understanding the chatbot revolution for business · On Apr. 12, 2016, Facebook opened up its popular Messenger chat service to bots with its “Bots for Messenger” developer platform

Understanding the Chatbot Revolution for Business

Chatbots — they’re the latest craze.

But what exactly are they? Why are they important? And should you consider building a chatbot for your business or corporate brand?

In 2016, a lot of buzz began to circulate around chatbots — piquing the interest of businesses largely because of their con-sumer engagement potential. All of this buzz has resulted in marketers and customer service professionals beginning to ask a lot of questions about chatbots. This eBook attempts to answer those questions — and give you some helpful tips for building a successful chatbot.

INTRODUCTION

02UNDERSTANDING THE CHATBOTREVOLUTION FOR BUSINESS

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ChaiOne defines a chatbot as a conversational user interface (CUI) that delivers text-based or voice-based information to users in a way that simulates human conversation.

While it may seem chatbots are a recent innovation because of all the recent hype around them — bots that imitate human conversation are nothing new. In fact, they’ve been around for more than fifty years.

What is a chatbot?


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MIT develops Eliza, a NLP (natural language processing) computer program

Jabberwacky, a chat bot designed to mimic human interaction, is released on the internet

1966

1977

Apple launches Siri

2011

Facebook launches M, a hybrid bot-and-human virtual assistant, accessible through Messenger

2015

Active Buddy Inc. develops SmarterChild, a chatbot on the AOL Instant Messenger and Windows Live Messenger networks

2001

Microsoft launches Cortana and Amazon launches Alexa via Amazon Echo

2014

Facebook, Google and Microsoft make major announcements about bot platforms at their annual conferences

2016

Chatbots are either powered by artificial intelligence (AI), which includes natural language processing (NLP) and machine learning, or a predefined set of rules.

AI-powered chatbots get continuously smarter over time thanks to machine learning. Rule-based bots, however, do not, because they are programmed to only answer a limited set of questions for users.

How chatbots work


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Rule-based chatbots generally have more buttons or menus that keep users on target, while AI-powered bots give the impression of having a real conversation with an actual person. Most chatbots today use a combination of machine learn-ing and a predefined set of rules.

Chatbots are cross-platform software products — so they can live on anything from smartphones and tablets to Smart TVs and websites. However, the vast majority of chatbots today live on messaging platforms, such as Facebook Messenger and Kik. And it’s because of messaging platforms that chatbots have made their way into the broader marketing conversation. The primary reason? Consumer access.

Facebook Messenger, for instance, has more than 1 billion monthly active users, while WeChat, a popular messaging service for the Chinese market has ~846 million.

Where chatbots live


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Chatbots and CUIs live on messaging platforms (e.g., Facebook Messenger); the iOS and Android operating platforms (e.g., Siri and Google Now); and in hardware solutions, such as Siri on Apple TV, Amazon Echo (aka Alexa), and Google Home.

https://www.messenger.com/

https://www.kik.com/

On Apr. 12, 2016, Facebook opened up its popular Messenger chat service to bots with its “Bots for Messenger” developer platform. In Aug. 2016, Kik, which launched a bot developer platform around the same time as Facebook, claimed 1.8 billion messages were sent between Kik’s users and its chatbots in a four-month time span.

Ultimately, chatbots are the vehicle that make widespread access to consumers on messaging platforms possible.

Accessing these users with bots


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Arguably, the most popular messaging platform on which to build a bot in the U.S. is Facebook Messenger, but other viable options exist depending on your target market and the goals for your chatbot. To give you an idea of the messaging platforms available, we’ve compiled a list of several major messaging apps.

Messaging platforms for chatbots


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Monthly active users: ~1 billion

Facebook opened up their widely popular messaging platform to chatbots on Apr. 12, 2016 — giving developers access to a slew of bot creation tools. As of Nov. 2016, 34,000 bots had been created on the platform.

Facebook Messenger

WhatsApp


Monthly active users: ~ 1.2 billion

WhatsApp, which is owned by Facebook, doesn’t currently allow chatbots; however, if bots are ultimately successful on Facebook Messenger, this could change very quickly.

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https://messengerplatform.fb.com/

https://www.whatsapp.com/

Monthly active users: ~ 846 million

WeChat is a Chinese messenger app developed by Tencent, Ltd. It’s a very popular app in the lucrative Chinese market — but less so in other parts of the world due to certain restrictions.

WeChat


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Monthly active users: ~ 175 million

Kik is used by 40 percent of teens in the U.S., and opened its platform to bots in Apr. 2016.

Kik

https://www.tencent.com/en-us/

https://botsupport.kik.com/hc/en-us/categories/204268167-Learn-about-Bots


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SlackDaily active users: ~ 4 million Slack is a popular messaging service for internal use by a company’s workforce. It has a growing base, and a built-in bot — Slackbot — that Slack describes as “part-time programmer and full-time assistant.”

