Chatbot benefits | Three critical reasons for using chatbots in your business

I originally wrote this article is for pragmatist business owners and decision-makers. But it’s just us useful for any location independent entrepreneur looking for tools that can help leverage their time, effort, and ROI.

If that’s you, I am sure the only things you really want to know about Facebook messenger chatbot benefits are…

• Will chatbot benefits include helping you profitably execute your strategic plan? (If so, how?)
• More specifically, do chatbot benefits include increasing your topline? e.g. can a chatbot add to tactical ways to improve your sales performance?
• And finally, can a chatbot help benefit your bottom line; i.e. improve your net profits? e.g. reduce customer service costs, provide affordable scalability; etc.

The bottom line being that when you’re considering chatbots for business use, all you want to know is one thing; how to make money with chatbots?

So for those who need the answers quickly, here’s what you want straight up; the three critical reasons I believe indicate it’s time for you to take notice of chatbots:

• Open rates
• Better engagement/Click rates
• Monetization

Frustrated with email marketing and social media?

To a degree, all the above points assume you’re already using email marketing in your business. Meaning you most likely understand the challenge of getting people to open marketing emails. Not to mention the even bigger challenge of getting them to click on URL’s of interest; i.e. the clicks that let you tag subscribers for subsequent targeted offers of your goods and services.

Likewise, I’d expect you’re already using some form of social media with even greater frustrations around return on investment.

If you’re not using email marketing and social media in your business you’re probably a sceptical laggard. If this is you, I doubt you really need to read any further!

But for those who have invested in email marketing and social media, with varying degrees of results and/or success, I highly encourage you to sit up and take notice of chatbots; particularly Facebook chat bots; e.g. the Facebook Messenger bot

Now let me explain why chatbots should matter to you…

1. High open rates

There are two aspects of ‘high’ open rates we need to look at. The first is the absolute numbers. The second is the percentage numbers.

Absolute numbers

In simple terms, the sheer volume of people who use messenger type services has increased significantly in recent years. Users are spending more time on messaging apps like Facebook Messenger, WeChat, What’s App, Skype, Slack and many others. So much so that research from Business Insider indicates messaging apps have eclipsed social networks in monthly actives

This fact alone indicates an incredible opportunity for business and brands to connect with many more people much more quickly. And in a much more personal way.

Scalability

Do you want to grow your business? If so, it doesn’t matter whether you’re thinking locally, nationally or globally. Chatbots give you a scalability pathway you couldn’t easily replicate for a similar cost.

For example, in their article ‘Top 5 Benefits Of Using Chatbots For Your Business’, Maruti Techlabs reference a previous study that suggests humans can only concentrate on 3–4 things at the same time. If it goes beyond that you are bound to meet errors.

Contrast those human limitations with the endless advantages of appropriately set-up chatbots. For example, the fact they can simultaneously have conversations with thousands of people, anytime, anyplace and, sometimes, even in any language.

Percentage numbers

Current evidence indicates chatbot open rates are significantly higher than email open rates. Of course, the data is constantly being updated and will change over time so I’m not suggesting this point is the be all and end all. Plus, understandably, most decision-makers will only want to compare the stats against their own email marketing open rates.

So let’s start with what we’ve got and make it relevant to you. First of all, compare your own email marketing open rates with the industry benchmarks provided in MailChimp’s Email Marketing Benchmarks. How well are you performing?

Broadcast open rates

Now let’s take a look at the open rates in the image below. The top table shows broadcast open rates from the chatbot platform ManyChat. The second table shows broadcast open rates from campaigns set up by Molly Pittman for Digital Marketer. (She’s also a ManyChat associate)

Sequence open rates

This image shows the performance of a ManyChat sequence; i.e. where a subscriber receives a series of pre-programmed messages (similar to how they would receive a series of emails).

Similarly, chatbot enterprise solutions company ubisend claims “Our customers achieve an 84.8% average open rate.”

My guess is that however good your own email open rates are, they are not up at this level. (We’ll get onto Click Rates next)

Remember message apps are pretty much like the text messages you get on your phone. How often do you NOT open a text message?

