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Are Bots Worth a Shot?

According to Oracle’s Executive survey, 80% of leading consumer-facing businesses have already used or are planning to use chatbots by 2020. Chatbots are scalable and cost almost nothing in operation as compared to their human counterparts. But, how practical is chatbot adoption for your business? Let’s see.

5 Key Success Metrics for Chatbots

Different industries can utilize chatbots to serve different purposes. Accordingly, the parameters to measure ROI may vary. For instance, marketers may consider lead generation as a criterion while the sales department takes conversions from chatbots into account. But, of course, the decision to opt for chatbots depends on specific quantifiable measures — to solve specific customer support processes.

What makes bots successful

#1 NLP Maturity

It is the average maturity level of Natural Language Processing capability of bots, measured by the way bot interacts. Initiating conversations with customers is a key focus area among organizations these days. To achieve this, bots have to be well trained in industry-specific jargon.

For instance, if a retail customer has a question about a brand’s return policy, the bot should be able to meaningfully understand the user’s query and provide relevant information as it relates to that specific question, as opposed to an information dump or worse yet failing to understand the query itself. If a bot is unable to process the user input, it contributes to ‘miss-messages’. Such instances occur when the user inputs query in a regional or idiomatic language. 

#2 Response Time

It is the average time taken for the chatbot to respond to customer queries, based on the total number of messages sent by a chatbot during an interaction. Typically this can average around 5-6 seconds. However, research indicates that users will leave a site if key elements take more than 3 seconds to load. 

#3 Intent Prediction

It is the ability of the bot to anticipate what a customer wants in real-time. To achieve this, the bot must be paired with multiple sources of data and AI capable — in order to combine user behaviour, transactions, and profile details. Using this, the bot can determine intent based on both aggregated interactions for known and unknown users, and personalized data pulled from back-end systems.

#4 Retention Rate

It defines the number of users who willingly return to using the chatbot to address their issues. The retention rate varies according to industries. However, the clear formula for increasing user retention is to equip chatbots with the ability to understand user queries and empathically respond to them. This metric is directly correlated with the ability to personalize sales and/or customer service greetings, in 1:1 messaging.

#5 Goal Completion and Fall-back Rate

The number of times a chatbot can resolve the query, manage ticket, generates leads, or results in conversion determines its goal completion rate. However, like humans, bots, at times, might not be handle queries on their own. Such instances account for the fall-back rate of the bots. 

Here’s an insightful read on why businesses should consider chatbots.

Successful Chatbot Adoption Across Businesses

Providing 24×7 support is not impossible for any organization. But, the labour cost associated is high, which makes chatbots a viable solution for instant customer support. IBM reports that globally businesses spend over $1.3 trillion/year to handle roughly 265 billion customer calls. 

The following are examples of chatbots adoption for cost savings.

#Messenger Marketing Bot

ManyChat provides bot platform on Facebook Messenger for marketing, e-commerce, and support. DigitalMarketer incorporated ManyChat’s bot for messenger marketing and have reported very high returns on their ad spend (nearly 500% ROI).

#Insurance Chatbot

Religare has incorporated chatbot on its website and WhatsApp to handle customer queries. It has resulted in 10 times more customer interaction and 5 times more sales conversion.

Here are more insurance chatbot use cases.

#B2C Chatbot Offering Personalization

1-800-Flowers is using IBM Watson’s Gwyn smart virtual shopping assistant. It interacts with customers to understand their gift preferences and accordingly help them select a personalized gift for their loved ones. More than 70% of 1-800-Flowers customers are happily ordering through Gwyn bot.

Here’s a sample Chatbot ROI calculation from a financial perspective.

The Future of Chatbots

CNBC reports, currently businesses are saving $20 million per year globally through chatbot adoption. By 2022, chatbots can cut operational costs by more than $8 billion per year. Also, researchers predict that by 2025, bots will accomplish about 90% of the B2C interactions. Looking at the reduction in cost and ease of operation, investing in chatbots is worth it.

