Latest 08 Dec 2021 | Messaging Channels | 5 min read

How Bots and Automation Affect Customer Retention

The first recorded Chatbot was designed in the 1960s by an MIT professor called Joseph Weizenbaum, which, perhaps unsurprisingly, was a very basic programme called ELIZA that could carry on a brief and very limited conversation. An incredible feat, but unlikely to pass the Turing test.

The technology has obviously moved on drastically since then, as has the number of bots. By 2016, there were 11,000 bots on Facebook Messenger’s platform alone. Over the past 5-10 years, chatbots and AI have evolved from simple pop-up windows on websites to become the digital face of many brands across websites, social profiles and private messaging channels used to engage customers across their lifecycle. 

Rather than being simple flows answering ‘yes’, ‘no’ or ‘I’m sorry I don’t understand’, modern chatbots use intelligent conversational design to ensure customer journey retention rates are high. Bots’ impact on customer retention is good news for a brand’s revenue and profit margins, because not only are existing customers 70% more likely to buy again, but also increasing retention rates by just 5% can increase profits by up to 95%

This blog will help you understand how improvements in chatbot and AI technology means improve customer engagement, relieve the pressure on human agents and generate revenue at scale.


Reducing the Sales Cycle

Whether the customer journey is entirely or partially automated, introducing bots to the party can remove steps from the process and streamline many tasks which save time for both customers and agents. 

Whether it’s using Click-to-Messenger adverts to acquire new customers and take them through a bespoke flow from click to purchase, or automating authentication to help identify a customer quicker, the efficiency and scalability of bots ensure that it’s a good experience at any touch point – leading to better customer retention and lifetime value.

Click to Messenger adverts reduce the sales cycle and increase conversions


24/7 Support and Availability 

Unlike humans, bots never sleep. Their capacity to handle a night shift is far greater than humans (well at least this human – I’m just cranky and hungry if awake and working between midnight and 5am) and operate at the same capacity outside of office hours. They’re able to work at scale and handle large volumes of conversations, as well as work in multiple languages, regions and time zones at the same time. 

Our survey found that 71% of customers would happily use a bot if it improved their customer experience - but 52% are not comfortable with an entirely non-human customer service interaction. It shows some brands have a way to go before they get automated services right. One key feature of a successful bot interaction is in-channel resolution, so brands should look at their most common customer conversational intents and which ones can be easily resolved by a bespoke bot flow. No matter what time of the day, queries like WISMO (where is my order) or checking a flight status are better when handled by a bot.

WISMO can be easily automated and available 24/7 without the need for human agents


Swift Resolution and Improving Customer Experiences 

CX automation can be employed across various points of the customer journey to streamline experiences, because they remember the customer’s information. One of the most CX friendly developments of recent years is  the ‘Continue with Facebook’ feature when logging in to websites - it means customers aren’t forced to remember lots of passwords (or use the same one across multiple sites) and improves brands’ conversion rates by removing friction points at the start of the website journey. 

With private messaging channels, swift resolution and improved CX are even better and encompass more use cases. For example, on Apple Business Chat, a customer’s Apple Wallet is integrated into the app, so when browsing products, customers are a few clicks away from purchase with all of their card and shipping address details pre-loaded, making it an effortless shopping experience. But it’s not just for purchasing, when sensitive information needs to be discussed, authentication is key. Using Facebook Messenger for identification for financial institutions or gaming companies allows for swifter resolution because the channel is tied to a specific Facebook account, and using your brand’s verification software plugged directly into the conversation allows for secure identification without having to switch apps or channel.


Apple Pay is built into Apple Business Chat and allows shopping experiences to happen completely in-channel


Perfectly Timed Customer Engagement

The beauty of automation and bots is that they make customer engagement a proactive rather than purely reactive process. It also turns private messaging channels into revenue generating tools. By building profiles of your customers via their interactions over messaging, brands are able to understand what their preferences are, allowing for more personalized marketing messages rather than mass-marketing to everyone. 

If a customer has a regular recurring purchase – send a reminder that it’s time to buy. If it’s time for their next appointment – send a link to book or use one of the channel’s tools to book in conversations. It also works for immediate needs, for instance if a flight is delayed or canceled, inform them with solutions before they even know there’s an issue. All of these make for a convenient experience, leaving the customer satisfied and more loyal to the brand.

If you’d like to know more about what makes a great chatbot, you can read our guide here.

The Benefits of Chatbot Technology

  • Reduced costs: Automating some of the most common customer intents cuts spending in the contact center and frees up agent resources to deal with more complex issues.
  • Improved customer satisfaction: great CX is always about providing the best possible experiences for consumers, sometimes a bespoke automated flow is the best solution for swift resolution. 
  • Increased customer engagement and convenience: The right message, sent to the right customer, at the right time, on the right channel creates personalized conversational experiences which inspire loyalty – speed and convenience are valued above everything else by modern consumers and messaging channels are the speediest and most convenient tools around. 


The Future of Chatbots and Automation

Customers are more open to automated experiences, but like everything in brand/consumer relationships, they have to work. Well designed chatbots are playing a key role in improving CX whilst reducing costs and driving revenue and loyalty. 

If you’d like to learn more about how to improve your customers’ experience, read our digital customer experience hub.

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