Bots for Business
How to Increase Customer Retention with Chatbots
Retaining customers can be a huge challenge, especially in a competitive market. Sound relatable? Find out how you can help increase customer retention with chatbots!
June 30, 2020
At first glance, it doesn’t seem too hard to build customer loyalty. A study by InMoment revealed that 60 percent of customers purchase more frequently from their preferred brands. But digging deeper exposes some harsh realities. According to various studies, 65 percent of customers don’t trust communications from the business, 69 percent don’t trust ads, and 33 percent of US customers admit to having switched brands after just one instance of poor customer service. So how do brands increase customer retention?
Customers want instant engagement and answers. They seek effective and immediate solutions for their inquiries, and they (of course) prefer companies that meet their expectations and standards. The good news is, artificial intelligence (AI)—specifically, chatbots—has revolutionized the customer experience by unleashing a greater customer-centric approach for companies aiming to increase customer retention (which, these days, should be everyone).
Following are three key ways to help increase customer retention with chatbots.
1. Supplement customer service representatives with chatbots.
Business operations tend to be global, so there’s a possibility that customer service agents are unavailable to customers during off hours. To address customers outside of your time zone, use chatbots as a supplement to agents—a supplement that can help solve customer service issues and provide around-the-clock support.
Chatbots enable businesses to build an effective customer support system that is available 24/7. Eighty-two percent of consumers want an immediate response to their sales questions and demand instant gratification from brands, which is exactly what chatbots provide. Chatbots can offer customers information such as product availability, order status updates, and payment processing.
Along with helping increase customer retention, supplementing representatives with chatbots can also preserve resources. When there are high volumes of traffic, demand, and inquiries, businesses can deploy a chatbot to respond so customers don’t desert the website in frustration. Chatbots can provide automated responses to frequently asked questions and offer preliminary assistance, allowing human employees additional time to answer more complicated questions.
Improving customer satisfaction is a definitive factor for loyalty and retention. Globe Telecom improved customer satisfaction by 22 percent after introducing a chatbot, along with reducing their call volume by half and increasing employee productivity by 350 percent.
2. Utilize chatbots to collect data and gain consumer insight.
A buyer persona is a representation of a brand’s ideal customer based on market research and data about their existing customers. Knowing buyer personas allows brands to market their products or services to their target audience.
Chatbots can help increase customer retention by asking research-based questions and analyzing data to create these buyer personas. As a customer is shopping on your site, chatbots can ask questions related to their demographics, such as age, gender, interests, and more. Chatbots should initiate a conversation with the user when they visit your site (for example, “What are you looking for today?”). Not only does this determine the purpose of the visit, but also it establishes a sense of personalization and trust with the customer and encourages them to share this information.
With these details, businesses can increase customer retention by featuring products relevant to customers’ search history, preferences, and purchase behavior, making those customers more likely to return to your website for future purchases.
For example, Sephora’s chatbot assists customers in finding the right products, which helps to increase sales, accumulate data to guide future purchases, and boost customer retention. Essentially a virtual shopping assistant, the chatbot shares tips, tutorials, and product reviews and ratings—sparing consumers the hassle of scrolling and sorting through the website to find what they need.
3. Use chatbots to request feedback.
Customer feedback is very valuable, but sometimes it’s hard to obtain. Many dissatisfied customers don’t complain to the business at all because they find the process of filing a complaint tedious or difficult. They simply shop elsewhere and tell their peers about their unpleasant experience, especially on social media.
Chatbots can help gather honest feedback and reduce the number of unhappy customers. The type of feedback you can collect includes the user's experience with page loading time and product availability and can even include recommendations for improvements. Businesses should note these complaints and suggestions and use them to adjust accordingly.
You can also incorporate chatbot surveys, which present traditional surveys to users in a conversational form. It makes the process of giving feedback fun, engaging, and interactive, which naturally encourages more users to contribute. CONVRG saw a 70–80 percent response rate on its chatbot surveys—more than three times higher than that of its email surveys. You can also encourage customer feedback by enabling your chatbot with a feature that garners feedback in exchange for an incentive, like a coupon for subsequent purchases.
If a customer expresses disappointment when asked for this feedback, chatbots can offer immediate compensation. After understanding the issue, you can give discounts and coupons to customers to help ensure that you don’t lose them. This is precisely the opportunity to win back their trust, and eventually, increase customer retention.
Messaging has emerged as a popular form of communication for both individuals and businesses. As of November 2019, WhatsApp had more than one billion users exchanging over sixty-five million messages per day. Customers’ desire to interact with companies in this way is only natural. By giving customers what they want, you’ll help gain their trust and encourage repeat interactions and purchases. For businesses looking to boost their online sales and increase customer retention, chatbots are the way to go.