From Slack’s Taco Bell ordering chatbot to Amazon’s Alexa, chatbots are all the rage right now. A chatbot is an application that is programmed to respond to human conversation based on rules set by humans. Most chatbots use machine learning and natural language processing to collect data, adapt, and improve its responses. The concept of chatbots started with Alan Turing’s 1950s Turing Test. It evaluates the program’s ability to impersonate human behavior by determining if the machine’s response is equivalent or indistinguishable from a human’s response. Every since then, technology has advanced. Chatbots began gaining traction since 2010 and recently exploded in popularity around 2016. Now, big tech giants like Microsoft, Google, Amazon, and Samsung are taking advantage of their abundant data to create their own chatbots. As a result, businesses are streamlining chatbots, built in-house or from built from another company, in their products, customer service, and the workspace as a communication channel. While they are versatile, multifaceted, and prevalent in most industries, this blog focuses on chatbots through messaging apps in conversational commerce and internal communication within a business.
Advantages and Examples
In conversational commerce, messaging apps like SMS, Facebook Messenger, and WhatsApp allow users to make purchases and transactions. According to the Chatbot Survey 2017 conducted by Mindblower, 90% of e-commerce benefit from chatbots. For example, Tencent’s WeChat has a chat bot that allows the user to book flights by merely talking to the bot. This reduces the need for any middlemen or intermediaries to complete a transaction; in this case, the consumer doesn’t need to leave WeChat, visit the airline website, take out a credit card, and pay. These chatbots help facilitate and promote business transactions, letting the user accomplished a multistep process in one app. On top of that, the convenience that comes with bots can increase and boost brand exposure. Conversation, even through a few texts, are more effective than a typical advertisement because it fully engages the consumers and leaves them with a better experience.
Chatbots are also used frequently in customer service to complete purchases, pay bills, and answer any customer inquiries. By 2020, chatbots should take over 85% of customer service interactions according to Top 10 Strategic Predictions by Gartner. For example, Wells Fargo uses Facebook Messenger to help customers to check their balance, transfer money, etc. This chatbot is available 24/7 whereas a bank teller or phone representative is available during certain hours and may become busy assisting other customers. Therefore, the instantaneous response reinforces positive consumer experience, thus increasing usage and revenue for the firms implementing them. With chatbots, businesses do not need as many people in customer service. They can reallocate workers to tasks that chatbots cannot do in order to enhance efficiency and productivity.
Internally, chatbots are beneficial for workspace communication. Many companies use Slack as a platform of communication between employees such as forming groups, team collaborations, and meetings. Slack has many chatbots that facilitate business processes like scheduling, holding meetings, or setting reminders for the group. Slack users can also code and customize their own chatbot to assign it whatever task he or she desires. With chatbots, businesses can cut out intermediaries and extra bureaucracy and deliver $8 billion in cost savings by 2022 according to Juniper Research. They can focus on creating further value for its company and customers in a fun and engaging way.
2018 State of Chatbots Report
Drift, Survey Monkey Audience, Saleforce, and myclever did a study on the impact of chatbots in commerce and on business. The graphs below show the respondants’ thoughts on chatbots.
For more data and findings, check out the report by clicking the button below.
Difficulties From a Business Perspective
Chatbots are great for businesses on both the consumer and business end. It is cheap and easy to build and implement a chatbot as there are multiple tech companies with chatbots available for anyone to use in their firm. However, there are a lot of difficulties a business can face if they decide to create an advanced, industry-level chatbot from scratch, such as Alexa, Google Assistant, Watson, etc. First, it is very difficult to train them. It takes a lot of data to train them as engineers have to write sentences, get responses from the chatbot, and then rate the response over and over for the machine to learn the correct response in every situation. Therefore, acquiring data is very time-consuming and expensive. Most chatbots require at least 2 years of R&D before release. Second, if a company does not want to collect data, existing high-quality data is exceptionally difficult to acquire in large quantities. Large companies like Amazon, Facebook, Apple, and IBM collect lots of data and have the necessary resources and means to innovate impressive chatbots. The best quality data is also usually kept secret as tech companies are highly competitive. Finally, since chatbots combine many functions into one application and can access nearly all of your data, the age-old question of privacy arises again. The all-in-one platform poses many security questions. People can use chatbots to spam people with fake accounts, like the Twitter fake accounts seen in class. In addition, chatbots make it easier to access many companies and operations, thus implying that it is equally easy to share one’s personal information. One wrong message could lead to a privacy leak of personal information. These companies implementing chatbots need to consider actions to protect their users while still giving them the power to perform many different functions.
Will Chatbots Replace Humans in the Workforce?
Ultimately, no. While I do believe that many jobs and services will become more optimal and efficient, I highly doubt chatbots will replace human beings. It is similar to when the Industrial Revolution introduced machines that shifted many hand-produced goods to machine-made goods. The new Industrial Revolution technologies made a lot of tedious and less efficient jobs obsolete, but it allowed people to do more progressive and meaningful work for society. Chatbots have a similar effect. We can cut out the intermediate steps, unnecessary bureaucracy, and extra costs so people can accomplish more productive and innovative projects that chatbots cannot do. Additionally, chatbots are machines created by the people and used for the people. Although some chatbots are so well-designed that it feels like talking to a person, we need to remember that it was the developer who pre-programmed it with human-like capabilities. While some chatbots do use AI to process, learn, and analyze information, chatbots do not have emotions like humans do. They follow set rules, patterns, and logic. They lack a heart and mind of its own to, let’s say, take over the world like some sci-fi horror movie. We made chatbots for our own use in order to create value for businesses, consumers, and ourselves. It is human nature to desire human connections. Therefore, we should utilize chatbots to enhance our experiences to make meaningful bonds and create a better world for everyone.