What are the hallmarks of a great customer service experience? Respond fast. Respond well. Respond precisely. Leave them smiling.

Now for years and years, humans have done this job with as much speed, accuracy, and warmth as they could manage. But people have their limits. They face constraints of fatigue, managing scalability, staying focused, and mood fluctuations. However, the customer on the other side may not be aware of these limitations. All he/she would remember is a bad experience.

That’s what makes chatbots so relevant for the service industry. This is not just about cutting costs or improving productivity anymore. Deployment of chatbots is now about enhancing the overall experience and grievance resolution too.

No wonder chatbots have made such a big arrival in areas traditionally served by humans.

The arrival of bots- The CX revolution begins

This is easy to miss when we see how a lot of banking and financial organizations are increasingly benefiting from implementing chatbots. The adoption has increased cross-selling activity and reduced customer service costs, along with a smooth and secure user experience for the financial industry. In the e-commerce sector, it was seen that customers prefer to receive information about real-time price updates about the brands during their shopping journeys. Bots are driving engagement with the user and helping in reducing the overall shopping time. This is how e-commerce companies are enhancing ROI by keeping operating costs low.

According to Fortune Business Insights, the market for chatbots will touch $1953 million in 2027. In fact, by 2024, as per predictions from Insider Intelligence, consumer retail spend via chat-bots worldwide will reach $142 billion. It stood at $2.8 billion in 2019. Also, 40% of internet users worldwide have shown a preference for interacting with chatbots than with virtual agents.

A report from MarketsandMarkets outlines that the global chatbot space could reach 10.5 billion by 2026, and what is contributing to this growth is the advent of technologies, such as analytics, AI, and cloud. The surge in customer demand for self-service is also working as an accelerator for the adoption of chatbots. It is offering a competitive advantage to businesses. There was more and more demand for AI-based bots to stay connected and informed during the pandemic.

The appetite for chat-bot solutions and services is expected to climb high because of the increasing demand for enhancing customer experience and building personalized relationships with prospects. Many verticals would embrace bots for their digital transformation initiatives. These mainly address mission-critical processes, improve operations, and differentiate customer viewing experiences. There is also the need for reduction in operational costs, better customer experiences, and resolution of customer queries, enhanced visibility into processes and operations, and improved real-time decision-making. That’s what is building the new landscape of key business and operational priorities and driving the adoption of chatbots.

Where do bots count?

Bots are great at handling anything related to customer services – like payments, complaints, and collections, and queries. So they have widespread applicability in many service scenarios. Apart from that, here are some examples of how chatbots are proving their abilities for certain service industries:

  1. Driving disintermediation in the FinTech space by adding speed to usual processes
  2. Adding precise and swift recommendations in retail and food industries
  3. Enabling buyer engagement in retail and entertainment space
  4. Prediction of buyer behavior in BFSI and restaurant industries
  5. Help in cost reduction of complaint-redressal and KYC parts in banking and insurance sectors
  6. Help with advanced marketing engagement and contextual shopping in the e-commerce industry
  7. Virtual assistants can help with global reach and break language barriers for last-mile processes in the personal transport, entertainment and logistics industries
  8. Handling appointments, accurate scheduling, and better time-management in healthcare and office-work scenarios
  9. Tracking orders, deliveries, and errors in businesses where the supply chain is a core part of customer service
  10. Handling refunds and product returns in e-commerce and omnichannel areas
  11. Taking care of renewals in membership-oriented businesses like salons, fitness centers, hotels, and resorts
  12. Fast and precise onboarding for specific segments in industries like loans and insurance
  13. Account management, up-selling, and cross-selling in high-worth segments of any industry
  14. They are the best options for overall business objectives like – operational cost reduction, lead generation, advanced selling opportunities, education of customers,

Here’s why a well-shaped chat-bot creates so much impact in a service function:

  • The capabilities gained from AI, machine learning (ML), and natural language processing (NLP) help it deliver answers with better content and context
  • Picking nuances and needs from conversations become easy and scalable with more and more data
  • Every interaction helps them to deliver more precise and more engaging interactions than before
  • Chat-bots have a faster road to reach the user’s intent – said and unsaid – because of their ability to intelligently process a vast volume and variety of data
  • They bring a great mix of proactivity and responsiveness to any area
  • They can assure consistency while delivering impressive speed
  • They are simultaneously collecting data while they are solving customer queries. This data can be fed in or leveraged by human decision-makers for designing better services in the future
  • The sophistication of chat-bots goes up when the right development platforms and a mature approach is used that fits the use-case
  • They are faster, non-exhaustible, and easy to maintain when compared to their human counterparts
  • They can give round-the-clock service to industries where it really matters – like the banking industry, hospitality, and smart citizen services
  • They can give a detailed answer to a simple question and can save the time of both the customer and human agent in various scenarios
  • They remove common struggle areas for customers like- trouble in navigating a website, a lot of time taken in finding services, a feeling of impersonal degree in using these services, poor design of apps, absence of basic details, inability to find answers to simple questions

Enter the service era

Incidentally, every industry has turned or will turn into a service industry. Cars are becoming connected. Products – ranging from white-box appliances to watches – are being added with features for feedback, interactivity, and improvement. Even a real-estate purchase today is layered with services of many stripes throughout the product lifecycle. A Deloitte report has outlined that the era towards services is building at a fast and deep pace because – there is an increasing propensity to share, make micro-transactions and purchase experiences, and more. This is helping in promoting asset optimization, business emphasis on scalability and flexibility. There is also a considerable level of consumer desire for personalization and empowerment. The world is moving from accepting standardized to expecting customized co-creation.

Businesses need something for differentiation beyond price and product. They need to control all those declining profit margins in the face of globalization. It is time for businesses to take up the challenge and opportunity of this new milieu with broad arms and clear roadmaps. As the report advises, innovative companies can take a broad look at the stakeholders around their value proposition and expand the network of contributors towards their value proposition. They can start enriching the offering and experience, often through reimagined customer engagement. There is ample opportunity to harness the network effect both among start-ups and experimental incumbents across industries. This would need a significant business model-driven innovation, with end-to-end business transformation. Businesses can also unlock adjacent assets and begin to cultivate opportunities on the edge. They can turn products into product platforms.

All this reiterates the shift towards a service economy. Notably, the ASEAN economy saw two-thirds of economic growth since 2010 (US$361 billion) coming from the services sector of the economy. Deloitte has observed many examples of impacts that businesses across industries – whether traditional “products” or “services” and both large incumbents and new start-ups, have created by successfully ‘reimagining’ services. They are doing so by addressing customers’ evolving needs.

If we look at some key components of ‘reimagining’ services- the major ones entail the transfer of value rather than ownership, of co-creation of customized and targeted experiences with customers, of flexibility and innovation in pricing structures, and deepening customer relationships by integrating into the customers’ life with multiple touch-points.

Now that’s a lot of work but a lot of this road can be easily covered through a great chat-bot strategy. Chatbots are not just tools of service – they are big levers for redefining a business’s service orientation.

It is paramount that businesses start taking their service capabilities seriously. It will not suffice to add service as a footnote. They will have to really enrich, accelerate and distinguish their service strengths if they want to survive and succeed in a competitive market where the last thing that the customer has to spare is patience or time. Service is going to be a compelling aspect of any business’s core proposition in the near future.

So maybe it’s the right time to think of using bots here. Talk to an expert on how best to carve a chat-bot strategy that shapes solid service strength for your enterprise.