As businesses today incorporate AI and automation technology into their customer service workflows and day to day business in general, chatbots are a high-value addition to the mix. However, what business stakeholders really want to know are the different ways a chatbot implementation can reduce customer service costs and expenses. And let’s face it, money is one of the most crucial factors that drive business decisions. Today, we explore how chatbots can help considerably cut down on customer service costs.
Chatbots – How can They Help You?
A chatbot is a computer program or an artificial intelligence tool that conducts a conversation via auditory or textual methods. Chatbots are often designed to convincingly simulate how a human would behave as a conversational partner and are used in dialog systems for various practical purposes including customer service, information acquisition and getting tasks done.
Chatbots are primarily of two kinds – Scripted bots and AI bots. While scripted bots as the name suggests, follow a predefined stream of conversation, AI bots or intelligent bots use AI and Natural Language Processing (NLP) algorithms to understand the ‘intent’ behind a question and respond back with the most appropriate answer possible.
Large and medium sized companies today have a customer base which is diverse, fragmented and presented all over the globe. Providing excellent customer service is imperative for companies to gain a competitive edge, increase customer retention and loyalty.
With companies having established an air of accessibility with the help of social media, email, and instant messaging services, customers now expect a quick response at all hours of the day. But these communication channels do not come cheap. Even back in 2017, Forbes had assessed that customer service was a $350 billion industry. Factor in the number of new companies and businesses that have permeated the market in the past two years, and you can imagine what that number must be today. With organizations working towards having leaner companies and cutting down costs, automated tools that can provide similar, if not greater customer service, that human resources could, have become all the rage. One such automated solution is the use of chatbots.
According to Gartner ,Inc, 25 percent of customer service and support operations will integrate virtual customer assistant (VCA) or chatbot technology across engagement channels by 2020. This number has gone up drastically from less than 2 percent in 2017! According to Gene Alvarez, managing vice president at Gartner, more than half of the global organizations have already invested in automated solutions for customer service, as they realize the advantages of automated self-service, together with the ability to escalate to a human agent in case of complex situations. Gartner research also reports that organizations report a reduction of up to 70 percent in call, chat and/or email inquiries after implementing an automated solution such as a chatbot.
According to the Aspect Consumer Experience Index, 70 percent of millennials report positive experiences with chatbots, and many prefer chatbots for the convenience and immediate gratification. Along with increased customer satisfaction, a 33 percent saving per voice engagement has also been noted.
But, do chatbots produce considerable and consistent savings?
Yes, they do. Here’s how.
Chatbots – Effective Money Savers
Some of the most prominent ‘money saver’ abilities that chatbots possess, are:
Let’s imagine a scenario where you are using a video production tool for a project due tomorrow. After hitting ‘save & close’, you are suddenly unsure as to where the video has been saved. In spite of frantically trying to locate it, you are unsuccessful in doing so. Panic hits and you immediately search for the tool’s customer service details. You don’t really care that it is 2 in the middle of the night; You need help, and you need it NOW.
In such a scenario, a perceptive company would ensure that 24/7 customer support is available for just these type of cases. However, if a company in an attempt to cut down costs, has done away with round-the-clock support, well, they better be ready for the customer’s wrath the next morning. The truth is, customers today pay for more than just the product. They pay for good service too. Hence, it is crucial that companies provide it. So what can a company do to provide good customer service WHILE cutting down on costs? Use a chatbot.
The greatest thing about chatbots is, they don’t charge by the hour. Whether you have implemented a chatbot for 9 hours in a day or 24, it costs the same. Hence using chatbots to handle after-hour queries, is practical. This way, customers trying to establish contact do not feel deprived either. The company too is happy as no additional resources need to be hired.
Reduced Training Expenses
An area of concern for most companies is the constant training of customer care agents. As newer products are added to the company’s portfolio, older processes reformed and new resources hired, training and updating becomes imperative. But this a cost that can quickly escalate and get out of hand. Chatbots on the other hand are capable of constant and automated refinement. Even in case of newer data, an update can be made to the centralized system and revision cascades to the overall chatbot operation. Chatbots are actually in constant improvement mode as they get trained through user queries and form patterns to understand what the best response to respective questions might be.
Helping Increase Company Revenue
Chatbots are not just good at ‘saving’ the company’s money, but are also capable of ‘increasing’ revenue. How is this done, you ask? Well, most companies today use chatbots for more than just user help. Chatbots learn from past conversations from users and provide proactive and personalized product/service recommendations to customers. This personalization in customer experience helps drive sales and revenue.
Optimizing workforce costs
Let’s face it, competent labour does not come cheap. While staffing still remains one of the biggest expenses globally, it is also the hardest to cut down. Especially with respect to customer care, companies that have tried to have fewer resources man the field, have faced not just customer wrath, but also employee burnout. Additionally, telephonic customer service has an added disadvantage; Fewer resources mean a longer wait time for the customers, obviously meaning a heftier phone bill. So, essentially companies can end up spending more on phone bills than saving on staffing. BUT, imagine if a chatbot was to be used as a first line of service? While a human chat agent can effectively chat with about three customers at onc, efficient chatbots can handle an unlimited number of interactions simultaneously. This means that a chatbot could be employed to handle as many customer concerns as possible, transferring the service process to a human agent in case of very complex queries.
Essentially, chatbots can help organizations provide better customer care with fewer resources. Although we cannot completely eliminate the human touch from customer service, chatbots can be used to cut down on human intervention as much as possible. This can be achieved by using chatbots to manage a larger volume of customer needs while reserving only the most complicated issues for human agents. This technique is capable of drastically cutting down on customer service costs. In fact, CNBC reports that chatbots are expected to cut down on business costs by as much as $8 billion by the year 2022. Now that is a number worth taking seriously.
If you’d like to learn more about enterprise chatbots please feel free to get in touch with one of our chatbot consultants for a quick consultation! You might also be interested in checking out our enterprise chatbot builder platform – BotCore.