Chatbot Fails (And How To Avoid Them)

Written by Emily Cummins  on   Oct 31, 2020

Having been around for a few years, chatbots have had some pretty unfortunate incidents. From all-out racism brought on by ruthless trolls to flat-out terrible user experiences, chatbot fails are all too common.

That said, not all companies adopting virtual agents are doing so with “chatbots.” There seems to be a bit of confusion around what is a chatbot and what a chatbot isn’t. The best chatbots may not even be chatbots at all. Let me explain. Chatbots are simplistic, rules-based programs. But when you hear companies touting how amazing their experience is with implementing a chatbot, it’s likely that they are referring to a higher form of artificial intelligence. Companies like WestJet are using more versatile Conversational AI agents built using advanced machine learning and natural language understanding to provide human-like conversation and reasoning. (Learn more about the difference between a rules-based chatbot and conversational AI).

Customers, however, often don’t know if a company is leveraging a chatbot or AI. People just expect to get their questions answered and issued to be resolved.

Why chatbots fail

Chatbots are manually programmed and usually follow a decision-tree. The creators explicitly map out actions for the chatbot to take based on what a user says. Chatbots fail because it’s pretty much impossible to pre-train a chatbot to work perfectly in every situation.

Communication is a complex thing; consider slang, misspellings, intonation, humor, and syntax. I hate to admit it, but I’m a human and I don’t always pick up on sarcasm or humor in my own interactions.

As a result, chatbots trip up. For a variety of reasons we outline below, we see customers frustrated or annoyed, brand reputation hurt, or flat-out bad user experiences.

The top 5 chatbot fails 😱😱

 

Chatbot Fail #1: Engaging in inappropriate conversation

This is what every brand fears. A “rogue” chatbot that engages in offensive conversation.

Chatbots may be pre-programed to unknowingly respond yes or no to a question that it doesn’t understand for the sake of carrying on a conversation. There are numerous other ways trolls can make chatbots say inappropriate things that damage your brand.

Fix: Don’t train your bot to respond to a question it doesn’t understand or repeat something blindly.

Chatbot Fail #2: Not Understanding the Basics

“I’m sorry. I don’t understand. 🙈 Can you try again?”

If you’ve interacted with a basic chatbot, I’m sure you’ve stumped it, even if you’re following prompts or asking a question that should be in its scope of knowledge.

For example, the Poncho bot was one of the first launched on Facebook Messenger. It was designed to tell people the weather based on their location. One problem – while it could respond to questions related to “Monday” or “Thursday,” it got thrown off by the word “weekend”.

The source of the frustrating chatbot loops and failure to understand originates from needing to be pre-programed to understand every utterance and word. It’s looking for specific prompts that have been thoroughly trained in order to know what to do next.

Alternatively, Conversational AI Agents leverage semantics to accurately understand the context of what a person is saying, even if it has not been explicitly trained with the exact phrasing.

Fix:  Take a significant time to train your customer service chatbot on as many utterances and situations as possible. Crowd-source to gather additional training data. Monitor engagement to continuously enhance training.

Chatbot Fail #3: Not adapting to the channel

When you send a text to a friend, you probably avoid typing really long paragraphs that are hard for your friend to read. Long-form doesn’t work in a chat interface.

Yet a chatbot fail we see frequently is long messages. If important information is buried in between the lines of long text, it will likely be skimmed over. And users prefer to digest smaller messages in sequence.

This is an easy fix for even the most basic chatbots. Learn more about our recommendations for how to write copy for a chat interface here.

Fix: Limit the length of chatbot replies to one or two sentences.

Chatbot Fail #4: Lack of Contextual Awareness

To carry on a conversation goes much further than knowing the dictionary meaning behind words. The words must be understood in the context of the conversation. For example, a chatbot can get confused, or completely ignore something that was said previously. This is a very hard one to fix in chatbots. As we note in our eBook, broadband provider Comcast found that there are 1,700 different ways to say “I’d like to pay my bill.”

Fix: Take time to map out more detailed conversational trees. Communicate to your customers the limitations of chatbots to manage expectations.

