5-way Chatbots increase Conversions and Retentions

By Srikanth
7 Min Read

Chatbots have become astonishingly sophisticated since they were introduced in 2009. Back then they captivated interest with their ability to understand questions and give suitable replies. Businesses realised chatbots presented tremendous opportunities. People were accustomed to chatting with people; conversations with chatbots quickly became nearly indistinguishable from conversations with people. This meant many queries could be answered by chatbots. So chatbots were deployed in roles where customer interaction was necessary. 


Businesses adopt chatbots because they are incredibly profitable. Their use keeps businesses competitive and edgy. Businesses that use chatbots increase conversion rates and retain more customers than those that don’t. A few ways chatbots helps businesses do so follow.

1. Chatbots Never Sleep

Chatbots don’t get tired, sleepy, bored, sluggish, or take a day off. People can’t work non-stop at their productive peaks. They need to sleep and tend to make mistakes. They’re also considerably harder to manage than chatbots.

Businesses that deploy chatbots use them around the clock. They worry less that chatbots will make a mistake. The technology powering chatbots is growing in sophistication every week. Chatbots learn constantly and often give more relevant answers to queries than people can.

An e-commerce business that wants customers to have a great experience needs chatbots. With chatbots deployed, it need not worry that customers will not be served promptly should they inquire about a product in the early hours of the morning. A chatbot is as alert at the wee hours of the morning as any other time. It can answer customers’ questions and move them towards conversions.

2. Chatbots Grow Along with Businesses

For businesses, a sudden influx of customers can prove irksome. It’s exciting when a business experiences a sudden and huge influx of customers, but should it be unable to serve customers as well as they expect, they will be disappointed and not return. 

Customers have come to expect exceptional online experiences. They regularly use free and slick sites that have raised the bar for all businesses. When a site is dysfunctional or shoddy, customer’s expectations aren’t met and many leave never to return. Chatbots enliven a site and add to its functionality. Customers have come to expect chatbots on every site and rely on them to shop.

Customers attracted to a brand following a creative marketing campaign expect to be served with the same creativity on its site. When their inquiries aren’t handled effectively and promptly, they are unlikely to be converted into loyal customers. Chatbots make it easy to answer inquiries from hundreds of people simultaneously. This helps businesses grow while meeting the expectations of its growing customer base. 

3.Pervasive Across Channels

Knowing how customers interact with a brand at multiple touchpoints is vital for businesses. Customers’ journeys with brands span channels: chatbots help businesses span channels. Using chatbots customers can be engaged on a brands’ site, app, or social media page. 

With the advent of digital media, customers’ journeys have become complex. Brands can manage this complexity using chatbots. Chatbots assist customers across channels and their importance will only grow. Smartphones make it easy to exchange text messages making chatbots an effective tool to reach customers across channels.

Chatbots can replace employees when it comes to reaching customers across channels. They can reach more customers at a significantly lower cost than employees can. And their ability to move customers towards a sale on different channels is exceptional as well.

4.Personalise to Retain Customers

Customers have been spoiled by free sites and paid ones. On their Facebook account, they are less likely to search for new friends than scout friends Facebook thinks they may know. Customers expect their every feed to be personalised. The same goes for e-commerce sites.

After the first purchase from a site, customers expect to see recommendations. They don’t expect a site to treat them during their 2nd and subsequent visits as it did during their first one. Meeting these expectations demands using chatbots.

Chatbots have distinct advantages over people in personalising experiences. A chatbot never forgets; people usually do. A chatbot will remember every customer’s name and prior purchases. So it can make relevant recommendations. With time at a premium and a dazzling array of tempting products, recommendations make shopping easy, efficient, and fun.

When customers see chatbots making relevant recommendations consistently, they are likely to adopt a brand as their own. 

5.Chatbots Shorten Sales Cycles

Chatbots can work alongside sales teams. Their efficiency at gathering and analysing data means they are remarkably successful at analysing which customers are likely to buy a product. Armed with this information a sales team can confidently spring to action.

Hence the time between finding a prospect and closing a sale is reduced considerably using chatbots. Furthermore, sales teams are armed with knowledge about prospects which leads to higher conversions.

Chatbots are powerful because the AI behind them is sophisticated. It uses data from billions of data points to answer questions. The responses made by chatbots are nearly indistinguishable from those made by people, but they cannot yet fully replace people. On e-commerce sites, many queries can only be answered with a nuanced understanding only people have. This is why chatbots, while an effective tool, should work alongside people and not replace them, at least not yet.  

Article Contributed by Mr. Vishnu Gullipalli, CEO and Solution Advisor, Retail Insights, MBA grad from Ohio University holds business and tech knowledge and brings in exceptional strategic capabilities and retail expertise in developing purpose-led brands/retailers towards digital innovation. His rich retail experience of  15+ years across the globe on Omnichannel and Digital Transformation Programs with companies like TESCO, Harman, Happiest Minds, Hyvee, Clarks UK, Asda, As Watson has brought sustainable growth and value in the way retail is transforming in the present to create a better future

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