Beyond the Hype, Chatbots Will Be Serious Business. Part 2: How Messaging Transforms Transactions

By Tim Ross

One way to wrap your head around the chatbot trend is to look at how they’re being used in China, where it’s become a popular commerce tool (people often use chat to order in a restaurant, for example). But as the ecosystem of bots grows in the U.S., I see them handling various other things for businesses, too. Key to their adoption is the convenience for consumers; with chat, you no longer have to:

  • Download a new app
  • Create a new profile
  • Enter payment info every time you want to purchase something on mobile.

Instead, your profile, payment info, and location will be stored in your chat app, enabling quick and easy transactions with a variety of chatbots.

Specifically, I think we’ll be seeing chatbots rule the following transactions:

Content & Information

Customized Content

This is an obvious one, but worth taking a closer look at nonetheless. There are a variety of ways in which chatbot content will be a useful customer acquisition tool. First, bots will serve as a more effective, natural language version of search. Users will be able to ask questions and receive automated answers and information. This can range from product info and comparison queries, to suggested locations, to instructions and tutorials, and more.

Then, content can be customized based either on information a business already knows about a customer (e.g. where they live), or on answers to a few questions.

To ensure a positive, personalized experience, a lot of chatbots will start users off with a survey, as Sephora’s Kik chatbot does.

Just think about the myriad interactions this will change. If you get emails about new real estate listings right now, for example, imagine getting chats about them instead, and being able to ask questions about particular listings or request to see more of a particular type of listing. If you’re traveling, you might get instant, guidebook-style info on where to eat, stay or shop. Pharmaceutical ads? Way better in chat, where you can ask questions and seek information privately, and read that long list of side effects to yourself. Want to explain to a customer how one of your products compares to another, or how your product compares to your competitor’s product? It’s much easier to do in a way that will actually get the message across in chat than it is in an ad.

Speaking of ads, chatbots will likely do away with the need for those terrible, long custom URLs pegged to every TV or print ad. Instead of expecting people to remember these or write them down, advertisers can switch to a simple chat address. Again in the context of a pharmaceutical ad, someone might see an ad for a particular drug, easily engage with the company on their phone and use chat to ask questions and get a diagnosis of sorts. The chatbot could serve up content that’s customized based on the user’s questions, and guide them toward various calls to action.

Chatbots can not only be programmed to have a specific “personality” but also to respond to users’ behavior in ways that make sense — noticing when a user is getting annoyed, for example, or when they seem to be excited about a particular product or service and may want to learn more.

Brand-Building

If you come up with a chatbot that does something cool or provides a unique experience above and beyond the quotidian interactions between any customer and company, you’ve created a powerful new customer acquisition tool. People who may either be unfamiliar with your brand or even dislike your brand could feasibly interact with your bot and change their minds. Moreover, early research is indicating that chatbots are far better than any other digital tool at actually getting online customers into offline stores and at converting digital interest into actual dollars. Chatbots in Kik and Snapchat, for example, offer specific codes that customers can use to order at restaurants or redeem coupons.

Advertising and sponsored content are also making their way into chat apps. Although Facebook is so far not offering that option, Snapchat and Kik both include video ads, and Snapchat allows brands to sponsor channels in its Discover feature. Kik even allows businesses to start conversations with customers instead of waiting for customers to contact them (it remains to be seen whether customers will decide this is just annoying). The one thing that may save ads from suffering the same fate in chat that they’ve suffered in other media — namely that people find a way around them — is the ability of chatbots to contextualize content; so an add that shows up in a particular chat stream will actually make sense and have a higher chance of achieving its intended purpose.

Activating Influencers

In the same way that brands have linked up with Instagram sensations and Twitter kings, they will link up with key influencers to integrate chat promotions, or even to create their own chatbot persona for users to interact with. This is already happening in WeChat in China, which means it’s only a matter of time before we start to see it stateside.