Chatbot Fail #5: No Margin for Error

With chatbots, there is no margin for human error or an ability to wander off-script.

It’s human nature to mess up. Sometimes we mistype something, misspell something or simply change our minds. If a person tries to go backwards in a conversation, or immediately fix a solution with “Oops I actually meant..” chatbots can’t handle it. Even a common misspelling “i need to lpace an order” could cause the failure of a bot to classify an intent correctly.

Chatbots are manually programmed and follow strict rules. There’s simply no way for chatbots to be pre-programmed to manually understand every instance in which a person might mess up or need to correct themselves. On the other hand, Conversational AI supports multi-turn dialogue, or the ability to switch between various user questions within a single conversation.

Fix: There isn’t one. This is a basic limitation of chatbots.

Chatbot fails are here to stay. Look to Conversational AI for superior customer experiences.

The rules-based nature of chatbots makes it impossible for many of these fails to be avoided. Companies looking to provide great user experiences that provide real value need to look to Conversational AI. According to Salesforce, 53% of service organizations expect to use chatbots within 18 months — a 136% growth rate that foreshadows a big role for the technology in the near future. That’s just the tip of the iceberg when it comes to chatbot statistics and predictions for the future.

Conversational AI continuously improves and provides a near human-like experience to customers. This is what’s critical to providing high customer satisfaction today.

Continue Reading: To read more about how Conversational AI and chatbots differentiate, click here. You might also be interested in learning how to maintain brand safety with Conversational AI.

How Fintech Can Use AI To Improve Customer Service and Increase Retention

Written by Emily Cummins  on   Oct 16, 2020

Disruptive fintech companies and digital-only challenger banks have shaken up an industry once plagued with little differentiation amongst products and poor customer experiences. Upstart banks and financial services companies like Brex, Chime, Monzo, and Wealthfront are digital-native and designed to provide an online customer experience on par with the best consumer apps. This is a point not lost even on legacy bank executives: 75% of banking executives believe the most critical impact fintech companies will have is driving an increased focus on the customer1

In fact, only half of the respondents from the banking sector (53%) believe their organizations are consumer-centric, compared with over 80% of fintechs2. Fintechs need to provide superior online and in-app customer support in addition to the smooth user experiences (such as sign-up flows) they provide in their products. This ease of use plus strong support builds long-term loyalty in the face of fierce competition for consumer wallets. Fintech companies are turning to AI to scale customer service, automating resolutions to repeatable tickets. AI also powers in-app and proactive service offerings that anticipate customer needs and resolve problems faster without taking users out of their flow. 

Frictionless CX for fintech companies is driving adoption 

Today’s banking and finance draw parallels to the media industry, where we’ve seen streaming upstarts steal eyeballs and attention from the legacy media behemoths. Consumers are realizing they don’t need all of the bundled extras and hidden fees from cable companies and are cutting the cord at alarming rates in favor of unbundled and streaming services like Netflix and Hulu. 

This same shift is happening in financial services. Consumers are flocking to challenger banks like Chime, simple-to-use retirement apps like Betterment and Wealthfront, and frictionless financial services like Venmo to handle simple banking needs. Their success has come because, according to Deloitte, fintechs “developed a product offering and channel experience that targeted the points of the value chain where incumbents’ weaknesses were most exposed and often not easy to fix. Most commonly, this was low satisfaction with customer service levels, broken digital account opening and servicing journeys, and complex product terms with various layers of hidden add-on fees.3

Today, 1 in 4 people under the age of 37 have an account with a digital-only challenger bank like Revolut, Monzo and NuBankk4. And while the United States has lagged in terms of adoption as compared to Europe, Asia, and LATAM, US consumer appetite for alternate providers of financial services is picking up, driven, in part, by the user-friendly experiences designed to save customers time. One example of this is with opening an account with a financial services company. Opening a new account with the UK’s Monzo bank and the US’s N26 is done in less than 5 minutes on a mobile phone5. This compares to opening an account with a traditional bank, which may require in-branch meetings, faxes and paperwork, and multiple days for approval. 

