Strategy

Chatbots Are the Future of Customer Service

“Hello, thank you for shopping with us today. How can I help you?”

Buyers know that familiar refrain from a customer service representative. But soon, whenever a consumer engages in a live web chat with a company, the person at the other end of the conversation may not be a person at all.

It might actually be a chatbot – a computer program designed to simulate conversation with human users and improve customer service efficiency. And while many will express dystopian fears of the robots taking over and stealing human jobs, experts believe this artificial intelligence will supplement customer and client needs and perhaps even create jobs domestically. (Not so scary, doomsayers, right?)

From customer service to advertising to marketing, chatbots can wear many different hats, depending on how they’re programmed. But there are opportunities and capabilities that start at answering questions, taking orders and making communications personalized. Last year, Oracle, a cloud-based application and platform service that assists in customer servicing, released survey results that showed more than 80% of businesses said they want a chatbot by the end of 2020. Many companies (Domino’s, Spotify, Airbnb and H&M to name a few) are already using chatbots, and other large companies like Staples will be rolling out AI-powered intelligence in their customer service departments within the next year. No exact figures on the usage of chatbots are available, but Gartner Research and Analytics for 2017 says that they’re “rapidly entering the market.”

Chatbots Are the Future of Customer Service

A chatbot can be seen as a new employee, according to Murray Newlands, an artificial intelligence expert. He started chattypeople.com in order to service companies that wanted to automate processes with artificial intelligence, and he’s excited about the prospects of the technology in customer service.

“I’ve always been a big believer that customer support needs to have a human touch, a level of empathy to offer customers who aren’t happy and a personable touch to offer others who are still on their buyer’s journey,” Newlands says. “Despite AI-powered chatbots being robots, the advancements in technology now allow them to use natural language processing to answer queries, making them more human than ever. With the right strategy and implementation, AI is going to transform customer care as we know it for the better.”

Newlands says that there’s no denying that chatbots are a disruption, but ultimately, can boost customer servicing. Staples, the parent company of Staples Promotional Products (asi/120601), sees it that way. “Staples is currently building out AI tools and experiences that will drive operational efficiencies within our customer service team. These tools will be rolling out over the next 12 months,” Ian Goodwin, the head of applied innovation at Staples, told ASI. Chatbots will be deployed throughout the company’s consumer-facing live chats, including instant messaging and its promotional products website.

Shopify, an e-commerce building platform for small businesses, is already seeing tremendous success with Kit, “Shopify’s virtual employee,” says Ellen Dunne, senior product manager of Kit at Shopify.

“Kit helps Shopify store owners scale their business and drives more sales by executing marketing tactics like creating and running Facebook ads, running reports, emailing new customers and more,” says Dunne.

Chatbots Are the Future of Customer Service

Since Shopify’s acquisition of Kit in April 2016, there’s been a significant increase of users utilizing this AI. Merchant adoption of Kit has increased over 800%, and Kit has driven five times more customers to merchant stores using Facebook ads from the previous year. In total, Kit has had over 3 million conversations with merchants since joining Shopify, according to data that Shopify has analyzed.

Kit was founded in 2013 before being purchased by Shopify. A motivation for this purchase is the company’s belief in the inevitable emergence of artificial intelligence. “In the context of e-commerce, the future is definitely going to be based in messenger and chatbots,” Dunne says. “Conversational commerce is a huge trend, and Shopify sits alongside many other big players like Facebook, Amazon and Twilio who are making big investments into AI and messenger-based products.”

Indeed, Facebook is investing in this technology, having recently acquired an AI startup that will build into the Messenger application as well as personal assistant technology. (It also shut down a study of teaching two bots to negotiate with each other, which ended in the bots concocting their own garbled language.)

Experiments like Facebook’s underscore the notion that chatbot technology is still early in its development. Chatbots magazine, a leading source in AI news and innovations, reported that “Chatbots aren’t as smart as we need them to be just yet to apply them universally to businesses online, but the potential can sharply increase anytime.” The magazine is managed by Octane AI and its co-founder and CMO, Ben Parr, who acknowledges “the weakness is that bot technology cannot yet understand what people say 100% of the time.” Still, as chatbots develop and communicate with people, the artificial intelligence should learn and improve its communication skills. And even now, Parr says, there is an inherent benefit for business to conduct simultaneous customer service conversations, and the rapid adoption of bots shows they can plainly see the advantages. “The ROI of bots for marketing and customer service is especially clear,” Parr says. “You simply can make more money or save more money using chatbots, so more businesses will adopt sooner.”

For now, companies who utilize a chatbot are certainly early adopters, and won’t do so cheaply. According to Oracle AI, the prices for chatbots typically range from $30,000 to $250,000 depending on the capabilities built into it and the level of interaction.

But will there be a time soon when humans are completely removed from the customer service conversation? It won’t be happening at Staples. Goodwin says the company’s use of AI will not replace the jobs of customer service reps, but instead “augment their abilities.” With chatbots assisting by answering questions before they get to the trained agents or by helping the agent pull up a product, it will allow Staples’ customer service team of reps and agents to focus on critical calls. “This type of communication will help with the reduction in non-critical calls to customer service and improved customer experiences,” says Goodwin. “This technology is still in the early stages and we will closely monitor all communication.”

JC Ramey sees a similar progression. “No doubt, this is impacting off-shore jobs for Tier 1 calls where people call in with general questions,” says the CEO of DeviceBits, a telecommunications company that supports their customers through AI powered customer service platforms. Technically sophisticated Tier 2 calls that require a live agent, he adds, “are likely to be stationed here in the U.S.”

Ramey also forecasts the creation of tech jobs to operate and maintain chatbots, a trio of roles that include Trainers, Explainers and Managers. “Trainers teach AI algorithms how to mirror human behavior, and keep language processing and translating errors down to a minimum,” Ramey explains. “Explainers serve as the middlemen between technologies and industry leaders, communicating the intricacies of AI algorithms to nontechnical staff. And managers uphold AI systems to legal and ethical norms.”

With happier customers, improved efficiency and domestic job creation, the implementation of chatbots seems even more attractive for a technologically-engaged future. Of course, there’s still work to be done, but it’s one step closer to realizing the future promised by The Jetsons.

Chatbots Are the Future of Customer Service