Commerce

In many use cases, messaging will represent a faster, more frictionless commerce vehicle. But chat-assisted commerce will be most effective with relatively simple purchases in physical environments where the reduced friction increases purchasing volume — a restaurant, for example, where it might be easier to sit at a table, chat your order and have it magically appear than wait for a server and go through the whole ordering process (see the example to the left, from a restaurant in China with a WeChat chatbot). I don’t think it will be long before chatbots are being used to skip lines in crowded businesses, either, or to place to-go orders, room service orders, or purchase specialty items (pastries at your favorite bakery, for example) ahead of time. Enabling these types of solutions will require integration into CRM, transaction, fulfillment, routing and more.

In-Store Support & Assistance

Once you’ve got your customer into your off-line store, you can also use chatbots to deliver a customized physical shopping experience, notifying them of deals on their favorite items, and helping them to find them in a store. As more and more chatbots are integrated with POS systems, customers will also be able to pay and check out, using a chatbot instead of a cashier and skipping the line altogether.

Wayfinding

Stores have been investing in indoor navigation and wayfinding for a few years now, leveraging beacons and mapping information to help customers find their way through stores and to suggest products along the way. That functionality has never been exactly seamless, though, and has always required the downloading of yet another app. Chatbots could improve on this experience, helping customers navigate, offering information, and answering questions throughout a customer’s retail experience.

Imagine a shopper in Target, for example, who could ask about where to find a particular product, and be served up not only directions to that aisle in the store, but also information about that product and other related products, or even pushed a coupon for the product in question.

Travel Reservations

There’s not a single airline, hotel, or rental car app out there that customers enjoy using. Instead, chatbots from these companies could easily interact with customers, enabling them to make, change, and cancel reservations, or request additional services or upgrades.

Venue Information & Commerce

Similarly, a great mobile experience does not yet exist for booking or managing concert or event tickets, but chatbots could go a long way toward addressing that gap. Today the experience goes roughly like this: download app, create an account, enter payment info. In the chat-based version of this interaction, it would go more like: open chat window that’s already on your phone, order, pay with existing credentials. Your profile and payment info are already stored, and the chatbot will also generally know your location, which means it can recommend events and better support your purchase.

Customers could find information about and directions to venues through chat and promoters can keep them posted on any changes to the event they’re attending, or deliver important information about what to wear or bring, when to arrive, and so forth. Those who opt in to push notifications could get messages about events happening nearby when they’re out and about, or about a concert coming up with a band they like or have seen before. When they get to the venue, customers could use chat to figure out where the nearest concession is, or even order ahead so they don’t have to leave their seat for too long. Just imagine having a beer brought to your seat during a ball game, or not having to wait in line for food at a concert.

Gamification & Entertainment

Games and quirky, fun experiences are a natural addition to interactions in chat, in a way that they just couldn’t be in real life. You probably wouldn’t interact with someone dressed up as Miss Piggy in Union Square, for example, but having a chat with Miss Piggy? It’s kind of fun. And it really helped Disney promote its Muppet Show on ABC.

Loyalty & Offers

For marketers, messaging represents a huge opportunity for promotions and loyalty marketing. Loyalty is something people have been trying to figure out on mobile for years and it’s never quite gotten there — consumers don’t really want to download a different app for every store’s loyalty program, and aggregator apps have failed to get enough businesses on board to make consumers feel like they’re really worth it. By integrating with CRM and digital direct-response systems, messaging can provide an instant, context- and location-aware vehicle to push personalized offers to users. But unlike the used car salesman feel of coupon offers, natural language bots can make this feel much more like a concierge at a hotel, or the greeter at a favorite restaurant.

Meanwhile, targeting promotions to a company’s chat followers can be useful in figuring out what sorts of consumers are engaging with you on chat, and what they’re likely to respond to.

Offline Offers

Connecting digital customers to offline offers or actions has always been a challenge. I’m not going to go so far as to say that chat solves that entirely, but it goes a long way toward closing that gap. A customer that has opted in to push notifications, for example, could get a “welcome back” message the next time they’re in a physical store, with information about what’s on sale or what offers they’re eligible for.

