Tag Archives: chatbots

Marketing Automation is enabled by Artificial Intelligence, Big Data and Chatbots

“Marketing automation is growing – sizzling fast, announced Michael Jans recently in his blog AgencyRevolution.com. In fact, there are eleven times more B-B companies using marketing automation than were in 2011 (VBInsight). Most visible marketing automation for retail customers are chatbots.

Advancements in artificial intelligence (AI), coupled with the proliferation of messaging apps, are fuelling the development of chatbots.  Artificially intelligent chatbots or conversational agents can be used to automate the interaction between a company and customer.

What is Marketing Automation?

Marketing automation, in general, complements interactive and direct marketing with the help of automation and further on in CRM and email marketing 4. The goal of marketing automation is to target the right customer with the right content 1. To achieve this goal, the optimization of customer data – e.g. name, contact information, transactional data is critical. Consequently customers can be targeted with the right message. Therefore marketing automation allows marketers to respond instantly to identified opportunities in real-time even outside the marketing plan.

This use of marketing intelligence provides valuable management insights to markets, customers and campaigns and leads to enhanced efficiency. Also, this same use of data enables customers to receive personalized, relevant messages and offers at appropriate times. As result of this, customer experience is improved significantly. Indeed, Sarah Burke of Spokal concurs: “Marketing automation is a super effective tool when it’s used to supplement our marketing efforts in an attempt to make the lives of our customers even better”.

However, marketing automation is facilitated by Artificial Intelligence.

Artificial Intelligence

Techopedia defines Artificial intelligence (AI) as an area of computer science that emphasizes the creation of intelligent machines that work and reacts like humans. AI is becoming part of our lives ever more. Today we can ask a computer questions, sit back while semi-autonomous cars negotiate traffic, and use smartphones to translate speech or printed text across most languages. For AI to work properly, the machines or robots needed to be ‘learned’.

Machine learning is the process that offers the data necessary for a machine to learn and adapt when exposed to new data. Nello Cristianini suggests we should think of it as training a machine: “It depends on the other two methods by reading mined data, creating a new algorithm through AI, and then updating current algorithms accordingly to “learn” a new task.”

For most retailers and marketers in the digital economy, the intelligent ‘machines’ of choice are chatbots. However, chatbots are dependent on a host of interconnected and emerging technologies, many of which rely on machine learning and require massive amounts of data 3.

The use of data to enable Marketing Automation

Douw G Steyn, owner of the Bricks2Clicks (this blog) had this to say about Big Data: “One of the fall outs of the digitization of business is the massive amount of data that are everywhere. Every time a customer makes a purchase online or registers online, data is generated. The data can potentially tell you almost everything about consumers.”

Randy Bean in MITSloan commented on the use of Big Data with AI: “The impact of Big Data goes well beyond simple data and analytics. Big Data and AI in combination are providing a powerful foundation for a rapidly descending wave of heightened innovation and business disruption. While the first wave of Big Data was about speed and flexibility, it appears that the next wave of big data will be all about leveraging the power of AI and machine learning to deliver business value at scale.“

Data mining can find the answers to questions that you hadn’t thought to ask yet. What are the patterns? Which statistics are the most surprising? What is the correlation between A and B? (upfrontanalytics.com).

“Intelligent machines need to collect data – often personal data – in order to work. This simple fact potentially turns them into surveillance devices: they know our location, our browsing history and our social networks. Can we decide who has access, what use can be made of the data, or whether the data gets deleted for ever? If the answer is no, then we don’t have control” says Nello Cristianini in the New Scientist.

Chatbots as interactive conversational platforms

By definition, a chatbot is a computer program that responds to natural language text and/or to voice inputs in a human like manner 2. Chatbots can run on local computers and phones, though most of the time they are accessed through the internet (Chatbots.org). Moreover, the effectiveness of Chatbots is depended on the quality of the source data and how well they are programmed. They are after all robots! And robots need to be learned…

Once a customer starts to interact with a chatbot, the chatbot’s software identifies the customer. The chatbot will then have the demographic information of the customer, her purchasing history – such as what products she’d purchased most frequently, what time of the year she does most of her shopping, and when last did she purchased? The scope and depth of information can be never-ending.

