Why You Need A Chatbot For Your Business – A Comprehensive Guide

Why You Need A Chatbot For Your Business – A Comprehensive Guide

The topic of Chatbots is perhaps one of my favourite topics in Digital Marketing when you talk about growth marketing. And no, it’s not because I am anti humans and want the whole world to chat with bots. In fact, I love humans just as much as you do, and I think their lives will be much improved especially when it comes to dealing with businesses when chatbots are more adopted.

The number one reason I am excited about chatbots is the fundamental value it brings to both consumers and businesses. But businesses are are yet to fully grasp its power and potential. At least the majority. With that said, grab your popcorn or whatever munchies of your choice as this is about to go down!


1. History of chatbots

Before we embark on all the bells and whistles of this powerful technology, let’s take a minute to appreciate how far it has come along. The majority of sources claim that the birth of chatbots dates back to 1966 when Joseph Weizenbaum, a computer scientist began working on a few chatbots and some of his work such as keywords and preprogrammed responses, are used today in many chatbots. Between then and 2010 when Siri was introduced to the world, some discoveries and improvements were made but that’s for another day. But, here is a nice visual of the history of chatbots.

In 2010, the world witnessed the first arguably worthy chatbot technology that can entertain us, humans, at least for a few seconds and perhaps help us in our day to day activities. Two years later, Google introduced Google Now and three years later, Alexa and Cortana were born. In 2016, Messenger Chatbots which we cover in-depth in this guide were very much the talk of the town. We never looked back since then.

2. The state of chatbots today

When I first came across the concept of chatbots a few years ago, I couldn’t help myself but feel excited. Yet I was a little bit let down by the not so, at the time, well-developed user experience. And let’s be honest, even today we are not there yet but, we have made significant improvements that have allowed chatbots to become an industry in its own right with a ton of providers and tech companies working relentlessly to take us to the next level.

For marketers like myself, we are not standing on the sideline to just cheer you developers, scientists and business analysts. We are running with you and telling the world about this, so the masses can adopt chatbots even quicker.

Most business leaders I speak to, tell me how important they think having a chatbot is for them. And that’s great. But their idea of why they need a chatbot tells me they aren’t seeing the big picture yet. They see chatbots as a tool to help save money on resources like sales, pre-sales and support. And there is nothing wrong with that. While this could be in fact, a good and a viable reason to adopt the technology, the much bigger upside of having a chatbot lies in the opportunity of exponential sales and revenue growth.

Here is why! If let’s say …

Scenario A: You have to hire additional staff at higher rates for a night shift to support your customers and you use a support chatbot, you are saving a bit of money and arguably on a big scale, you are saving a substantial amount of money.

Scenario B: You use chatbots to tap into higher rates of sales conversions, revenue and lower your cost of acquisition through certain tactics and strategies covered later in this guide, you are essentially putting your business growth on steroids.

In both scenarios, you are saving money but in scenario B, you are multiplying your returns and growth. Cost-saving strategies are not all made equal. Saving money on the front-end means your growth is going to accelerate at a much faster pace than you are today. It’s the dream, isn’t it?

3. A brief look at the technology behind chatbots

Over the last few years, we saw significant improvements in AI and machine learning which made chatbots are reality. But there are many facets to the technology. If you look at Siri or Alexa, there is a collective of technologies that they embody to actually be able to converse with you.

First, you need to be able to convert humans’ speech-to-text and then, you have to be able to speak it back to a human which is called text-to-speech. This is part of the NLP (Natural language processing) technology which has made some leaps and bounds so that when a chatbot talks to us, it doesn’t so much like a robot and emulate the human natural conversational voice as much as possible.

Then, you have the other parts of NLP which are natural language understanding and natural language generation. These are what enable chatbots to understand our conversations and questions and be able to converse back. This is done through advanced machine code that is able to break down, segment, compare, and run an enormous amount of computations to process and generate language.

Last but not least, you have machine learning and deep learning which are sophisticated models and networks of models utilising advanced statistical models amongst other techniques that aim to learn and apply new information to utilise over time. As you can see, there is a lot going on behind a powerful chatbot.

4. Levels of Chatbots

One of the interesting things I have come to realise when I started diving into the world of chatbots, is the wide range of variance in capabilities out there. From very simple chatbots that barely greet you and wish you a good day, to chatbots that can pretty much engage in a sophisticated and intellectual conversations, there is something for everyone.

As a business owner or a leader who wants to leverage chatbots to improve the performance of your business, the first thing you need to think about is customer engagement and experience. Thoughtful & purposeful design is the only way you can create a competitive edge in the digital environment. By improving your customer experience, you increase customer engagement alongside other performance metrics which only mean that you are further bridging the gap between your business and your customers – all at a very reasonable cost. Seems like a no-brainer!


4.1 Chatbots for lead generation (CRO tool)

There are two ways to improve ROI and the effectiveness of your Natural language processing. The first is through optimisations on the front-end of your PPC campaign or any traffic generation activities like SEO and content marketing. The front-end optimisations are things you could do to get more traffic for less cost. In Google Ads, for example, adjusting your bidding strategies or further segmenting your ad groups or adding negative keywords; are all examples of front-end optimisations.

The back-end optimisations are what is normally called Conversion rate optimisation (CRO) which is basically increasing the chances of the traffic converting into leads and or customers. An example of a CRO tool is email capture pop-up windows which allow you to collect more information and turn your traffic into prospects.

So, what does that have to do with chatbots?

A lead generation chatbot is perhaps one of the most recent and innovative tools in the CRO world. The reason it is so effective is that you are able to engage your traffic and personalise their experience and provide information at their fingertips. Most people don’t have time to keep looking for the information they are after. If you can answer a question or two through a chatbot, you would save them time and effort aka give them value and a great experience. At the same time, you as a business have learned more about your prospects and collected handy information that you can pass to your sales team. Talk about the benefits of marketing automation and sales enablement, right?!?

4.2 Chatbots for customer services

You also have chatbots that are designed to complement and perhaps take over (in the near future) the entire customer support processes. Both an upside and downside to this is that bots, up until this point, lack the level of emotional sophistications humans have which means that just as much as they are not going to be ruined by a rude customer and as a result be less productive, they may not have the empathy that humans have that get customer service personnel to go the extra mile to help their customers.

Whichever way, chatbots will still bring scalability and cost reduction especially on operating costs which will help businesses scale and help more customers at will.

An example of a support chatbot is what Zendesk calls the Answer Bot which works alongside the customer support team to answer customers instantly and help them find the information they are looking for.

4.3 Chatbots as a sales specialist

How many times did you go to a store to buy something and wanted to speak to a specialist about the product you were looking for? How many times did you end up buying what you intended to buy when the sales rep helped you find all the answers you were looking for? You have most likely left if the sales rep didn’t engage you or gave you the answers. Selling is more science than art – many would agree. In the case of a chatbot, it’s also the convenience and time-saving. You could have found the information yourself about this new phone you wanted to buy, but you chose to speak to someone instead to get information quicker.

Chatbots trained on products and services will be able to help customers online to find the right product for them with ease. This will further boost the e-commerce industry as arguably, people still go to stores today to speak to specialists. This will likely change when sales specialist finds their way in.

4.4 So, how do I get started on building a chatbot?

Stay tuned! In the next few weeks, we will be releasing guides on how to get started and giving you recommendations on which chatbots to use and sharing some case studies on brands that are killing it with chatbots.

In the meantime, if you have any questions or comments, get in touch by leaving us a comment or an enquiry.