Chatbots – Hot Air Or The Next Big Thing?
“A 10 billion dollar industry the next 10 year”. “The next big deal”. Every conference Ydigital has attended the past 6 months in across Jakarta, Singapore, Kuala Lumpur and Hong Kong have had chatbots on the agenda. Rapid Advancement in AI and the proliferation of messaging apps fuels the development of chatbots and the benefits of efficiency and customizations are clear.
Despite all the hype, only few brands have successfully managed to introduce bots. Below we give our view on why they will work and why they won’t.
Why bot’s will work
- The market is there: 1.4 billion people already use messaging apps, projected to raise to 1.75 billion by 2019 (emarketer).
- Positive sentiment: A study found that 38% of consumers globally rated their overall perception of chatbots as positive. Only 11% of those surveyed globally reported a negative perception, while the remaining 51% had a neutral stance.
- People are ready to talk to bots: 63% of people would consider messaging an online chatbot to communicate with a business and brand (Mindshare)
- People are ready to buy from bots: 37% of Americans are willing to make a purchase through a bot, according to DigitaLBi with a 55 dollar average purchase.
- Technology is getting smarter: By 2029 we won’t be able to tell the difference between a bot and a human as bots will have human level language skills, Ray Kurzweil a futurist and engineer from Google predicts. One could argue that with the law of singularity this may happen even faster.
Clearly, brands have a huge opportunity to tap into, but there are also many pitfalls.
Why bots won’t work
- Bad UX and real value: If bots are not designed with the user experience at the heart, they will fail. The adoption depends on UX and the real value the bot provides
- Attempting to fake it: Our advice if you plan to launch a bot is to be honest about to consumers when they talk to a bot. A simple intro as “hey I am a bot” will make a big difference and 75% of users want to know if it’s a bot or a human they interact with. Don’t fake it.
- Wrong usage: Globally 48% of people prefer a bot that solves problems rather than one with personality. If you plan to introduce a bot that helps users with questions about your company it’s more important that the bots knows as much as possible rather than trying to make it act as a human. Consumers are busy and we want instant gratification.
- Unforgiving consumers: Not only are using impatient, we are also unforgiving. Expectations show that 73% of Americans wouldn’t use a brand’s chatbot again after a bad experience and 61% reportedly would be more frustrated with a bot couldn’t solve a problem vs a human. This stresses the need for strategy and execution excellence so don’t jump into it unless you are prepared.
- We are worried about human costs: An Oxford study from 2013 estimates that 47% of human jobs are in jeopardy due to automation. This may not be a direct reason why bots will work or not but it’s a crucial aspect to consider to say the least and it might be the reason why many companies are sitting on the fence when it comes to introducing bots.
When we talk to our customers we always make clear that launching a chatbot must serve a specific purpose that fits into the overall digital business strategy. Bots can be transactional and focus on moving data from one platform to another (robotic business process automation) or informational and communicate directly with consumers for support or general information, using machine learning.
No matter what your purpose is for introducing bots, the pros and cons above hopefully helps you decide if it’s time for you or not to get on the bot train.