The  of a typical conversation between a chatbot and a retail client (image: Chatbotsnewsdaily)

Eric Samson writing in Entrepreneur.com mentioned 7 benefits using chatbots as marketing tools

  1. Customer service – by providing the chatbot option for customers, you will lower the stress of dealing with customer service and increase customer satisfaction with your brand.
  2. Consumer analysis – chatbots can play a large role analysing customer data, and optimizing sales and marketing strategies in light of this analysis.
  3. Personalized ads – another chatbot strategy that’s proven to be successful is the creation of personalized ads.
  4. Proactive customer interaction – chatbots are ideal for “reach out” initiatives. To do this, the accompanying action should be something small, like inquiring whether or not the customer needs assistance.
  5. Site feedback – chatbots are great for reaching out to customers via simple questions and the gathering of feedback. This strategy is useful, especially for website optimization.
  6. Lead-nurturing – using the information that chatbots collect about a customer, you can create customized messaging that guides the consumer along his or her “buyer’s journey,” ensuring movement in the right direction that achieves higher conversion rates.
  7. Maintain a presence on a messenger act via a chatbot – by maintaining a presence on a messenger app via a chatbot, you can save money while simultaneously remaining available for your customers 24 hours a day.

According to Chatbot Conference, the 3 main disadvantages of chatbots are:

  1. Too many functions – most of developers strive to create a universal chatbot that will become a fully-fledged assistant to user. But in practice functional bots turn out not to cope with the majority of queries.
  2. Primitive algorithms – AI chatbots are now considered the best as they can respond depending on the situation and context. However, complex algorithms is required for this purpose. Meanwhile, only IT giants and few developers possess such powerful technological base.
  3. Complex interface – talking to a bot implies talking in a chat, meaning that a user will have to write a lot. And in case a bot cannot understand the user’s request, he will have to write even more. It takes time to find out which commands a bot can respond to correctly, and which questions are better to avoid. Thus, talking to a chatbot does not save time in the majority of cases.

Concluding

With Big Data, Artificial Intelligence and Chatbots there aren’t a clear ‘pecking order’. The Upfront Analytics Team explain it as such: “Data mining, artificial intelligence, and machine learning are so intertwined that it’s difficult to establish a ranking or hierarchy between the three. Instead, they’re involved in symbiotic relationships by which a combination of methods can be used to produce more accurate results.”

The speed at which technology is moving forward – “software is developing software” and “machines are building machines” an affordable, practical usable chatbot for customer care and marketing is not far away…

Read also:

  1. Predictive Analytics helps Retailers to make sense of Big Data
  2. Chatbots in Retailing – a Fact or a Fad?

Notes

1 Mattila, J. 2016. Customer experience management in digital channels with marketing automation, Master Thesis, University of Oulu, Department of Information Processing Science.

2 D’Haro, L.F. and Lue, L. 2016. An Online Platform for Crowd-sourcing Data from Interactions with Chatbots. Proceedings of WOCHAT, IVA.

3 Etlinger, S. 2017. The conversational business: How chatbots will reshape digital experiences, Altimeter.

4 Sandell, N. 2016. Marketing automation supporting sales, Master’s Thesis, University of Jyväskylä.

Image

Pixabay

 

Chatbots in Retailing – a Fact or a Fad?

Retailers are frequently yelled at by frustrated customers, or, if things go well, they are commended. That’s part of the emotional exchange that comes with a retailer’s job description. However, chatbots may change all of that.

A chatbot is a computer program which conducts a conversation via auditory or textual methods. In other words, sales assistants in a number of retail businesses are now robots. To this end, bots can help retailers in many other ways.

“Chabots are seen as easy and fun ways to help customers achieve an outcome. You’ll encounter them on web sites, social media and even on your smartphone. Say hello to Siri, Allo and Alexa, to name a few”, writes Christine Crandell recently in Forbes.

