Beyond the Hype, Chatbots Will Be Serious Business, Part 1: Why Messaging Is Happening and What It Means

Facebook’s Messenger announcement at its annual developer conference shows a depth of seriousness in platform, focus and ambition around messaging as a legitimate communication channel for businesses. But where did the chatbot revolution come from and why is it picking up steam now? It’s simple really: As more and more consumers are transitioning over to mobile for the bulk of their Internet usage, there’s a new digital shift happening from apps to chatbots. Or as Wired puts it: bots are going to power a “post-app Internet.” So what are chatbots exactly? They’re basically software designed to automate tasks and communication. Thanks to advances in artificial intelligence and natural language processing, they’ve advanced beyond the command-line interface they were in the 90s to provide an experience similar to what you’d get if you called a 1–800 number for customer service. Another way to think of it is that chat apps (also known as messenger apps) are essentially the new web browsers, and chatbots are the new websites.

In his keynote at Facebook’s F8 developer conference, CEO Mark Zuckerberg said Messenger is the company’s fastest growing app — faster than Facebook itself. In the last 12 months, messages between business and people in Messenger have doubled. Companies like Walmart, Sprint and Hyatt are using chat for customer service; KLM was an early leader, using chat for ticket confirmations, check-in, and everything in between; and Uber and Lyft have enabled users to request a ride in Messenger without downloading an app. Many people have talked about chatbots replacing 1–800 numbers, and Zuckerberg referenced that, too, noting that 1–800-Flowers has been an early adopter of chat as a commerce tool. “In the near future, to order from 1–800-Flowers, you’ll never have to dial 1–800-Flowers,” Zuckerberg said.

The “not having to download an app” part is the real value of chatbots for consumers. Rather than having to download different apps for every brand they interact with, consumers can download one messaging app and then interact with various company chatbots within that app.

In a special session on Messenger at F8, Facebook’s Jessica Lee described the chatbot revolution as a huge paradigm shift. “Businesses are creating new, conversational experiences,” she said.

To help them do that, Facebook has released a chatbot API and various tools, enabling developers to build chatbots for Messenger. The send-receive API is the backbone of Facebook’s new API tool. It can be used to create automated responses, and also to loop in actual humans when necessary. Message templates allow for chats that can be text, images, or a bit of both, with a call-to-action button.

Lee cited the shopping app Spring as an example, noting that the general mobile shopping experience today is tedious. Spring, a launch partner of Facebook’s Messenger chatbot program, used the API and conversational interface to improve the experience. Other Facebook Messenger chatbot launch partners include Poncho the weather cat, which is using natural language processing to gauge users’ attitudes and respond in kind, and CNN, which is delivering a quick summary of the day’s news to users via Messenger. And in the same way that people can follow or like a business from a variety of places, they’ll be able to engage a company’s messenger bot from that company’s site or from within Messenger.

The point is that chatbots today are not the chatbots of a few decades ago, which were clunky command-line text interfaces that came nowhere near approximating human dialogue. Chat is nothing short of the next digital revolution, providing companies with a unique opportunity to engage consumers conversationally, building better customer experiences and deeper loyalty than ever before.

Why Now?

Facebook is not the only, or even the first, entrant to the chatbot market. Slack already has support for bots, most notably the Taco Bell bot, which enables hungry tech workers to order lunch from within the messaging framework. A week before Facebook’s announcement, teen-favorite messaging app Kik launched its bot store, including bots from H&M and Sephora. And Microsoft has been big on bots for a while as well. While its embarrassing, racist bot debacle was a good example of there still being work to do on the artificial intelligence front, the company’s Chinese bot, X.ai , has none of those issues and has been a popular way for businessmen in China to handle their schedules for months now. In fact, China has been out ahead on this stuff for years, using bots in WeChat to do everything from shop online to order at restaurants. More than 90% of mobile users in China use chat in this way.

Chatbots have become a big thing now for a few reasons. First, people are already using chat all the time. More than 900 million Facebook users already use Messenger, for example, and between Messenger and WhatsApp alone, people are already sending 60 billion chat messages a day. Gartner predicts that by 2020, customers will manage 85% of their relationship with any enterprise without interacting with a human.

Then there’s the fact that the various technologies necessary to make bots any good — primarily artificial intelligence and natural language processing — have matured to a point where they are market-ready. Sure, if you are looking for an AI bot that you can ask open-ended questions and it can automatically figure out what you want (think Siri), then we’re still a few years away. In fact, even in her F8 presentation, Facebook’s Jessica Lee admitted that it’s still early days for bots and that many companies will initially opt for some sort of hybrid between humans and bots. Still, if you are looking for an AI bot that you can ask open-ended questions and it can automatically figure out what you want (think Siri), then we’re still a few years away. But if you’re using natural language processing to create questions that are applied to specific answers (pre-written or at least templated) in a narrow domain? That process works really well today, and it’s a game-changer for businesses hoping to engage mobile customers.

It’s not just that chatbots offer a more convenient, app-free experience for consumers, but also that they actually improve consumers’ interactions with companies. They’re a communication platform, providing what I’ve taken to calling “conversational engagement.”

Every time a consumer logs into their messaging app, for example, they might get push notifications they’ve opted in for — e.g. a Target chatbot might tell a customer that’s in a physical store,

    “Welcome back to Target, Tim, We have a 50% discount sale today on diapers. We know you can never have enough.”

And if they want to engage with a particular company, it will be as easy as selecting that brand’s chatbot from a menu.

The adoption of smart watches, wearables, and beacons, and the increased popularity of voice messaging as well (especially as that technology continues to improve) will only further accelerate the rise of the chatbot. Small (or non-existent) screens demand voice and simplified, new UIs, and beacons enable proximity-based interaction.

Are All Bots Created Equal?

Here’s where it gets interesting: If consumers are using a single app filled with dozens of chatbots, brands are going to need to differentiate their bots. The nature of chat is that it’s casual and conversational, which makes it easier to engage customers without annoying them. But it would be weird if, say, the Sephora chatbot sounded exactly like the CNN chatbot.

Ultimately, I see chatbots as an extension of a company’s brand. They’ll need to have a distinct personality, and that personality may even change a bit depending on what sort of customer they’re talking to. Brands should be seeing chatbots not as yet another digital trend they need to hop on, but as a useful extension of their brand that enables regular, real-time, conversational engagement with their customers.

Chatbots also represent that rarest of things in digital marketing: a communication platform with pretty attractive development economics. Because chatbots are inherently cross-platform and cross-device, without any sort of version or release issues, they’re pretty straightforward to develop and maintain.

As with other digital tools, the challenge here will be both technological (the need for continued improvements in both AI and NLP) and creative. Just as websites and apps started out a little hokey and clunky and evolved into fairly sophisticated experiences, chatbots will evolve to be not only an appropriate extension of a brand, but also to provide experiences that engage, or even delight, customers, and stand out from a herd of other bots.

Which brings us to Part 2: The business use cases.