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February 15, 2018
The Rise of Chatbots (Or, Beware the Robot Apocalypse)
Customer interaction and customer service are the critical drivers of engagement, repeat business and brand loyalty. Serving Americans’ need for instant information and instant gratification is a complex, costly, technically challenging and frustrating quest for most brands.
The history of customer engagement and customer service is a continuing saga of trying to find the optimal cost-effective combination of human connections, specific information and enabling technology. Almost everything, from in-store face-to-face interactions, to email and phone centers, live chat, apps, text messaging, social media and website functionality, has been tried in the search for cost-efficient, responsive, respectful, high quality information-rich customer service.
Enter chatbots: software configured, programmed and embedded in messenger apps, websites and SMS to replicate or simulate human conversation. A chabot maintains a conversation with a user in natural language, understands the intent of the user, and responds based on business rules, stored responses or data from the business. Powered by advances in artificial intelligence (AI), Natural Language Processing (NLP) and machine learning (ML), these robots connect to Internet and mobile structures using APIs which give them immediacy and regular updates.
Principally deployed on SMS and messenger platforms, like Facebook Messenger, WeChat, What’s App, Telegram or Slack platforms that have become more popular than SMS or social media, they are on-call 24/7/365 and generally can anticipate and respond to frequently asked questions, routine inquiries, common complaints and basic transactions like sales, returns, reservations and subscriptions.
In many cases, they also can connect a person to a human customer service agent. The 2018 State of Chabots Report, sponsored by Drift, Survey Monkey and Salesforce, found that 15% of customer service interactions are currently handled by bots, roughly one quarter the number handled by phone and email. In the near term, APIs will enable broader connections to mobile, social and web platforms so much so that many are predicting widespread penetration and use in the next 48 months.
Uptake for chatbots has been strong. The outlook borders on hype. Business Insider estimates that 67% of consumers worldwide have used a chatbot for customer service in the last year and that by 2020 over 80% of businesses will have some sort of chabot in action. Grandview Research reported that 45% of end users in their survey preferred a chatbot for customer service while 57% of respondents to a Hubspot survey are interested in chatbots for their “instantaneity”. One-third of survey respondents, in a Pointsource study, preferred chatbots over humans. One in five respondents to ubisend, see chatbots as the easiest way to contact a business. Gartner predicts that by 2020 the average person will have more conversations with chatbots than with their spouse, even though PwC found that 27% of those surveyed couldn’t tell the difference between a human and a chatbot conversation.
Market observers are bullish. Juniper Research thinks chatbots will save companies $8 billion by 2022. Foye pegs savings to banks at between 50 and 70 cents per transaction. Gartner predicts that 85% of customer service will be handled by chatbots by 2020. Market and Market charts chatbot compound growth rate at 35.2% through 2021. A Mindbrowser study found that 96% of businesses think chatbots are here to stay.
Aside from the benefits to brands, the primary payoff for consumers is access and accuracy of basic information, swift interactions in accent-less neutral friendly tones not to mention the momentary and the lingering pleasure that comes from a speedy positive interaction. According to Stanford professor James Landay, speech recognition is three times faster than typing into a cell phone, which bodes well for bots versus SMS or Twitter.
A clear division and redeployment of labor is in the offing. Fewer humans will be answering phones or responding to email, text or web-based messaging. Complex or nuanced conversations must still be handled by humans. But for the majority of needs, bots do the job. Bots will continuously improve as speech recognition and voice activation improves and as more and more issues, questions and complaints are logged, responded to and recorded.
Sharing our lives and our needs for information and customer service with robots is on the horizon. But beware the robot apocalypse.  

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Danny Flamberg, EVP Managing Director of Digital Strategy and CRM at Publicis based in New York, has been building brands and building businesses for more than 30 years.Prior to joining Publicis, he led a successful global consulting group called Booster Rocket, as Managing Partner. Before becoming a consultant, he was Vice President of Global Marketing at SAP, SVP and Managing Director at Digitas in New York and Europe and President of Relationship Marketing at Amiratti Puris Lintas and Lowe Worldwide.
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