Siri, Allo and Alexa are computer characters which, through natural language-style dialogs with humans, perform various tasks, such as answering questions, helping them to navigate websites. “They can either look like a human being, or a digital avatar, an animal, alien or may have an image that does not look like a living creature at all” according to ChatBots.org

Apart from retailers not having to face angry customers anymore, the bots allow Bricks and Clicks retailers to catch up on lost sleep. A chatbot is a handy aid for retailers with online customers when their bed time arrives.  “We’d all like to be all things to all customers, but even the most dogged marketer has to sleep sometime”, according to TargetMarketing magazine. The fiction of chatbots has now became a reality as many retailers has bought into the technology.

How chatbots can be used by retailers

Chatbots can be used in many ways by retailers. Nicki Baird (Forbes) suggests that chatbots can do everything – from interacting with customers about new products, to helping them to figure out the trading hours of your shop. Furthermore, leverage chatbots the ubiquity of messaging apps and allows retailers to conduct one-to-one conversations with customers in real-time. Besides, retailers have the opportunity to make money with chatbots.

Ross Simmonds (Crate, Hustle and Grind), identified seven ways retailers can make money with bots:

  1. Bots as a Services (BaaS) – help people and teams to be more productive. They can manage tasks or tackle communications challenges – by replicating business models already in use;
  2. Bots plus sponsored and native content – native or sponsored content is a model in which brands pay to have their content distributed by media companies directly into their channels;
  3. Bot leveraged affiliate marketing – for example: retailers can develop a bot that offers tips and tricks on how to stay healthy and use affiliate links to send people to fitness products that have affiliate links associated with them;
  4. Bots for research – there are bots that you can pay to do the research for you.
  5. Bots for lead generation – may act as a lead generator with an initial focus on content. Chatbots designed to deliver insights and information to users who are looking for advice or information can be lined up with products that the retailer offers;
  6. Pure retail sales bots – the user will make the purchase directly through a chat with the bot and it will act similar to a transaction from a typical website;
  7. Cost per conversation/task – as bots become more sophisticated, people may be willing to pay to have conversations with the bots that can help them with various challenges in life.

“Thanks to big data, artificial intelligence (AI) and predictive analytics, as well as the proliferation of messaging apps, retailers finally have the tools (including chatbots) to get the right messages to their customers”, suggests Craig Alberino in TotalRetail. However, the chatbot hype is not favored by everyone…

Consumers that use  chatbots can complete a purchase in a minute or two. Have a look at the video from Kore:

The future use of chatbots

Although the use of chatbots is getting much attention nowadays, not everyone is excited about it. Jon Evens writing last year in The Walrus reminded us of the “Eliza effect: “Humans unconsciously assume that software which communicates conversationally has much more intelligence and sophistication than is actually present.

Inevitably, the software eventually fails to match that assumption, disappointing and frustrating the user who unconsciously expected more.” Consequently, your frustrated customers may want to communicate (again) in person with you. Because the computer does not understands… Above all, what is good and bad about chatbots? Quora.com responded as follows:

The Good Things about Chatbots The Bad Things about Chatbots
1.       Chatbots are a good alternative for mobile apps 1.       Chatbots have a high error rate
2.       With bots, nothing new needs to be learnt 2.       Chatbots don’t put people first
3.       Bots are capable of providing a great user experience 3.       Bots are limited in their capabilities
4.       Chatbots as the factotum for all business needs 4.       Chatbots aren’t as intelligent as humans

Concluding

In summary, are chatbots the “silver bullets” that retailers can use to compete in a digitized retail environment? Or will it be another fad with demanding customers not getting assisted properly? I suppose we have to wait and see. However, Leo Sun (fool.com) recently asked: “Were the social network’s chatbot ambitions ahead of their time?”

Importantly, this is after Facebook is reportedly scaling back its chatbot efforts on Messenger after the programs failed to fulfill 70% of users’ requests. Consequently those requests couldn’t be handled without human agents, and bots built by outside developers “had issues” because the “technology to understand human requests wasn’t developed enough.”

Finally, perhaps Dale 1, (2016) sobering comment can be noted by all: “If we want to have better conversations with machines, we stand to benefit from having better conversations among ourselves.”

Additional reading:

  1. Artificial Intelligence – Digital Outcomes or Digital Disruptions for Retailers?

Note:

1 Dale, R. 2016. The return of the chatbots. Natural Language Engineering, 22(5):811-817.

Image and video:

  1. Pixabay
  2. Kore