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Industry Insights

The Chatbot Revolution: Establishing Innovative Customer Connections

By Akhila Sriram on July 21, 2021

Over the last decade, brands have spent a considerable amount of time, money and energy on establishing themselves on social media, creating “viral” content to increase brand awareness and recall. Facebook, Twitter, LinkedIn, Instagram, Snapchat and others have been hailed as the tools to “connect” with customers that were missing all these years.

Well, move aside, social media, because messaging apps have taken over! Brand strategy is increasingly being shaped by messaging apps and consequently chatbots and virtual assistants, to create personalized interactions with customers, and ensure experiences that leave a positive emotional feeling and higher customer acquisition.

A Case Study in the Power of Chatbot

In keeping with American Eagle Outfitters’ marketing strategy of making communications authentic, their intimate apparel brand Aerie – which made headlines with the “Aerie Real” body positivity campaign – has extended this value to the ways in which the brand communicates with its audience. They accomplished this through authentic communication with customers in the language they prefer, using the channels they frequent, and at times when they like to interact. Their chatbot allows users to learn about products and browse based on usage and preferences, read lingerie fitting and tips, and get inspiration from body positivity messages from the Aerie Real community, and leave feedback with the bot itself. It is not a surprise then, that the chatbot has given the brand twice the number of users their social campaigns ever gave them.

Although 67% of the chatbots that have been launched till date are used to simplify customer support, brands from across different verticals are increasingly using bots to connect with customers in innovative ways. Bots, in fact, have revolutionized the way in which brands approach customer engagement – be that giving out retail advice, as in the Aerie bot, awarding frequent users with discounts, as on, or assisting with shipping and logistics, as in UPS. Bots are also a very sophisticated platform for bi-directional marketing, such as giving out information about the product or brand to the customer, while also simultaneously collecting information for market research through surveys and feedback.

Three More Examples of Impactful Chatbots

  • Disney introduced the Officer Judy Hopps bot just before Zootopia hit the theatres. Launched on Facebook, the idea behind the bot was to make users help Judy crack cases. The bot saw more than 10 minutes of engagement per user, and many frequent users, ensuring sustained interactions. Social media was rarely able to come close to this kind of engagement!
  • The Whole Foods bot builds on the finding that recipes are mostly searched for online in the aisles of grocery stores. The chatbot provides users with delectable recipes they could try, along with store locations and product availability. Content marketing at its very best!
  • Luxury brand Burberry’s bot is an intelligent customer support channel, but also gives users insights into newly launched collections and what to expect in their fashion line, building an entire community of fashion-forward early adopters. I confess to having “chatted” with their bot for almost 15 minutes while looking for a bag.

Chatbots Across the Business World

The travel and hospitality industry, which is so vested in providing the best possible experience to its customers, can use chatbots in many innovative ways. Some examples include quick booking, concierge services, rewards programs, and easy checkouts.

Retailers can use chatbots to cross-sell and up-sell based on customers’ purchase history, suggest products by understanding the customers moods and needs, as well as check for inventory and tempt customers with the latest trends. Customer service queries that are solved on the phone typically take a long time. With chatbots, the interaction can be successfully closed in a few minutes.

Banking, a vertical that typically struggles with customer service issues, can use chatbots to completely revamp their interactions with customers. For example, by collecting information on a customer’s credit history and relationship with banks, the bot can notify them of a new line of credit that they are eligible for, enabling cross-sell and up-sell.

The healthcare industry can bank on chatbots to significantly improve patient experience. Medical advice can be made easily accessible, reminders can be set for medication, and mental health check-ins can be provided. Clinical trials could really benefit from chatbots that do daily check-ins and monitor patient well-being.

The Growth and Development of Chatbot Technology

The fact that the pace of chatbot development and launch is at its peak shows that bots are important and relevant. In the earlier days of bots, creation and launch was a complex process. Bots used a technique called language parsing to give pre-set responses to questions posed to them, leading to limited success in conversations.

Today, bot launches are not so complicated. Companies like Chatfuel let you build bots within minutes, without any coding knowledge. Leading technology companies like IBM and Facebook are investing big bucks on furthering the capabilities of bots. IBM’s Watson uses powerful AI algorithms and machine learning on top of language parsing to improve conversation outcomes. These developments mean that bots can now learn from interactions and incorporate feedback received to continuously improve. This has led to richer conversations and more accurate responses. Consider this:

  • It is estimated that bots can reduce costs for businesses by up to $7.3 billion
  • The chatbot market is expected to grow by 35% year on year
  • By this year, 80% businesses were expected to use chatbots to support customer engagement

Our Work with Building Customer Relationships

OSG is at the forefront when it comes to innovation for customer-centricity. OSG uses a combination of behavioral analytics, artificial intelligence and machine learning to understand what matters to customers and continuously guide innovations. Our solutions and work focus around making sure our clients’ customers are engaged with the product and service offerings available, and that the business has the insights it needs to plan for future success.