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Your Business Guide to Navigating Chatbots

by Sam Bartlett
7 minutes read

AI language technology has become the shiniest, most exciting digital development of the decade since the internet was turned on its head by the launch of ChatGPT last November.

And one of 2023’s biggest business boosts to emerge from this development has been the way companies interact with their customers.

“Until recently, few online experiences elicited as much browsing rage as seeing that smiley face pop up in the corner of the screen with the cheery prompt of ‘How can I help you today?’, because the rule-based chatbots that predated commercially-available AI offered a limited range of responses, tended to repeat answers and the badly programmed ones were about as useful as a bikini in a snow storm,” says High Street Auctions Director Greg Dart, who has spent the past eight months immersed in AI research spearheading the company’s next generation digital strategy.

“As frustrating as they were, rule- or script-based chatbots did fulfil a consumer-driven need. Especially during the pandemic with so much business shifting online, customers expected companies to be available 24/7 and chatbots filled that gap answering basic questions.”

Dart says this year, AI has revolutionised the capabilities of these frontline digital agents.

“They can provide AI-powered answers, route questions to the right agent and take messages when no-one’s available. These next generation voice- and text-based chatbots are much smarter, they problem-solve and they’re more human.”

Chatbots Explained

Dart says chatbots are basically computer programmes that employ algorithms like AI, machine learning (ML), natural language understanding (NLU), and natural language processing (NLP) to simulate human conversations with users in chat windows.

“That may sound like a mouthful, but it’s not overly complicated from a business or end-user point of view. Simplified, artificial intelligence gives computers the capacity to scrutinise vast data sets, to learn from them, to find solutions in the data and convey them in human tones. The more they learn, the better their ‘work performance’.

“Chatbot technology is designed to provide conversational responses to customer queries without human intervention. They can talk to lots of customers at the same time and provide information in seconds.”

Chatbots by Numbers

Dart says the research effort currently being devoted to chatbot tech is immense, and the results often surprising.

“Statistics from UserLike show that some 80% of digital consumers interact with chatbots at least once a year. That figure may seem high given that a SalesForce study puts present global business adoption of AI-based chatbots at around 23%, but less so if one factors in that 300 000+ chatbots are currently active on Facebook Messenger alone.

“According to July figures from DemandSage, with a 24.9% year-on-year growth forecast, chatbots are set to be the most rapidly expanding brand communication medium this year.

“Mordor Intelligence predictions for this market are even more optimistic. The international research company recently set the 2023 chatbot market value at US$5.86 billion, increasing at a compound annual growth rate of 29.18% over the next five years to a value of $21.08 billion by 2028.”

Good Bot, Bad Bot

Dart says companies upgrading their tech need to choose their chatbots even more carefully than they do their front-line staff.

“Your chatbot is going to be your online clients’ first impression of your brand and those interactions will determine in a matter of seconds whether they become loyal customers or buy from your competitors.”

“Good Bots” are defined by:

  • Increased efficiency: When the chatbot is able to accurately interpret a customer’s intent, it can respond more effectively and dramatically reduce clients’ wait time.
  • Actionable Service: Depending on the nature of your business, chatbots should be able to (among others) answer questions about your services, secure appointments, refer queries to the right staff should a client want to speak to a human, and take and deliver detailed messages. Good bots don’t just deliver information – they deliver service.
  • Improved customer experience: Understanding and comprehensively responding to customers’ intent and what motivates their need to reach out, enables chatbots to provide relevant and accurate responses to queries. This leads to agreeable client interactions that grow brand loyalty and boost the balance sheet.

“Bad Bots” hurt your brand with:

  • Missed business opportunities: If the chatbot doesn’t understand what a prospective client is asking, that sale opportunity could be lost before you are even aware it exists.
  • Frustration and dissatisfaction: Anyone who’s ever been stuck in a chatbot question loop will feel antipathy towards that company. Unhappy clients seldom return.
  • Increased workload for human agents: If your chatbot can’t accurately respond to queries, customers will ask for human help. The best organisations seamlessly integrate virtual assistants and human agents – both are essential at the frontline – but not all client queries should end up in staff hands if your chatbot is doing its job. This can substantially increase operational costs.

Chatbot Security Essentials

Dart says a final but critical consideration for businesses upgrading their tech with chatbots is security – both corporate and client.

“In the pre-quantum computing age it’s a sad fact that all systems have vulnerabilities; flaws or unintentional ‘back doors’ into networks that can be exploited. Vulnerabilities are often the result of a poor security plan, weak coding or simple user errors, and chatbots are no exception.”

Some of the vulnerabilities that businesses should look for when implementing a chatbot online include:

  • Lack of encryption when customers are communicating with the chatbot, and when the chatbot is communicating with backend databases.
  • Insufficient protocols and training for employees, which can lead to backdoors being exposed, or private data unsecured.
  • Vulnerabilities with the hosting platform used by the website, chatbot tool, and/or databases that connect to them.

Dart says there’s no such thing as a stupid question when businesses are interviewing potential tech service providers.

“The chatbot you choose needs to come with all the bells and whistles; it’s your brand’s first ambassador, your frontline digital oracle and your business’ virtual client concierge that should always be there and always be helpful.

“It must also be end-to-end encrypted by a service provider that’s a cybersecurity whizz and available for round-the-clock support in the unlikely event of a breach.

“Ask questions about everything until you’re satisfied that you’re getting the best bot for your business.”

Dart’s final word of advice to companies is that investing in an inferior chatbot will ultimately do more brand damage than having no virtual assistant at all.

“Cheaping out on a chatbot is bad business. Don’t do it – period.”

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