From marketing to social media, retail to entertainment, the global chatbot industry is projected to grow from US$2.8bn in 2019 to $142bn by 2024, according to Insider Intelligence.
By using artificial intelligence (AI) coupled with machine learning (the ability for a system to evolve and learn) and natural language processing (NLP), chatbots are the ultimate customer engagement tool with apparently limitless applications.
Divided into ‘solutions’ and ‘services’, chatbots mimic written or spoken human language to simulate real conversations and interactions.
By ‘parsing’ the text or speech presented to them, a complex set of algorithms then work to interpret what the user said, infers what they mean or want, and responds appropriately.
So advanced is the technology driving these ‘conversational agents’, there are very few barriers to wide industry usage, both in terms of numerous specialist companies providing such services to the ‘drag and drop’ offerings for start-ups and entrepreneurs.
Indeed, in the above-referenced report, sectors using chatbots included banking, financial services and insurance, media and entertainment, retail and e-commerce, travel and hospitality, telecom, healthcare and life sciences.
The benefits are more than 24/7 access
While businesses and customers become more used to online AI-driven software, the advantageous nature of chatbots for the latter is tangible.
Sales and marketing company Drift asked more than a thousand potential consumers: ‘What frustrations have you experienced with online services in the past month?’
Top of the pile? Overly complex website navigation, simple questions not being answered and the lack of basic business details available.
The same respondents were then asked: ‘What do you predict you would use a chatbot for?’
And surprise, surprise, it was for a convenient and effective solution to their online issues: getting quick answers, resolving complaints or problems and receiving detailed answers or explanations.
Fulfilling these core needs of customers in today’s Industry 4.0 world via artificial intelligence really doesn’t require much intelligence of the human kind. And this is just the start.
Machine learning and NLP means chatbots will evolve quickly to personalise online experiences, realistically recommend products, become radically more human in speech and even provide support in times of need.
Consider healthcare and well-being. There are already chatbots launched by WHO in multiple languages to prevent misinformation about coronavirus, health apps offering reliable next steps for patients and digital therapists doing the same.
Good for business – and marketers
It is widely accepted that certain industries benefit more from automated response mechanisms than others – and it can mirror the amount of online interaction that is expected in the first place – but in reality, there are very few sectors untouched by such technology.
Ultimately, saving money will always be the top line for companies, and chatbots can help reduce costs with little outlay.
Customer service salaries, infrastructures, and education come at a high cost for consumer-facing companies, and this can all be reduced greatly with this technology in place.
Indeed, Juniper Research claimed that the cost savings from using chatbots in the Banking Industry was estimated at $209 M in 2019, and will only grow.
But more than that, sales and marketing departments will profit in other ways, not least from the data gathered through these devices.
Say a content provider covering a specific industry such as finance wants to optimise their editorial output and offer commercial clients leads on what these audiences want, then the simple solution is automation.
Not only do the readers win by getting more content written around their interests, but third-parties now know what the market is talking about in real-time – namely intent data.
After all, reliable data is at the heart of successful digital sales and marketing.
Given we haven’t even mentioned Alexa, Cortana or Siri at this point proves the idea of using chatbots and voice recognition technology is already second-nature to us.
But they represent a safe interaction. They sit in your home and, despite the frustration of hearing the wrong radio station when one clearly requests Capital Gold, they mainly work, and offer convenience and fun.
Businesses drastically ramping up their written or voice recognition services in place of humans are, of course, at more risk.
Shay Chinn, Chief Technology Officer of Agent.ai, states: “Maybe we’ll get to the point when chatbots can ask the right questions and fully take over from humans, but it’s a long way off.
“It might be an even harder technological challenge than designing a successful self-driving car.”
After all, AI relies on the human producing the algorithms and logic in the first place, and while machine learning and NLP means the technology can become highly personalised and ‘real’, chatbots will most likely remain a smaller function of the larger technology suite helping to drive business in our digitalised world.
And should the specific functions of a chatbot fail, no matter how innovative and clever they are, a human must be available to take over. Otherwise, businesses risk losing the very customers they are trying to attract.
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