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Chatbots: What You Need To Know


Chatbots are getting a lot of attention in the press, yet so little is known about them.

However one thing is clear to see: chatbots are on an upward trajectory.

The value of the US chatbot market in 2016 was $190.8 million. Projections by Grand View Research predict the global chatbot market will reach $1.23 billion by 2025. And even that may turn out to be a rather modest estimate.

Just looking at this google trends graph for chatbots speaks volumes too.

In this article we’re going to deep dive into chatbots and call out the main reasons why they’re gaining popularity. So let’s start with the most basic of questions.

What’s a chatbot?

There are many, many definitions floating around the web, most of which do nothing to tell you what one actually is. In simple terms, a chatbot is software that interacts with a humans over a messaging app.

What that means in plain English: if you use a messaging app like WhatsApp or Facebook Messenger, as well as friends you can add ‘artificial’ contacts that you can chat with. These contacts aren’t human, they’re computers (or ‘bots’).

There are simple chatbots for weather, such as Poncho which gives you weather updates. More sophisticated chatbots that help you book flights like Kayak. Domino’s Anyware lets you order a pizza. Or like the Marriott Rewards chatbot that helps you research and book a hotel room.

Thanks to advancements in machine learning and natural language processing, the ‘intelligence’ of chatbots is on the increase. The future will see chatbots giving you a personalised service: having memory of the previous conversations you’ve had with it (understanding your preferences etc) and allowing you to request and provide information in any order (using any style of language).

Why are chatbots getting so popular?

The growing popularity of chatbots is thanks to one major trend happening at the moment: The growth of messaging apps.

The big four messaging apps (WhatsApp, Facebook Messenger, WeChat and Viber) are used by more than 3 billion people monthly (see chart below). This is quite staggering when you think social networks themselves (Twitter, Facebook, etc) don’t even get those numbers of users.

People don’t just like messaging apps for conversing with friends, family and social groups, they love them. The economist reported over 200 minutes per week spent chatting on them.

As we’ve seen, the use of messaging apps is exploding. Forward thinking businesses are realising the potential of messaging apps as a major new channel for sales, customer service and marketing.

As people are flocking to messaging apps in their droves, it makes sense to use these channels to interact with your customers.

The business benefits of chatbots

Firstly, and perhaps most importantly, chatbots allow businesses to automate elements of their marketing, sales and support. Most service based businesses employ sales and support people to look after their customers and answer customer questions. With chatbots, as you see in the Marriott Rewards example, a chatbot can help steer customers towards what they’re looking for.

As it’s a chatbot, customers can chat 24/7 so not only would this improve customer service in terms of availability, it means customer service can be delivered at a fraction of the cost.

Secondly, businesses are constantly challenged to get their voice to be heard in a busy cacophony of channels. A quarter of all downloaded apps are abandoned after a single use. Chatbots allow you ‘go where your customers are’ - which, as we’ve seen, is increasingly on messaging apps.

Thirdly, voice. According to internet impresario Gary Vaynerchuk voice is the next search engine. Already “1 in every 4 searches on Google (on a mobile phone) is done through voice”. Sooner than we think, we’ll be using voice based commands to request and search for things from everything to guitar pedals to package holidays. Chatbots allow you to be on voice devices too.

As a marketer where should I start if I want to dabble with Chatbots? and are a great way to get started with building a simple, rule-based bot. However, as you need to map out the dialogues yourself they take some time to get up and running. They also limit the devices you can deploy your chatbot on.

Our members BotSkill has developed their own chatbot service that speeds up the chatbot building process considerably. take a fraction of the time to get a fully functional chatbot up and running for your business, and is deployable on most chat and voice devices.


So there we have it, the how, what and why of chatbots. Whether we like it or not, large scale automation is just around the corner. But as William Gibson famously said, “the future is already here — it's just not very evenly distributed”. Here’s a slice of the future, do you want in?

Ged Richardson (@gedosan) is CMO at UK based bot specialists Botskill. Their new product Chatamo helps businesses be available anywhere in minutes via chat and voice devices.

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