Chatbots: Approaching 60 Sure Looks Good on You

Chatbots have come a long way in becoming more intuitive and useful, thanks to some of these technologies and best practices to draw from.

Carlos Meléndez, Co-Founder and VP of Operations, Wovenware

November 1, 2021

5 Min Read
sdecoret via Adobe Stock

Since chatbots entered the scene with MIT’s introduction of ELIZA in the mid-60s, their purpose has been more or less the same -- to enable effective communication by mimicking human conversation. As the technology advanced over the years, the cloud generated a whole new level of possibilities, ushering in an easier pathway to national language processing (NLP), AI, analytics and more. Yet, as chatbot capabilities increase, so too do user expectations. Consumer-facing industries have been dependent on chatbots to address customer needs, and we can expect chatbots to only get better with age.

In its beginning, chatbots were rudimentary, and could respond to a simple decision-tree of pre-programmed answers to questions, making it obvious that you were not communicating with a human. There were many growing pains and customer frustrations along the way as chatbots struggled to understand people and respond appropriately. Yet, chatbots have come a long way in becoming more intuitive, thanks to some of these technologies:

Cloud-based technology. Because of flexible and configurable cloud technology, organizations of all sizes in industries as diverse as healthcare and retail, have been able to offer voice-based and web-based chatbots for customer service as well as marketing, sales, HR, supply chain and other functions. Cloud-based technology enables chatbots to integrate with other systems, such as CRM and order systems, so they can access the information they need to answer customer questions quickly and accurately. These chatbots facilitate self-service, allowing customers to find the information they need 24/7 without involving humans, alleviating the administrative burden and cost of large call centers.

Additionally, by combining chatbots with cloud-based PBX call waiting, companies can manage an increasing volume of incoming calls during peak times. The phone lines at one burger shop, for example, never stopped ringing during the pandemic due to the increased demand for take-out food. With chatbot technology, it was able to handle the increased business and take the orders or route the calls accordingly, depending on customers’ needs.

Natural Language Processing. Natural Language Processing (NLP) has contributed greatly to the proliferation of chatbots. Built upon machine learning, NLP programs are enabling conversational AI, and better communication between companies and their customers. In addition to creating a more conversational experience, NLP reduces the frustration of miscommunication and enables customers to avoid the huge vortex of phone menu options. Technology innovations in NLP are also continually improving machine-to-human communication, better understanding accents, slang, idioms, dialects, and even different languages.

Artificial intelligence and analytics. With the advent of AI, chatbots are becoming “smarter,” by not only understanding what people are saying, but also the emotion behind it. For example, by detecting the increased volume and changing tone of a customer’s speech, they can detect anger and frustration, and respond more effectively, such as by transferring an angry customer to a supervisor.

Analytics are being used in a similar way to better understand and respond to customers. They’re predicting the likelihood of customer churn based on previous interactions and company-wide statistics and helping chatbots respond accordingly. If the software identifies the possibility of churn, the chatbot might offer a promotional item or service or transfer the call to a specialist who can better service the call.

Creating the Most Effective Chatbots

As organizations become more dependent on chatbots to interact with their customers on their behalf, their use cases are becoming increasingly more creative. In healthcare, for example, chatbots are being used to alleviate administrative work by scheduling appointments, addressing insurance and COVID-19 questions, collecting relevant information and more.

As companies rely more and more on chatbots as the face and voice of their companies, how can they ensure they are providing the most intuitive, engaging experience for customers? Here are six best practices to consider:

  1. Understand your customer. As much as possible, try to know who your customers are, what type of information they want and how they want to receive it. Meet them where they are. For example, if they prefer to communicate on Facebook or WhatsApp, make sure you have chatbot solutions for them there.

  2. Let them know that you understand them. Using AI and analytics, you can hyper personalize the customer experience, so they are aware that you know them and are responding to their needs.

  3. Ensure privacy and security. Given the prevalence of fraud, it’s imperative that chatbots ensure privacy and security and verify that they are speaking with the right person. Privacy is particularly critical in industries such as healthcare, which must comply with HIPAA.

  4. Solve problem quickly and in the best way possible. Don’t be content to just service customers, but continually improve the capabilities of your chatbot to delight them. Strive for every customer interaction, whether it be through phone calls with service reps or voice- or web-based chatbots, to result in an exceptional experience.

  5. Solicit feedback. Build in a feedback loop, requesting customers’ comments on their experiences so you can identify any issues and fix them promptly.

  6. Monitor chatbots for continuous improvement. Establish KPIs measuring performance metrics which should be continually monitored by supervisors who can use the information to change actions, or fine-tune algorithms for continuous improvement.

Chatbots should reflect a company’s brand and be imbued with a personality that reinforces that brand, such as a sense of humor or empathy. These personal attributes make them seem more human, enabling your customers to emotionally connect with them and engage more fully.

With the need for 24/7 customer response, huge, generic call centers are no longer practical and will soon become a thing of the past. Thankfully, chatbots can fulfill this need and their usage will continue to grow.

We can expect to see new, evolving and more sophisticated chatbot applications that instead of being poor substitutes for people, will become preferred associates and ambassadors of the brand – whether it be retail, banking, insurance, or other industries.

As chatbots round the corner to 60, they’re only starting to hit their prime and the best is yet to come.

About the Author(s)

Carlos Meléndez

Co-Founder and VP of Operations, Wovenware

Carlos Meléndez, is co-founder and VP of Operations of Wovenware, a San Juan-based provider of custom software engineering and AI services, and an AI center of excellence for its parent company, Maxar Technologies.  Prior to cofounding Wovenware, Carlos was a senior software engineer with several start-up software firms and held strategic consulting positions with global consulting firm, Accenture.  

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