Ted Livingston, the founder and CEO of Kik, a social media and chatbot platform, recently published an entry on the blog site ‘Medium’ that caught my eye. With their software targeted at teenagers, Kik claims to be an expert in chatbots and young millennials (who are, arguably, one in the same). Ted says,
“Chatbots will come to be thought of as the new browsers; bots will be the new websites[…]and apps will be obsolete”
While I disagree with the notion that websites will be overtaken by an army of chatbots, I do agree that the app ecosystem is due a shake up.
Chatbots
Having a chat interface on a web page has become a popular feature, creating a handy illusion of transparency and trust; if you look at any growth hacking list for landing page optimisation tips, adding chatbots will definitely be on there. Chatbots are currently in the popstar phase – we saw it with VR and now we’re seeing it with chatbots.
Deciding what’s right can be difficult, especially when resources are limited and making the wrong choice (or no choice) can spell disaster.
Competitors are vying to be the first to adopt the trendy new tech, and the feature is sometimes being used clumsily as a result. Services often implement chatbots when they don’t actually need them, only using them as a basic customer service tool, not integrating them into their systems and keeping the feature in its most basic form. But chatbots can do far more than you may think. To fully understand their capabilities and potential uses, I built my own.
Use cases for chatbots:
- Complex customer orders can be taken within a restaurant or from home.
- Retail stores can push promotions to customers who are close to their location.
- Customers can be helped to make ecommerce purchases during events by speeding up the payment process and reducing the need for peak time staff.
- HR departments can use the chatbot as a tool to monitor employees’ satisfaction or administer opinion polls.
- Flights can be booked and relevant information can be sent and received during transit.
- Customised updates can be scheduled, such as weather updates based on time of day or location data.
Apps
Apps have enjoyed a much longer presence in the digital world and, therefore, have had much longer to show how they can be useful. I think you would agree, it is difficult to imagine how a fitness app such as ‘RunKeeper’ could be replaced by a chatbot counterpart.
When apps are fully adopted by users, they become personal on an intrinsic level -the customisable content is hard to replace and user loyalty only grows stronger. For these reasons, apps are here to stay for the time being, but at some stage, apps will reach market saturation.
The graph below shows the most recent app creation data from the online statistics website, ‘Statista’. At a glance, it is clear to see that the growth of new apps over the last few years has started to level off.
I will try to highlight the obvious wins and pitfalls of both chatbots and apps, hopefully making it easier to understand how to take advantage of their capabilities, and if/ where they can be applied in your business.
Bots
Pros
- Bots can handle volume very easily. If you notice there are repetitive queries coming through your site, bots are a great way to divert traffic away from your human capital where it could be put to better use. Airlines have been early adopters of this, see KLM’s bot named BB. Bots such as these are also able to learn, adding to their overall worth and reducing the need to program new answers.
- Bots are fast and give instant gratification with immediate replies. A well written bot can improve user satisfaction simply through its speed of answer.
- Bots are relatively cheap. Check out this blog post on the staggering cost of apps (the average price is reaching $270,000). For chatbot development, time and cost is vastly reduced due to the simplicity of set up, testing, and integration.
Cons
- If your bots aren’t learning on the job then unfortunately they are restricted to their predefined answers. This can be a bit of a detractor as they lack the skills to handle off topic queries and may come across as cold in a negative situation, such as a complaint.
- Unless integrated with an app, chatbots lack the slick-looking branding that often comes with custom-built apps. It is possible to bring across style in conversation or in media associated with the chat, such as pictures, but there is a limit.
- Chatbots are very good at single service situations, such as finding information or making small changes to an account. If your system is complex and ever-changing, the chatbot will need to be updated and reconfigured. It is also still wise to have a human hanging around in the background just in case things don’t go to plan. This we also see with KLM’s bot, BB.
Apps
Pros
- Apps are excellent branding tools. They’re highly visual and, for the time you’ve got the user captured, they can be incredibly valuable in getting a message across. Companies like Nike have used them to pair with new shoes, to design fitness plans, and to get like-minded runners together.
- Apps can give the impression that a company is larger and more widely used than it is. The App download button adds prestige, trust, and can help solidify a new client. See Ratedpeople’s approach to ‘appifying’ their users’ experience.
- If the service is being used frequently, then apps can reduce the friction of logging in and navigating the platform. This works especially well for the logistics industry, see Anyvan’s realisation of this problem way back in 2014.
Cons
- Many apps quickly become forgotten pieces of software, tossed to the last scroll page of your phone. Statista predicts that in 2018, 21% of apps downloaded were used only once. The likelihood of this happening to your app is therefore equally as high.
- Too much focus on apps can be a blocker to quality engagement. Some companies try to drive users through apps to get more downloads, but this blunt-force approach is not a viable long-term strategy.See an example of this on a Zomato listing using a mobile device.
- Competition between apps and chatbots is definitely starting to heat up. Ted may be right, some service based brands may start to shy away from expensive apps in favour of the chatbot option. Look at the market leaders in your industry and, by reading their blog posts and updates, you can see how this is actually panning out.
Deciding what’s right for your business can be difficult, especially when resources are severely limited and making the wrong choice (or no choice) can spell disaster.
To keep in mind:
When deciding between chatbots or apps,consider how the addition will be used, who will use it and what it will actually be used for. For instance, a medium-sized user base that frequently works with a service while on the move may benefit from an app instead of a chatbot. Your business may also have multiple user segments, in which case focusing on multiple solutions rather than one do-it-all solution may be better.
Another consideration would be to determine where in the marketing funnel these features will be used. Will they help new users or clients to convert at the activation phase? Or are they there to help existing users and clients? From a growth hacking perspective, increasing retention is the key to steady, sustainable growth and should be done before trying to ramp up growth.
Take a good long look at the complexity of the problem before deciding on a solution. Can it be broken down into smaller chunks or solved in an easier way? If it can’t, apps and chatbots may not necessarily be the silver bullet you were looking for.
Insights from a Growth Hacker & Product Owner 