The pandemic has had a tremendous impact on businesses and has accelerated the digital transformation of businesses that was already underway. One technology, in particular, has been critical in fast-tracking this transformation. AI-powered chatbots.
AI-powered chatbots have come a long way from your basic pop-up chat windows. At first, business organisations used them mostly for user conversions. They have now progressed to responsive virtual personas that can capably solve customer complaints and problems. Chatbots are used for more critical sales functions, including improving lead time and quality, and shortening the sales cycle. According to a Gartner report, using AI in sales can increase conversion rates by 30% when generating and closing leads.
Today, chatbots do more than just answer ‘yes’ or ‘no’ questions. They are able to contextualize problems, offer more nuanced solutions, and even adopt natural, conversational tones.
Automated customer service chatbots, for instance, are able to prompt conversation and are even equipped to offer suggestions and offers that the customer might find beneficial. With customers demanding more and more personalized user experiences, AI-powered chatbots will be able to mine data about individual customers and create more precise customer experiences.
Chatbots use the natural language processing (NLP) standards but what makes them interesting is that the more they interact with customers, the more watertight their functions become over time thanks to ML-led algorithms.
This leads us to how AI-powered chatbots are helping with customer retention.
Customer retention is a tough game to ace. According to the Harvard Business Review, acquiring a new customer is 5 to 25 times more expensive than acquiring a new one. Fred Reichheid, who invented the net promoter score to track customer satisfaction, wrote a paper that states that 5% increase in customer retention rates in creases profits by 25% to 50%.
Here’s how chatbots can help elevate the customer experience.
Shortening the sales cycle
There is no doubt that there is a lot of mundane yet essential data entry tasks that need to be done before homing in on a lead. With AI, companies can focus on the real task at hand – selling and customer retention. Chatbots reduce lead time spent on prospecting customers. They get companies to focus on selling. In the meantime, AI-driven chatbots can use data to predict complex risk patterns, assign scores to customers and actively engage with each and every customer before they choose to cancel or opt out of the service. This can significantly shorten the lead cycle and retain important customers.
Round the clock support
According to a report by Hubspot, 90% of customers cite instant response as a critical factor when it comes to customer service.
Unlike humans, AI-led chatbots don’t need vacations, sick leaves or time off. They can go on continuously and can also handle huge call volumes. Chatbots are always available and can operate across different time zones, in different languages. In fact, customers prefer chatbots to waiting for human response support, according to this report by Userlike. For customers, this is a make or break deal, if they cannot get immediate customer service. In fact, while retaining the versatility of your human customer response team, bringing in chatbots to respond to your customer during high-traffic times or holidays, can ensure that your customers don’t leave your website in frustration or opt for another business over you.
When chatbots take over tasks that require sheer volume of hours, human customer service representatives are free for more important and creatively satisfying work. They can also take on work that goes beyond the chatbot’s expertise.
Improve revenue and quality of leads
Chatbots capture data during their interactions with customers and this data can help chatbots identify customers who are at the risk of ending business.
When interacting with customers, chatbots are also crafting buyer personas based on every interaction. They ask research-based questions and use data to create buyer personas. This data is critical in understanding and retaining customers. For customers who are at the risk of attrition, chatbots can use special offers or text messages to re-engage customers back with the business. What is interesting is that chatbots can be used to market other products to your customers based on their interests and what they are looking for from your business.
By working these cross-selling and up-selling techniques into your chatbot’s configuration, you can certainly improve customer retention and increase customer lifetime value. The chatbot’s understanding and knowledge of the customer will go a long way in enhancing its relationship with them.
With chatbots, you are also significantly improving revenue. You do not have to hire overnight support staff or hire a huge number of employees to service a high volume of enquiries. Customer service chatbots can help businesses reduce up to 30% of costs, according to this report.
Improve customer experiences and collect feedback
Chatbots help you create seamless customer experiences. They can retain the data the customers filled in so that even when the customers return, they need not enter all their details again. They are configured to continuously learn from each and every interaction. With chatbots learning more and more with increased customer interactions, their ability to collect customer feedback and analyze it is also getting refined.
According to this research by Forrester, customers like to get answers in a self-delivery fashion, with less intrusion but more immersive experiences. Customer experience is so much more than the bells and whistles of a beautifully designed website or a very responsive chatbot. The phrase chatbot retention refers to chatbot services that are designed to hook customers and keep them engaged to the brand. A lot goes into building your chatbot strategy – targeted content and personas, personalization, visual elements and much more.
Delivering a key message
Beyond the obvious uses of a chatbot, they can truly help nurture customer profiles and bases that are otherwise hard to crack. It is also possible that with a chatbot, you can deliver key messages to your customers, based on the depth of information and knowledge provided by chatbots.
Chatbots are also used to get customers to engage with the website more and to spend more time on it. In essence, when key messages are delivered perfectly, it reduces the sales process that many businesses spend a lot of time to crack.
Chatbots and the human element
According to a Forrester Analytics report, 54% of online customers in America do not expect chatbots to serve their purpose efficiently. This perception is understandable. After all, how can a chatbot understand our complex needs and queries?
The point to note here is that low-cost, repetitive chatbots can be counter-productive. The trick is to use them with other intelligent systems. One solution is to have humans check and verify answers from a chatbot, building a watertight library of interactions and responses. To humanize chatbots interactions, creating a chatbot persona, visual expression, conversational chat style, emotional responses, colloquial language and personalization can go a long way.
While chatbots can address many pain points, they cannot completely replace human customer service specialists. Getting the equation right goes a long way in ensuring business success – the ultimate goal of an AI chatbot is to address simple questions, mundane tasks and give the customer service specialists more important requests to handle.
The future of AI-driven chatbots
We have barely scratched the surface of chatbots. For instance, you can make them work in tandem with other excellent automation tools and automate your entire customer retention process. You can integrate your chatbot strategy with your customer relationship management strategies with AI-driven chatbots.
AI chatbots can handle complicated queries and even use visual curation to understand a customer’s search behavior to translate these cues into retail purchases. With image and voice search dominating the scene today, chatbots can operate beyond narrow boundaries and really understand customers. Demand forecasting is another huge area of opportunity. AI-driven sales and chatobts can sift through tons and tons of data on a customer and forecast potential sales opportunities.
Marketing experts state that the reason chatbots make such excellent advocates of a business and its brand is because chatbots can solve problems by actually using the business’s products and services. We live in an era of hyper personalization and this is when real-time and predictive analytics play a huge role. This refers to making key decisions based on the most recent data. Businesses that use these tools to deliver relevant and important services to customers will stay ahead of the curve.