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The Chatbot Conundrum: Are Digital Assistants a Boon or a Bane?
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March 22, 2023 News

Written by: Martin Dale Bolima, Tech Journalist, AOPG.

 

The promise of using chatbots is hard to pass up—or is it? Could it also be that this promise—cost savings and increased customer satisfaction—is too good to be true?

But, before anything else, what is a chatbot anyway?

A chatbot is a computer program designed specifically to communicate with customers by responding to their questions. It utilises Artificial Intelligence (AI) and Natural Language Processing (NLP) to “understand” such questions and “answer” them accordingly. This, in effect, simulates person-to-person communication.

Chatbots are now ubiquitous. They are installed in smart speakers, used as smartphone assistants and leveraged by businesses to interact with their customers. Highly advanced versions of AI chatbots are also available and are oftentimes referred to as “virtual agents” or “virtual assistants.” These AI chatbots are in turn being deployed increasingly by businesses to help in assisting with customer queries and concerns.

Chatbot Use Is Growing in Business

More companies are now using chatbots, including in Asia. That is mainly because today’s consumers are a more demanding lot, according to Anand Venkatraman, COO at CleverTap and former Vice President and General Manager, APAC Partnerships, at Freshworks, in a commentary he wrote for Disruptive Tech Asia (DTA) previously.

“Customer service expectations are evolving at such a fast pace. Fast response times, round-the-clock availability and omnichannel service sit high on the wish list of today’s consumers when asked about customer service expectations,” Venkatraman wrote. “As more consumers come online, businesses are beginning to leverage new channels to respond to their customers such as live chat, messenger apps and social networks. With this connectivity, more organisations are seeing the benefits of chatbots to address and respond to the needs of their customer.”

In his own commentary for DTA, Gibu Mathew, APAC Vice President at Zoho Corp, attributes the growing use of chatbots to the rise of e-commerce, particularly in Asia these past three years.

“Enterprise use of chatbots has grown, and in Asia where brands have played a huge role in defining how it is being utilised, we are seeing more brands embrace it for broader customer service activities,” wrote Mathew. “E-commerce, in particular, has helped to accelerate the adoption of this technology as customer service demands change to match our on-demand culture and companies struggle to manage the costs associated with call centres. These centres have become more difficult for companies to maintain due to the high cost of training a large number of staff required to deal with the sheer volume of customer interactions.”

A Necessity, Not a Novelty

In other words, chatbots have evolved from a novelty to somewhat of a necessity. It is now a means to an end. That end is to enhance the customer experience but with the costs of doing so kept to a minimum. Ricky Kapur, Head of Asia Pacific at Zoom, points out to DTA that virtual agents are better suited to handle pain points often associated with the customer experience. This makes chatbots the sensible choice. Among these issues, according to Kapur, are scalability problems, slower response times and inaccurate or inadequate resolutions. These evidently can be resolved by virtual agents.

“Intelligent chatbots can resolve many of these pain points by providing round-the-clock and instant self-service resolutions. This reduces operational costs while ensuring the high volume of support requests is met,” Kapur explains.

Simon Ma, Director and Regional Manager for ASEAN also at Freshworks, shares the same view. He notes how chatbots “help brands meet [customers’] growing expectations” and “make it feasible for brands to help customers faster.” Ma adds that “chatbots can increase customer conversion by enabling brands to provide personalised experiences for their customers.”

Here is a simpler take: An effective chatbot is one that is able to provide answers to a problem in the quickest time to offer the best user experience. On top of that, implementing across a business’s enterprise software should be hassle-free. The priority of the chatbot is to increase efficiency and reduce errors. And that is why choosing the right chatbot is vital for a business.

Therein lies the rub. Choosing the right chatbot is not as simple as it seems.

To that end, a good question that needs to be asked is this: Can the chatbot understand the user’s needs and complete the task required across enterprise applications? One of the struggles that chatbots today have is the potential of misunderstanding requests that are too specific. Chatbots are designed to answer inquiries based on what they have been programmed with from their database. When the user prompts a request outside the database, the bot will either not know how to assist or provide answers that do not solve the problem. When this happens, it only amplifies the user’s frustration and negatively impacts the experience the business intended.

Consider this customer’s bad experience with a chatbot, as shared on Twitter:

The Chatbot Conundrum

Rashid Khan, Co-Founder and CPO at Yellow.ai, agrees, especially when run-of-the-mill chatbots are involved. In such cases, they can do more harm than good to a business.

“Most generic chatbots fall short of providing the personalised, intent-driven experience that consumers look for,” notes Khan. “They are rule-based bots that interact based on a set of predefined questions and are incapable of handling nuanced questions.”

In other words, generic chatbots are severely limited.

Zoom’s Kapur has a ready explanation of why these generic chatbots are a bane rather than a boon for businesses. And he knows the adverse impact they can create.

“Many traditional chatbots are based on hard-coded question-and-answer pairs, which can lead to difficulties in detecting uncommon questions and leaving customers frustrated,” says Kapur. “We found in a recent survey with Morning Consult that more than half of consumers say they would leave a brand after just one or two negative experiences.”

A separate study by Forrester Consulting, conducted on behalf of the customer experience platform Cyara, highlights Kapur’s point. Forrester Consulting found out that a bad chatbot experience prompted 30% of 1,554 surveyed consumers to look elsewhere and forced 70% to abandon a potential purchase. The respondents of said survey also gave the chatbots they interacted with a score of 6.4. With 10 being the highest, that score is just slightly above mediocre. Tellingly, the same respondents categorised nearly half (40%) of their chatbot interactions as being of the negative kind.

