An Analysis of Chatbot Effectiveness in Marketing and Customer Service

This report examines the effectiveness of AI-based chatbots in enhancing customer service and marketing strategies. The introduction defines chatbots as interactive programs designed to facilitate communication and improve customer relationships. The main body delves into three key reasons for chatbot effectiveness: improved customer service by handling queries efficiently, enabling better decision-making through data analysis, and fostering brand consistency. The report uses examples like Woolworths and Staples to illustrate these points, highlighting the benefits of automated responses, data-driven insights for strategic improvements, and the creation of a consistent brand voice. The conclusion summarizes the vital role of chatbots in increasing customer service quality and promoting customer retention by providing better services. The report also acknowledges limitations such as high implementation costs. The report also includes an extensive list of references for further reading.

Introduction to
Marketing

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................2
Reason 1 of using chat bot or effectiveness...........................................................................2
Reason 2 of using chat bot or effectiveness...........................................................................2
Reason 3 of using chat bot or effectiveness with evidence (340)..........................................3
Conclusion.......................................................................................................................................4
REFERENCES................................................................................................................................6

INTRODUCTION
Chat bot is a machine agent or computer programme which is being designed for allowing
people to interact or communicate by making an effective use of chat interface (Christian,
Andjarwirawan and Setiawan, 2020). This programme has an ability to interpret words which are
being given to them by people and accordingly provide answers. It is also known as self-help
tool which allow companies of improving their customers relationship by providing access to
them or users to interact about products and services anytime. It allows customers to interact
with brand through stimulated conversation. Chat bot has several advantages and benefits and
one of the main benefit which companies like Woolworths and others are taking include:
increasing quality of services, increasing customers retention rate, taking better decisions,
solving customers’ queries in a effective and timely manner and providing more personalized
experience to all customers or users when they make use of chat bot and interact with brand.
Rather, these there are several other benefits which company can take such as reducing cost as
by implementing this program companies do not require hiring more customers service staff and
it makes them able to solve problems in a timely manner which save their time and cost as well.
It also makes them able to increase efficiency by reducing excessive people power. But there are
some limitations as not all companies can implement this because of its high implementation cost
and sometimes customers become frustrated as come chat bot work from a limited data base.
This present study will discuss effectiveness of making use of AI-based Chat bot and how it
allows companies in improving customers’ services. There are several reasons which show that
Chat bot is one of the best ways of improving quality of services given to customers and all these
reasons will be discussed in a detailed manner (Chen and et.al., 2018). Some main reasons which
this study will show include: it allows companies to handle several customers’ queries a once
and in a timely manner which makes customers feel valued, companies can make better decision
from data which they receive and provide services to customers accordingly. All these reasons
directly help company in improving their brand as well as quality of services. All these reasons
also make company able to increase customers’ retention rate by which they find easier of taking
advantages of competition and becoming the market leader.
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MAIN BODY
Reason 1 of using chat bot or effectiveness
Chat bot is an effective cloud based messaging platform which is being designed
especially for all size of business for allowing them to interact with their customers and solving
their queries. One of the main benefits and reason of using this chat bot by many companies
including Woolworth is improving quality of services which are being given by companies to
their customers and allow them to retain with the company for the long run. So, one of the main
reason is improving quality and retaining customers.
Handling queries: Companies can provide better services to customers by making use of chat
bot. Customers’ service is considered one of the main key of success of businesses it can only be
possible when customers receive products and services as per their requirements and also when
they feel they are being valued by companies. Now all of these becoming possible by Chat bot
because this programme has an ability to give automated answers to repetitive questions quickly
and also forward request to responsible or real person if requirement of solving complicated
problems (Benefits of Chat bot for Busines, 2020). For example: there are some customers who
have same queries regarding products and services and after giving answer to 1 customers about
the problem, this bots is being programmed in a manner which makes them able to provide
answers to other customers automatically if they ask the same questions. It dos not require
having staff members which saves time and customers also feel valued when they get solutions
immediately. Companies can handle more than 1 task at the same time by implementing this
programme which reduces customers’ waiting time. Hence, it can be said that handling queries’
of customers is the main ability and reason which allows companies to improve quality of
services and customers retention rate (Weerabahu and et.al., 2018).
Reason 2 of using chat bot or effectiveness
Making better decisions: It is already stated that chat bot or this messaging programme is being
developed in a manner which collect several data and information’s. Companies make use of it