Invariably, it appears the interactive and immediate nature of messenger apps reflects itself in these much higher open rates. For example, questions can be asked and answered in real time with little, if any wait time.

Monitoring Consumer Data & Gaining Insights

Another key benefit of high open rates is you have an excellent opportuniy to gather data and learn more about your customers and prospective customers. In his article ’10 benefits of adoptiing chatbot marketing to your business’, Arun Bhat says

“Chatbots are built with a purpose to understand human behaviour and provide data analysis about the customer…

Bot analytics provide brands an opportunity to go even deeper into their data analysis.

(Because) chatbots interact with customers directly in the real time, and not via some 3rd party such as a social network, the brand can avoid collecting data analysis from scattered sources.”

In their article, ‘Top Seven Benefits of Chatbots’, data intelligence company Exastax uses the following example:

• If your landing page generates a good amount of organic traffic but doesn’t convert well, your chatbot can reach out to customers visiting this page with a survey to collect more information on why they are leaving the page without purchasing etc.

They go on to state chatbots can also be used to track purchasing patterns and consumer behaviours by monitoring user data. They reference a similar article in Forbes stating that (having this data) helps a company to decide “which products to market differently, which to market more and which to redevelop for relaunch.”

I’m sure you don’t need me (or Forbes) to tell you the more you know about your prospects and customers, the more likely you’ll be able to connect with them.

Open Rates Summary

Increased open rates, both in absolute terms and percentage terms creates more opportunities to connect with both prospects and customers. Regardless of whether you’re trying to improve pre-purchase procedures, point-of-sale conversions or post-sale support, you now have an even greater opportunity to do so using chatbots.

2. Better engagement/click rates

Set up appropriately, chatbots offer the potential for highly personalised interactions with businesses. Looking at the same open rate images above, it appears this personalisation is having a very positive effect on click-rates too.

Real language

Arguably, these encouragingly higher click rates can be attributed to the fact chatbots can more easily emulate ‘real language’.

In his article ‘9 Reasons to Build a Chatbot Now’, Viktor Stolyarenko says:

“Let’s admit it, the language apps use to interact with our clients is not the language we speak to our friends. It’s based on technological single-word commands like “sign up”, “log in”, “download”, “click”, “fill in” and it lacks such social language as “please”, “hello”, “for sure”, “how is it going?”. It’s like our businesses suffer from the social communication disorder.

With a chatbot, you can express anything you want, and your users will definitely value it. Moreover, such discourse is more engaging and makes people want to stay with you and chit chat for a bit longer.”

What does better engagement/click rates mean for your business?

Going back to our initial three questions (the pragmatist business owner cares about), let’s look at how better engagement/click rates could help with any, or all, of the following:

• Lead Generation
• Pre-sales; i.e. customer assistance
• Point of sale conversion rates
• Post sales support

Lead Generation

In the previously mentioned Exastax article ‘Top 7 Benefits of Chatbots’ they refer to ‘Better Lead Generation & Qualification‘.

“Personalized messaging that assists consumers along “buyer’s journey” is possible with the consumer information that chatbots receive. A bot can ask the necessary questions (and provide the relevant answers) required to generate a qualified lead for you.”

(‘Qualified’ lead meaning the bot could also filter out the type of customers you DON’T want for your business! In turn you can expect higher conversion rates)

Pre-purchase/sales

In their article ‘Benefits of Using Chatbots for Your Business’, The App Solutions company state:

“The percentage of consumers who prefer to buy online is inexorably increasing every year…. (a significant portion of which) search online before making a purchase. Which means that even those who prefer offline shopping spend some time looking online before this.”

Quoting the Exastax article again, they talk about chatbots providing ‘Extensive Customer Assistance’:

“Your customers may require help trying to understand which products fit their needs/budgets any time of the day. Moreover, shoppers may not find what they are looking for due to navigation issues when they are on your site. Or there may be a lack of information about particular products.

In all these situations, chatbots can provide assistance real-time like a sales person in a real store. Furthermore, along with text and voice, they can present customers rich content with product pages, images, blog entries, tutorial videos based on their responses that can help them through their (buying) journey.”

Point of sale conversion rates

Chatbots give businesses a chancee to get on the front foot when it comes to sales conversions.

