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How Chatbots are Driving Digital Transformation

September 05, 2019

The Rise of Chatbots

Calling a contact center is one of the least-enjoyable engagements a consumer can have with a business due to the waiting time, lack of clear menu options and language issues often involved when making a call to resolve a business issue. Companies have long wanted to find a more effective way to interact with customers, and advances in chatbot technology are making this a reality. As such there has been a flurry of uptake in enterprise chatbots, especially in B2C service industries such as banks and airlines. As a result, chatbots are being deployed in a variety of use cases. In Japan, for example where this is a massive influx of foreign tourists the New Otani Hotel introduced a chatbot to assist foreign guests and chatbots will also be used during the 2020 Tokyo Olympics to help guide foreign guests.

Chatbots have up until relatively recently relied on text-based and increasingly voice-based systems which rely on a pre-existing database of questions and answers in order to proceed with a conversation. Artificial Intelligence is, however, becoming more integrated with chatbots and will help give a more life-like feel to the customer experience. One notable example in China is the Xiaoice chatbot which has a staggering 660 million users and 5.3 million social media followers. Xiaoice is a chatbot designed to engage in lifelike conversation with users using a neural network, and as such is tracks conversation topics to make the user more interested and can track user sentiment. One Xiaoice user reportedly spend 29 hours speaking to the bot, which had 7,500 conversational turns. As AI enables more human-like interactions, next generation chatbots will become increasingly widespread in industry.

Chatbots Disrupting Customer Service- Amtrak

Amtrak is the national rail service in the United States, and the company has long struggled to encourage more people to consider trains as a transportation option as the country is dominated by air and private ground transportation. In order to create a better customer experience, the company created a chatbot named `Julie` in order to interact with customers. Julie is able to chat with prospective customers and can answer questions and suggest the shortest route to a specific destination. Julie then transfers customers to a webpage where the customer can then purchase tickets. Amtrak has highlighted many benefits of using a chatbot including, one million dollars saved in customer service costs, overall bookings increased by 25%, online ticket sales increased by 30% and user communication with their chatbot increased 50% year-on-year.

Chatbots Disrupting Digital Marketing - Sephora

After customer service, the area where chatbots are having the most impact today is digital marketing, as chatbots are being increasingly used in areas like lead generation, supporting new product launches, collecting customer data and increasing brand loyalty. An early mover in this space is French cosmetic giant Sephora, which launched a chatbot on Kik messenger. This chatbot is capable of having a conversation with a customer where it is able to give makeup tutorials, suggest products and give skincare tips. Due to the success of the initial pilot, Sephora added the capability of the chatbot to locate physical locations and book appointments for specific services. Customers who had a conversation with a chatbot prior to booking spent US$50 more in the store compared to non-chatbot users and overall customer bookings increased by 11% after the launch of the new chatbot service.

Chatbots Disrupting Human Resources – Coca Cola Vietnam

Human Resources are another area where chatbots can have a great impact, as HR professionals spend the vast majority of their time answering questions about existing policies and following operational procedures as opposed to devoting time the HR strategy. As such chatbots are starting to appear as a powerful IT tool for the Human Resources department which can automate a great deal of the department`s daily work. For example, Coca Cola`s HR department in Vietnam was struggling to keep up with the volume of inquiries and questions from its local staff and deployed a chatbot to help ease this problem. The chatbot was programmed to speak English and Vietnamese, easing the language barrier. Employees were able to start using the chatbot with no prior training and many labor-intensive functions were routed to the chatbot. For example, all high-level travel approval had to be authorized by senior management, which was consuming a large amount of their time. After the chatbot`s introduction, 50% of all travel requests are now approved by the chatbot. Furthermore 60% or all requests for vacation are now done through the chatbot, saving more valuable time of executives.

What Does the Future Hold for Chatbots?

Chatbots will only become more robust over time as their algorithms process more data and AI technology becomes stronger and will at some point in the future definitively pass the Turing Test, a situation where chatbots will be indistinguishable from a human user (some companies claim this has already happened). Voice will also become increasingly important in many situations, driven by the popularity of smartphone assistants and smart speakers. Once this happens the number of use cases for chatbots will multiply significantly in a variety of areas such as healthcare and education.

Chatbots will also be able to help solve some public safety and security problems once the technology is ready. For example, in the United States there is currently a serious shortage of call center workers employed by 911 emergency service dispatch services. Such centers in the United States receive over 240 million emergency calls per year and due to high overtime, low pay and occupational stress the sector has a high turnover rate. As a result, many dispatch centers across the country are operating with less staff than legally required and this often results in slow emergency service response time. In the future chatbots will represent an option for emergency dispatch centers to not only operate in a more efficient manner, but also contribute to creating a safer society as well.

Selected Sources:

https://www.prnewswire.com/news-releases/chatbot-concierge-bebot-comes-to-tokyos-iconic-hotel-new-otani-300653801.html

https://www.techgoondu.com/2018/12/11/in-time-for-olympics-2020-ntt-preps-smart-stadiums-and-ai/

https://singularityhub.com/2019/07/14/this-chatbot-has-over-660-million-users-and-it-wants-to-be-their-best-friend/

https://medium.com/internet-business/how-did-amtrak-save-1-million-5-examples-of-successfully-launched-chatbots-a68e88ba3e20

https://www.socialmediatoday.com/news/4-reasons-why-every-marketing-team-should-be-considering-chatbots/551874/

https://www.peoplematters.in/article/advertorial/leena-ai-hr-chatbot-making-coca-cola-vietnam-future-ready-22480?utm_source=peoplematters&utm_medium=interstitial&utm_campaign=learnings-of-the-day

https://www.kingsiii.com/help-phone-blog/emergency-monitoring/america-is-facing-a-call-center-worker-shortage.asp

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