We specialize in building NLP and AI-powered chatbots for enterprises. Drop us a line at hello@mantralabsglobal.com to know more.

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Retention playbook for Insurance firms in the backdrop of financial crises

4 minutes read

Belonging to one of the oldest industries in the world, Insurance companies have weathered multiple calamities over the years and have proven themselves to be resilient entities that can truly stand the test of time. Today, however, the industry faces some of its toughest trials yet. Technology has fundamentally changed what it means to be an insurer and the cumulative effects of the pandemic coupled with a weak global economic output have impacted the industry in ways both good and bad.

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Source: Deloitte Services LP Economic Analysis

For instance, the U.S market recorded a sharp dip in GDP in the wake of the pandemic and it was expected that the economy would bounce back bringing with it a resurgent demand for all products (including insurance) across the board. It must be noted that the outlook toward insurance products changed as a result of the pandemic. Life insurance products were no longer an afterthought, although profitability in this segment declined over the years. Property-and-Casualty (P&C) insurance, especially motor insurance, continued to be a strong driver, while health insurance proved to be the fastest-growing segment with robust demand from different geographies

Simultaneously, the insurance industry finds itself on the cusp of an industry-wide shift as technology is starting to play a greater role in core operations. In particular, technologies such as AI, AR, and VR are being deployed extensively to retain customers amidst this technological and economic upheaval.

Double down on digital

For insurance firms, IT budgets were almost exclusively dedicated to maintaining legacy systems, but with the rise of InsurTech, it is imperative that firms start dedicating more of their budgets towards developing advanced capabilities such as predictive analytics, AI-driven offerings, etc. Insurance has long been an industry that makes extensive use of complex statistical and mathematical models to guide pricing and product development strategies. By incorporating the latest technological advances with the rich data they have accumulated over the years, insurance firms are poised to emerge stronger and more competitive than ever.

Using AI to curate a bespoke customer experience

Insurance has always been a low-margin affair and success in the business is primarily a function of selling the right products to the right people and reducing churn as much as possible. This is particularly important as customer retention is normally conceived as an afterthought in most industries, as evidenced in the following chart.

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        Source: econconusltancy.com

AI-powered tools (even with narrow capabilities) can do wonders for the insurance industry at large. When architected in the right manner, they can be used to automate a bulk of the standardized and automated processes that insurance companies have. AI can be used to automate and accelerate claims, assess homeowner policies via drones, and facilitate richer customer experiences through sophisticated chatbots. Such advances have a domino effect of increasing CSAT scores, boosting retention rates, reducing CACs, and ultimately improving profitability by as much as 95%.

Crafting immersive products through AR/VR

Customer retention is largely a function of how good a product is, and how effective it is in solving the customers’ pain points. In the face of increasing commodification, insurance companies that go the extra mile to make the buying process more immersive and engaging can gain a definite edge over competitors.

Globally, companies are flocking to implement AR/VR into their customer engagement strategies as it allows them to better several aspects of the customer journey in one fell swoop. Relationship building, product visualization, and highly personalized products are some of the benefits that AR/VR confers to its wielders.  

By honoring the customer sentiments of today and applying a slick AR/VR-powered veneer over its existing product layer, insurance companies can cater to a younger audience (Gen Z) by educating them about insurance products and tailoring digital delivery experiences. This could pay off in the long run by building a large customer base that could be retained and served for a much longer period.

The way forward

The Insurance industry is undergoing a shift of tectonic proportions as an older generation makes way for a new and younger one that has little to no perceptions about the industry. By investing in next-generation technologies such as AR/VR, firms can build new products to capture this new market and catapult themselves to leadership positions simply by way of keeping up with the times.

We have already seen how AR is a potential game-changer for the insurance industry. It is only a matter of time before it becomes commonplace.

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