Boosting CRO Using a Chatbot — Can Chatbots Make Money?
Chatbots. They’ve been around for yonkers. But never really made any waves. You might recall encountering one while casually browsing the internet.
BINGBONG — Hi, I’m Leon 🙂 How can I assist you today?
That’s right before you hit that close button. Buzz off. Fast forward to 2021 and we’ve gone from Mr Roboto to Terminator 3.
Chatbots have gone from greeting customers with hello, to helping businesses increase their sales by 67%. They’ve gone from answering customer complaints to increasing overall website conversion rates by more than 40%.
Is it because chatbots got smarter? Are customers more demanding? Or, have people come to terms with speaking to a robot?
In this post, you’ll learn all about chatbots, how chatbots influence marketing and sales, and why chatbots are now widely adopted in B2B and B2C conversion strategies.
But first, can chatbots really make you money?
To get to the bottom of this, we look at what is a chatbot and how does it work
Just what exactly is this technology that allows users to communicate with companies 24/7 to have their questions answered quickly and easily?
In essence, chatbots are an artificial intelligence technology that replicates human-like conversations with people via text messages. These interactions can be as simple as getting opening hours to hiring a car, booking a hotel and making a reservation at your favourite restaurant — all at once.
You’ll find chatbots across multiple platforms, including Facebook Messenger, Slack, Websites, and many other messaging apps. Just about anywhere where text is used to communicate, a chatbot can be implemented.
But, are all chatbots made equal? AI vs Rule-based chatbots — how does it work?
Although chatbots and artificial intelligence are thrown around interchangeably, the capabilities between conversational AI and rule-based chatbots are vastly different.
One uses natural language processing and machine learning to mimic human behaviour, while the other relies on a predetermined set of rules. So, how does an AI chatbot work?
Here are the main differences and uses between chatbots versus AI:
(informational and transactional)
(conversational and advisory)
|Key-word driven||Powered by deep learning which enables easy scalability|
|Acts based on highly structured and specific instructions (decision trees)||Uses Natural Language Processing (NLP), Natural Language Understanding (NLU), and Machine Learning to mimic a natural conversation|
|Interactive FAQ; handles common questions or simple transactions||Contextually aware, learns user’s preferences over time, provides recommendations and even anticipates needs|
|Uses automated responses with conversational menus||Monitors data and intent for a more personalised and interactive experience|
|Most commonly used chatbot||Similar to digital or virtual assistants, Alex and Google Assistant|
|Difficult to train, does not learn from past experiences||Learns from real interactions and applies predictive intelligence and analytics based on user profiles and past behaviours|
|Difficult to scale||Understands spelling mistakes, jargon and short-form|
|To optimise the bot performance, companies have to manually update rules||Easy to train and can be updated with historical data|
So, what’s the best choice for your business? All fingers seem to point towards an AI chatbot platform.
However, before you can adopt a chatbot as part of your lead generation strategy and begin optimising, you first need to understand customer behaviour.
Customers want and expect more from businesses
In light of the recent pandemic COVID-19 and emerging technologies, businesses are struggling to keep up with customer demands.
Your customers want to be understood, they seek a seamless experience across multiple channels, and they want to know you have their best interests in mind.
They want you to understand their needs
73% of customers expect companies to understand their needs and expectations
They expect to have multiple options when contacting you
In addition, 85% of customers expect conversations with reps to move seamlessly and in real-time between channels
They need you to respond quickly
88% of customers expect a response from your business in 60 minutes
Over 50% of customers expect a business to be available 24/7 [VentureBeat]
They crave a personalised experience
84% of customers say being treated like a person and not a number is very important to winning their business
They want you to give them consistent answers
More than 75% of people say that getting inconsistent answers from customer support is a major frustration.
They prefer saving time over money
67% of customers say they’ll pay more for a great experience
This has prompted a huge surge in the need for self-service tools, such as chatbots and AI technology. And it’s not just for customer service issues.
The true value of a chatbot
In order to keep up with customer demand in today’s digital market, businesses must optimise and automate as many processes as possible — this is where a chatbot reveals its true value.
1. Generate more sales and revenue
Myth: Chatbots are only used for customer service. Chatbots are being used widely by businesses to generate more sales and revenue. Why? Because 47% of consumers would actually buy items using a chatbot. Chatbots allow customers to interact with a business quickly to get the information they may need before making a purchase.
2. Save time, effort and money
Chatbots save time and effort by automating customer support queries and handling an unlimited number of conversations simultaneously. Chatbots can help companies save up to 30% of their customer support costs by speeding up response times, freeing up agents for more challenging work, and answering up to 80% of routine questions.
3. Provide a better customer experience
The biggest challenge for most businesses is differentiating themselves in a saturated market. Chatbots and conversational AI allows businesses to leverage customer experience to get a competitive edge and increase their bottom line revenue.
How to boost your CRO using a chatbot: 5 strategies for increasing conversions and revenue
1. Use AI chatbots to engage and convert more website traffic into sales
Maximising website traffic online is a common problem experienced by most businesses. It’s impossible to man the fort and greet thousands of visitors a day in, day out, 24/7/365 days a year.
Unless you’re this guy.
Chatbots let you engage more website visitors with the ability to customise interactions to suit your business needs — be it a lead generation or customer support.
A great case study of how conversational AI was used is when Amtrak implemented an advanced AI-powered chatbot to help visitors find what they needed, without speaking to customer service.
The bot was given the name “Ask Julie” and was designed to function as Amtrak’s #1 customer service representative and it’s clear to say, the results speak for themselves.
Ask Julie was able to help:
- Visitors book rail travel by simply stating where and when they’d like to travel
- Pre-fill forms on Amtrak’s scheduling tool and provide guidance through the rest of the booking process
- Provide information on what items can be carried on trains or help make hotel and rental car reservations.
