Everyone’s Talking About Chatbots: What You Need To Know

The advancements in digital marketing require marketers to continue to upskill to stay abreast of the changes and the opportunities (or challenges) they present. The scope of digital marketing is forever widening. Having a good working knowledge of the latest advancements is no longer a luxury, it’s a necessity. Today’s consumers expect around-the-clock service. In response, companies are increasingly looking to implement chatbots and virtual assistants to respond to customers any time of day, any day of the week.

Chatbots secure a place on all of the 2023 digital marketing trends lists. That’s because they are so effective – 80% of consumers have interacted with a chatbot at some point.  In 2020, the chatbot industry was worth over $17 billion. By 2025, the growth is expected to increase to over $102 billion. With this in mind, this blog takes a closer look at chatbots.

The Buzz On Chatbots

What is a chatbot? There are two kinds: virtual assistants and messaging apps.

Virtual Assistants – This chatbot helps users find information, remember stuff or buy things – Apple’s Siri and Amazon’s Alexa are good examples. They are powered by machine learning; they rely on artificial intelligence to learn and figure out what a consumer wants.

Messaging Apps – This chatbot enables businesses and brands to be online 24/7, providing customer support – Facebook Messenger and WeChat are good examples. They use pre-programmed rules to interact with consumers.

Marketers would be hard pressed to find an easier or more efficient way to engage with customers. Chatbots provide around-the-clock customer service that few businesses could afford to offer with employees alone. Another benefit of using chatbots is marketers can offer instant responses to inquiries, which is imperative in today’s competitive, global online marketplace. Chatbot technology empowers a business to be able to provide service to hundreds of customers at once – all without taxing their staff with this chore.

According to a recent Mindshare report, 63% of consumers prefer messaging on chatbots to communicate with businesses or brands. The advantage for businesses is not just in increased sales or customer satisfaction but also in the diminishment of repetitive tasks employees no longer have to perform. Over the last couple of years, chatbot savings are estimated at up to $8 billion. In the next few years, that savings could easily jump to tens of billions of dollars as chatbot usage is more prevalent. As chatbots continue to reduce operating costs, the market will continue to expand, with chatbots used for marketing, payments, processing, and services. By 2024, worldwide consumer retail spending via chatbots will reach $142 billion – up from $2.8 billion in 2019, according to Juniper Research.

Here are some interesting stats from reporting by ServiceBell:

  • 40% of consumers would rather use a chatbot than talk with a human in a live chat
  • Over 50% of online consumers love the 24/7 accessibility chatbots offer
  • Nearly 90% of chatbot users view them as acceptable or extremely helpful
  • 1/3 of consumers think chatbots should be a staple for customer interaction with businesses
  • Chatbots help 55% of businesses generate high-quality leads

Messaging services are expected to surpass social networking sites in terms of the number of users. Questions raised by consumers are increasingly being handled with chatbots, with 90% of inquiries being answered successfully by a chatbot. This eliminates or greatly reduces the reliance on or need for telephone agents.

Starbucks is just one example of a business taking full advantage of chatbot technology via the MyBarista app. Customers can now order from the brand by auditory message through Amazon Alexa or messaging. They are then notified when their order is ready for pick-up and can pay for their order and tip their server all through the chatbot.

The growth in the chatbot digital market is a reflection of the growing need to offer24/7 customer service, an increasing consumer preference for self-service operations, and corporate desire to reduce operational costs by reassigning some tasks to chatbots. Chatbots developed for integration with messaging applications are projected to increase in usage as businesses continue to automate their sales and customer service. Chatbot technology enables businesses to deliver timely services at a reduced cost and is well worth investigating.