Poor service drives churn in fintech 

With more competition, churn remains a major issue for fintech companies. One study found that one day after signing up for financial apps, only 34.8% of users remain; a week later, this drops to 14.9%; and three months later to just 3.4%5. Respondents consistently cited “poor service” as their reason for churning off apps6.  

Fintech companies need to meet the demands of the modern consumer who doesn’t like waiting, craves simplicity and ease, and is often completing tasks on their smartphones. By prioritizing existing customer happiness and providing the support that they expect, fintech companies will grow revenue by reducing churn. This is because seven in 10 US consumers say they’ve spent more money to do business with a company that delivers excellent service, and 95% of consumers cite customer service as important in their choice of and loyalty to a brand. 

The four pillars of excellent fintech customer service  

Digital-first millennials who have expectations for truly seamless, immediate and convenient customer support are the primary and earliest adopters of fintechs. To retain these customers, fintech companies need to implement four key customer service strategies. 

  1. Provide meaningful, 1:1 in-app support: While omni-channel support is essential, for fintech companies in particular, most of the interaction with the customer is taking place within apps. Don’t force a person to exit the app, call a support line or send an email to get in touch. Providing support within the apps where services are provided gives customers access to the information they need at their fingertips. Deploy live chat functionality to enable a person to receive support in the exact moment of need. 
  2. Be always-on and always-available: Customers run into issues 24/7/365. And especially when money is involved, customers crave immediate support. Don’t restrict customers to business hours or keep them waiting for a response. Respond immediately, no matter if it’s after-hours, the weekend or a holiday. 
  3. Leverage AI to automate resolutions to basic issues: Self-service is core to all fintech experiences and a key reason people become customers in the first place. An AI-powered customer service chatbot can immediately resolve issues, including resetting passwords, checking account balances, transferring funds between accounts or paying monthly bills.  With AI chatbots managing many repeatable tasks, live agents focus on more complex or urgent tasks. AI chatbots differ from first-generation bots as they enable customers to engage in natural, human-like conversation, not tied to rigid decision trees.   
  4. Get out in front of issues with proactive service: Solving issues before customers even know they exist brings the idea of convenience to a new level. By leveraging AI, fintech companies can understand when a problem is likely to arise, when a customer might get frustrated or when specific information would be valuable. Fintechs can then preemptively intervene before a customer has to reach out.  

As soon as an account is set up, for instance, fintech companies can reach out with precise information drips to proactively answer the most common questions after onboarding. After 3-6 months, a person’s questions have likely changed, so targeted education can reduce customer frustration. To implement proactive service, identify friction areas, the top customer service tickets that arise along the customer journey, and differentiation amongst customer segments. You can then identify low-impact, high-value opportunities to offer proactive service. 

Closing: How AI can help fintech companies excel at customer success  

As competition in the financial services industry heats up with new entrants and incumbent banks taking massive steps to reinvent their customer experience, differentiation increasingly comes from customer service. Meeting customer expectations for immediate, convenient and frictionless support is directly correlated with long-term customer happiness and growth. 

To turn customer support into a competitive edge and meet quick-rising demands for quick, convenient and personal resolutions, fintech companies need to bring AI into the workforce to resolve issues immediately, and introduce always-on, proactive and in-app service.

Find out what your ROI will be if you build an AI chatbot. Try our free chatbot ROI calculator.

Are you a fintech company looking to create frictionless customer service interactions? Get in touch for a demo today! 

Click any of the links below to get more of our insights on FinTech customer service solutions.

References 

  1. PWC: https://www.pwc.com/gx/en/industries/financial-services/fintech-survey/blurred-lines.html 
  2. PWC 2: https://www.pwc.com/gx/en/industries/financial-services/publications/fintech-is-reshaping-banking.html 
  3. Deloitte: https://www2.deloitte.com/content/dam/Deloitte/us/Documents/financial-services/us-dna-of-digital-challenger-banks.pdf 
  4. SI Digital: https://sidigital.co/blog/customer-retention-financial-services 
  5. Tear Sheet: https://tearsheet.co/marketing/5-techniques-fintech-and-banking-apps-use-to-engage-and-retain-users/ 
  6. Qualtrics: https://www.qualtrics.com/customer-experience/banking-report/#section3 

