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The Rise of the Chatbot and Frictionless Communication with Consumers

The Rise of the Chatbot and Frictionless Communication with Consumers

In 2016, rapid progress in machine learning and natural language processing led Zenith to identify voice search as one of the key trends for the year. I believe the natural development in 2017 will be the widespread use of chatbots. Messaging is already widely established and popular messaging platforms are opening up to developers and brands. In 2017, I’d expect to see thousands of chatbot launches as brands take advantage of these new opportunities and the reduced cost of building bots.

Chatbots in use

Chatbots are automated services, powered by rules and machine learning that allow consumers to interact with brands online via a messaging interface, such as Facebook Messenger, WeChat, Slack and Telegram, without having to download a separate app.

We’ve already seen a select number of brands take the first tentative steps in utilising this exciting technology. Dutch airline KLM is now using Facebook’s chatbot platform Messenger for Business to communicate with passengers before departure, and users can message the KLM bot questions 24 hours a day and in 13 different languages. This is a great step towards improved customer relations and makes the whole travel experience a lot smoother for passengers who are more and more frequently demanding instant updates while at airports.

Meanwhile, alcohol brand Absolut has launched a chatbot that provides consumers with personalised free drink coupons that can be used in new bars within their hometown. Absolut can use the bot to reach out to users to inform them on new product launches, events happening in their city or special promotions exclusive to users of their chatbot.

Why invest?

In 2017, we’ll see chatbots enabling more brands to reduce their customer support costs while still maintaining a direct dialogue with their buyers, paving the way for marketing and sales to open new revenue channels. Personalised recommendations for consumers, based on insights collated from a trail of chats, will become the norm.

It’s a great way to reach young audiences in a dynamic way and build more meaningful relationships with their customers at scale. In just one chat with a customer, a bot can help them make a purchase decision, handle payment processing and notify shipping delivery. All of this can take place on the same interface, avoiding the need for a convoluted series of multiple message thread. With the ability to mine available data, chatbots can provide a highly personalised service through ongoing user conversations.

However, this is not to say the implementation of chatbots will be without any challenges. Brands will need to clearly determine the audience they are trying to reach, and define the precise vertical channel (commerce, content or service) in which the bot will operate. The most successful brands will limit the scope of what their chatbots can do by initially focusing on one particular product or service. As the year progresses, we’ll see the slow expansion of these chatbot’s knowledge bases, as brands will be able to feed them more relevant information over time. Brands that can nail down the key purpose of the bot in the consumer journey as a starting point stands a better chance to succeed.

Seamless communication

Before brands launch their own bot experience, they should first answer a key question to determine what should drive their overarching strategy: who are you trying to reach with your bot?

Brands should limit the scope of what their chat bots can do by focusing on one product or service to start with. Only then, can they slowly expand the chatbots knowledge base by feeding it more relevant information over time. In order to have a good user experience, brands need to be able to make the right decisions to construct a good UI and persuasive two-way conversation with a wide variety of audiences. They will have the intelligence to deliver many convincing messages and replies in real time.

Brands can then use the data obtained from chatbot interactions to further refine the chat bots themselves. Having processes in place to harness these learnings will improve the very products and services that chatbots support.

We need to bear in mind that although a good chat bot will give consumers the illusion that they are interacting with another human, it will never be able to fully understand the subtle nuances of human emotion. As humans, we’re empathetic, we know when to listen and when to interject and we understand the root cause of frustration and panic. But a bot cannot pick up on these cues. Bots should recognise situations in which customers require human intervention and be equipped with tools that allow them to do so seamlessly.

Companies will quickly see that by embracing chatbots for customer support and driving down their “cost centres”, they will open up a direct dialogue with their consumer, which will pave the way for marketing and sales to open new revenue channels. The continued success of chatbots will rely on brands reacting to how customers use them. ​Key to this will be an understanding of consumer intent, and the perpetual development of new services to address their needs.

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Linda Tan

Linda Tan

Linda Tan is a strategic insights director at Zenith.

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