for getting feedbacks and queries of customers for improving services. By getting all feedbacks,
companies monitor all data which allows them to take better decision regarding service
improvements and strategies development. If companies find same queries and feedbacks from
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several customers then it find easier to identify area for improvement and also relevant strategy
which is not working in an effective manner. So, companies do not have to evaluate their all
strategies as with the help of feedbacks and data received on this programme they can make
changes in relevant strategies which save their time and also satisfy customers (Marusich and
et.al., 2016). When companies make changes in their strategies as per the feedback comments of
customers and when customers find changes then it makes them feel valued and they feel that
company is taking them and their views seriously. It engages them with the company and also
increases trust.
Chat bot also allows companies to know purchasing patterns of customers as well as customers’
behaviours regarding buying products and services as well as their needs by monitoring user
data. This monitoring plays an important role because by knowing customers’ needs and buying
patterns companies can make better decisions as which product required being marketed
differently, which to redevelop for re-launch by using different strategies and which to market
more. So, overall it can be said that on the basis of given commands by customers to this chat bot
companies can predict responses based on their languages and guide the bot to suggest customers
about more convenience services. After doing this, bot also respond and notify to relevant
marketing as well as sales department about personalized products (Zhang and Cranshaw, 2018).
So, overall it can be said that by making better decision companies are improving quality of
services and also satisfying customers in an effective manner which is its another reason or
effectiveness.
Reason 3 of using chat bot or effectiveness with evidence (340)
Several reasons have been identified which makes companies able to improve their
quality of products and services given to customers and increasing sales as well. Overall, reasons
and ways which is being found is it provides detailed information’s about customers and also
give access to customers of getting solutions and companies information. So, it can be said that
information is the main key of the success. Other main reason by which companies can attract
customers ad satisfy them is:
Creating brand consistency: Customers satisfactions mainly based on quality of
products which they get from companies but it is also important for companies to make their
brand consistent as it affects behaviours of customers towards company. For making it consistent
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and changing thoughts of customers’ towards company, businesses requires making messages
consistent which is possible with chat bot. When customers get poor service even once then they
do not think for switching brand or companies which can decrease sales and make image poor
(Bigné, William and Soria-Olivas, 2020). So, for businesses it is important of being stable or
making improvements for retaining customers and continuous satisfying their needs.
In the context of chat bot it can be said that it is being developed in a manner as it can
learn that how to speak in a brand’s unique voice. There are some examples of chat bot and
companies which proves this brand consistency and feature of chat bot such as: Staples, it gave
its signature Easy button a mind of its own with this companies (Staple) Easy system (Chat bot
for improving customers’ Satisfaction. 2017). It is also integrated with Face book messenger,
Staple app Easy system which allows customers different ways in which they can interact with
their familiar brand. It also allows entertainers to get engaged with their fans. So, it can be said
that there are several ways and reasons which actually shows that chat bot are playing a key role
in improving customers’ satisfaction and service by using it as a marketing tool.
Conclusion
From the above study it has been summarized that chat bot played a vital role in increasing
customers’ services and allowing them to retain with the company for the long run There are
several reasons which shows effectiveness and ways as how chat bot allow companies in
improving customers services. This study has discussed 3 different reasons or effectiveness of
using chat bot for customers’ services in a detailed manner such as: improved decision making
process with data, solving customers’ queries or problems in a timely manner and by creating
brand consistency with customized chat bot. Lastly, it has discussed how companies can take
competitive advantages by providing better services and getting all these benefits.
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REFERENCES
Books & Journal
Bigné, E., William, E. and Soria-Olivas, E., 2020. Similarity and consistency in hotel online
ratings across platforms. Journal of Travel Research, 59(4), pp.742-758.
Chen, J.Y. and et.al., 2018. Situation awareness-based agent transparency and human-autonomy
teaming effectiveness. Theoretical issues in ergonomics science, 19(3), pp.259-282.
Christian, K., Andjarwirawan, J. and Setiawan, A., 2020. Aplikasi Toko Online Dengan Chatbot
Pada Toko KCA. Jurnal Infra, 8(1), pp.9-13.
Marusich, L.R. and et.al., 2016. Effects of information availability on command-and-control
decision making: performance, trust, and situation awareness. Human factors, 58(2),
pp.301-321.
Weerabahu, D. and et.al., 2018, December. Digital Assistant for Supporting Bank Customer
Service. In International Conference of the Sri Lanka Association for Artificial
Intelligence (pp. 177-186). Springer, Singapore.
Zhang, A.X. and Cranshaw, J., 2018. Making sense of group chat through collaborative tagging
and summarization. Proceedings of the ACM on Human-Computer
Interaction, 2(CSCW), pp.1-27.
ONLINE
Benefits of Chat bot for Business. 2020. Online Available through: <
https://www.digitaldoughnut.com/articles/2017/october/top-7-benefits-of-chatbots-for-
your-business>
Chat bot for improving customers’ Satisfaction. 2017. Online Available through: <
https://www.telusinternational.com/articles/chatbots-improve-csat-scores>
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