Referencing the Exastac article once more, they highlight ‘Proactive Customer Interaction’..

“In general, companies apply a “passive customer interaction”, which means that they only respond to customers when they are contacted. In competitive businesses – especially with a remarkable percentage of millennials as customers – none of the brands have the luxury to act passive anymore.

Since none of the organizations have enough manpower to initiate a communication with all of their customers periodically, chatbots allow you to start a conversation with each customer, regarding any issue, any time of the day.”

Whilst this could be applied to any part of the purchasing journey, I particularly feel it can make the most difference at the point of sale. For example, as the articles says, “(Prospective customers) may have registration, payment, checkout and delivery questions”.

Think about that for a minute… a chatbot has the potential to address many of these ‘objections’ at a point when the potential customer is considering abandoning their cart. Even if a chatbot only overcomes some of the ‘objections’, what difference could that make to your sales conversions/revenues. (Of course abandoned carts are another subject altogether, but these too can also be dealt with by a personalized messages as opposed to an email).

Post sales support

Using chatbots for post sales support offers the potential for both consistent support standards as well as cost savings. Set up appropriately, chatbots can deliver a consistent standard of 24/7 customer support 365 days a year!

Think about the frustration a new customer may have after purchasing your product or service if they have a question they cannot get answered ‘until the morning’. Or they get served by a hungover employee disgruntled with their holiday pay rate.

What difference could it make to the new customer’s perception of your company if those questions could be effectively and politely answered at the time they need the answers?

Imagine that, a customer gets an FAQ answered on Christmas Day, a young child stays happy all day and your company gets the positive word of mouth.

Consistency

Back to the Maruti Techlabs article ‘Top 5 Benefits Of Using Chatbots For Your Business’,

“Since chat bots are basically virtual robots they never get tired and continue to operate every day throughout the year without requiring a break.

Humans react to others based on their mood and emotions. If an agent is having a bad day, this may manifest itself in customer interactions.

Whereas chatbots are bound by some rules and obey them according to how they are programmed. Meaning they will always treat a customer politely.”

Cost Savings

The Exastac article argues chatbots can provide cost savings too:

“First of all, implementing a full functioning chatbot, is much cheaper and faster than creating a cross platform app or hiring employees for each task. Furthermore, chatbots allow organizations to simultaneously handle many customers.

Bots can be programmed to give automated answers to repetitive questions immediately and forward the request to a real person when a more complicated action is needed.

This enables human customer service representatives to save time and assist more important cases rather than time consuming simple tasks.”

Post-Purchase Customer Engagement

Needless to say, it’s important to keep your customers engaged with your brand. While social media can help with this, we’ve already discussed how chatbots can do this far more personably and timely. In certain circumstances, they can also do it with a sense of humour! (More on that later perhaps)

So what? …Engagement/Click Rates Summary

In tandem with open rates, if every other variable in your business stays the same, i.e. advertising/marketing spend, lead conversion rates, average sales values, average lifetime customer value, then what difference could an improvement in these two key statistics make to your business.

3. Monetisation

This article is for pragmatist business owners and decision-makers. If you’ve read this far, then I will assume that’s you. As a result, I’ll also assume you totally understand three key commercial realities of being in business.

1. Adding revenue generating channels is usually a good thing.
2. The easier it is for a customer to pay, the better chance you have of making the sale.
3. The importance of getting paid in a timely manner. (And preferably in advance. What self-respecting business owner or accountant wouldn’t want to see the pre-payment ledger going up!).

Arguably, monetization is the most exciting development in the evolution of chatbots. And it is very much an evolution!

Payment gateways are a form of the Holy Grail in the online world of digital marketing and ecommerce. As new platforms emerge, and gain popularity, it’s always only a matter of time before the business world’s commercial instincts kick-in and want to find ways to monetize that platform.

But it’s not always as simple as it sounds. Invariably all forms of payment gateways need to negotiate the substantial banking security systems that exist in the modern world. That said, given time, there is always a solution.

For example, first we found ways to accept payments on websites, which evolved into full blown online shopping portals. Then the world of apps went through the same changes. Do you remember a time when app developers couldn’t get paid? But Apple evolved, opened the gates and now premium apps are everywhere.