American Express #WellActually – A Homage To The Internet’s Most Famous Customer Service Research Study

Written by Dylan Max  on   Oct 10, 2020

If you’re in the customer service space, you’ve probably heard a handful of these customer service statistics:

  • 33 percent of consumers say they’ll consider switching companies after just a single instance of poor service
  • More than half of Americans have scrapped a planned purchase or transaction because of bad service
  • Millennials are the only generation that tells more friends and family about instances of good service than bad ones
  • Americans across the board report telling more people about poor service (15 people on average) than about good experiences (11)

And lastly, the finding that may be responsible for more corporate buy-in on customer service and CX improvement over the last 4 years:

  • US consumers say they’re willing to spend 17 percent more to do business with companies that deliver excellent service

Do any of these customer service statistics sound familiar? That’s because they come from the most quoted customer service research report in the history of the internet. It’s true, the American Express research report has been quoted over 2000 times. In a niche industry like customer service, that number of citations is almost at a biblical-status.

American Express’ landmark report has been cited 2,300 times across the internet

You might ask yourself: “Was the report that good for an entire blog post to be written about it? What is the purpose behind this suck up piece?” No lie, as I sit here at my coffee table singing the praises of a customer satisfaction survey, I feel as much like a movie critic as I think I ever will be.

The real reason why I’m writing this up is because the American Express #WellActually Customer Service Report has mysteriously vanished.

If you click on the link cited by over 2000 publications today, you will sadly end up at a 404 page (the ones that say “Page Not Found”). Go ahead, give it a try: https://about.americanexpress.com/news/pr/2017/wellactually-americans-say-customer-service-better-than-ever/

The 404 error you get when you try to read the American Express #WellActually report

As fanatics of improving the industry of customer service and customer experience, we refuse to let this cornerstone content go quietly into the night. Rescued from the ashes of digital dispair, you’ll see the report in its entirety as it was intended. Our goal is to enlighten the community. If you have an article that was previously linked to the famous report and are interested in giving your readers a better viewing experience, please consider linking to this post instead.

American Express #WellActually Customer Service Study

Social media vent sessions may give the impression that the state of customer service is suffering. Not so fast, according to the 2017 Customer Service Barometer. The study, fielded by American Express (NYSE: AXP), shows U.S. consumers are happier than ever with the service companies provide.

Eight in 10 Americans (81%) report that businesses are meeting or exceeding their expectations for service, compared to 67 percent in 2014. In fact, 40 percent of consumers say businesses have increased their focus and attention on service, a significant increase in just three years (up from 29% in 2014).

“More companies are realizing that delivering great care is not just the right thing to do; it also makes great business sense. Seven in 10 U.S. consumers say they’ve spent more money to do business with a company that delivers great service,” said Raymond Joabar, Executive Vice President of American Express’ servicing organization. “Service is an increasingly important competitive advantage for companies, both large and small, that make doing business easy and put their customers’ needs first.”

Digital servicing options are helping to drive this uptick in servicing satisfaction, as is improved person-to-person care. More than two thirds of those surveyed (68%) said that a pleasant representative was key to their recent positive service experiences, and 62 percent said that a representative’s knowledge or resourcefulness was key.

Americans continue to reward companies that get service right. US consumers say they’re willing to spend 17 percent more to do business with companies that deliver excellent service, up from 14 percent in 2014. As a group, Millennials are willing to spend the most for great care (21% additional), followed by men (19%).

But there’s another side to that coin, too: poor service is costing companies. More than half of Americans have scrapped a planned purchase or transaction because of bad service, and 33 percent say they’ll consider switching companies after just a single instance of poor service. The stakes remain high for getting service right.

Millennials Share the “Likes”
Millennials are particularly happy with the service they’re receiving from businesses. Eighty-four percent say that businesses are meeting or exceeding their service expectations, significantly more than older Americans (79%).

Millennials are also the only generation that tells more friends and family about instances of good service than bad ones, bucking an established trend in how Americans talk about service. As in previous years, Americans across the board report telling more people about poor service (15 people on average) than about good experiences (11). Millennials, though, tell an average of 17 people when they get great care, compared to the 15 they tell about poor experiences.

