Chatbots are sprouting up everywhere, in every industry. Companies with chatbots range from CNN, whose news bot serves requests for news in particular industries, to Marriott International, whose chatbot helps Marriott Rewards members research and book rooms in more than 4,700 hotels.

Because big brands are making waves in the chatbot world, and companies of all sizes are dipping their toes in, Grand View Research expects the global chatbot market to reach $1.23 billion by 2025 — a compounded annual growth rate of 24.3 percent.

What Is a Chatbot?

A chatbot is a service application that uses a conversational interface like Facebook Messenger, Whatsapp or Slack to “speak” with customers and prospects — although many brands are now also hosting their chatbots on their own websites and apps in place of traditional live chat interfaces.

Simple chatbots are built to respond to specific questions with specific answers, helping lead customers down predefined paths. That might include answering a customer’s question regarding store opening times or providing the name of the nearest train station. The answers will only be triggered if users ask specific questions that the chatbot can recognize.

Chatbots that leverage artificial intelligence (AI) and machine learning (ML) — the type preferred by leading brands — deliver a higher quality of conversation that increasingly resembles real human communication. Compared with simple chatbots, they are more flexible, better at solving problems, more conversational and usually a little more entertaining. They learn from every conversation they have, which helps them adapt to various questions, common typos and even off-the-cuff chatting.

Here are some of the benefits of chatbots:

  • They are capable of handling consumer interactions around the clock, across multiple channels simultaneously, without the need for human support personnel.
  • They can enhance existing personalized customer journeys with information, sales and entertainment.
  • With a chatbot, there is no chance of human error outside of the code base.
  • They offer companies a chance to show that they are innovative, and perhaps differentiate themselves from competitors

Should You Build a Chatbot?

Consumers are getting more comfortable with chatbots, and the benefits of chatbots to businesses are clear. But unless your company is being crippled by customer support costs, investing in a chatbot is still very much a luxury rather than a necessity right now.

While there is plenty of guidance on how to build a chatbot — the real question is, should you build a chatbot? Putting aside cases where customer support overhead costs are forcing companies to innovate, are chatbots necessary? For answers, we reached out to some chatbot experts to evaluate the situation, and they offered some insights that brands should consider before adopting chatbots. Among other things, they said a lot of work goes into building and maintaining chatbots, and deploying a chatbot raises security concerns and requires changes in workflows.

Martim Schnack, VP of product at New York-based Rare Carat, an online jeweler that built the world’s first jewelery chatbot, told CMSWire that building a chatbot is a bigger commitment than you might initially think.

“Our biggest lesson was that a bot is never done. Rather, it’s a constant effort to test and improve, with the elusive goal of feeling ‘real.’ It’s a task that will never finish,” Schnack said.

Learning Opportunities

Outside of the time, effort and money required to maintain a chatbot, brands also need to be aware of the security challenges that arise with chatbot adoption.

“Developers need to keep in mind the security aspect of building a chatbot, particularly when sensitive data — such as [personal information] or transactional data — is being communicated,” David Horton, head of innovation at New York-based technology consulting firm Synechron, told CMSWire. Horton’s advice is timely, considering the fact that developers and marketers alike need to be aware of how the EU’s pending General Data Protection Regulation (GDPR) will impact them.

Finally, we spoke with Brandon Gredler, director of innovation at Austin, Texas-based innovation agency T3 for the final say on how brands should approach chatbots.

“Treat chatbots like a [totally] new discipline, ” he said. “Not only do teams and workflows shift, but you must also rethink KPIs. You’re now monitoring for things like fallback rates and rates of confusion.”

For example, Gredler added, “it’s typically a good thing if customers spend an extended amount of time on your site. However, if they spend a long time conversing with your bot, it may be a sign that your conversational flow isn’t clear or concise enough. Taking this into consideration, marketers and brand owners must abandon traditional design principles and rethink their performance indicators.”

In other words, brands need to consider that a chatbot brings about a new and needy dimension to their customer experience. A dimension that requires constant tweaking, pinpoint security protocols and a brand new way of evaluating progress and performance.