Should Your Business Consider Chatbots?

The business community has benefited greatly from advancements in digital communication technologies. Today, there’s practically no end to the ways companies and brand representatives can engage with, troubleshoot for, market to or otherwise stay in touch with their fans and customers.

Chatbots are a relatively new addition to a bundle of tools that already included email, video chat, SMS, social networking and more. Chatbots are the next logical step in many ways when it comes to keeping businesses and customers in constant and easy contact. But they’re not for everybody. Below are some of the advantages of — plus one or two warnings about — chatbots to help you decide if it’s the right time and the right tool for your company.

What’s a Chatbot?

This word is one of those terms that pretty much gives it all away up front: A chatbot is an audio-based or text-based assistant that can autonomously help customers find answers to questions, troubleshoot problems or carry out other business-related tasks, such as ordering or re-ordering products, changing payment information, inquiring about or renewing subscriptions and memberships and much more.

Command-based chatbots are relatively rudimentary but still deceptively “intelligent.” They can respond to customer inquiries using heuristics that match replies with the most relevant topics or sub-menus for the customer.

On the other hand, AI-based chatbots are more sophisticated but also have a further way to go before they’re available to a wider array of businesses and more consistently able to reply accurately to any inquiry. But chatbots powered by AI are undoubtedly already showing their potential: Thanks to their use of natural language processing, they can reply “from scratch” instead of using canned responses. They can even become better over time at picking up meaning and intent from conversations with human callers.

With the different types of chatbots a little better understood, let’s move on to the main question, which is whether or not chatbots are worth the investment for your business. For a start, some industries are simply a likelier fit than others.

If Chatbots Make Sense for Your Industry

Chatbots are a relatively new concept, but they do already exist out in the wild. And there are several frontrunners when it comes to the types of industries that are well-suited to adopting chatbots. Some of them are:

  • Hospitality
  • Banking and financial services
  • Retail
  • Service-based companies

Based on polling, some 80 percent of business representatives would be interested in bringing chatbots into the fold at their company. But early popularity in the industries mentioned above already indicates which use-cases might yield the best results and return on investment. In hospitality, guests and travelers often require nearly instant solutions for checking into hotels and lodging, boarding airplanes and other conveyances, choosing venues, organizing transportation for meetings and conventions and a multitude of other tasks that have to happen at the speed of business.

In financial services, chatbots can help even regional banks and nonprofit credit unions provide members with account information or help them tailor their retirement or college savings. In retail and services environments, chatbots can pick up some of the slack during high-traffic times of the day or season by taking orders, pointing customers to what they’re looking for and more.

The point is, there might be use cases in your industry, and there might not be. Industries that depend on timely, accurate, always-available customer interactions appear to be early favorites, but as the technology improves, applications will undoubtedly continue to appear almost everywhere.

If You (and Your Customers) Value Time

On the customer and the company side of things, the first major advantage of chatbots is that they’re on standby 24 hours a day and don’t take a single day off during the year, provided there aren’t any technical snafus behind the scenes.

Allowing customers to have their questions answered on their own time is great already, but chatbots also save time for the company by providing an automated solution to the “problem” of answering common inquiries all day long. Both parties can breathe easier. Customers know they won’t have to try their luck calling back during business hours or trawling through a website for answers, and businesses know their employees are a little freer to respond to other, more urgent demands on their time.

There are one or two caveats when it comes to using chatbots in extremely customer-facing industries. Human beings know — or can be trained by locals — to respect cultural taboos and avoid words or phrases that might cause offense in another country or region.

The problem of maintaining cultural propriety during international affairs is not a new problem. But while it seems to make sense to turn chatbots into public liaisons in regions where you don’t have a strong employee presence to process customer calls, those chatbots had better have been developed with linguistic and cultural input from the region they’re intended to serve.

Being mindful of potential cultural frictions and even the subtleties of respectful political correctness is key to successfully using a chatbot to fill in your service gaps here and abroad.

If You Want Additional Insight Into Your User Base

The average interaction between a human customer and a chatbot can yield a surprising amount of information about your user base — too much, potentially, for a human operator to take in all at once, much less record and pass on to interested parties.

A phone conversation is practically analog compared with a chatbot chat when it comes to the potential to take in information from your user base. When your customers interact with your chatbot, with just a couple of simple questions and basic analytics, you’ll come away with a greater understanding of how they use your products, where common sources of frustration are coming from and nitty-gritty details. These details include their location, the device type they’re using to contact you or interact with your services and other factors that might be of interest to your marketing team, your R&D team or both.

Chatbots are here already — and companies are figuring out how best to put them to work. By 2021, say industry experts, the chatbot “market” — including third-party cloud-based chatbot solutions — should reach a total value of $15.8 billion. That’s a ringing endorsement. Just remember that chatbots are a product like any other, and computing their probable ROI isn’t that much different, no matter what else you’re promised by a software vendor. In some cases, the human touch might just be the better choice for your business anyway — you’ll need to decide based on your unique circumstances.

