AI chatbots and customer retention

AI chatbots and customer retention
All the blood, sweat, and tears that go into wooing new customers make customer acquisition more exciting, yes, but also invariably more expensive. But the boringly safe, exponentially higher ROI-generating option of customer retention is no walk in the park either.
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Because customer retention is about more than making a sale. It’s about:

  1. Making your customer happy,
  2. Keeping them happy
  3. Nurturing them for another purchase
  4. Repeating the process all over again.

It’s a Herculean task, and even the best customer service teams can buckle under the pressure.

AI chatbots can take a lot of that pressure off, and bring something to the table that no human team can fully guarantee — consistency.

In this article, we discuss the connection between customer satisfaction and customer retention, and how AI chatbots can help you achieve both.

Understanding Customer Retention

Ever heard the proverb ‘A bird in hand is worth two in the bush’?

Here’s why customer retention offers immense ROI:

  • Existing customers already trust and value your offering.
  • It becomes cheaper and less time-consuming to win them back.
  • When repeated enough times, their repeat purchases become habitual, requiring little to no push from you.
  • These repeat customers are also prime candidates for brand loyalists, and eventually, brand evangelists.
  • Apart from contributing to brand value, they represent steady income streams, insulating your business from competitive pricing wars.

How Customer Satisfaction Leads to Customer Retention

Customer satisfaction measures a customer’s perception and reception of your brand.

Customer Satisfaction Score (CSAT) is a key performance metric representing how happy customers are with your product or service and how likely they are to recommend it.

Companies with high CSAT (and corresponding customer loyalty) scores generally expend considerable resources to provide personalized, instant, and consistent customer support.

And while not all satisfied customers return, all returning customers are always satisfied ones.

Diagrammatically, the relationship between satisfied and repeat customers looks like this.

How Customer Satisfaction Leads to Customer Retention

How AI Chatbots Improve Customer Satisfaction

AI chatbots, as opposed to rule-based chatbots (you know the ones that ask you for the make and model of your product, the date of purchase, the price of purchase, your address, your blood type, the color of your firstborn’s eyes, and the brand of lawnmower your neighbor uses before they’ll deign to tell you that no, you can’t use that bowl in the microwave after all?), are conversational agents that can bypass the need for a menu-based, scripted conversation and tackle customer queries right away.

For inexplicable reasons, they’re more preferred by customers and using them gives you a higher chance of achieving your customer satisfaction goals.

The deployment of AI chatbots in your customer support mechanism can facilitate:

1. Instant Resolution of Customer Queries

The internet-fueled model of always-on business means you have to provide always-on support.

AI-backed conversational agents can solve multiple queries in real-time and at scale.

It can suggest knowledge portal resources, answer FAQs, and redirect customers to troubleshooting guidelines as soon as a query is received.

Being attended to at the right time gratifies and pacifies most customers and enriches the customer experience.

2. Reducing Customer Wait Times

Since chatbot interactions are instant, wait times drop drastically.

InSPORTline, a Smartsupp client, used their chatbot to bring down response time to a maximum of 25 seconds.

Even if an issue needs further operator assistance, your chatbot can immediately raise a ticket and escalate it to a human agent.

Reducing Customer Wait Times

Vico Food Box reduced the number of escalations requiring human support to just 10% by routing queries through Smartsupp’s chatbot first.

While they wait, the bot collects crucial information to pass on to the agent, further streamlining issue resolution.

3. Consistent and Reliable Customer Support

AI chatbots don’t perform any differently on a Sunday morning than they do on a Tuesday afternoon.

Or when they’re dealing with thirty customers instead of the usual three.

Designed to handle high volumes, AI-powered customer support can ensure reliability and consistency regardless of

  • Business hours
  • Location and
  • Language

That information is provided in writing and doesn’t need to be remembered scores them yet another point with self-help preferring customers.

4. Efficient Integration with Other Tools

By collecting data across sessions, you can create a centralized repository of customer information.

Each time you interact with a customer, whether it’s on

  • social media
  • WhatsApp, or
  • email,

you have access to all of their previous interactions with your support team.

Customers can seamlessly switch from a live chat session to a phone call without losing the progress they’ve made on the other channel and having to start all over again.

The Role of AI Chatbots in Customer Retention

Over a period of time, consistent efforts to provide customer satisfaction develop into customer retention.

Chatbots offer unique benefits that consolidate customer service and aid customer retention such as:

Personalized interactions

The chatbot analyzes which pages the customer is viewing, how much time they’re spending, etc. and asks pertinent questions to fill gaps in understanding. It can then make personalized offers and tailored product recommendations to drive conversions.

The chatbot analyzes which pages the customer is viewing

The chatbot uses product cards to make recommendations more appealing.

The customer gets all the benefits of a dedicated customer service agent attending to them without the limitations of in-store visits and regular working hours.

Personalized conversation flows also drive up switching costs for customers by making it difficult for other firms to treat them with the same level of familiarity, thus improving retention rates.

After-sales Support and Client Onboarding

Chatbots can share tutorials, interactive demos, and find knowledge base articles to make customer onboarding a smoother process.

Based on their conversation history, visual learners can be offered video tutorials, and verbal learners can be presented with written step-by-step instructions.

Monitor conversational data for problem areas and adjust flows accordingly.

E.g., if data shows an increase in customer complaints one week after a purchase, the chatbot can be programmed to offer human assistance during that critical period.

To further support customers, the company could also schedule automated emails five days post-purchase, connecting customers with a dedicated agent for personalized help.

