Chatbots: An Overview and Analysis

Categories: Chatbots

We recently talked about the growth of chatbots and hope to explore this topic a little further by analyzing the current state of the market, understanding the opportunities and applications for our clients and partners, and also making prediction about where we think this technology is going.

NOTE: This is evergreen blog post. We will keep updating it and adding to it in weeks to come. So subscribe to updates if you want to follow the conversation.

Current State of the Market
Chatbots are here and they are probably here to stay. Think of the current state of the market as back in the days of the Apple Newton, before the Palm Pilot. The Apple Newton over promised and never delivered (1993).  The Palm Pilot under promised (no true handwriting recognition, you hand to learn to write in their language) but delivered (was actually useful) when in came out in 1997 and it create an appetite in all of us for the one product the truly delivered on the promise –  the Apple iPhone (2007). Unfortunately this all took about 14 years! Last week, Facebook announced the great chatbot revolution but many of the applications are of the Apple Newton variety, some have Palm Pilot potential, but if Moore's Law is correct, we should staring seeing compelling “conversational” application emerge in the next 12 to 18 months –  that's why the time to get started is now! Wait a while and it will be all over! Think of it as the first month of Apple's opening of the App Store –  it seemed like a lot of apps but boy, if you had only gotten in the ground floor!  The one thing Facebook has gotten right is these little bots will probably replace toll-free numbers and become a primary method of providing customer service!

Key Concepts
Here are some key concept to understand when it comes to chatbots:

It's Not Just Private –  Public vs Private Conversations
Don't assume that all conversations have to be private.  True, most chat conversations (text, messenger, IM) are private one-to-one conversations, but it is possible to carry on a conversation in the public square, using services like twitter. This creates an opportunity for creating viral and “drive-by marketing” online. Like someone shouting in the public square, soon people near by may start to listen.

It's Not All Artificial –  Artificial intelligence vs Human intervention
Think of chat as a channel, not necessarily just a bot. Most people assume it's all artificial intelligence, but it doesn't have to be and in fact it shouldn't always be. I suspect that human intervention will be part of most (good) solutions. Just like callers are given ability too talk to an operator, chatbots will be able to route users to human being when and if necessary.

It's Not Just Content – Content On Demand vs Conversational Commerce
I think the real opportunities for chatbot lie in generating commerce. True, they are good way of delivering content, but companies (and clients) will start paying attention when bots can engage in following revenue generating or cost cutting tasks:

  • Taking orders or booking appointments online (Revenue Generation –  Heavy lifting)
  • Delivering paid services or content via chat  (Revenue Generation –  Heavy lifting)
  • Product recommendation and curation (Revenue Generation –  Light Weight)
  • Inventory, store or branch lookup  (Revenue Generation –  Light Weight, Cost Cutting)
  • User Opt in-in to receive offers, coupons and updates (Marketing/Sales)
  • Custom service and support (Cost cutting)
  • Order status lookup (Cost cutting)

Applications By Action Type
As we mentioned, chatbot applications (including those on Facebook) are still in their infancy, but here are some of the emerging type of application interactions and activations current available:

Application by Functional Approach or Flow
Different chatbot application take different approaches when interacting with or educating users using the application. Here are some of those approaches:

  • Purchase First: assumes user wants to make a purchase
  • Subscribe First: assumes user wants to get and subscribe to news or content
  • Support First: assumes user is looking for support
    • None
  • Tutorial First: assumes that the first thing a user wants to do is get a tutorial of the application capablities

    • The Wall Street Journal

  • Gaming Format: allows user to participate in an (interactive) adventure game or story and allows thems to make step by step decisions

Chatbot Directories

Chatbot Best Practices
We have a separate post dedicating to maintaining a list of bot best practices, most of which have been generated from our on-going review of Facebook Chatbot applications.

 

 

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