By Robin Collyer, CRM& Marketing Specialist at Pegasystems

We are witnessing explosive growth in the popularity of chatbots, which now have a significant part to play in marketing and customer engagement strategies. In fact, 80% of companies either already use chatbots or plan to implement them by 2019.

As a result, the chatbot market is enjoying impressive growth; according to reports, it will increase in value from $703 million to $3,172 million in 2021 – that’s a compound annual growth rate of 35.2% between 2016 and 2021!. Companies are realising that chatbot technology is critical if they are to optimise their engagements with millennials, as the younger generation places far greater value on technology in their interactions with brands than older consumers.

It’s easy to see why chatbot technology is becoming so popular. It can give firms a deep understanding of customer behaviour, enable targeted marketing communications, and drive a better level of service – that is, when the technology is used correctly. There are some critical points that organisations need to consider if they want chatbots to really add business value.

Firstly, it is vital to carefully consider the positioning. Tasks assigned to a chatbot must have clearly-defined rules that guide a chatbot to enhance value for the customer, as well as for the brand. If these parameters are too ambiguous or complicated, then the chatbot will not be able to respond to customers appropriately. This would obviously frustrate customers, which is likely to impact negatively on a brand’s reputation and potentially harm customer loyalty.

The second key consideration for firms thinking about using chatbots is transparency. This is especially important given the rising concern about data security and privacy. Companies must tell their customers if they are talking to a bot or a human when they interact with them. Research conducted by Pega earlier this year highlighted this issue, showing that 77% of British consumers want to know when they were talking to a human or bot online. It’s also essential that customers understand the benefits of communication with a bot instead of a human. These benefits include 24/7 access to customer service, and personalised guidance to help access the information or products they’re looking for.

Chatbots are a support to human interaction, not a replacement for it – even though there is a common misconception that “robots are taking over”, this is not the case. Technology is there to help humans do their jobs better, not to replace them. Companies must understand this before they onboard chatbot technology. Using innovative new technology should never come at the expense of the human touch – this is something that customers value deeply, so should not be sacrificed when adopting chatbots. With this in mind, it is crucial that issues be swiftly and seamlessly escalated to human operatives if a chatbot is unable to resolve a customer issue.Before onboarding chatbots, employees must understand which decisions bots can handle and how this power can be transferred to a human operative.

This need for tasks to be smoothly passed from bots to humans is part of a wider need for chatbots to fit seamlessly into the rest of the customer engagement system. The communication strategy therefore needs to be designed very carefully, to make sure chatbot responses mirror the rest of the communication strategy in terms of tone and style. As well as communicating in a way that accurately represents the brand, it’s important that chatbots demonstrate empathy and engage authentically with customers.This requires the chatbot’s guiding decision strategies to be carefully thought out, to ensure that they represent the brand, as well as provide the best customer experience. For example, Pega’s Customer Decision Hub is configured to determine Next Best Actions for customers; this helps bots determine how they should respond to customers to optimise customer brand perception.

To ensure that integration of chatbots is a success, companies should always keep in mind that this technology must, above all else, enhance the customer experience and drive the brand’s reputation for excellence. Proper configuration is key to make sure that chatbots are in a position to deliver appropriate responses and fit seamlessly within the company’s systems. As online security and honesty surrounding use of data remain two of the top concerns for consumers, it is essential to ensure transparency – it is only by being open about their use of AI that companies can expect customers to trust chatbots.