How Are Chatbots Changing the Customer Experience?

May 30, 20178min

The way that customers engage with businesses is changing every day, thanks to incredible technology that’s constantly thinking of new ways to make interactions more efficient and personalised. Artificial Intelligence (AI) in particular is leading the way for transforming customer-facing industries such as banking and retail.

Take the Swedish bank, Swedbank, for example, whose web assistant Nina now has an average of 30,000 conversations per month and can handle more than 350 different customer questions. This technology is set to gain pace in the coming years; according to Narrative Science, 62 per cent of organisations will be using Artificial Intelligence (AI) by 2018. But what does all this mean for the personal service that humans provide? Will the rise of chatbots mean the decline of the customer experience?

Customers Becoming Used to AI Interactions

First, let’s look at the positive ways technology AI-related technologies such as chatbots and NLP (natural language processing) are transforming the way customers and businesses interact with each other.   It’s clear that consumers have embraced the convenience technology can offer; Siri and Alexa are now consumers’ everyday companions, helping them to write emails, order shopping online and play music all through voice command.  In fact, it’s estimated Siri handles over 2bn commands a week, and 20% of Google searches on Android-powered handsets in America are inputted by voice.

For businesses, the beauty of chatbot technology is that it’s cheaper than training and hiring human customer-facing employees. In today’s digital world, customers want efficiency, ease, and authenticity when they communicate with a company.

They don’t want to wait on hold for hours to a call centre employee; which is why technology that enables them to ask quick questions that don’t need human input is great (“how much data do I have left this month?”) And technology is becoming impressively accurate at understanding human language; IBM recently set a new industry record of 5.5% for conversational speech recognition.

SugarCRM’s research with Flamingo found that customers are already engaging with AI as part of their experience interacting with businesses. Just over three quarters of people surveyed said they’re comfortable using chatbots and think they would improve the online experience. It follows on the business side, 73% said chatbots are relevant and almost 60% are seriously considering using chatbots within the next five years.

The Future for Chatbots

But, chatbot interaction has to be meaningful if it’s to bring real benefits to the customer experience. The Flamingo research found one fifth of consumers are not happy or comfortable using chatbots because they can’t always answer everything. When you consider the customer experience is now the benchmark by which companies are judged – Gartner reveals that 89% of organisations now expect to compete solely on this – it’s crucial businesses deliver this in the best way possible.

This is what the next generation of chatbots will tackle. They won’t just spit out pre-determined answers to customer questions; they’ll also examine customer and employee interactions over time to offer increasingly meaningful guidance.

There’s also going to be a practical approach where a human can be called in immediately if a consumer poses a difficult question or the technology registers irritation in the consumers’ voice. This highlights how important human-to-human interaction will continue to be. Although chatbots are certainly becoming more sophisticated, building technology that has the ability to recognise – and respond to – the nuances of human emotions will be a long-term goal for businesses.

The question of just how “human” chatbots should be is also still on the table: Male or female? Young or old? Friendly and polite or just knowledgeable? There are some hints at general preferences but perhaps each brand should decide for itself, based on what’s best for their audience.

How Chatbots and Humans Can Work Together

In my opinion, the future of the customer experience isn’t “chatbots or humans” – it’s both. The role of AI and its brethren – chatbots, virtual reality, NLP – should be to bring efficiencies to business operations, particularly when it comes to automating tasks and processes where humans don’t add value.

Technology should also work in tandem to empower employees in their interactions with customers; giving them all the information they need to deliver the best experience possible. For example, providing clear information on the customers’ previous interactions (when did they last contact us? What other products do they hold with us?) – to enable a holistic, seamless experience which proves to the customer they are valued and understood.

In fact, a report by Accenture found 79% of banking professionals agree that AI will revolutionise the way they gain information from and interact with customers. At a time when the quality of the customer experience can be the difference between keeping or losing a consumer, this is where I believe businesses will most benefit from implementing AI in to their strategies. The pace of technology shows no sign of waning, but the ‘human touch’ and the role it plays will remain vital to the overall customer experience.

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Clint Oram

Clint Oram

Clint helped found SugarCRM in 2004 with the goal of enabling companies around the world turn their customers into loyal fans. Today, he leads marketing and corporate development strategy for the company. Clint was one of the original architects and developers of the Sugar application and has focused on building out the product, company, partners and community in a variety of executive roles. Prior to co-founding SugarCRM, Clint held senior roles in the development, professional services and product management organizations at Epiphany, Octane Software and Hewlett Packard. He has 20 years of experience in the enterprise software industry and over 15 years designing and building award-winning CRM software solutions.




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