Beyond The Hype: What is a Chatbot & How to Leverage The Biggest Marketing Opportunity of The Next 5 Years

May 2, 2020

Learn how you can leverage the biggest marketing opportunity of the next five years by creating a social messaging, lead gen or ecommerce chatbot.

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Chatbots have steadily gained ground in the world of marketing and customer communication over the last few years. Apple’s Siri, the Google Assistant and Amazon’s Alexa have become household names when it comes to voice-assisted search. But text and chat still dominate when it comes to engagement. Between friends, with family and even with businesses. The truth is, more people are messaging than ever before.

The initial hype around chatbots led to a boom of interest. You may have come across a chatbot on a website. Chatbots often pop out on the right side of a site with a friendly greeting asking how it can help.

Chatbots are proving themselves to be a very useful tool for brands to connect with consumers at scale and increase their ROI. Whether you are considering a chatbot for your business or want to learn more about this huge marketing opportunity, this article explains what chatbots are, their benefits and how companies can leverage them.

What are Chatbots?

They are a form of conversational AI that responds to human input – spoken and written language. Chatbots are the new ‘voice’ in customer communications that allow conversations with customers and prospects. In a nutshell, a chatbot engages in a conversation with customers just like a real person. Not just words too. Chatbots as a marketing channel also enable you to have highly interactive, media-rich experiences that guide your customers through a funnel to reach a desired outcome.

How Do Chatbots Work?

Chatbots are designed to respond to simple prompts or engage in complex conversations about intricate topics. The complexity of chatbot AI ranges from retrieving information that matches specific keywords to having active learning capabilities that offer comprehensive responses and tailored suggestions depending on past conversations. There are also plenty of cases where chatbots help guide a customer along a buying journey by prompting responses and tailoring their experience at every step.

Advances in Natural Language Processing (NLP) and AI have contributed generously to improving chatbots’ conversational abilities. NLP allows chatbots to translate common language into a form that the chatbot can understand. From a sentence, a chatbot can derive your intent and respond accordingly. It can understand what you are asking and provide an appropriate response. AI enables the chatbot to learn through its interactions with people. Paired with human supervision, this AI can help you develop a better understanding of your customers and provide instant responses to their needs and wants.

Benefits of Chatbots

Chatbots have numerous benefits for businesses. Here are some of them.

Increase Customer Engagement

Did you know that engaged customers account for 23% of your business’ profitability, revenue, and relationship growth? Also, enterprises that engage their customers on social media report an increase in customer spend by 20-40%. Chatbots facilitate customer engagement by offering customers relevant information. Also, they make conversation with customers proactive as opposed to reactive.

Cut Operational Costs

Research shows that chatbots reduce operational costs by 30%. With chatbots, you don’t need to employ many customer support employees, and hence decrease labor costs. With 70% of incoming messages on social media being pre-purchase, there’s also a big opportunity to turn those operational costs into revenue gains.

Gather Customer Insights

Apart from communicating with customers, chatbots collect customers’ insights from conversations. You can use the feedback to improve products and services and processes. You can also use the declared data captured in conversation to make recommendations to your customers in real-time. Personalize their buying journey.

Even build more meaningful segments based on their actual preferences, rather than just anonymous browsing behavior. Chatbots can also identify purchasing patterns and consumer behaviors that inform decision-making.

Increase Employee Productivity

Chatbots answer standard and repetitive customer queries so that customer support agents can handle more complex issues. Research shows that chatbots allow 64% of customer support staff to resolve challenging customer issues. Also, by 2023, they will save 2.5 billion customer service hours.

Deliver Error-free Service

Chatbots are accurate and offer error-free service, unlike humans, who can make mistakes while collecting customer data and sharing pricing information.

How to Leverage Chatbots

Chatbots have plenty of benefits for businesses, ranging from streamlining customer service to achieving cost savings. But, how can companies leverage chatbots to harness their benefits? Below are a few examples of how you can use chatbots.

1. Social Messaging Bots

These bots are employed to start conversations with customers and prospects online on social media. You interact with customers on a personal level. On their social messaging apps and at their moment of highest intent. You may be asking, why invest in social messaging bots?

Chat messaging has better open rates than other forms of digital communication. One chat messaging campaign recorded an 88% open rate and a 56% click-through rate. The average is around 80% and 30% CTR. This is unheard of on other marketing channels.
Consumers prefer to communicate with enterprises using chat. According to a Nielsen survey, direct messaging is the second most common communication form with companies. Chatbots offer direct messaging and real-time interactions.
Allow for segmentation and targeting: social messaging bots gather information about prospects and customers, so that businesses can segment and target them effectively.

2. Guided Shopping Bots

These bots allow you to delight your customers with seamless shopping experiences. You can also recommend products to customers in real-time. Guided shopping chatbots prompt your customers to answer a few questions about what they’re searching for and then respond with the most relevant products in your inventory. With guided shopping bots, you can move customers from the awareness stage to purchase with a single conversation. You increase chances of conversion and minimize chances of abandoned carts.

3. Conversational Display ads

The days of ads talking ‘at’ consumers, not ‘with them’ are gone. Conversational display ads allow brands to talk with prospects and customers directly within the ad unit. Imagine one ad unit for all of your cohorts. Unlike in the past, when a user clicked on an ad and was redirected to a landing page, conversational display ads let you stay at your current page while starting a chat with a brand’s bot. They are embedded directly within the websites and mobile apps that your customers use every day.

For instance, let’s say you are reading a car review. A targeted display ad might show up as you read the review that prompts you to learn more about a new vehicle. That ad takes you through a guided tour of all the latest features and benefits of this new car. It only highlights the things you care about. How does it know? Because it asked you. Once you’ve been able to learn more, the chatbot prompts you to schedule a test drive at a local dealership. You’ve now gone from discovery to consideration to action in a single interaction. From a marketers point of view, that’s a very streamlined version of the traditional marketing channel..

4. Lead Generation Chatbots

These chatbots identify potential consumers, evoke interest in your offerings, and develop a relationship with the prospect. They help your business generate more qualified leads by initiating personalized conversations. With the lead generation chatbot, your customers get;

Tailored experiences based on their needs
Increased engagement, which contributes significantly to turning a visitor to a lead.
Unsurpassed convenience because they get the information they need promptly
Real-time interactions

As a marketer, you can also qualify each of those leads in real-time before sending them to your CRM or asking them to get in touch.

Chatbot Future Trends

Here are some key statistics highlighting the future of chatbots.

By 2021, 85% of customer interactions will be tackled without human agents.
61% of consumers perceive chatbots as the future of customer service.
50% of companies plan to invest more on chatbots as compared to mobile apps.
By 2022, investments in chatbots will be approximately $5 billion.
Chatbots will save enterprises $8 billion per year by 2022.

Bottom Line

The use of chatbots has been on the rise in the last couple of years. Thanks to chatbot AI, NLP, and machine learning, today’s chatbots have more conversational capabilities to engage customers. Chatbots have many benefits for businesses. Put simply. They offer your customers a better way to engage with your brand. For marketers, they offer a treasure trove of declared data about customers and an easy way to personalize every experience from ad click to purchase. It’s no big surprise that chatbots are quickly becoming the future of consumer communication and marketing. Contact us to learn how our conversational marketing platform can help your business leverage chatbot technology.