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August 22, 2016

Are chatbots the latest online customer service channel?

Major brands are increasingly using online tools to meet rapidly-evolving consumer expectations. Some firms are now turning to live chat technology called ‘chatbots’ to communicate with consumers in real-time, indicating that they are fast-becoming the latest online customer service trend.

With the rise of smartphone technology, consumers are increasingly engaging with their favourite brands on the go. In this fast-paced modern world when consumers communicate with a brand online, it is key that companies respond quickly, to retain business.

Data suggests1 that 42% of consumers who complain to a brand via social media expect a response within the hour. Evolving customer expectations have prompted the rise of chatbots as a major customer service channel.

What are chatbots?

The development of chatbots, Business Insider explains 2, has been fuelled by the proliferation of messaging apps and the rapid advancement of artificial intelligence technologies. They are basically software programmes that carry out a range of vital tasks independently via messaging. These duties include everything from offering advice to processing consumer orders.

Business Insider explains that firms can reap a number of key benefits by using chatbots. Crucially, they allow companies to interact with consumers 4/7 with minimal human input, streamlining staffing costs. Due to advancing technology, chatbots are becoming less expensive to develop and use, meaning that they increasingly becoming viable consumer engagement tools for businesses.

Importance of mobile

It is also important to note, according to Business Insider, that “chatbots are particularly well-suited to mobile – perhaps more than apps.” In 2015, UK telecoms industry body Ofcom found3that two thirds of British adults now own a smartphone, with 33% rating these devices as the most important for going online. Therefore, it is key that firms find ways to engage consumers via smartphone.

Research conducted by LogMeIn4, a software provider, found that 85% of consumers are unlikely to do business with a firm again, following a negative mobile interaction. The same study showed that shoppers now execute 27% of purchases via mobile devices.

Commenting, LogMeIn’s Vice President of Product Marketing for Customer Engagement and Support, Dave Campbell, said: “There are more ways than ever for companies to engage with customers and mobile is a vital part of a company’s e-commerce success… Customers expect a seamless experience and access to information across all of the channels and devices they use.”

With chatbots perfectly-suited towards delivering this seamless experience, they are now being used by companies to provide better service.

DOM Pizza Bot

Let’s take popular pizza brand Domino’s Pizza as an example. An article on Inc.com5, a business news website, writes that the company is increasingly using messaging technology to interact with consumers.

There are a number of ways now to order a Domino’s Pizza online, including via Amazon Echo, by text or even through sending an emoji on Twitter.

Marketing news service The Drum reports6 that Domino’s has now released its own chatbot. Called @DOMThePizzaBot, this service is designed to take customer orders via the Facebook messaging app, which now boasts over one billion monthly users.

According to the Guardian 7, Facebook is currently planning to release an encrypted version of its own messenger bot, to provide better security.

Commenting on Domino’s new chatbot, the brand’s Head of Digital Nick Dutch said: “We’re delighted to allow our customers to order direct from Messenger – with one billion monthly active people using Messenger each month – it’s the obvious choice for Domino’s.

We want to make ordering our freshly handmade pizza as easy as possible so we’re always on the look-out for new ways in which we can do this. Just message pizza – or send an emoji. It really couldn’t be easier.”

Speaking out, Tom Ollerton, the Director of Innovation at We Are Social, a global online marketing agency, noted: “The new Domino’s bot for Messenger is a significant step towards creating a transactional social experience. Domino’s is one of the first brands in the UK to enable direct ordering via social media.

Social media has always been great for brand building and the softer end of sales. But bots for Messenger are changing all that, making social a viable sales conversion platform.”

The Drum tried out Domino’s chatbot and it turned out to be a bit of a joker. When The Drum sent a message saying “So you’re a pizza bot?” @DOMThePizzaBot responded with “You startin’?! You wanna pizza me?” Here we see that with @DOMThePizaBot, Domino’s has done more than create an automated customer service tool. The brand has utilised the power of humour to develop an engaging customer service aid, allowing it to also act as a powerful marketing tool.

New marketing tool

With @DOMThePizzaBot, we are only just beginning to see what companies can do with chatbots. Forbes notes8
that “the next generation of chatbots store, synthesize, and recall important data.” In other words, brands could also use this technology to target promotional content to consumers based on their previous online activity, refining online marketing strategies.

Brands can already use “standard messaging bots” to send ads or promotional content  via Facebook’s messaging app. Marketing portal Campaign Live notes 9 that Facebook is refining this feature, recently introducing new rules requiring brands to respond to consumer enquiries sent via bot within 24 hours. However some types of messages e.g. templates such as receipts are exempt.

With this move, it looks as though Facebook is trying to turn chatbots into more effective customer service channels, potentially making them even more valuable tools for businesses.

Furthermore, experts believe that this move could lead to the introduction of sponsored messaging on Facebook, which the company is already trialling. As artificial intelligence and messaging app technology advances, allowing for the development more natural chatbots, the sky really is the limit.

Footnotes
1. http://www.convinceandconvert.com/social-media-research/42-percent-of-consumers-complaining-in-social-media-expect-60-minute-response-time/

2. http://uk.businessinsider.com/chatbots-explained-why-businesses-should-be-paying-attention-to-the-chatbot-revolution-2016-7

3. http://consumers.ofcom.org.uk/news/uk-now-a-smartphone-society/

4. http://business-reporter.co.uk/2016/06/29/mobile-experience-can-make-break-customer-loyalty/

5. http://www.inc.com/john-brandon/the-day-is-coming-when-customer-service-will-be-run-by-chatbots.html

6. http://www.thedrum.com/news/2016/08/12/domino-s-rolls-out-dom-wise-crackin-facebook-messenger-pizza-bot

7. https://www.theguardian.com/technology/2016/may/31/facebook-messenger-bot-encryption-secure-messaging

8. http://www.forbes.com/sites/danielnewman/2016/06/28/how-chatbots-and-deep-learning-will-change-the-future-of-organizations/#7bb96cba6563

9.http://www.campaignlive.co.uk/article/facebook-messenger-bots-send-ads-consumers/1405802

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