Gathering Explicit and Implicit Feedback

You can use a built-in survey at the end of every session to collect feedback from customers about the satisfactory resolution of their questions.

Smartsupp’s chatbots are also capable of understanding indirect cues like the number of times the customer sought help on the same topic, whether the session ended abruptly, and sentiment analysis through natural language processing.

They automatically generate summaries and reports both for self-help queries and (pre and post) agent interactions.

The conversation analysis helps segment customers and provide crucial information to companies about client demographics, behavior and choices.

Armed with this information, companies can predict customer needs and preferences, and prevent churn.

Retargeting and Re-engagement

Website and session data allow businesses to observe each point of contact in relation to the customer journey.

Also, you can use the data captured by Smartsupp leadgen chatbots and integrate it with Google’s Customer Match to reach and re-engage past customers.

Their activity and conversations can be used to display personalized ads throughout the Google ecosystem — on Google Search and Shopping tabs, GMail, and YouTube.

The contacts gathered can be of course used in direct email campaigns or CRMs. This allows for further personalized campaigning and outreach efforts.

The sessions can also be reviewed to see where customers came from, their intent, the time they spent on the website and on which pages, and whether they ran into any issues.

Personalizing Customer Interactions with AI Chatbots

You can set up your chatbot to trigger on specific pages and start the conversation with an appropriate automated message.

These topical conversations can be customized according to the page the customer is viewing, their clicks, browsing time, number of visits, their region or location, etc.

Unless the customer has deleted cookies, the chatbot can recall previous conversations and transactions, and use them to bypass initial filtering questions.

The conversation can be picked up where it was left off, and once enough qualifying information is collected, it can be used to send follow-up emails to customers.

E.g. A dissatisfied customer can have their complaint resolution expedited, sent timely updates on the company’s redressal steps, and offered a reconciliatory bonus or discount.

To maximize repeat purchases, design automated email sequences to win back a disgruntled customer in collaboration with your best customer service reps.

Make a separate sheet and populate fields like complaint subject, resolution status, and solutions offered from the session report generated by the chatbot.

Email outreach tools like Hunter Campaigns can be integrated with CRM data to personalize templates further.

Personalizing Customer Interactions with AI Chatbots

Schedule emails to be sent a few minutes after the customer has left the chat session.

You can also use Campaigns to make nuanced personalizations like segmenting your email list based on lifetime value and modifying the sending time according to a customer’s location.

Using AI Chatbots for Proactive Customer Engagement

If you’re not using your chatbot to pre-empt customer needs, you’re leaving a large chunk of potential sales on the table.

Train the bot to give meaningful, engaging responses to customers by remembering and recalling previous conversations and context.

Create separate flows to offer proactive support to returning customers.

Your chatbot can activate push notifications offering

  • support for an already purchased product,
  • information about new version launches or upgrades, or
  • loyalty points to encourage upselling and cross-selling.

Since the AI chatbot offers multichannel support, the retargeting campaign can be continued on a channel the customer is more active on.

The chatbot can offer to arrange a demo or walk-through with an agent to a customer that visited a product page several times.

Customers on the fence about buying a product can be sent a nurturing email sequence containing testimonials and a limited-time discount coupon.

A customer who was not satisfied with the information or solution provided can be contacted via text message or WhatsApp to ask if they still need help.

Challenges in Using AI Chatbots

Understanding Customer Requests

A major reason for the non-adoption of chatbots by customers is their fear of being trapped in circuitous scripted conversations that fail to

  1. understand and
  2. solve

their problem.

With Smartsupp, rigid, keyword-based chatbots are a thing of the past. Their AI bots can process natural language requests, even when differently phrased, and pull up the correct guide or solution from the knowledge base.

If a question asked is outside the scope of programmed responses, they can immediately flag it for human oversight, avoiding customer frustration and erosion of trust.

Impersonal tone of voice

If you’ve centered your brand around warm client relationships or a distinct brand voice, but your chatbot has about as much personality as a GPS voice assistant, it will alienate customers.

Choose a chatbot that allows you to customize the communication style to align with your brand’s personality.

Create message templates and train AI tools to use catchphrases and a tone of voice that your customers associate with you.

Technical compatibility

Look for chatbots that pair well with the desktop and mobile versions of your website, as well as your app.

Even when not completely incompatible, far too many chatbots end up not displaying properly, slowing down site loading time, or failing to integrate all channels of customer communication.

Watch out for these issues during demos and search for reviews that mention post-purchase support and integration success.

Measuring and Improving Performance

AI chatbots require continuous monitoring and adjustments before they can emulate the success of your human customer service team.

Use the performance dashboard to keep an eye on the number of triggers, successful resolutions, and human agent escalations.

Compare them to other periods and against your sales data.

If your chatbot comes with a no-code builder, it becomes easier to revise flows according to customer and agent feedback.

Conclusion

Customer satisfaction is the single biggest controllable factor that ensures long-term customer relationships.

AI chatbots enable you to provide top-notch service at a fraction of the cost and labor of traditional customer service.

You can integrate them with your website and mobile app to

  • Provide anytime, anywhere service
  • address and solve their inquiries instantaneously, and
  • offer personalized support and recommendations.

If you want to

  • increase human agent productivity,
  • lower customer support costs,
  • manage customer expectations,
  • provide superior customer experiences, and
  • keep customers coming back,

AI chatbots are powerful tools to achieve those goals and more.