Let’s Chat About Chat
Chatbots arrived on the scene with great fanfare back in 2014 and promptly had venture capitalists falling over themselves to invest in the newest disruptive technology. This also triggered companies from all industries to pursue the development of their own chatbots to assist with day-to-day tasks and customer inquiries.
However, these early chatbots took longer to understand commands and many of them still needed human assistance to complete certain tasks. In fact, 70% of Facebook’s personal assistant M’s responses were completed by human handlers. Facebook shut down the M operations shortly thereafter because this chatbot had fallen short of user expectations.
Today, chatbots are being developed well beyond the capabilities of this initial customer-facing assistance tool. Companies that use chatbots have a better close ratio, can identify quality leads faster, and can quickly route those leads to an experienced salesperson. In fact, companies using chat have seen their sales funnel increase by 67%! Let’s discuss whether your credit union should consider AI-based chatbot technology.
In 2017, JP Morgan released data showing their chatbot saved the company 360,000 hours. Yet to many businesses, chatbots are seen as an expense with limited return. Like the Facebook example above, businesses often view chatbots as a cost center since they needed staff interaction to be effective. The initial chat implementation costs can be significant investment since they require time and resources to build a library of questions and responses before the service can be deployed. Even after deployment, chatbots require time and resources to continuously update the question-and-answer library.
There is a better way. A more advanced chatbot uses basic artificial intelligence to reduce the amount of work necessary to keep the question-and-answer library current. For example, a chatbot with AI starts with basic questions and answers such as an account balance inquiry. Over time, the bot learns from continued interactions and creates patterns of responses based upon separate questions asked in a succession. For example, a consumer interested in a car loan would go to the website and search through various pages to obtain information. When AI is incorporated into the website, then an auto loan question in the chatbot could trigger a response such as “Would you like to see our rates?” followed by the question “Would you like to apply for a loan?” The AI-based chatbot is designed to have the user take action, as opposed to merely crawling the website for information which may or may not result in a loan application.
Credit unions have largely maintained a consultative sales strategy. In this model, human engagement between the salesperson and the consumer has high value, but also high cost. Sales employees use data sources to profile existing members in order to offer the most relevant products and services.
The chatbot, too, can upsell products with clever trigger-based questions. As mentioned earlier, companies that use chatbots have a better close ratio, can identify quality leads faster, quickly route them to an experienced salesperson, and their sales funnel report a 67% increase in sales. Credit unions that use chatbots within digital banking create a consultative sales experience based on past behavior. While this may seem like an impersonal engagement process, the data ensures that the chat experience is tailored to the member. The digital sales process is often more efficient than a traditional staff sales interaction, creating a more efficient experience for the member and cost savings for the credit union.
So, is an AI-based chatbot worth it? Business leaders today are gaining efficiencies and closing more deals by using chatbots to enhance their sales function, reporting that 26% of all sales start through the chatbot channel. Plus, the chatbot offers a consultative sales opportunity 24 hours a day and 365 days a year. A staggering 51% of customers say businesses need to be available 24/7 to conduct business on the consumers’ schedule. The chatbot effectively offers a model to address those demands.
Ultimately, credit unions need to decide what service and sales experience they want to offer to their membership. While there are many digital solutions available, it doesn’t mean they are automatically right for your strategy. But we do know that the business cliché of “I want what I want, where I want it, and when I want it” is even a more prevalent consumer demand in a post-COVID world. Credit unions with a large digital user base may find that an AI-equipped chatbot can enhance their user experience and save them money.
The adoption rates of conversational based technology have created incredible revenue streams, new customers, and increased customer retention for Amazon and Google. These are examples of AI-based chatbot technology accepting voice requests instead of typed inquiries. The fundamental logic, however, is the same. Take the request, review the past product usage of the end user, and use targeted questions to drive new sales.
We started out with the question “Should your credit union consider chat technology?” If your strategic plans are to increase sales, reduce operating expenses, and provide a better digital user experience, than perhaps you already have the answer.