As more and more people start to communicate on messaging apps, chatbots will get involved in many, if not all aspects of our lives, from healthcare to customer service to retail shopping to news and entertainment.

The chatbot revolution

According to Forrester, consumers use only 25 to 30 apps on average each month and spend 88 percent of their time in just five downloaded apps. Mobile moments are highly consolidated, with about 12 app categories owning 85 percent of mobile moments [1].

The result? Businesses must borrow mobile moments from third-party platforms to serve

more customers on mobile and serve all customers more conveniently. From a marketing perspective, this means chatbots — which exist on messaging platforms that have already been downloaded by the consumer — will quickly evolve into a powerful tool for building a corporate brand.

Why chatbots and messaging platforms are a perfect match

The real potential of chatbots is tied to AI.At present we are not quite where we need to be in order to make chatbots the highly effective virtual customer assistants and brand ambassadors that businesses want. But the time is coming when AI technology will catch up — so businesses need to start preparing now or risk being disrupted by early adopters who are already experimenting with this technology.

We are still in the early stages of the chatbot revolution


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Chatbots are already helping folks do everything from checking in to a flight to shopping for groceries. The WholeFoods chatbot, for example, helps customers select in-store items for dinner. Meanwhile, KLM’s chatbot delivered 50,000 boarding passes via Facebook Messenger in the first three weeks it was available. According to KLM, since Mar. 30, 2016, it has logged more than 1 million messages, including booking confirmations, check-in notifications, boarding passes, flight status updates [1].

Early chatbot adopters

The problem with many chatbots today is there are a plethora of them on messaging platforms that overpromise and under-deliver. But why? Subpar user experience stemming from overambitious bots with insufficient AI. The resulting customer experience? Frustration.

The graph below illustrates just how various brands are currently using chatbots.

Credit: Forrester Research, Inc. - The State of Chatbots


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In the future, chatbots will be everywhere due to their more natural CUI compared to apps and or corporate websites — and as AI technology improves, they’ll become even more potent.

It makes a lot of sense that we’re moving towards this technology. According to Forrester, consumers prefer voice to apps or the web for some activities, such as getting answers to quick questions and directions.

What the future holds for chatbots


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The graph below illustrates how consumers are already using voice or conversation for a wide range of tasks.

Credit: Forrester Research, Inc. - The State of Chatbots


From an e-commerce perspective, some chatbots already allow you to make purchases. As chatbots become more sophisticated — more and more of us will be using chatbots to pay for everything from clothes to furniture and more!

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In the future, if you want to interact with a business, you’ll be able to quickly have a conversation with a bot — without having to first visit the company’s website, mobile app or visit the store.

Depending on the brand, chatbots could ultimately replace a companies’ corporate website and mobile apps. And while this isn’t likely, what is almost certain is that chatbots will replace bad mobile apps because they offer a more convenient and natural CUI.

Chatbots impact on e-commerce


Today, automated systems handle much of these requests; however, AI-powered chatbots on messaging platforms — with their more natural CUI — will create a better, more successful customer experience.

It’s possible that AI-powered chatbots may get so advanced that they’ll be able to handle very complex customer conversations, but we’re not there yet. In the meantime, the best thing to do is to keep it simple when creating a chatbot.

Most successful chatbots today use some combination of AI with a predefined set of rules.

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For the immediate future, even the best AI-powered chatbots are no replacement for human intervention. But it may not be long before AI-powered chatbots are taking on complex tasks.

Take call centers, for example. Five years from now, customers getting in touch with a retail energy provider could ask the bot a question about their bill on a messaging platform. If the customer starts to get angry, the AI-powered bot — through machine learning — would recognize the frustration of the customer and 1) address the issue or 2) quickly get him to an actual customer service representative.

Chatbots are not a replacement for humans... yet

These are famous last words for marketers and customer service professionals.

Truth be told, it’s now much easier and cheaper today to build and deploy a chatbot than it was several years ago — as evidenced by the 34,000 + bots that were created in an approximately 7-month time span on Facebook Messenger. However, building a bot that actually works — one that enhances your brand engagement or your customers’ experience with your brand is an arduous and time consuming process.

Even with bot developer platforms and AI tools, the pitfalls for building a chatbot are numerous — and that’s why it’s a good idea to have a solid strategy in place before you begin your build.

Building a chatbot is easy


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Companies, including IBM and Amazon, offer AI frameworks that make developing bots easier.

If this is your businesses’ first foray in chatbot building, you’ll want to begin your journey by asking yourself these questions:

What’s the goal for your bot? What’s the customer problem you want to solve? What are your key performance indicators (KPIs) for your project? How will you measure project success? Can you determine with certainty how your customer will engage with a bot? Should you implement a rule-based, AI-powered or hybrid bot? Do you know what an effective user experience (UX) looks like for your bot?

