Chatbots vs. Live Chat: The Questions You Should Ask

《Chatbots vs. Live Chat: The Questions You Should Ask》

There’s a reason why people say “the first impression is the last impression.” Some 51%” of customers> never approach a business again after one bad experience. That puts pressure on every interaction—and every missed opportunity—with potential customers, recent purchasers, and long-time users.

Web chat is often the first impression for customer service interactions. While chat services initially connected consumers with real customer service staff, chatbots have become increasingly common—for obvious reasons and with obvious limitations.

Ultimately, no platform guarantees an improved customer experience. Consumers care most about solving their problems. Whether they do it with a person or a chatbot is secondary.

This post covers:

  • What chat platforms can (and can’t) do.
  • The questions you should ask to find out which platform is right for you.

Why you should care about chat

It’s what your consumers want. Preference for chat continues to grow: Some 70%” of consumers> prefer chat to voice if given the choice, and nearly” two-thirds> of customers who engage with a chat platform are more likely to return to a website and purchase again.

It can save you money. Collectively, companies spend more than %241″ trillion annually fielding billion calls>. As IBM notes, “that’s a lot of money dedicated to sub-par experiences.” Further, call centers are notorious bastions of turnover, increasing employer costs. Estimates” peg turnover at with each occurrence costing a company as much>

Just as businesses have been happy to move away from costly call centers, they’ve been equally intrigued to experiment with chatbots. Not all experiments have been successful.

When chatbots work—and when they don’t

Several years ago, Gartner” predicted> that, by 2020, businesses would manage 85% of customer interactions without involving a person. AI-powered chatbots were central to that prediction.

A more recent prediction from Gartner” hedged> on humanless customer service but nonetheless anticipates that, in just over a year, 25% of all customer service operations will be virtual.

Currently, chatbots rely on one of two technologies:

  1. Command-based chatbots that answer a limited set of questions.
  2. AI-based chatbots that answer more ambiguous queries.

Both types of chatbots perform best for “Tier 1” questions, or those that are easily interpreted and whose answers can be extracted efficiently from a database (e.g. “What time does my flight leave tomorrow?”).

Both still struggle to answer complex questions and, in some cases, incredibly simple questions:

《Chatbots vs. Live Chat: The Questions You Should Ask》
A series of progressively simpler questions for the 1-800-Flowers chatbot yielded increasingly disappointing answers.

The relative power of AI-based chatbots depends, in large part, on their access to training data. Companies such as Acobot crawl client websites to generate” a seed list of terms and knowledge> in a matter of minutes.

As you can imagine, the richness of that source material—and the subsequent quality of chatbot responses—varies greatly.

Live chat vs. chatbots: 6 questions you should ask

More than anything else, Facebook catalyzed the rapid adoption of chatbots when it opened its messenger app to private developers in 2016. For companies, it was a new channel to reach their 1.5 billion consumers.

The rush to market generated spectacular successes and failures. These first movers, as well as more recent entrants, exemplify the situations when you should—or shouldn’t—deploy chatbots.

1. Are you struggling with customer service response times?

  • Chatbots respond instantly, 24 hours a day, 7 days a week.

A human takes more” than seconds> to respond to a query. A single 15-second delay may not impact the customer experience significantly, but the aggregate delay—15 seconds for each response in each interaction across every representative—can add up to longer wait times and higher staffing requirements.

Likewise, if consumers expect answers 24/7, chatbots are the most cost-effective (and, in some cases, only plausible) solution.

《Chatbots vs. Live Chat: The Questions You Should Ask》
An attempt to use Facebook Messenger to find out about a recent flight. KLM’s human response came almost six hours later (and had no way to patch together Facebook data within anything else in their CRM).

IBM” cites autodesk virtual agent> (AVA) as a success story for chatbot response times: The company improved customer response time by 99% while also escalating complex questions to human agents (a system sometimes called “Hybrid AI” or “Agent-Assist”). The improved response time cut average resolution times down from 1.5 days to just 5 minutes.

AVA resolved many of its 1 million annual support requests without human support, including simple issues such as changes of address, activation codes, and contract questions. AVA estimates that the chatbot integration reduced total per-case costs from $15–200 to $1.

Even if user questions are ultimately escalated to a human representative, a chatbot’s instant response may keep someone from leaving your site. (Alternatively, an inane reply may chase users away—speed isn’t the only KPI for customer service.)

2. Do you waste time answering simple, fact-based questions?

  • Chatbots can fetch basic information from company databases almost instantly.

Satisfi” labs> provides AI-based chatbots to zoos, aquariums, museums, and similar organizations. Their chatbots collect visitor data while also helping consumers book tickets.

Chatbots solicit basic information with questions like “Which day would you prefer to attend the event?” or “How many people will be attending the event with you?”

