Were you unable to attend Transform 2022? Check out all of the summit sessions in our on-demand library now! Watch here.

Many technological trends come and go; the great ones last forever, and the not so great fade away, barely remembered as a fad. Not all technologies are purposeful, but when they are, they make our lives easier, neater, and smarter. This article presents an honest evaluation on conversational agents (bots) and where (we think) they stand in the future.

Whether you are a business owner or simply a customer, you must have encountered bots in your daily life. From online shopping (conversational commerce) to asking Siri a simple question, bots are everywhere. Some conquer the digital channels, while others falter hours after creation despite being backed up by lots of R&D. What separates a good bot from a horrible one, and what can you do to avoid fumbling into a bot nightmare?

Why chatbots?

The purpose of a chatbot is not solely to automate responses to users. It is also meant to reduce the amount of more expensive interactions that take place through other, less effective methods of engagement. For example, from a consumer perspective, would you rather order an Uber through multiple interactions on your mobile device or through one simple voice command? For most people, the answer is obvious.

Now, from a business perspective, would you rather your customers experience a difficult journey to your services or have a smooth experience and follow a simple, direct path? Once again, the answer is clear. If the advantages of using bots are that apparent, why are they the subject of such controversy?


MetaBeat 2022

MetaBeat will bring together thought leaders to give guidance on how metaverse technology will transform the way all industries communicate and do business on October 4 in San Francisco, CA.

Register Here

One of the reasons companies bring chatbots into their communications is to improve the level of customer support. Over 10,000 companies in the UK are developing chatbots for their websites to improve communications with consumers. Gartner predicts that intelligent automation will manage 85 percent of businesses’ customer relationships by 2020.

Consumers expect companies to deliver fast, accurate customer support; integrating a bot seems like a logical solution — until it goes wrong. From issues with limited vocabulary and response iterations to mismatched chatbot personalities or even poor integrations with an existing system, a badly conceived bot can turn the customer experience into a nightmare for both parties. The end result? Your solution turns into your problem.

So what makes chatbots so controversial?

Machine learning is of vital importance, although it is not a new concept. Using Facebook as an example, what appears on your news feed is determined from a deep-learning algorithm, which produces relevant content such as news but without “conversation” occurring. Investing in this technology saved Facebook $2 billion over the space of five years.

However, from a consumer perspective, the majority of users don’t know how the algorithm hides silently, constructing a profile through their online activities in order to enhance their experience, with no transparency as to what exactly is being used. There always seems to be a similar undertone in technological advancements — data privacy issues being obscured — and bots are no exception to such controversy.

Do people actually want to talk to chatbots?

We naturally assume that because a trend is taking over, all consumers actually desire it. So what happens is regardless of the type of consumer they serve, companies flood into investing in these new technologies because it falsely appears as a universal solution. What is forgotten are the important specifications of the customer profile: age, location, and general data that make them valuable to a business.

Millennials and Gen Z members, born into the digital era where on-demand services are driving business models across industries, serve as prime examples of generation being targeted by tech advancement. Kik reports that 60 percent of bot users are between 13 and 19 years old, with more females than males.

Generation X remains much harder to target, as its members are not digital natives. They are slower to adopt technological trends such as online shopping, social media, and augmented reality. It is highly likely chatbots will have limited success in this generation at the beginning, so expect a slow adoption process. However, history tells us that millennials have played a primary role in the process of other generations adopting new technologies in a somewhat trial fashion; until then, trust will have to be built and nurtured.

The forgotten art of traditional marketing

As previously mentioned, the purpose of a chatbot is to serve customers, make them feel pleased with the service or company, and help them enjoy their experience. It is important for the user to remember, though, that they are only communicating with an unsympathetic piece of coding rather than an emotional human being.

Uber, the tech giant, has integrated a bot into Google Maps. This bot understands where you want to travel and displays a ride option without you even having to download the app. It has also integrated the bot into social media via FB Messenger. Talk about a new client on-boarding strategy. Basically, it’s hard to evade Uber’s grasp no matter where you are. That is a bot example worth following.

Siraj Salim, our CTO at Ampersand + Ampersand, says “bots will certainly excel in catering to the isolated experiences rather than the holistic ones. Industries like CPGs will be able to use them for knowledge based related queries, healthcare will be able to use them for administrative tasks (see our own ProjectNIMA). As the technology stands today, none of the industries will be able to use bots for end to end customer support (e.g. in CPGs) or to even deliver a basic end to end care package in healthcare. Having said that, bots are proving to be an innovative technology / method for lighter activities like mining and delivering knowledge based information, marketing or even gamification in products. A great deal of behavioral change is needed before we are comfortable to coexist with bots.”

Conversational agents aren’t universally beneficial. The key to getting the most out of them is to find out how they can be used and what services they can provide across different industries.

VentureBeat's mission is to be a digital town square for technical decision-makers to gain knowledge about transformative enterprise technology and transact. Discover our Briefings.