Men are especially chatty when it comes to service, telling twice as many people as women both about their poor experiences (21 compared to 10) and good ones (15 compared to 7).

How May I Help You?
There is a growing preference for self-service and digital options on simpler inquiries, specifically for online chat and mobile apps.

More than six in 10 U.S. consumers say that their go-to channel for simple inquiries is a digital self-serve tool such as a website (24%), mobile app (14%), voice response system (13%) or online chat (12%). But, as the complexity of the issue increases, such as with payment disputes or complaints, customers are more likely to seek out a face-to-face interaction (23%) or a real person on the phone (40%).

More people than ever are also using social media to get help from businesses. In the past year, 35 percent reported reaching out in social channels, up significantly from the 2014 survey (23%) and double the percentage from 2012 (17%). Of those who have used social media for a customer service concern, 84 percent say they have received a response or resolution, up significantly from 65% in 2014.

Key Takeaways for Businesses
The study offers key takeaways for businesses looking to improve their service:

  1. Deliver service on the customer’s timeline. As companies improve the service they provide, customers want them to focus on taking care of their needs quickly (40%). The future of service belongs to those who deliver quick, convenient and personalized service in the customer’s channel of choice. This could mean enabling customers to find answers themselves through digital options as well as making it easier to connect with a knowledgeable professional.
  2. Earn the advocacy of customers. Excellent service continues to be a way for businesses to unleash positive word of mouth. This is especially true for Millennials, so companies should make sure they can take care of younger Americans the way they want to be served. For example, Millennials are twice as likely as the general population to prefer self-service for simple inquiries.
  3. Make the connection. While most Americans still prioritize service that gets the job done, the personal connection matters. Eighty-one percent say that getting a satisfactory answer is a very important part of servicing satisfaction, and 74 percent want a knowledgeable professional. But nearly half also say that personalized service (47%) and appreciation for them as a customer (45%) are very important in providing excellent care.

About the American Express Customer Service Barometer
The American Express® Global Customer Service Barometer is a study conducted by American Express and Ebiquity, exploring customer attitudes and preferences around customer service. Research was completed online among a random sample of 1,000 U.S. consumers aged 18+. Interviews were conducted by Ebiquity, a team of independent marketing performance specialists. The overall results have a margin of error of +/- 3.1 percentage points at the 95% confidence level. The same survey methodology was used in Canada, Mexico, the U.K., Italy, India, Singapore, Hong Kong and Japan.

There you have it!

Finally, this customer service masterpiece has been brought back to life. Peace can be restored to the universe. If you’re interested in telecom customer service or other research reports, I highly recommend checking these out:

How AI can reduce churn in the streaming industry

Written by Emily Cummins  on   Oct 5, 2020

Customer churn is a major threat to every streaming company. Companies lose $1.6 trillion per year to churn1. With more and more streaming providers jumping into the ballooning market, streaming services can leverage conversational AI to reduce churn. With the latest in machine learning and real-time interactions, these intelligent chatbot tools and the systems that power them can autonomously resolve issues and preemptively intervene to increase customer retention. 

More Choice. More Churn. 

Customers have more choices today than ever before. The number of homes expected to cut the cord is estimated to reach 44 million in 20202. More and more massive media and tech companies are spending vast sums in marketing and promotion to capture customer attention. Disney+, Apple TV+, HBO Max, and Peacock have launched their own other-the-top (OTT) offerings,  in a bid to steal viewers from Netflix, Hulu, and Amazon Prime. There are also emerging subcategories. ESPN+, for example, offers exclusive access to some British Premier League games in the U.S and the new Disney-owned service focuses heavily on smartphone consumption – meaning, streaming users. 

As companies dangle free trials, bundles, and other deals as incentives, customers are exploring their options. The biggest drivers for subscribing to OTT Services are: access to a specific program or event; free trial; and the customer enjoying the service and deciding to keep it. The fight for customer attention has only skyrocketed during COVID-19.  In a press release, Steve Nason, Research Director, Parks Associates, says “With movie theaters closed and cinematic productions and live events cancelled or postponed….overall video consumption is accelerating.3”  


“We are seeing a record number of consumers experiment with new OTT services as a result of the COVID-19 crisis and the shifts in strategy in the industry.”

