How to Measure the ROI of Chatbots?

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How to Measure the ROI of Chatbots? 1

Chatbots are widely changing the shape of support and concierge industries across individual niches. Different industries need different kinds of chatbots, but what’s common between most of them is the dire need for quick support. Industries are spending trillions of dollars for providing support, and the chatbot industry could cut that cost by at least 50% in 2–5 years. It a tough one we know, but we have already got you covered on if chatbots are a necessity for businesses?

The reasons to use chatbots are endless, but the most important ones are quality of service and the saved cost of operation. The companies will never have to be offline again, the chatbots could be live 24*7/365, without breaking a sweat. Chatbots don’t lose productivity no matter how much we draw out of them, and that’s exactly why they promise a high ROI in comparatively less time.

How to Measure the ROI of Chatbots? 2

What are chatbots?

Chatbots are the ones meant to help users with their respective queries, they can be reached by chatting with them. There are a lot of types of chatbots, we will discuss them in the very next section. But mostly, when we talk about chatbots, the basic idea is talking about a program that can autonomously reply to queries and answer questions, its knowledge base may be limited, or it may be capable of improving upon it using deep learning.

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Kinds of chatbots

Chatbots are basically categorised into two simple types, bots who have pre-decided functions defined and bots who keep learning with some sort of algorithms. The learning bots’ range in complexities depending on the algorithm they use, while the simpler ones are fed specific information, have specific options to choose from, and can’t go beyond the context pre-fed to them.
Read more: What are Voice Assistants, why does AI future concern them?

Who exactly does chatbots replace?

How to Measure the ROI of Chatbots? 3

Chatbots are never to be taken as a complete replacement for a human support executive, they just rather take the mundane queries head-on and reply to them on their own. It isn’t so that chatbots aren’t capable enough, it is just that people don’t trust them with sensitive issues. Chatbots basically are up all the time support executives who could fetch information about the product they are being used on top of.

In most cases, the learning type chatbots could keep up a simple conversation for up to 5 minutes. The smaller pre-fed ones can’t keep up a conversation at all, they just provide the relevant data when an option from their list is selected. If some customer has an issue that can’t be solved by both, they are supposed to be redirected to a human support expert. Mostly the chatbots are basically used for people who are just looking for information and don’t actually have an issue that needs to be solved.

Metrics to calculate the ROI of chatbots.

1. Feedback
Feedback at the end of the chat conversation will determine a lot about if your customers love or hate your chatbot. If they are redirected to a human agent, make sure to place a two-point feedback form at the end of the conversation. But don’t get your hopes too high, most people don’t find chatbots fascinating anymore, and won’t be giving any feedback at all.
This feedback should be analysed with a notion that a lot of factors are going to affect it. Suppose if the customer is happy with the chatbot, but not with the support executive’s resolution, they would be furious and give a bad rating to both. That is exactly why you need data according to all these points, and combine the data derived from large data sets, to get an approximate ROI for your chatbot.

2. Time to converse, to resolve, and total time to exit
When measuring ROI of chatbots, the most important factor you need to weigh in all these metrics is customer satisfaction. Apart from that, time will tell. No really, time be the one metric that can help you efficiently calculate ROI of chatbots. But you need to efficiently weigh-in time to converse, to resolve, and the total time to exit, in the equation.
You can use Euler’s formulae for a tentative idea, you will need it to manage resources further down the road any which way. When you employ chatbots, you can cut down the time to solve generic queries, and your workforce can then directly focus on customers wanting complicated support. Reducing the total hours of actual manpower, while considering the total uptime being 24 hours, are both to be included while calculating a chatbot’s ROI.

3. Issue resolve rate
People contact support for either asking questions or resolving their issues. Don’t let anyone tell you chatbots can’t resolve issues, they can easily take minor issues and solve them in a blink. But when the issues involve something related to emotions, or something related to real-world assets like money, which is in the real world mostly the case, playing the chatbot game is fairly a risky affair.

Read more: The average cost to build a website in 2019

Research well before making decisions, about actually why you want to deploy a chatbot. Making categorisation in this metric is exactly what would help you get a clearer picture of what’s happening in the real world. And let’s face the facts, the bigger the issue, the lesser the resolving rate for chatbots, and it’s simply completely opposite for their human counterparts.

4. User satisfaction if/or not pushed to human support

The old, the young, the technology lovers, and its haters, would be some typical classifications of people who would be interacting with your chatbots. As you could recognise they are polar opposites, so would be their satisfaction/dissatisfaction of using chatbots. You will have to go deep down the personalisation road and draw out conclusions based on large datasets. Doing both of these together would require a very complicated algorithm, to even begin with.
You could group people first and then judge by all three metrics above, to finally draw out if the user is satisfied. Assuming 25% of people hate chatbots, and 25% of people love them, you are left with 50% that would be good subjects to analyse user satisfaction. Things like total time being saved by chatbots vs the time one had to wait for a service representative, would also play a part to conclude on user satisfaction.

Conclusion

Weighing in all these metrics, calculating how much workload is split when using chatbots, all without compromising user experience, is the only way to calculate the true ROI from chatbots. If you skip any of these, the ROI might look good on papers, but the comprises to get it there will hurt your business hard. Depending on your niche, there would be other things to take note of too, you will have to see on a scale of 1–10 about how your customers will feel about chatbots.

As a bit of advice, fake chatbot development companies may tell you how you can lay off all your support staff, never believe that stuff. Getting a custom chatbot will cost you, but with these metrics weighed in right, it will be one of the best investments for your business. Not everyone needs a custom-built chatbot, you can simply approach companies that build chatbots, for a non customised one. It could get the work done perfectly if personalisation is not on your list.

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How to Measure the ROI of Chatbots? 5
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How to Measure the ROI of Chatbots? was originally published in Chatbots Life on Medium, where people are continuing the conversation by highlighting and responding to this story.



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