The same evolution is happening with chatbot payment gateways. And the good news is the you can ALREADY get paid via many messenger app chatbot platforms. (If not all of them).

So when it comes to chatbot benefits for business use, payment integration to third parties via APIs brings even more options to the chat bot functionality. For example, with the help of a chatbot, you can not only choose the product or service but also buy it.

The evolution as we know it…

At TechCrunch Disrupt SF 2016, the Head of Messenger David Marcus announced that bots will be able to accept payments.

Finally, the credit card info people already have stored in Facebook or Messenger can be used to instantly make purchases in bots that are part of the new closed beta the developers can apply for. To support payments in Messenger, Marcus said that the company is working with all the major players in the industry including Stripe, PayPal, Braintree, Visa, MasterCard and American Express.

Since then, the chatbot payment gateway monetization bandwagon has gathered much momentum…

For example, chatbot platform ChattyPeople allows integration with Shopify, PayPal & Stripe meaning you can monetize your Facebook fan pages.

In May 2017, chatbot platform Chatfuel used their blog to announce:

“We have added the capability for bot admins to receive in-bot payments worldwide (via Stripe). Stripe Worldwide Payments is different from Messenger Native Payments that Facebook released not long ago. This new functionality is something that we have developed specifically for our platform to allow our bot creators to accept payments easily all over the world.”

And to prove how quickly the landscape is changing, while I was writing this article, ManyChat, another well-established chatbot platform also used their blog to announce they are beta testing Stripe payments.

So what?… Monetisation Summary

It’s a no brainer really. People love ‘chatting’ and now your business has an opportunity to turn those chats into revenue generating transactions. To quote ManyChat’s recent announcement, the benefits (of integrating a chatbot with the Facebook Messenger app) are five-fold:

• Your customers don’t have to leave Messenger to buy from you. Less friction + a more streamlined checkout process = higher conversion rates.
• It’s perfect for conversational selling. Thanks to the interactive nature of Messenger Marketing, you’ll be able to ask all the relevant questions and offer your users the product that’s best suited to their needs.
• Major trust factor. People trust Facebook/Messenger, so questions of credit card security will be a thing of the past.
• The possibilities for scalable marketing automation are endless! Sell products directly inside your automated Messenger sequences. Turn your chatbot into your company’s best 24/7 salesperson.
• Since everything happens in Messenger, there’s no need to set up third-party or cross-domain tracking. Implementation is simple & easy.

If you’ve read this far, then I hope you’re convinced your business seriously needs to embrace chatbots. And soon! Before your competition does!

The alternative is you could find yourself suffering a severe, painful (and potentially) very costly case of bot rot!)

Beware bot rot

You’re a pragmatist business owner/decision-maker whose only interest is results.

The pragmatist in you doesn’t care for the next Shiny White Object that could distract you from your business goals. You don’t care about any technology per se, and nor do you share a visionary’s appetite for the significant risk associated with ‘betting on the next’ big thing. Your budget (and career!) can’t afford it!

At the same time, I am guessing you don’t want to suffer a lengthy dose of bot rot either!

What is ‘bot rot’?

Bot rot is the ignorance of a technology (and it’s benefits) that looks set to infiltrate the majority of our lives for many years to come.

When I say ‘a lengthy dose of bot rot’ I am referring to (roughly) the latter three quarters of the Technology Adoption Lifecycle Model. (If you’re not familiar with the model, or Geoffrey Moore’s ‘Crossing the Chasm’ theory), this is the time some pragmatists, as well as the conservatives and skeptics resist a new technology. While visionaries and other pragmatists are reaping the rewards of ‘early adoption’ or being in the ‘early majority’.

This may sound like I’m digressing, but let me explain why chatbot benefits are here to stay. Not to mention improving all the time…

Crossing the chasm

Geoffrey Moore’s premise is that the reason many new technologies fail to become mainstream is because they fail to negotiate the ‘chasm’. (See the image below). The ‘chasm’ being the gap between the buying motives of the visionaries and the buying motives of the pragmatic majority.

