Use of chatbot as a marketing tool is growing

The use of chatbots in customer relationship management is growing rapidly, and many marketers plan to launch a branded chatbot in 2017.

Chatbots are proliferating on messaging apps like Facebook Messenger, Kik, and Line. Less than a year after major internet players launched chatbot platforms, companies are already showing strong interest.

Chatbots in healthcare & banking

According to Juniper Research, Chatbots will assist healthcare and banking sectors to achieve cost savings of over $8 billion per annum by 2022 from $20 million this year. These sectors can make cost savings because they van reduces enquiry resolution times.

Healthcare and banking providers using bots can expect average time savings of just over 4 minutes per enquiry, equating to average cost savings in the range of $0.50-$0.70 per interaction.

Outlook

Developments in the chatbot industry are definitely encouraging.  In May, networking giant Cisco announced that it’s buying MindMeld.Inc, an AI start-up for $125 million.

MindMeld developed an AI platform that enables customers to build intelligent and human-like conversational interfaces for any application or device.  Cisco expects this acquisition to power its collaboration suite.

Last year, internet major Google bought API.AI, a start-up that offers conversational interface for human-like bots. The acquisition of the chatbot technology provider was in a bid to challenge Facebook and Microsoft.

Recently, Santa-Clara based cloud company ServiceNow acquired Qlue, which creates virtual messaging agents.  It has also invested in BuildOnMe, which delivers a chatbot focused on HR.

With the addition of Qlue’s technology, ServiceNow will be able to deploy chatbots in organisations’ systems to answer HR related questions.

According to Credence Research, chatbots market was valued at $ 88.3 million in 2015. The segment is expected to witness exponential growth in the coming years. Technavio predicts that the global chatbot market is expected to grow at a CAGR of more than 37 percent during 2017-2021.

It says the BFSI sector had 40.72 percent chatbot market share in 2016, while government sector held 15.14 percent share. Retail and E-commerce firms had 14.56 percent chatbot market share, followed by travel and hospitality sector with 10.32 percent.

Some setbacks

According to market research firm Forrester,  the success rate of chatbbot is low.  Facebook reported that its chatbots failed 70 percent of the time — and some early adopters have dropped their chatbots due to disappointing performance.

Most chatbots fail because companies: don’t clearly define their purpose, set goals that are far too ambitious and launch chatbots before they are ready.

Forrester points out that success will hinge on marketers’ ability to define a clear purpose for the chatbot and set clear objectives for the marketing team.