— Steve Nason, research director at Parks Associates


As new entrants flood the market, though, churn increased. The churn rate rose to 41% during Q1 2020, compared to 35% during the same period in 20194. While churn is going to always be a factor for streaming companies, taking steps to retain customers is essential to the bottom line. Acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one5. Increasing customer retention rates by 5% increases profits by 25% to 95%5.

The role conversational AI chatbots play in reducing churn for streaming companies 

Arguably the top-dog in the streaming space, Netflix is notoriously data-driven. The company analyzes troves of customer data to provide a personalized experience and hyper-relevant recommendations, as well as dictate content decisions. The company analyzes things like: the completion rate for content; how much a person paused, rewound, fast-forwarded or, rewatched; the time-lapse to completion for a piece of content; the day of the week and date a person engages with content, and much more. In addition to altering the titles displayed on a person’s home screen, this personal data is used to understand and anticipate churn. 

By analyzing churning customers, companies like Netflix can start to pick up on profile attributes, changes in viewing behavior, lifecycle, and customer service contacts that are likely to lead to churn. Companies can then preemptively intervene to try and retain an at-risk customer who is demonstrating similar behavior. For instance, it could be a customer who has reached out two times in a certain time frame with streaming or downloading issues. Or, a person who has abandoned all content that they have started in the past four weeks without completing any title. Conversational AI chatbots can put this entire process on autopilot, intervening at the exact moment that churn is a risk to nurture the relationship. Here are three ways streaming companies can use conversational AI to reduce churn: 

  • Reach out in the moment of max impact to keep customers hooked and wanting more: 57% of customers churn passively, partly because they were disengaged with the company’s services6. Within the platform itself (on mobile or desktop), via email or through a messaging platform like Facebook Messenger, streaming companies can proactively reach out to a customer to help them discover new content via a conversational interface. Companies could also tease upcoming content that the viewer is likely to be interested in to keep their subscription active. 
  • Automate resolutions to customer service issues: 39% of Americans who canceled a contract with a company cited customer service6. When a customer has an issue – whether it’s billing or account issues, streaming or technical issues, or difficulties logging in – they expect instant resolutions. Leveraging AI chatbots to get back to customers instantly when they need help is critical as customers now expect effortless, fast, and convenient support, and therefore reduce churn. 
  • Engage in an ongoing conversation with the customers: The best way to keep customers around is to keep them happy. Conversational AI chatbots can check in with customers throughout their lifecycle to check on satisfaction and ask for feedback. Leveraging AI chatbots, companies can automate truly intimate 1:1 conversations. While it would be cost-prohibitive to hire live agents to engage in this proactive communication, AI has matured to be able to think like a human in many circumstances. For instance, AI agents can now pick up on the sentiment of a person based on their use of words, time delays, caps, punctuation, and use of emojis. If an AI agent determines that a customer is defecting, the AI agent could provide a targeted incentive or offer to keep them around. 

Conclusion: Streaming companies need conversational AI chatbots to reduce churn  

Traditional media companies (NBC with its Peacock service, for instance) are, for the first time, selling directly to the consumer. It’s harder and more expensive than ever to grow an audience, captivate attention and command wallets. As competition heats up, retaining customers is more critical than ever, especially as customer retention is the foremost contributor to a company’s revenue. 

For customers, churning is easier to do than ever before. In an article in Reuters, Rich Greenfield, an analyst at LightShed Partners said: “…churning off of a service once meant finding the phone number of your cable operator, navigating an automated menu and waiting on hold. We now live in a world where with a couple of clicks of your finger on your phone, all of the friction from cancellation is gone.”7

This combination of ease of canceling and more choice for entertainment represents a real risk for streaming companies. Conversational AI is a great tool that streaming companies can leverage to reduce customer turnover. 

Find out what your ROI will be if you build an AI chatbot. Try our free chatbot ROI calculator.

Interested in learning more about conversational AI for media and entertainment companies? Check out our new ebook here.

References