Without going into depth on this point, one massively significant reason is the pragmatist business owners/decision-makers want to know the technology is really only part of the ‘whole product’. This means the technology itself (albeit a key component) is not important to them.

A pragmatist wants solutions that will benefit their business. If they know the core technology is surrounded and supported by the necessary associated resources that will ensure it’s worth the investment, they will get behind it. For example, training, support, integrations, payment gateways etc.

Which begs the question….

Have chatbots ‘crossed the chasm’?

In my opinion they most definitely have. For example, as already discussed in the ‘Monetisation section’, leaders in the field have emerged such as ManyChat and ChatFuel who make it relatively easy for anyone with a Facebook page to employ a chatbot. This means competition exists and that can only be a good thing for an emerging market.

In addition, you could build your own chatbots if you’re technically inclined. Around the time of the Techcrunch announcement Facebook launched an online shop with coding tools so anyone could build their own chatbots for Messenger. (https://mybusiness.singtel.com/techblog/how-using-chatbots-can-benefit-small-business)

Since then more and more resources have become available. Such as online support groups where you can get chatbot templates and answers to your own chatbot questions.

Throw in the fact companies using chatbots include big established players like Dominoes Pizza and Taco Bell and you can quickly and easily see examples that you can replicate and adapt in your own business. (When I have some more time, I will add some interesting examples of companies using chatbots. You may be surprised how creative you can get with chatbots).

But what is a chatbot?

This article is meant for business owners and decision-makers so I’ve purposely avoided technical jargon if at all possible. But if you’re like me, and you’re still reading this far, then maybe all you need to know now is a quick answer to the question, ‘What is a chatbot?’

I guess the simplest way to describe a chatbot would be to say a chatbot is what you get when a messenger app meets artificial intelligence (AI). Set up appropriately, they have the potential to inform, educate and entertain .

Chatbots are essentially text-based services but with the ability to deliver images, sound and video to improve the subscriber experience.

Basically, there are 2 types of chatbots – unintelligent ones that act using predefined conversation flows written by people and intelligent AI chatbots that use machine learning.

According to entrepreneur.com those that function based on rules are much more limited than those that work with AI because they only respond to specific commands. Hence, they require a great deal of thought to set up to replicate the potential logic flows of any particular chat.

Chatbots tools that are powered by artificial intelligence are more dynamic because they respond to language, and don’t require specific commands. They learn continuously from the conversations they have with people and can help fulfill an array of tasks without a monumental amount of programming.

Chatbot benefits & why you should be using chatbots for business

Before I leave you, here’s a quick reminder that all three of the following chatbot benefits have the potential to significantly increase revenue as well as reduce costs. To what degree will depend on the type of business you have and your particular strategic goals.

• High open rates
• Better engagement/click rates
• Point of sale monetization

If all the above hasn’t convinced you to take notice of chatbots, here are a few parting shots from some of the other articles and blogs referenced throughout this blog post:

“First of all, chats are hot, they are only at the starting point of their adoption by the masses, and it is going to be exponential growth for a while. So again and again, if you adopt this tech now, you’ll reach your audience much faster, with much less effort, and save a lot of money.” – https://letzgro.net/blog/9-reasons-to-build-a-chatbot-now/

“All competitive companies must maintain a strong online presence, and chatbots are changing the way your audience interacts with you. They help you build an emotional bond with your customer, and because they are still new, building a chatbot now means a strategic advantage over the competition.’ – https://www.entrepreneur.com/article/290297

“With new advancements coming every year it is safe to say that the future of chatbots appears bright.” – https://chatbotsmagazine.com/top-5-benefits-with-using-chatbots-for-your-business-159a0cee7d8a”

“According to Facebook Messenger product manager Kemal El Moujahid –

“Messaging experiences run on top of the mobile OS layer, and this stack is already much more standardised than the various mobile devices could ever be. And in places like China, the shift already happened: 40% of WeChat user’s message with a business every day(source: Qi’eZhiku 2016).

Vendors and retailers need to rethink their communication strategies to strengthen their presence in the channels where their customers prefer to be. For now, it is messenger apps.” – https://theappsolutions.com/blog/marketing/benefits-of-chatbots-for-business/