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Chatbots are winning. Here’s why that’s good news for customer service

Mon 19 Apr 2021 | Martin Taylor

The market for chatbots is growing and their impact on consumer spending habits has been dramatic

In recent years, chatbots have come a long way with today’s state-of-the-art systems offering versatile and agile conversational capabilities that are filled with meaning and personality. In many circumstances it’s becoming increasingly challenging to distinguish artificial chat from authentic human discourse and in the customer service context, consumers are being won over by systems that can help meet their needs. Indeed, research carried out in 2020 revealed that approximately 40% of people actually prefer to use chatbots when shopping online.

That’s hugely significant, but perhaps not altogether surprising given that most consumers simply want their questions answered or their concerns dealt with. As long as an online chat-based customer experience is effective, does it really matter who the conversation is with? And given the willingness of consumers to switch brands or service providers if service falls short of their expectations, chatbots are helping businesses fill an urgent need. For example, the ability to complain about a problem, get answers to questions or simply overcome the frustration of being ignored, can make a tangible difference to customer satisfaction.

However, the underlying technology behind chatbots has been a long time coming. It’s now over 70 years since the celebrated mathematician, computer scientist and codebreaker Alan Turing devised a test – he called it the ‘Imitation Game’ – to help determine whether machines could think. The basis for the Turing Test was whether a computer could fool a human into believing it was chatting with another person rather than a machine in a typed conversation. Today, this still provides the basis for assessing whether chatbots can be considered successful or not, with the annual Loebner Prize serving as the longest running Turing Test competition, whose winners frequently participate in compelling and authentic conversations.

In commercial terms, today’s chatbot developers strive to create authentic communication experiences, not only to improve customer service outcomes but also to ensure long term relationships. Significant development in sentiment tracking, natural language processing (NLP) and machine learning are quickly helping chatbots to become a major customer service asset. The best examples can now even recognise moods in their human counterparts and respond accordingly, deploying bi-directional human-like communication, all designed to optimise the customer experience at every stage of the process.

The market for chatbots is growing and their impact on consumer spending habits has been dramatic. By 2024, Insider Intelligence has predicted that consumer retail spend via chatbots worldwide will reach $142 billion – up from just $2.8 billion in 2019.

Champions of the contact centre

Within contact centres – the hub for customer communication in organisations around the world – chatbots enable customers to ask questions, complete purchases, give feedback or arrange appointments, all without the need for a live human agent. Their role is to act as a primary resource for customers who want a fast response to the issue at hand, and by doing so they help take pressure off busy customer service agents who can focus their time on the more complex enquiries.

But that’s just the start. Chatbots are also employed to provide customers with live updates, minimising the need for human agents to repeat monotonous tasks. NLP technologies can transcribe speech to text automatically, and this is increasingly used to ensure organisations remain compliant with industry regulations. This on-demand functionality helps agents to reduce information discrepancies for every relevant customer interaction – and to do so at scale.

And therein lies an important point – delivering effective and immediate service to hundreds or even thousands of customers can now be achieved with intelligent automation where conversations are now often indistinguishable from those with a ‘real’ person. Intelligent, scalable automation can deliver a consistently high quality interaction, that not only not deliver better CX, but a more efficiently engaged process that is in sync with demand, and ultimately, can meet the needs of customers directly or escalate it to a higher level.

But in every case, the main aim of implementing chatbots should not be focused on merely replacing human agents, but instead to ease their workloads and maximise the quality of customer contact. Similarly, implementing chatbots is also not about finding shortcuts to good customer service and they should always be implemented alongside customer service professionals whose experience and adaptability cannot be replaced.

In a world accustomed to immediate access to information at any time and from any place, customers will not accept any less in their dealings with brands. If organisations fail to provide this, and instead give slow or inaccurate responses, they will quickly lose customer loyalty. Looking ahead, as AI techniques continue to improve, we can reasonably expect chatbots to increase in sophistication and help organisations to continually improve their CX standards.

Experts featured:

Martin Taylor

Deputy CEO
Content Guru


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