Among the common pain points encountered by consumers in the same survey are:

  • Chatbots providing inaccurate or nonsensible answers.
  • Their inability to handle complex queries.
  • Their failure to find resolutions to problems.
  • Dragging interactions that lead nowhere.

Despite these pain points, 61% will do repeat business with a brand that provides a positive chatbot experience. This suggests some chatbots really do their jobs well.

Two Sides of a Coin: The Good Side

For all the horror stories of bad chatbot experiences, the truth is some chatbots get the job done. Those are the kinds of chatbots enterprises need. But they will need to invest in them, says Dennis Reno, Chief Customer Officer at Cyara. And the trade-off is a good one, apparently.

“Delivering positive chatbot experiences has a critical impact on customer satisfaction and sales, and subpar chatbots will not cut it for consumers today,” says Reno. “Organisations that invest in quality assurance testing and training chatbots can provide customers with better and more consistent chatbot experiences. Businesses that strive to meet customers’ chatbot expectations can increase customer loyalty, boost brand reputation and lower contact centre support costs since customers are less likely to seek out more expensive avenues of communication.”

That investment involves leveraging the latest in technology, and it appears more companies are doing that exactly.

“We are now seeing increasing use of advanced technologies like Natural Language Processing and Machine-Learning in chatbots. Such chatbots are able to effectively and accurately interpret questions from customers no matter how they are phrased,” notes Kapur. “The use of these technologies also enables a true omnichannel experience, where customers looking for more personalisation can easily escalate to a human agent in a seamless handoff. This means that businesses are able to meet customers where they prefer to communicate and deliver the frictionless, always-on and reliable customer experience they want.”

Notice, though, how Kapur mentions “human agent” as still being part of the experience. The truth is chatbots cannot do it all—at least not yet. Maybe never. They still need human agents in some, if not most, cases.

Christoph Jourdan, Vice President, APAC Solutions Consulting at Sprinklr shares that sentiment. In fact, he believes chatbots work best in tandem with human agents, not as a standalone. He also believes chatbots and human agents will soon have a happy middle ground. Its ultimate beneficiaries then will be the companies themselves and the human agents as well.

“AI chatbots are most impactful as support for human customer service representatives. AI technology is here to enhance, not replace, customer-facing employees,” Jourdan argues. “In the next decade, AI and chatbot technology will continue to evolve as part of the modern customer service tool kit. Inbound calls, human interactions and costs will drop substantially, while consumer satisfaction will increase. Employees will be able to perform higher-order work and engage directly with customers on the most challenging issues.”

What a Chatbot Should Be

So, the questions are:

  1. What should a chatbot be like?
  2. What should it be able to do?
  3. How can a business get such a chatbot?

Good chatbots, according to Yellow.ai’s Khan, must “effectively address customer queries and engage with them, support marketing and sales functions and deliver the right message.” All this, Khan adds, must be done “at the right time on the right platform in the customer’s preferred language.” Essentially, what Khan is saying is that chatbots must be dynamic so they can support businesses at every stage of marketing—awareness, consideration, purchase and delight.

Again, an effective chatbot is one that is able to provide answers to a problem in the quickest time to offer the best user experience. On top of that, implementing across a business’s enterprise software should be hassle-free. The priority of a chatbot is to increase efficiency and reduce errors, hence choosing the right chatbot is vital for a business.

Sprinklr’s Jourdan is more specific. According to him, good chatbots:

  • React less like a machine. AI chatbots need to have the capability to collate all available data, discern intent and respond to different situations accordingly and in a conversational manner.
  • Treat AI as an ongoing process. AIs learn from experiences and benefit from large data sets. A constant effort to ensure customers’ cues are being interpreted and responded to correctly is essential. AI-led conversations are most effective when they can access data from all customer-facing teams.
  • Redirect correctly. Chatbots are best deployed for simple, high-volume tasks. They should be designed to escalate sensitive or complex conversations to human agents.

All that, however, might be too much for a company to do. In fact, companies might be ill-equipped in the first place to make a chatbot that is humanlike and powered by AI. But companies do not have to create their chatbots on their own as a range of tech firms can do that. They can help enterprises with all their chatbot needs—and ensure that these virtual agents function in a way that will help the company, not hurt it.

The Chatbot Landscape

Organisations looking to leverage chatbots of the good kind at least have their choice of potential providers. Ma, for example, touts Freshworks’ omnichannel AI-enabled chatbot Freshchat. He says it can “analyse and predict customer intent and either guide an agent or interact with customers by itself based on that information.”

Khan swears by Yellow.ai’s Dynamic AI agents, which he claims is continuously trained via data sets culled from over 1,000 global enterprises. He also touts these agents’ ability to carry out intuitive conversations “with greater enterprise integration and multilingual capabilities.” He further adds that Yellow.ai’s dynamic chatbots use analytics to successfully increase customer satisfaction by as much as 40%.

Those are just two examples. The chatbot landscape is populated by others that can help companies maximise their use of chatbots and enhance that all-important customer experience. Ultimately, though, the onus is on key decision-makers to decide which solutions best fit their companies’ customer service needs and which firms can help in that regard.

It is a critical choice that will impact a company’s bottom line and long-term viability. And that is why companies must be wise and deliberate about it.

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