Do Chatbots Increase Customer Experience (CX)?

Except if you’ve been living without the internet for the last couple of years, you couldn't have missed the excitement around chatbots. And if you did, go on any website and you’ll see what I mean. In almost every business, they have been seen as a major step in improving Customer Experience (CX). But are they really efficient? Let’s jump in.

Companies Run After the Best Customer Experience

82% of customers have stopped using a company because they have had a bad Customer Experience (1). Under these circumstances, CX has never been more crucial for companies.

82% of customers have stopped using a company because they have had a bad Customer Experience (CX)

Indeed, the development of online shopping offers customers a wide range of choices where to buy on the web and allows them to switch from one company/brand to another if they consider not having a great experience. Now more than ever, companies seek to offer the best CX. 

Also, 91% of companies surveyed by Bold 360 esteem Customer Experience as important. 34% of consumers questioned in the same survey, evaluate their “experience” as average, not good or terrible. Finally, only 13% of them give a 9 out of 10 to their CX according to PR Newswire (2).

CX is important given that companies who invest in improving their Customer Experience observe an increase in customer loyalty (92%) and in revenue (84%) (3).

In light of these figures, companies are all looking to improve their CX and Chatbots seem New ways to connect with customers.

What Are Chatbots?

Well, before going into further detail in the article, let’s vanish all confusion and have a common definition: chatbots are online software that can converse via text or speech interaction and are a substitute for a human agent.

Chatbots are online software that can converse via text or speech interaction and are a substitute for a human agent.

Yet we have a definition, it’s important to note that there are different variants of chatbots. Depending on the technology they rely on, chatbots perform basic to advanced interactions with consumers.

Currently, most of the chatbots on the market are the following:

• Flow/Keyword based chatbots: They’re the most basic and are tree-based bots (including menu/button and keyword recognition). This means they use if/then logic paths or flow that allow chatbots to reply to customers.

Source: insights.jumper.ai

• AI/Machine Learning Chatbots: They’re the advanced type of chatbots. To answer customers, they rely on Artificial Intelligence and Machine Learning. 

Source: insights.jumper.ai

For the purpose of this article, my choice is deliberately narrowed down. But remember that other types of chatbots and technologies are developed such as Natural Language Processing (NLP), Natural Language Understanding, and Natural Language Generation are the next technologies.

How Chatbots Increase Customer Experience

In parallel with the growth of the internet, customers’ expectations (and what satisfied them) towards businesses evolved over the years. Without distinctions, all sectors are now concerned, from online shopping, and banking to customer support and many more. Companies found in chatbots a solution to satisfy customer expectations.

Chatbots' advantages for companies are considerable. They increase Customer Experience by addressing 2 limits of the live human agent: availability and instantaneity.

• Availability: Chatbots don’t take time off or require any vital human needs (like eating, or sleeping…). They’re available 24/7/365 to answer customers’ needs. Actually, 64% of internet users said it’s the most preferred feature (4).
• Instantaneity: 57% of consumers said that they're interested in the immediacy chatbot offer (5). Chatbots address customer queries in seconds rather than in minutes for live agents. They can also handle an unlimited number of conversations while human support are limited by the number of simultaneous chats they can manage.

Source: drift.com

Besides, 42% of customers like chatbots because they find them easy to use (6). We can also mention that they find them fun and friendly, informative and customers liked the experience. Other areas are improved when using a chatbot: shopping experience, customer satisfaction and a lot more. All these elements result in better CX.

Even if chatbots have evolved over the years, they have some limits. This brings us to the next point.

When Chatbots Fail to Satisfy CX

It’s estimated that 80% of companies will be using chatbots by 2020 (7). A significant number of researches – mainly led by companies offering chatbots solutions - have shown that they increase CX. Well, the reality is rather different. Chatbots are not that “intelligent” which as per consequence they can fail to satisfy Customer Experience.

Before explaining the main chatbots’ limitations, I want to share with you some intriguing facts. First, 80% of customers worry that a chatbot would make a mistake by ordering the wrong items for example (8). Also, 43% of customers prefer dealing with Live Agents rather than bots (9) and customers will use chatbots to find a human Agent. Finally, customers think that chatbots are designed to keep them away from Human Agents. There are more statistics showing the same trend. So, yes customers use chatbots - probably because they don’t have other options? - with some caveats.

Chatbots are great. Still, they have one major downside: understanding the complexity of human language. Definitely, the way we communicate is obscure for computer-based software.

First, keep in mind that not all chatbots are “AI” populated which make their interactions even more limited. Even with the development of technology such as NLP, most of the chatbots on the market are decision-tree logic solutions. For instance, they follow a path that they have been developed for. This path is composed of IF/THEN scripts; if click “yes” then “show this”. Thus, the top complaint about chatbots is that they cannot answer questions. Then, 53% would simply leave the conversation if the bot is not sophisticated enough (10).

Source: jasoren.com / netomi.com / smashingmagazine.com/

Secondly, they hardly understand misspelling, intent, intonations, double meaning, humour, slang and many more variations. Human conversations are complex making us unique but also hard to decrypt for chatbots which leads to frustration for customers. This is important for brands to consider because 73% of web visitors said they would not use chatbots a second time if the first time was not satisfying (11).

Endnote

So, yes, chatbots are great and can do many things, being multipurpose and many more. CX is improved because they are always on as well as quick to guide customers in need of assistance for example.

But they also fail to improve customer experience because of their limitations mainly due to humankind's language complexity and nuances. In 2020, they are not entirely ready to handle complex interactions. Most the chatbots are not built with the most advanced technology yet. In those cases, they tend to degrade CX and the envy for the customer to deal with chatbots (and the company).

That being said, in the days to come, it makes no doubt that chatbots are the future of online communication with companies.

Resources:

(1): AI Customer Experience Report: Impact of Chatbots and AI on the Customer Journey/Bold 360

(2): New Research from Dimension Data Reveals Uncomfortable CX Truths/PR Newswire

(3): New Research from Dimension Data Reveals Uncomfortable CX Truths/PR Newswire

(4): Chatbots In Customer Service – Statistics and Trends/Invespcro

(5): 2019 Chatbot Statistics – All The Data You Need/intellectyx

(6): Chatbots on websites: How effective are they?/obj.ca

(7): 80 of businesses want chatbots by 2020/Business Insider

(8): The Ultimate Guide to Chatbots/The State of Chatbotsrepot, 2018

(9): 2019 Chatbot Statistics – All The Data You Need/intellectyx

(10): New Data Indicates People Don't Use Chatbots Like We Think/cmswire

(11): Why Brands Abandon Bot Technology and How to Make Chatbots Work/jasoren