- 5 million questions answered annually
- 800% return on investment
- Increased bookings by 25%
- Saved $1,000,000 in customer service expenses in 1 year
- Bookings through the bot generate 30% more revenue
2. Use chatbots to connect with customers on all channels
The average consumer will use up to 10 different channels to communicate with a business. Chatbots can be implemented across multiple channels including websites and social apps, and make it easier to stay connected with customers on their preferred channels.
Some chatbot builders even allow for a seamless integration between marketing & sales apps, making it easier to track leads and conversations to ensure a seamless experience from bot to sales team.
Good Spa Guide is a great example where a chatbot was implemented on Facebook Messenger to increase website traffic and conversions. It provided customers with a more personalised and conversational method of booking an appointment, without actually being on the website.
- 47% click-through rate on automated messages
- 29% increase in website traffic in six weeks
- 13% increase in spa bookings
3. Use chatbots to automatically generate and qualify more leads into your funnel
For the last 10 years, lead generation has managed to find itself at the top of every marketer’s hitlist, with 61% ranking lead generation as their number one challenge.
This included generating high-quality leads, getting a high volume of leads, and a lack of resources, staff and time (to handle questions).
To this day, one of the biggest challenges faced by most businesses, including the case study below, are poor quality leads and repetitive non-revenue generating tasks.
Anymail, a small two-man operation, was having trouble staying on top of sales, marketing and customer support. They were flooded with the same repetitive questions via email, which brought in no revenue.
A chatbot was implemented to answer these support questions using educational content, which was incorporated into ready-made responses and automated messages. Those who responded to an automated message were then transferred to a sales rep.
- 1 in 3 buyers used the chat system before making a purchase
- 9 out of 10 big buyers used the chat system before making a purchase
- An estimated 60% of revenue comes from chatbots
If poor quality leads are an issue, consider a chatbot for your website, which can handle support questions, qualify leads and free up staff from non-revenue generating tasks.
4. Use chatbots to sell products, test offers and run promotions
Chatbots have come a long way since their robotic FAQ-style interactions. The technology is now widely adopted by many industries including Finance, Travel, Hospitality, Retail, Healthcare, and particularly ecommerce businesses.
Chatbots for ecommerce is an emerging trend paving the way for a better customer experience when shopping online. But customer experience isn’t the only thing.
Automated messages and pop-up notifications have become powerful marketing tools that allow ecommerce businesses to upsell products, test abandoned cart offers, handle transactions, and run promotions.
- 47% of consumers are open to buying items using a chatbot [Hubspot]
- 40% of consumers want offers and deals from chatbots [Ubisend]
5. Use AI chatbots to gather real-time data to learn more about your customers
As a marketer, it’s easy to get swept up in testing the latest CRO tactic and forget who you’re really optimising for — the customer. Chatbots help you learn more about your visitors by allowing you to collect real-time data.
After the first round of questioning, collect the data and analyse how you can optimise the customer journey. Using these insights, you can craft a more personalised and seamless customer experience, and increase your conversions.
- 82% of customers who had a chat with a support agent are more likely to place an order [SuperOffice]
- 84% of customers say being treated like a person and not a number is very important to winning their business [Salesforce]
- 57% of executives cite that conversational chatbots enable their websites to provide personalised attention to customers [Accenture]
6. Combine your chatbot with other marketing initiatives to increase your conversion rates
There is a common misconception that chatbots interfere with other marketing activities. This couldn’t be anymore farther from the truth. Not when Leadpages manage to increase conversions by 36% using targeted automated messages.
Leadpages implemented a chat system to let visitors ask questions and within a few weeks they were averaging 100+ questions a week — without a pop-up welcome message. This opened the door for a bigger opportunity to encourage conversations that lead to conversions.
So they added a welcome message and highly targeted messages on specific service pages.
- 267% increase in chat conversations
- 36% increase in website conversions
- Targeted messages had an open rate of 30% and a 21% click through rate
7. Important chatbot metrics to track
To ensure the chatbot you have implemented becomes a success or failure, you’ll need to measure the following chatbot metrics and adjust accordingly. They allow you to track and measure whether your customers are happy conversing with a bot or not, and when human takeover is necessary.
- Conversation duration — measures the length of the bot and user interaction. Monitoring this KPI will help to gauge the effectiveness of the chatbot in the length of the conversation.
- Interaction rate — measure the average number of messages exchanged during the user-bot conversation.
- Fallback rate (FBR) — captures insights about scenarios where the bots do not understand the user request and provide a relevant solution.
- Conversion rate — measures conversations resulting in a lead or sale.
- Satisfaction rate — measures customer satisfaction.
Other measurements to consider, include:
- Total sale value
- Net promoter score
- Cost per acquisition
- Number of active users
- Number of bot sessions initiated
- Overall customer retention rate
So what’s the verdict?
Can chatbots really make you money? It’s a question that continues to divide experts like Moses and the great red sea.
Despite a market forecast of $1.3 billion by 2025 and a projected value of $112 billion in ecommerce transactions by 2023, it’s not all rainbows and butterflies.
Chatbot implementation brings about its own set of challenges including, lack of talent to develop and work with bots, deployment costs, and cost to acquire.
Not to mention, there’s always scepticism surrounding the whole concept of speaking to a robot, with 64% of users reluctant to engage with a conversational chatbot.
While chatbots and conversational AI can be super effective for some businesses, it may not work so well for others, especially if you have low website traffic.
Luckily, the success of your conversion strategy doesn’t need to rely solely on the implementation of a chatbot.
There are plenty of other opportunities to increase your conversion rate with our free CRO audit. Find out where and why parts of your website are and aren’t converting, and get recommendations on how to improve your results.