The real reason why chatbots will succeed in business

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In a line, chatbots are more profitable than self service and that's why businesses will adopt them. Last year and the beginning of this year we have seen a lot of companies embrace machine learning and use chatbots as a new interface for users.


What is a chatbot

If you haven't yet heard of or used a chatbot (try Slack for a few of them) it is basically a service (or program) that will take an input from a user like a chat, tweet or message and render a service. Some examples of bots are the ones in Slack, IFTTT, Skype and so on. A lot of messaging platforms have introduced them as a way to enhance the value of the platform because now with a simple line of text you can get things done in addition to just chatting with people.

What's in it for users

Well the obvious benefit to users is, convenience. They don't have to spend time navigating websites and reading all the options before they find the cheapest airline ticket, or best hotel room and so on. With a simple chat you're able to now order for those services.

Mobile and wearable enable faster access

Add to this the small mobile screens with high speed internet, wearable that you can use, you now have a bigger need and ability to trigger workflows and services quickly. You don't  have to wait to be in front of a computer (or rather a keyboard :P)

Isn't this bad for business

Websites relied on pageviews for ad revenue and on user searches for revenue. There was a lot of opportunity to cross-sell and up-sell if users came to a page. Now, if users are just typing what they want in a single line with no option to show them new services or ads, why will businesses embrace the chatbots? Well, the reason is because chatbots can be more profitable than self service.

So .. why will it succeed for business

Users like to have a simple way to do things because it isn't their profession to use your product or their passion to use your product (well most users anyway). They use your product as a means to get something done. So the less they have to do, the better they like that. When wesbites came up and became popular, they gave something to the customer that they never had .. the ability to self serve at anytime from anywhere. The customer didn't have to drive to an agent or office or make a phone call during business hours or only on weekdays. It opened up a lot of flexibility to get the same service at any time. 

Businesses will start to adopt chatbots as helpful agents to optimize their service for you

But with that came the burden of reading and choosing on the customer. More and more, websites and services have complex options and conditions on their website so a customer really has to invest a lot of time before they can make a decision. So now a chatbot can take away that from a customer by automatically picking the best option. This makes the chatbot a sort of an agent. The chatbot can suggest more profitable plans to users or charge a premium and I would bet that users will prefer that instead of having to do all the research and selection themselves on a website.

Make it easy to stay with the service

Also, it makes it easy for the user to stay on a particular service if they just need to chat a line or two to make some changes or to enable or disable some services since the big configuration is already done as a one time setup. Most users will just stick with the simple service instead of having to switch and research the best alternative.

The customer will also win .. eventually

Over time, I think as third party chat bots become popular there will be a case for a win-win for businesses and customers. Chatbots can truly act as agents that work on behalf of the customer picking the service provider that is the best option for the customer and not generating more profits, or cross-selling new services. Imagine a third-party chatbot telling you to stop subscription because you just don't use it enough to justify the cost :)
Anyway, I think that is still some time away. For now, I think businesses that embrace chatbots will be able to offer a new easy way to use their services and customers will be fine with paying a premium for that. They'll likely see better retention rates too. This would be something they'll want to do.