Appointment Openings & Upgrades

Wellness, fitness, and beauty businesses have lagged behind other industries on the digital front, but chat could go a long way toward improving their booking capabilities for customers and their inventory management for business owners. Say a customer uses chat to book a massage at a spa, for example. On the day of their appointment, if the spa had additional appointments available, it could message the customer asking if they might be interested in adding on a facial or pedicure. Similarly, say a yoga studio has openings in its evening class — its chatbot could notify regular customers and push notifications to any customers in the vicinity of the studio.

Customer Support

Everyone was excited when support got more social, but messaging is another big step forward in improving support while reducing costs. By instantly answering questions, a bot can deflect a costly support call and speed time to resolution. Moreover, the bot can provide a more “human” style of interaction and use language processing to assess a customer’s frustration and understand when to escalate cases. By integrating with knowledge bases, CRM and trouble ticket systems, bots will also be able to improve service for ongoing cases, providing continuity and keeping consumers in the loop with status updates.

Trouble Ticket & Follow-up

Concierge support services like Zendesk and CRM offerings like Salesforce are already looking at integrating with bots. Facebook Messenger chatbot launch partner Spring integrated with Zendesk to provide a hybrid chatbot-human experience to shoppers using its Messenger experience. The Spring Messenger chatbot can suggest items to shoppers within Messenger and, if a customer has a specific question — how do sizes run in this brand?, for example — automatically connect to Spring’s Zendesk live concierge team to answer the question, then seamlessly hand the transaction back to the bot to close the deal.

Early Diagnosis

One of the most valuable uses of chatbots in the Customer Service realm will be their ability to diagnose and address problems before a customer would have traditionally called or emailed the support desk. This will deflect calls, keep customers happy, and reduce support costs at the same time.

Appointment Scheduling

Whether it’s a repair appointment, a consultation, or a service appointment — a haircut, for example — scheduling is much easier through chat than through email or phone. Rather than call, email, or have to use one of the many broken online scheduling widgets, customers can simply chat an appointment request, respond to the bot with the date and time that works for them, and that’s that.

Reminders & Follow-ups

Chat is also a less intrusive way to remind people that they have an appointment coming up, and a more convenient way to collect post-visit feedback. Just think about every time you go to a store or deal with a customer service rep and are asked to either go online and fill out a survey or stay on the call to take a survey. A very small percentage of people actually do this, and we all know that they are not representative of the general public. A quick chat survey, though? Many more customers are likely to engage with that.

Reservation Confirmations

Imagine if you got a reservation confirmation via chat instead of a phone call, or an email that goes to your spam folder. That chat could include simple “reschedule” and “cancel” buttons to make it easy to change plans, and the restaurant’s chatbot could even tell you about that night’s specials before you get to your table.

Travel Logistics

Some hotel chains (Hyatt, for one) and airlines (KLM) are already using chatbots to perform a variety of functions that have always been clunky on other digital platforms: reservation confirmations, check-ins, and special requests. Instead of downloading the mobile app for an airline or hotel — which means eating up data for what generally amounts to a frustrating experience — travelers can keep tabs on both hotel and airline reservations from the same chat app, and use various call-to-action buttons to check in or make changes. The number of hotels and airlines going this route, and the variety of services they offer via chat is only going to increase in the coming months. Requesting a seat assignment on KLM long before you’re standing at the ticket counter, for example, or checking in to your room at the Hyatt in the morning and letting them know you’ll be arriving late … maybe even ordering room service as you’re in a cab on your way.

Ultimately, for businesses bots are an excellent way to engage customers. I talk about chatbots in the context of conversational engagement because I think that’s their biggest value to companies — not only providing the services mentioned above, but doing so in a way that continually improves a company’s relationship with its customers.

Want to know more? Continue reading Part 3: Who Will Help Businesses Succeed with Messaging