Chatbots, a popular subject of discussion back in 2016, are still growing in popularity with 2017 showing further developments that secure their longevity and proven benefits offered to businesses. Many reports talk about the importance of an improved customer experience, with the chatbot apps contributing to direct benefits for users. In fact, 86% of respondents of the “Customer Experience Impact” Report by Oracle said that they would be prepared to pay a higher price for a high-quality customer service. Consumers are already accustomed to having interactions via chat. The purpose of this new technology is to improve this experience in aspects such as the quality and speed of responses, 24/7 support and lower costs incurred by the company. The fact is that businesses are nowhere near towards reaching the full potential of chatbots, particularly the multiple applications of them, across many contexts. The main focus of this article is the growing adoption of chatbot app development in a business context. It serves as an introduction to chatbots: to understand what they are and what benefits they offer, how they can help CXOs with their challenging goals of improving the customer experience and how chatbots can help them to improve KPIs such as the acquisition and retention of customers. It also mentions some key considerations when deciding to develop one.


A chatbot is a computer program that is engineered to carry out real conversations with users. Trends talk about the growing popularity of chatbots with 60% of consumers stating that they are a ‘technology of the future’. On top of that, almost 50% of consumers state that if implemented correctly, they would prefer to deal with all their customer service communications through content exchange such as online chat or texts. The technology behind the development of these programs is primarily based on Artificial Intelligence (AI). The most basic version of chatbots is built using Natural Language Processing, where keywords from the user input are being mapped to replies provided by the chatbot. The drawback of this approach is that it cannot understand the human intention behind the customer input. On the other hand, bots with AI capabilities added on top can increase the accuracy of correct responses and interpretation of the requests up to 90%. These bots can also understand things like emotions and user behaviours, and can constantly improve their responses through machine learning over time. Furthermore, AI capabilities provide bots with an optimal path in order to produce the best-fit results; taking into consideration the short and long-term goals of the business.


ChatBot-TechBlocks-Although it’s a relatively new trend, many businesses’ have taken advantage of chatbot benefits to create unique and improved customer experiences. Chatbots can bring value by both cutting down on the costs of traditional customer service departments and driving up sales. Taking the retail industry as a tangible example, a benefit would be to summarise similar responses received by customers and create a chatbot as an improved version of an FAQ solution. Furthermore, customers love getting advice and a more personalised experience to their queries than they might have had previously while shopping online. This improves the purchase rate and helps the customer with their shopping decisions. Taking advantage of impulsive purchases can also be a benefit of chatbots, driving sales given their ability to provide prompt responses before missing a potential sale due to a delayed response from a human customer service representative. It is always a work in progress, but given that we are in the early days of this technology, it is to be expected that not everyone is happy with their experience when interacting with chatbots. These challenges do not seem to affect the overall opinion of consumers, however, with only 11% of respondents in a LivePerson survey from a sample size of 5,000 from 6 countries stating that they have a negative opinion about chatbots.


We have seen the benefits of bots and the growing trends around them, and now the next question is what are the high-level key considerations when building a chatbot? As mentioned above, a benefit of bots is to cut down costs. A thorough business analysis exercise is an essential step, to trace the areas for improvement in a company, to define the role of the bot, and set targets. A key area will likely be the customer service department where customers interact and exchange information. A second consideration would be to review the strategy of the company and the current types of customers to determine the best channel of communication that a bot implementation would add the most value in (e.g. Facebook chat, SMS, online chat in the company’s website). Thirdly, key technical design considerations must be made, such as whether the bot will be NLP vs AI-based and explore any potential integrations with existing applications currently used in the company.


One of the key stakeholders in a company that should push for their implementation are CXOs. Chatbots are the answer to a majority of the main reasons of what keeps CXOs awake at night: things like not providing the best customer experience due to bottlenecks (often inadvertently) introduced into their business e.g. increased wait times, errors and inefficiency in telephone customer service, and not keeping up with the latest trends to help them improve the overall experience. Taking full advantage of the ability for a cost-effective 24/7 customer service offered by chatbots can introduce tremendous efficiencies in terms of overheads, an increased shopping experience and a resulting rise in sales.

Companies such as the ones in the retail industry have already started to introduce chatbots in their businesses and are already realising their benefits. According to Gartner surveys, Customer Experience (CX) is considered as a major competitive advantage that can differentiate companies and acts as a main determinant on how loyal a consumer is with a brand. Although the focus of this blog is on improving the customer experience, chatbot apps have many advantages in order to automate other areas of the business; such as a simple yet time-consuming process of setting appointments. If leveraged correctly chatbots can introduce competitive advantages and should be moved on the top of every forward-looking CXO’s agenda.