The State of Chatbots 2018 Report
January 17, 2019
I was inspired to dive into the subject of chatbots after finding The 2018 State of Chatbots Report which describes how chatbots are reshaping online experiences. Yet, I thought to myself, do most people really even know what this technology is?
A chatbot is a computer program using AI designed to simulate a conversation with human users, especially over the internet. It is also known as smartbots, talkbot, chatterbot, Bot, IM bot, interactive agent, conversational interface or Artificial Conversational Entity. The term “ChatterBot” was originally coined in 1994 by Michael Mauldin, creator of the Verbot, Julia.
These programs have technically been around since the 1950s. But only in recent years have they become very popular as more brands implement them to communicate with customers. Today, most are used for B2C customer service, sales, and marketing. Companies use chatbots to answer simple questions, increase customer engagement, for promotion, and to have additional ways to order from them. Many now include functional features such as games and web searching abilities too.
According to a recent study by Oracle entitled “Can Virtual Experiences Replace Reality?” more than 800 senior marketing and sales professionals across Europe, the Middle East, and Africa were surveyed, and the results showed a strong interest in adopting chatbots. In fact, 80 percent of the brands surveyed said they planned on using some form for customer service within the next four years. But only 36 percent of those respondents are already using it, which is telling. Business News Daily said, “enterprise-level companies are already using chatbots in droves, and in 2018, it’s likely that they’ll become more widespread in large businesses and eventually trickle down to small and midsize businesses.”
Virtual assistants such as Google Assistant and Amazon Alexa, Windows’ Cortana, messaging apps such as Facebook Messenger or WeChat, and individual organizations’ apps have all sprung from this technology. An IBM Watson-powered “Rocky”, introduced in February 2017 by the e-commerce company Rare Carat provides information to prospective diamond buyers through their website-based chatbot.
In 2016, Facebook Messenger allowed developers to place chatbots on their platform. In the first six months of release, there were 30,000 bots created for Messenger, rising to 100,000 by September 2017. For example, KLM Royal Dutch Airlines launched a chatbot via Facebook Messenger called BlueBot (BB). The primary function of BB is to help passengers book tickets and keep them up to date on flight status, gate changes, and similar data-driven functions. In just the first six months of operation, BB sent nearly two million messages to more than 500,000 customers. KLM later expanded the reach of the chatbot by hooking it up to Google Home, adding an audio/voice layer.
The process of creating a chatbot can be divided into two main tasks: understanding the user’s intent and producing the correct answer. It’s similar to the development of a web page or a mobile app and can be divided into design, building, analytic, and maintenance. The designer will define the chatbot personality, the questions that will be asked to the users, and the overall interaction. In order to speed up this process, designers can use dedicated chatbot design tools that allow for immediate preview, team collaboration, and video export. An important part of the chatbot design is also centered around user testing. User testing can be performed following the same principles that guide the user testing of graphical interfaces.
According to the 2018 State of Chatbot report, speed and availability are where chatbots are perceived to provide the most value to consumers. Specifically, 64 percent of respondents said 24-hour service is the best feature of the chatbot, and getting an instant response. As research from InsideSales.com and the Harvard Business Review shows, even if you wait just five minutes to respond after a lead first reaches out, there’s a 10x decrease in your odds of actually getting in touch with that lead. After 10 minutes, there’s a 400% decrease in your odds of qualifying that lead.
In 2018, overall consumer reaction to chatbots is mostly positive. Going forward, AI advances will only improve the way chatbots function, along with lessons how to best use the technology. Today, the 9-to-5 mentality is no longer a choice. With the internet and chatbots, now you can always be “open for business” in a relatively non-automated way. Otherwise, you are losing where others, possibly your competition, are gaining ground. 2019 is the time to get on board and take the time to start your company’s chatbot. What are you waiting for? Call or write to WrightIMC if you would like a free consultation and find out how to start today.