. After 10 minutes, there’s a 400% decrease in your odds of qualifying that lead.

So as part of our survey, we wanted to see how expected response times for chatbots compared to expected response times for other communication channels. The question we asked: How soon would you expect to get a response on each of these communication channels?

Response Time by Communication Channel – More than 24 Hours

chatbots-report-after-24-hours

 

Response Time by Communication Channel – Less Than 24 Hours

chatbots-report-within-24-hours

 

Response Time by Communication Channel – Instant Response Expectations

chatbots-report-instant-response

Ultimately, consumers expect to get instant responses from online chat more than any other channel (77%), but chatbots came in a close second (75%), and were followed by face-to-face meetings (73%).

Meanwhile, email (62%), landing page (web) forms (52%), and social media (50%), were the top channels when it came to expecting responses within 24 hours, and letters were far and away the number one channel when it came to expecting responses after 24 hours (60%).

The takeaway: Online chat is the channel that most consumers expect a real-time response from. However, chatbots came in a close second — higher than face-to-face, telephone, or apps.

And here’s something to consider: As an ecommerce business, by using live chat in combination with chatbots, you can deliver response times and resolve issues faster than ever before. When employees are online, they can take the lead in responding to incoming chats. But if chat volume gets too high, or if there are no employees online at the moment, chatbots can step in to assist so your response times don’t suffer.

In addition to looking at response times, we also wanted to see how chatbots compared to more traditional business communication channels in terms of perceived benefits. Specifically, we wanted to hone in on how chatbots compared to apps, email, and phone calls.

So we asked our survey participants: Which of these benefits do you most associate with communicating with businesses and organizations?

Chatbots vs. Apps

chatbots-report-chatbots-vs-apps

 

Chatbots vs. Email

chatbots-report-chatbots-vs-email

 

Chatbots vs. Mobile Phone

 

The Takeaway: Chatbots are the new apps, but they’ve yet to completely replace the need for phone and email when it comes to communicating with businesses.

Consumers preferred chatbots over apps in five of the ten benefit categories we looked at, which included not only getting quick answers to simple questions and 24-hours service, but also getting quick answers to complex questions and getting detailed/expert answers.

When it came to email, consumers once again preferred chatbots in the categories related to speedy response times (re: quick answers, 24-hour service). However, email had a definitive edge when it came to getting detailed/expert answers.

And it’s a similar story when we look at chatbots vs. phone calls, although in this case it’s notable that consumers also preferred using the phone for getting quick answers to complex questions. Email and phone were also considered superior when it came to ease of communication, as well as registering complaints and getting them resolved in a timely fashion.

One way businesses can make up for these perceived limitations of chatbots: Have chatbots give consumers the option of being able to send an email or schedule a call if that’s how they’d prefer to communicate. Because especially when dealing with complex technical issues, hopping on the phone with an engineer is likely going to be the better option.

While chatbots have a lot to offer in terms improving online experiences, they can’t replace the human touch.

Conclusion

These days, consumers expect to be able to find the information they’re looking for online quickly and easily. And when a business can’t provide that type of experience, they become frustrated. Chatbots are poised to ease these frustrations by providing the real-time, on-demand approach that consumers are seeking out.

The top three potential benefits of chatbots that consumers reported in our survey:

  1. 24-hour service (64%)
  2. Instant responses (55%)
  3. Answers to simple questions (55%)

And that’s true across all age groups. It’s not just Millennials who see the potential benefits of chatbots. In fact, Baby Boomers were 24% more likely to to expect benefits from chatbots in five of the nine categories we looked at compared to their Millennial counterparts.

However, chatbots — like all technologies — aren’t without their limitations: 43% of consumers said they prefer dealing with an actual person (that was the number one potential barrier to using chatbots). That being said, 34% of consumers also predicted that they would use chatbots for getting connected with a human. So it doesn’t have to be either/or. As a business, you can use chatbots to supplement your human workforce (not replace them).

Compared to other business communication channels, chatbots scored the second-highest when it came to consumers expecting instant responses, only losing out to online chat. But by using chatbots in combination with online chat, businesses can deliver a level of real-time service that they’d be unable to achieve using either technology on its own.

And while chatbots can’t replace phone or email when it comes to providing in-depth answers to technical questions (some things will always require a human touch), they are poised to become the new apps. As you saw in the previous section, chatbots outperformed apps in the following five benefits categories:

  1. Quick answers to simple questions (Chatbots, 69% | Apps, 51%)
  2. Getting 24-hour service (Chatbots, 62% | Apps, 54%)
  3. Quick answers to complex questions (Chatbots, 38% | Apps, 28%)
  4. Ability to easily register a complaint (Chatbots, 38% | Apps, 28%)
  5. Getting detailed / expert answers (Chatbots, 28% | Apps, 27%)

There’s been a lot of hype around chatbots recently, and ultimately, we see chatbots as a technology that can help bridge the gaps between business communication channels, and that can help deliver a better, speedier online experience to consumers.

Having Trouble Picking The Best Chatbot For You?

Take a look at our chatbot examples library, where you can browse the variety of chatbot styles & approaches.

You can also try our Chatbot Software for free by clicking here and signing up for a free account. No credit card required.