How ChatBots Grow Brands and Improve Customer Retention

April 13, 2017 | Rob LaPointe

ChatBots received a lot of attention within the bubble of Silicon Valley and the Tech world, including on this very publication. But in the broader landscape of the US, only 78% of adults (i.e. those who hold the purse strings) know what a ChatBot is – or have even heard the phrase. While the chances are that they’ve interacted with a ChatBot, the term is generally unknown.

This lack of awareness around this innovative new tech is partly due to Facebook and their lackluster launch of ChatBots on Messenger. While they made a big fuss around it at first, the marketing push quickly fell off, causing a general lack of clarity around exactly what is a ChatBot. Still, the push behind ChatBots continue, and for good reason.

Bots truly do have a unique ability to help promote businesses and help grow a marketing campaign to epic levels. A few key examples include Lionsgate usage of a ChatBot to help grow their upcoming Power Rangers film, and the Dominos Pizza Bot. More than that, Facebook (despite tis dropping the marketing ball) is committed to pushing ChatBots on their Messenger platform; a platform that has over 1 billion users.

Generally speaking, ChatBots can be divided into 3 categories in ascending order of intelligence:

1. Human Supported

This is a ChatBot that can only respond if real live human being is on the other end. This can be a tricky deal and is often the least successful and most expensive long term.

2. Decision Tree

Creating a limited tree that can help guide a chatbot through a conversation with a user. Limited Chatbots based off Decision Trees tend to not be as accurate, but ones that lean closer to AI are quite popular.

3. Machine Learning

Machine Learning and AI are also popular buzzwords these days and for good reason. ChatBots that fall into this category use Natural Language Processes to understand, interact and even learn from conversations. AIs tend to be very successful, but do cost more money and time.

The ChatBot Market

There are some other big movements in the ChatBot sector that indicate this market may be ready to really take off. The biggest and most notable is the inclusion of Payments for Messenger’s ChatBots. Facebook’s largest ChatBot rival is Kik, who has possibly over 300 million users (they do not disclose actual active user data).

With over 20,000 Bots hosted on their platform, Kik represents a pretty sizeable player in this area; they are in fact one of the rare tech Unicorns (it has a valuation over over $1 billion US). Since the launch of the platform in 2015, Kik has probably had over 2 billion messages exchanged and has received the attention of notable tech giants like the Chinese investment firm Tencent.

That being said, Kik has suffered from the same lack of awareness that Messenger has faced, potentially undergoing issues with growing its possible market. What’s needed from this new industry is a slight pivot; currently most Bots developers utilize their Bots as a replacement for an app. But a ChatBot’s true potential is its ability to connect technological innovations with offline businesses.

First, ChatBots have barely been around for a year. They started off rough, with a popular example being Poncho, the WeatherBot. Poncho was, to be brutally honest, pretty terrible when it first launched. That being said, it rapidly improved (faster than even most apps have) and now has an engagement comparable to an app (about 60% within the first week). Again, they gained numbers comparable to an app – in about a year.

Secondly, Facebook has added the ability for developers to accept payments from Users. Kik appears to be following closely behind, nipping closely at the Social Media giant’s heels. We’ve seen what happens to a tech market when the payment capabilities are added – when Apple added allowed it for their apps.

What happened when they did? The entire profitable app industry was born. In other words, we are looking at the ground floor of a burgeoning market, one that could be worth potential billions an revolutionize the world of business. Furthermore, this isn’t relegated to the world of online industry: the ability for ChatBots to accept payments also have the potential to connect offline retailers to the world of technological innovation.

Kik seems to be following in the steps of WeChat, which also uses a ChatBot. With a WeChat Bot, Users can be at a restaurant and view the restaurant’s menu. They can order the food they want; and, of course, users can pay through the ChatBot. Bots represent a fundamental change in how people use tech to interact with the offline world, as well as the online.

Whether you’re tech savvy or tech illiterate, a hatBot may very well be the tool your business needs to reach unparalleled heights. Don’t have a business? Maybe it’s time to open up your own ChatBot Store and Platform.

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