Are Chatbots Dead? What Digital Innovation Leaders Should Know in 2020

September 10, 2020 (Updated)

Chatbots

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The term “chatbot” isn’t doing the industry any favors. In most cases, it’s a misrepresentation of the technology that exists today.

Conversational technology has evolved way past chatbots. The problem is, even bot developers aren’t sure how to position their new solutions. 

“Brand assistants,” “messaging agents,” “micro apps,” A.I. chatbots”… there are so many terms and definitions are floating around. This only contributes to the confusion. 

The reality is, conversational technology isn’t just redefining businesses — it’s disrupting industries. Yet, its technological identity crisis makes it hard for innovation leaders to understand its potential.

So, are chatbots are dead? Let’s find out.

Chatbots created a PR problem 

Let’s go back to 2016. The term “chatbot” is making its way onto the agenda CMOs and CIOs everywhere. Businesses are excited about the idea that customers can “chat” with a robot anytime and anywhere. 

Silicon Valley is ready for smart automation. Tech writers speculate that chatbots will replace apps. The metaphorical “hype-train” has left the station. 

Flash forward to 2018, and almost everyone is disappointed with how things panned out. Chatbots created frustrating user experiences. Companies wasted valuable time and resources. Chatbots didn’t solve as many problems as they created. 

So, what happened? 

Why early chatbots failed

There are a number of reasons why chatbots failed. Sure, the fact they relied on text-exchanges was a factor — one that we’ll touch on later. But, the biggest problem was that chatbots weren’t created to solve business problems. 

Businesses hopped on the hype-train without a plan

Creating a chatbot for the sake of creating a chatbot? That’s a recipe for disappointment. 

There’s not much to be gained from creating a chatbot that can talk about anything. Tricking people into thinking that they’re talking to a human? Also not a good idea. 

Chatbots weren’t designed to add value for customers

We also learned that to be effective, chatbots need to add value to the processes they replace. Simply cutting costs isn’t enough. As a customer-facing tool, chatbots directly impact customer satisfaction, churn, and LTV. 

Technology lacked context

The way people want to communicate differs based on context, channels, and expectations. The technology needs to support a specific use case. 

In some cases, AI might be necessary. In other cases, a rule-based approach is best. The customer experience should dictate which technologies are used. Not the other way around. 

A Comprehensive Guide to Conversational Apps

The next generation of chatbots: conversational apps 

Now, conversational technology is at the point where it adds real value to customer experiences. When it’s done right, it makes processes better, faster, and more efficient. 

Conversation technology is disrupting industries like insurance, finance, banking, and ecommerce. Some of the highest-valued startups in 2020 attribute their success to conversational applications. 

If we haven’t already made it clear, we’re not talking about chatbots anymore. Instead, chatbots have evolved into what’s called conversational applications. Here’s why “conversational apps” is the most appropriate term for what we’re building now: 

  • In general terms, we’re building applications. Applications are programs or groups of programs designed for end-users. 
  • These applications are conversational. To be conversational, interactions must exchange of thoughts and ideas between two or more entities. 

Again, let me reiterate: conversational apps are designed for the end-user. To be truly disruptive they need to simplify the user experience or otherwise make it better

Another key difference is that conversational apps use a variety of user interfaces (not just text). These could include: 

  • Text-based interfaces (like chatbots) 
  • A graphic user interface (GUI)
  • Voice-based interfaces (like Amazon’s Alexa) 
  • Natural Language Processing (NLP)
  • A rule-based approach 
  • Decision-tree methodology
  • Human assistance 

What makes conversational apps different is that they’re designed to adapt to different mediums, platforms, and use cases. They can use any one of the techniques mentioned above — or a combination of them. 

The point is, it’s less about the technology and more about how to best serve a user in a specific context. Whether that’s through buttons, text, graphics, or voice is entirely dependent on the specific experience they need to create. 

Conversational apps can also be designed to manage the handover between automated and human help. This way, they can use automation to solve simple problems in which speed is valued most by the customer, but if human help is needed, there’s a seamless transition. 

The key takeaway 

Well-designed conversational experiences, like the ones we design at Hubtype, are designed to make experiences better. But, “better” is entirely dependent on the context. 

Using technology like AI and NLP might sound “better,” but if all the customer needs is a simple answer to a simple use case, it’s probably unnecessary. In fact, it will probably end up overcomplicating things. 

So let’s get back to the question: are chatbots dead? 

Not entirely. Text-based interfaces still have their place. It’s just that they represent just one component of conversational apps. 

Businesses today must start with specific problems they want to solve. Then, they need to build conversational experiences that tackle those problems. They should lean on experts like Hubtype to match the conversational technology to their use cases. 

Are you ready to build a conversational strategy that adds value to your organization? 

At Hubtype, we can help. We help enterprise businesses aggregate messaging channels and enterprise-scale software stacks. We power meaningful conversations at scale.

Our opensource framework, built on React.js, allows robust integrations. This includes CRMs, APIs, analytics, AI, and other business tools. Developers then focus on building beautiful conversational apps that drive business results.

Hubtype works with national and multinational brands around the world. HP, Bankia, Salomon, Massimo Dutti, and Volkswagen all rely on us to increase ROI. Our tools improve the lifetime value of their customers, all while reducing operational costs.Contact us today to get started.

Whitepaper: A Comprehensive Guide to Conversational Apps

This 22-page whitepaper published in Q1 2020 explains how conversational apps are driving the single largest paradigm shift in business today. It discusses how we got here, what it means for businesses, and what you need to know to keep up.

Topics include:

  • How customer engagement for enterprise businesses has transformed
  • How conversational apps help empower, transform and elevate business
  • Industries ripe for conversational apps
  • A guide to building conversational apps and experiences
Download the Whitepaper: A Comprehensive Guide to Conversational Apps