Chatbots: Do They Live Up to the Hype?

Will robots one day take over the world? You can keep your sci-fi fantasies alive, but we think it’s still up for debate.

What we do know to be true and evident is that more and more services are being automated–including customer service and consumer engagement.

Chatbots are a form of artificial intelligence that have the ability to understand the human language and can also reply like a human.

If you’re an avid Apple or Amazon user and have ever utilized assistance from Siri or Alexa–you can call yourself a chatbot user!

What’s exciting is that as a business owner, you can now be a chatbot creator.

Whether using a service like Kik or Facebook Messenger Bots, eCommerce businesses, service providers, and even governments are creating chatbots as an increasingly personalized way for their customers and constituents to interact with their brands.

In 2016, Microsoft CEO Satya Nadella declared, “Bots are the new apps.” Even the White House Facebook page created a chatbot at one point that walked people through the process of sending questions or feedback to then-President Obama.

Chatbots allow businesses to quickly and easily address customer needs and questions.

For example, if someone were to ask a bot for a retailer, “What are your store hours?” the bot would respond with something like, “Our store hours are from 9 a.m-6 p.m., Monday through Saturday.”

You don’t have to pay someone to answer. You don’t have to worry if an employee might respond incorrectly.

That said, it’s no wonder chatbots are all the rage.

This so-called “hype” surrounding chatbots begs the question–are they really helpful in securing more conversions?

In short, the answer is yes–but only in the right context and when used in the right ways.

Read on for three case studies featuring companies that have used chatbots–two with success and one that tanked.

Case Study #1: Sephora


In March 2016, beauty product giant Sephora launched their first chatbot on messaging app Kik.

According to their senior vice president of digital, Mary Beth Laughton, “With Kik, it was really about leveraging our library of how-to content that brings together things like video and images and text tips to our client on Kik in a quiz-like interface. We recommend relevant content based on their interests.”

How did it work out for them?

According to Laughton, once a Kik user begins conversing with a Sephora bot, there’s deep engagement.

These users average 10 messages with their bot per day, and though Laughton couldn’t disclose specific numbers, she shared that the targeted push notifications to view new content have a high open rate.

Additionally, according to Beerud Sheth, CEO of Gupshup, “A chatbot can dramatically increase sales for a brand like Sephora that has a wide variety of SKUs. Chatbots act like the in-store sales assistant, always available, instant, highly knowledgeable.”

Sounds like a success story to us–and if your business, like Sephora, has a wide variety of items to sell, it may be well worth it to create a bot that can seamlessly guide customers toward conversions.

Case Study #2: Winnie


While many businesses create chatbots as an extension of their operations, some businesses are created to solely be a chatbot.

Winnie is a chatbot that helps guide website owners in making decisions regarding their selection of hosting providers.

This decision-making process tends to be tricky for most people, so it helps to have some hand-holding.

Winnie has become a popular solution for people in these situations because it helps them narrow down their options based on their needs and gives them suggestions for hosting packages with various providers.

The success of Winnie is evident in the numbers–since launching on Facebook Messenger, it has achieved a click-through rate of 72% of users who click to an affiliate hosting provider.

Case Study #3: Kodak


It’s a Kodak moment!

…Or is it?

Kodak Moments (the consumer division of Kodak) recently created a Facebook Messenger Bot that uses unique image science capabilities to go through your Facebook camera roll and recommend photos that you may want to get printed with their services.

When Verge writer Sean O’Kane attempted to use the service, he was provided with a photo that prominently featured his ex-girlfriend.

Not exactly something most people would want printed on a coffee mug.

Sure, at the time he posted the photo of his ex, it may have received a lot of likes, comments, and engagement.

However, the chatbot wasn’t sophisticated enough to factor in the fact that O’Kane and his ex had ended their relationship sometime after the photo was posted.

If you are considering utilizing a chatbot in your customer engagement strategy, keep the following tips in mind…

  1. Clearly define the bot’s purpose. It’s important to plan out why you have your bot, and know how to set achievable goals from there. Speaking of goals…
  2. Set realistic goals. Chatbots are relatively still new, and existing technology may not be able to help you accomplish what you think “robots” should be able to do with the bot. Start small, and go from there so that you don’t over-promise and under-deliver (such as in the case with Kodak).
  3. Don’t launch too quickly. Similar to point 2, don’t be trigger-happy to launch if your bot isn’t there yet development-wise. Take your time to work with skilled developers to develop your chatbot and make sure they impress right off the bat.

It’s becoming increasingly clear that artificial intelligence can help us automate a wide range of tasks–which can make our lives a little easier.

Ok, we may not feel all that comfortable with the idea of self-driving cars, but chatbots are something we can certainly get on board with, if done right.

Chatbots also have a big role to play in mobile marketing. Learn more about this integration as well as other big mobile marketing trends on the horizon in this post!


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