Bio: Nathan Sykes is the editor of Finding an Outlet, a source for the latest in IT and business news and trends.

Pros and Cons of Lender Options

moneyWhen it comes to financing your business, it takes a village. Or at the very least, it takes the right commercial lending partner.

With an increasing number of options available, it’s important for every business owner to fully understand what the lending process entails and how they can choose the right partner.

 

What You Need to Bring to the Table

No matter what lending partner you end up choosing, there are still a number of baseline requirements you’ll need to meet on your end as a borrower.

These usually include preparing documents showing your company’s basic financial information, recorded profits, and any accrued debts.

You may also be asked to provide personal financial information like credit scores as well as resumes or a personal statement about you and your business.

Know What You Need

After gathering all your personal information, you may discover that you actually need to wait to apply for a commercial loan because your credit score isn’t up to par.

Likewise, you may realize that you don’t know exactly how much money your business needs.

In order to find the right commercial lending partner, you need to get down to the nitty gritty and map out exactly what needs funding and how much money is needed to cover those costs.

Do you need real estate for a brick and mortar location? Do you need an expensive piece of machinery to automate your processes and make your business more profitable? Or are you simply having an issue with cash flow at this stage in your company’s development?

As the article “How to Choose the Right Commercial Lending Partner” notes, knowing this information will help you narrow down the specific loans and lending partners you should apply to.

Weigh Out Pros and Cons of Lender Options

Lending options can include banks, private investors and institutions, or even the involvement of the government. Each of these has its own pros and cons to consider.

If you have solid credit, an established business, and need funds fast, banks are a viable option.

Business owners should keep in mind though that the repayment periods on these commercial loans may be shorter than with other options.

If your business qualifies, there’s also the chance to apply for an SBA loan.

These will usually require more paperwork and take longer to process but have the benefits of a longer repayment period and offer lenders more security.

Research Reputations

If you don’t qualifying for any bank or SBA loan programs, you may seek other private options. This is where business owners need to be careful and do their homework.

Research the lending partners you’re considering by not only looking them up in the Better Business Bureau, but search for reviews or lending experiences online and in person from fellow business owners.

Doing this detective work now can save countless hours; headaches, and dollars later.

Launching and continuing to fund a business can be one of the most stressful parts of entrepreneurship.

Fortunately, following these clear steps can better your chances of not only getting a commercial loan, but finding the right partner for the ongoing life of your business.

About the Author: Kristin Livingstone writes on a variety of topics including small business and commercial lending.

What Do Mortgage Banking and Loan Growth Mean for You?

shutterstock_107386784Whether you own a home, a business, or both, there’s a good chance you have a loan with the bank.

Increases in mortgage banking, business loans, and other general loans are benefiting banks, which could in turn benefit you.

Here are just a few ways loan growth can affect consumers as well as business owners:

Common Expenses for Banks

Just like any other business, banks have a number of expenses and operating costs to consider. All of these expenses ultimately affect the loan terms and interest rates banks can offer you, the consumer.

Operating costs are the number one factor in a bank’s ability to offer attractive loan rates. These operating costs include everything from employee payrolls to utilities to marketing and advertising as well as property rental expenses.

There are also interest payments that banks must make to their liabilities, such as deposits. Although some banks net billions in profit each year, operating costs can absorb up to 75% of those profits.

This boils down to the bank’s annual performance and, when banks perform well, they can increase their lending practices and offer better rates.

National Banks vs. Community Banks

moneyMortgage banking and loan growth affect different types of banks in different ways. What could result in lower interest rates for a national bank may not have the same effect for smaller community banks.

The article “Mortgage Banking & Loan Growth Help Banks Offset Increase in Expenses” mentions loan growth as a main expense factor for banks. However, community banks simply can’t offer the same amount of loans as larger national banks. As a result, you might find better interest rates at national banks.

With that said, because national banks have higher operating costs, there are usually more fees involved. Likewise, although national banks can offer a variety of different loans, smaller banks have more loan flexibility when it comes to the terms they offer.

If you’re in search of a personal loan or a business loan, it’s important to consider both national and community banks when weighing your options as loan growth affects these institutions in different ways.

Banks and the Consumer

As mentioned before, when banks experience periods of loan growth, it increases their profits and makes it possible for them to offer better interest rates to the consumer. In other words, when more loans are on the table, banks collect more interest and can therefore lower their interest rates.

Additionally, loan growth also gives both large and small banks the ability to offer more favorable loan terms. This includes larger loans and extended loan periods in combination with lower rates and fees over the life of the loan.

Flip Side of the Coin

On the other hand, when mortgage banking and loans are lower than expected, banks usually have to compensate by increasing interest rates. This can be a particular disadvantage if you choose to lock in your interest rate.

Before taking a loan or signing a mortgage, first do some research and make sure loan growth is high and interest rates are as favorable as possible.

When it comes to banking, there are a number of ways loan growth can affect you, the consumer.

About the Author: Adam Groff is a freelance writer and creator of content. He writes on a variety of topics including banking and finance.