《Chatbots vs. Live Chat: The Questions You Should Ask》
The chatbot for the National Baseball Hall of Fame provides useful but limited guidance on visiting.

This is one reason that the airline industry has been one of the quickest to adopt chatbots—many of their customer service interactions focus on simple questions about flight times, delays, or ticketing information whose answers are easily extracted from a database.

3. Do you want more data about customer service interactions?

  • Chatbots can diagnose online trends and report back to your organization.

Pairing conversational data from chatbots with visitor location on a website helps organizations customize their experiences and improve conversion rates.

The same is not true in the case of live agents. Unless live chat agents have access to powerful integrations” like microsoft dynamics>, they may not be able to recall the customer history efficiently or understand past pain points. (See the above example from KLM.)

4. Are you trying to reduce customer service costs?

  • Chatbots can reduce costs in high-volume customer service centers.
  • Chatbots still require a backup, human-based option.

The time and money it takes to roll out a chatbot vary greatly, from a few minutes and a few dollars (with a service like ManyChat,” which has tiered audience-based pricing starting at per month to of hours> of development costs to build a conversational bot from scratch.

How do those costs compare to live agents? A survey of hourly rates on Glassdoor estimates the hourly rate of a live chat agent at $7–15, and Upwork suggests that customer support representatives with field specialization often charge 20–50% more than other reps.

As one live chat agent manages only 4%E2%80%936″ chats at a time>, a high-volume live chat service can quickly become a cost center, especially when layering training, management, and turnover costs on top of hourly expenses.

However, chatbots add another layer of technical risk to online experiences—a website, a chat platform, and its chatbots must remain operational. For most companies, that makes some kind of backup customer service option essential. (IBM” predicts> that phone-based customer service will exist solely as a backup option by 2020.)

5. Do you need to scale customer service operations?

  • Chatbots can extend personalized customer service that would be prohibitively expensive to implement with real people.

Chatbots often disappoint when they’re intended to replace humans for core customer service needs. However, companies have found more opportunity for experimentation (and a higher user tolerance) when chatbots deliver a level of customer service beyond what consumers expect.

Examples of how companies have scaled customer service with chatbots:

《Chatbots vs. Live Chat: The Questions You Should Ask》
Kia’s messenger chatbot “Kian” allows the company to scale personalized service.
《Chatbots vs. Live Chat: The Questions You Should Ask》
Emirates Vacations uses a chatbot within its display ads to create contextual, frictionless opportunities for consumer engagement.

6. Are your customer service conversations complex?

  • Chatbots are nowhere close to passing the Turing test.

Users tend to prefer” live chat> because chatbots often fail to understand even basic requests:

《Chatbots vs. Live Chat: The Questions You Should Ask》《Chatbots vs. Live Chat: The Questions You Should Ask》

Beyond such abject failures, the subtleties of human-to-human interactions are essential for on-brand communication.

  • Everlane.” the fashion retailer shuttered its chatbot in part because unpredictable quality of interactions risked diluting brand voice. rather than trying to extend a pseudo-personalized reach it refocused on email medium which controlled all messaging and could better meet consumer expectations tailored but not hyper-personalized communication.>

For complex sales” funnels>, human agents also excel at helping consumers navigate the decision process, addressing doubts and answering specific questions.

  • Intercom.” when ceo eoghan mccabe announced a new chatbot earlier this month he argued that the key to improving chatbots was move away from phone tree model inevitably ends with recommended email address or number no solution and instead focus on answering tier questions while elevating remainder trained sales staff. intercom answer bot mines past interaction data human-to-human responses build ai-based responses.>

《Chatbots vs. Live Chat: The Questions You Should Ask》

Chatbots face other well-known conversation limitations, especially when it comes to human emotion. For example, sarcasm is often confused with sincere communication.

Even for a successful chatbot, advances may” dig a deeper hole>: Facebook’s now-shuttered personal assistant M drew more difficult questions from users each time it had success. Everyone, sooner or later, was disappointed.


Live or automated, chat is growing. Much of the debate between live chat and chatbots boils down to a single type of customer experience, as” told by asonele kotu> to Marketing Technology Insights:

The customer might start out thinking they’re chatting to a person, but after a while, the truth is going to dawn. Then they’re really going to regret the five minutes spent describing their recent holiday to Jamaica.

Part of a strong customer success strategy is access. Customers want to reach your company without the frustrating journey to get to you. And by “reach your company” we mean they want to talk to a real person who breathes and everything.

There is a central truth here: Chatbots cannot fake human-based customer service (yet). If your chatbot strategy hinges on sustaining that deceit, you’ll fail. However, a chatbot doesn’t need to simulate a human to be successful.

The companies that have succeeded with chatbots recognize how to deploy them now (for Tier 1 questions), when to shift to live chat (for complex issues), and how to start planning for the future of customer service that, as of now, remains uncertain.

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