Research from Hootsuite suggests the size of the chatbot market is expected to reach $1.25 billion by 2025 and shortly after this time, 25% of organisations are predicted to incorporate some form of chatbot into their main customer service strategy.

An automated alternative to a human on the other side of the screen, chatbots can appear in website chat windows, SMS text and social media messaging services such as Facebook, Twitter and Whatsapp (or all of the above!) Thanks to advances in conversational AI, are becoming plausibly alternatives, or at least supplements to human customer service.

Data capture and chatbots

According to Ccom Digital, chatbots can assist in enhancing data capture and analysis, allowing businesses to make better informed strategic decisions based on this collected data. Similarly, Sprout Social suggests that chatbots can help with social listening to capture data from their conversations. This relatively simple form of data capture can make it easy to determine common themes and trends in the form of FAQs, or basic sentiment analysis.

This data provides businesses with invaluable insights to inform new product development and personalisation, improving the overall customer experience. Businesses can examine chatbot conversations through “machine-learning text driven analysis and sentiment analysis” to extract insights into customer demographic data and purchase history to help personalise future offerings. This gives businesses using the tech significant competitive advantage over other firms. With big data and especially social listening becoming ever more useful, expect this segment to grow over the next decade, as more and more first-party data is collected on customers.

Conversion rate optimisation

According to Sprout Social, chatbots are very effective at helping customers over the line of making a purchase. They can help customers find exactly what they are looking for and provide them with relevant offers and discounts, increasing conversions and revenue as a result.

For customers at the point of consideration but unsure about specifics, chatbots and conversational AI can ask customers a series of questions to point them in the right direction to receive efficient support to help them checkout more quickly. Once their questions have been answered, whether it’s query on delivery times, costs, or feature sets, chatbots can incorporate CTA buttons to entice customers into making a purchase by leading them to the product page or to checkout, resulting in a sale.

According to Hootsuite, Chatbots can effectively eliminate pain points in the customer journey to reduce bounce rate and shopping cart abandonment. Instead of customers receiving information at the end of their purchase journey and not proceeding with the sale, chatbots can provide support at each stage of the customer journey to reduce the chances of shopping cart abandonment. Therefore they can communicate essential information to the buyer before they reach checkout, increasing lead generation as a result.