Building a great chatbot


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You may consider working with a Digital Strategist to help you get your project moving. Digital Strategists can help connect big-picture digital strategy with the right technology and messaging platform solutions for your chatbot.

https://chaione.com/blog/3-ways-a-digital-strategist-simplifies-complex-digital-transformation-projects/

Assume nothing about the bot you want to build


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Making assumptions about the business requirements necessary for creating a chatbot is the quickest way to put one in front of your customers — it’s also generally the quickest path to failure.

When it comes to chatbots, simply building a chatbot based on assumptions about your customers is like throwing a dart at a dartboard — you may hit a bullseye, but chances are you’ll miss your target.

The first step you need to take when building your bot is to identify the user problem you want to solve and the key performance indicators (KPIs) for your project. Your next step should then be to conduct research about your target audience.

Getting started with your build


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Contextual inquiries help define business requirements for developing custom software products like chatbots — and are generally conducted by a trained professional with an ethnographic and human factors research background.

A contextual inquiry, which is a user centered design (UCD) research method, places a trained researcher, generally with a PhD-level of education, in the environment of the user. For major corporate brands, contextual inquiries are absolutely vital to creating a positive chatbot experience because they help aid in the development of highly accurate user stories. During the contextual inquiry, important information is gathered that helps define the business requirements for the final design of the chatbot — often revealing pertinent information that would otherwise be missed using other intelligence gathering methods.

Get down in the trenches


Chatbots need to be built through an iterative and agile process as companies learn what works, what consumers want, how they ask questions, and how they respond.

Today, consumers on messaging platforms must be patient with AI-powered chatbots — but that doesn’t mean that they will be. That’s why, when deploying your chatbot, it’s important for the first iteration to be as good as it possibly can be. Research gathered from contextual inquiries helps make that possible — putting your business in a much stronger position for the long term success of your chatbot.

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Understand that AI-powered chatbots require iterative and agile development

Once you’ve completed all of your research — the next step is to pick a platform. Earlier in this eBook, we provided information on some of the major messaging platforms, but there are several others out there that may be a good fit for your needs. When selecting the appropriate platform, the two most important things to consider are 1) the overall goal for your chatbot and 2) the customer base you want to reach.

Picking a chatbot platform


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Most chatbots created today will use buttons — make all buttons and commands actionable to get users familiar with your chatbot Create a personality for the chatbot that matches your brand (ex. easy going for restaurants or travel, more serious and considerate for financial services) Design for human emotion — use friendly, inclusive language when speaking to your users Inform the user exactly what a chatbot can do and what it cannot do — when the chatbot’s abilities are stretched, give clear feedback to the user to say that query cannot be answered, but here’s how you can find the information you need Clarify what the user is asking for when input is ambiguous rather than guess what the user inquired about (providing wrong information is worse than being asked to clarify an inquiry) Keep it light if your bot can’t answer a question to cut down on user frustration

Designing and testing your chatbot At this stage you’ll want to leverage your user stories to create conversation flows.

Ideally, this requires the expertise of a user experience (UX) designer to meticulously create an appropriate script for your bot and an engineering team to help integrate open source application protocol interfaces (APIs) from AI frameworks.

Here are some Chatbot best practices tips from a UX perspective:

https://chaione.com/design/


Use analytics platforms to identify content blocks and adjust for them Keep people engaged by setting boundaries to the conversation Do usability tests with users before launch to ensure typical types of queries and interactions with the chatbot will be successful with the user base after the launch

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Ultimately, the future of consumer engagement for many businesses and brands will be aided by chatbots. As is the case with most transformative technology — early adopters will reap the benefits in the long-term. For now, the best thing businesses and brands can do is take the necessary first steps to begin building a chatbot strategy. When executed correctly, chatbots have proven to be a valuable tool for consumer engagement — and their importance will grow — as businesses and brands learn how to better serve their customers with this disruptive technology.

Conclusion

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Contact us to find out more about how ChaiOne can help develop a chatbot strategy for your brand or business.

Want more awesome content? Read our eBook, The Ultimate Guide to Customer Experience

CLICK HERE FOR A FREE 20 MINUTE CONSULTATION WITH A DIGITAL STRATEGIST

The Chatbot Revolution is Here!

http://info.chaione.com/free-mobile-digital-solution-consultation-2.html

http://chaione.com/wp-content/uploads/2016/11/The-Ultimate-Guide-to-Customer-Experience_V1.2.pdf


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1.”The State of Chatbots”,Forrester Research, Inc., Oct. 20, 2016

Reference

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understanding the chatbot revolution for business · On Apr. 12, 2016, Facebook opened up its popular Messenger chat service to bots with its “Bots for Messenger” developer platform