3 ways chatbots deliver ROI for customer service

Marketing pros always like to talk about the cool factor. In advertising it drives curiosity. In a new product it creates demand. But with the cool factor for customer engagement, the proof is in the plateau — the plateau of productivity that is, a.k.a. the user adoption promise land in Gartner’s Hype Cycle methodology.

As of the August Hype Cycle for Emerging Technologies 2016, Gartner puts natural language understanding (NLU) into the Trough of Disillusionment. The fuel that fired those expectations can no doubt be traced to Facebook’s April announcement at F8. At the conference, Facebook opened API access to Messenger and opened the floodgates to developers, who immediately launched chatbots for checking the weather, ordering flowers, and getting news from CNN.

Unfortunately, these bots proved underwhelming for both pundits and the public alike. When those lofty expectations were not being met, chatbots slid into the dreaded Gartner trough. They were slow, and they provided responses that seemed to either not understand questions or simply ignored them.

However, consumers are saying they want to use them. New findings in the Aspect Consumer Experience Index show that 61 percent of consumers feel that chatbots in customer service are the way of the future.

So how long chatbots will stay in that trough is up for debate. Yet one thing is clear: Chatbots aren’t going away anytime soon. Facebook currently boasts over 30,000 chatbots on Messenger, while Pandorabots, a web service for building and deploying chatbots, has helped create over 285,000. When will we know what chatbots start to climb to the plateau of productivity? It will happen when they start showing the money.

The ROI on customer engagement investment as a whole has been demonstrated in a number of areas: 72 percent of consumers said they stopped doing business with a company because of a bad customer service experience, and 96 percent of consumers said they are more likely to do business with a company that has strong customer service, according to the 2014 Aspect Consumer Experience Index. But because automated interaction is new to the customer experience mix, its impact on the bottom line is a little harder to see. In the just-released survey by the Altimeter Group, 69 percent of the digital transformation strategists and executives surveyed said the lack of ROI was a primary challenge to justifying the value of digital transformation initiative. So how does a chatbot demonstrate a return?

1. Lower telephony costs

If chatbots become the first point of contact between consumer and company, it will by result decrease costlier voice calls in the contact center. It won’t eliminate all of them, mind you — not this year anyway — but new Aspect research found that 43 percent of consumers surveyed said that in a perfect world, all customer service should be done through intelligent assistants or chatbots. Even if a person makes a “call me” command to connect with a live agent after initiating a chatbot interaction, a contact center pays about 33 percent less for outbound calls than inbound calls.

2. Reduction in labor expense

McKinsey recently estimated that 29 percent of customer service positions in the U.S. could be automated through chatbots. A significant portion of customer service questions are the easy-answer type: “Where is your closest store?” “What is your return policy?” “When are my boots scheduled to arrive?” These simple and repeated questions can be easily addressed via an intelligent, automated response. And while this means a sizable reduction in labor costs, not all interactions are suitable for an automated response via chatbot. What it does mean is that customer service representatives will be able to spend more time resolving complex issues.

3. Improved employee productivity chatbots

One initially overlooked but rapidly growing area for chatbot deployment is inside the enterprise. There are intelligent assistants like x.ai that help you schedule meetings a little more effortlessly, Slack bots (chatbots on Slack) like Growbot that automate and amalgamate project feedback, and automated task management bots like Workato that are designed to cut through messaging clutter. A recent Pelorus research survey found that 74 percent of contact center managers felt that improved customer service agent technology can decrease error rates and improve the customer experience.

There is a predictable and reliable component of chatbots. They never tire, do not call in sick, and if designed correctly are consistent and exacting. This is not to say that chatbots are the end of personal interaction. There will always be the need and desire for person-to-person interaction. In fact, our latest research shows 86 percent of consumers feel that there should always be an option to talk to a live person if they are engaging with a chatbot.

True, chatbots are a cool technology. They appeal to the growing number of text-first generation of workers who prefer self-service and digital-first interaction. And while in enterprise technology it can be disastrous to cater to cool, intelligent automation in customer engagement shows some very promising investment ROI potential. And positive ROI never falls out of fashion.