Due to a multitude of factors, including increasing competition, markets have become more consumer-driven. As organizations compete to develop the best products and services, they’re also engaged in a battle to deliver the best customer experience.
Consumers expect their brands to be available round-the-clock and their issues addressed quickly. In recent years, chatbots have emerged as an excellent tool for organizations to meet such expectations. This is why the sector has been growing exponentially, and the global market size is projected to reach $1.3 billion by 2024.
Designed to simulate conversations, machine learning and artificial intelligence allow chatbots to become more human-like. This adds to the customer experience, making them an invaluable asset in digital marketing.
Read on to learn about the pros and cons of chatbots and whether they’re worth it.
Benefits of Chatbots
For companies, especially eCommerce and service businesses, chatbots offer plenty of benefits. Some of the industries that have profited the most from chatbots include healthcare, finance, education, real estate, travel, and finance.
1. Gather Customer Insights
The primary objective of any business is to grow and generate more revenues. You can only achieve this by continually increasing the value you offer your clients. Along with improving your products and services, this may also involve addressing their concerns.
Chatbots are a platform for interacting with consumers. During these interactions, consumers will pass crucial information about their problems and preferences, and you’ll also see their activities. Such insight will allow you to make improvements where necessary and adjust according to consumer preferences. Responding to such insight will increase brand loyalty, translating to higher lifetime value per customer.
Read: Building A Powerful Marketing Plan For 2021
2. Cost-Effective
Addressing customer concerns is non-negotiable. Failure to do so will lead to high churn rates. Using customer support teams is the only other viable option. Depending on your business’s size and nature, you may need a large team, translating to high recurring costs. As your business grows, such costs will also increase as you will need more personnel.
Setting up a reliable chatbot requires significant financial and time investments. However, once you are done with the initial costs, the recurring costs will be low, making it cheaper in the long run.
3. Round-the-Clock Availability and Swift Responses
Whereas staff may come in for the regular 9-5 shifts, companies are required to operate 24/7. This is especially so if you serve regions in different time zones. Chatbots are available to consumers at any time of the day. More importantly, they’ll respond to queries promptly.
This may be the difference between losing a lead and securing a lifelong customer.
Disadvantages of Chatbots
With all their capabilities, chatbots also have some limitations.
1. Lacks Emotion
When communicating, people often put implied meanings in the conversation, expecting the other party to understand. This involves adding elements such as sarcasm, irony, and humor to their speech.
Despite significant strides to make chatbots more conversational, they’re still incapable of understanding emotions. They are incapable of reading between the lines and take words for their face value. This makes it difficult for chatbots to adjust to human emotion or give appropriate responses to queries.
Fortunately, this can be addressed using machine learning and AI, which allows you to teach your chatbot to be empathetic when certain messages come up.
Read: Empathy In Artificial Intelligence
2. Require Maintenance and Optimization
To ensure your chatbot functions optimally, it will require regular maintenance, review, and optimization. You should also feed it with new and insightful data. This ensures that communications with customers improve over time.
Are Chatbots Worth It?
Undoubtedly, chatbots offer a reliable and cost-effective means of communicating with customers and collecting insight. Whereas their effectiveness may vary from one industry to the next, their value is unquestionable. With the right execution, your chatbot will help you improve customer experience and increase sales.
Andy Bush is President of Bush Marketing. Contact him today at 416-214-4298 or andy@bushmarketing.ca for a discussion about how Bush Marketing can help your website do more for your business.
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