In the modern era of constant digital connection, where customers expect their responses to be immediate and their purchases to be on their doorstep by the next day, the speed at which a company can react to their customers is paramount.

Traditional customer service contact methods such as telephone and email are increasingly struggling to deal with the rapidity of response that most customers now expect.

This is particularly true when those customer service responsibilities have been relocated overseas through business process outsourcing (BPO). While certainly able to save on costs, BPO has a range of downsides that are putting it at a disadvantage when compared to the hot new technology for customer service and marketing, the chatbot.

What Is a Chatbot?

In simple terms, a chatbot is a non-complex AI, or artificial intelligence, program that can mimic the responses of human customer service agents and provide answers to customers that engage it through a text-based interface. 

The use of chatbots has already spread over a wide range of sectors, with oil giant Shell using a chatbot to "answer your questions about oils and lubes" of which we're sure you have many, as well as giving out more information regarding Shell products, services, and careers.

Other large companies are also investing in AI-based customer service tech.

Apple, with an eye on keeping its reputation and a progressive tech company intact, has invested in both a virtual reality (VR) company, to support it’s rumored augmented reality (AR) glasses release in 2023, and artificial intelligence (AI) platform Voysis with an eye to using natural language interfaces to pioneer a new kind of customer experience.

Microsoft has also gotten in on the action by recruiting former senior Apple executive Ruben Caballero to head up their AI and AR HoloLens project.

Why Will it Replace BPO?

The reality is that chatbots are both faster and cheaper than having an overseas call center.

Research by Telus International indicated that chat-based customer service is both 100 times faster than email communication and costs around 50% less than handling phone calls.

However, the real death blow for BPO customer service is the fact that chatbots and human customer service operatives can be smoothly combined.

While chatbots are certainly becoming more popular, many companies are also looking at options that combine the holistic opportunities of human interaction with the speed of using an AI program. One such option is live chat.

The Rise of Live Chat

Live chat allows customers to talk directly to a customer service agent without needing to use the phone. Research by J.D. Power indicates that 46% of customers prefer live chat to other methods of contact and 38% of consumers are more likely to buy from a company if they offer live chat support. 

Research by enterprise chat software SnapEngage indicated that visitors are 70% more likely to leave a website if they encounter an error 404, or missing page.

To reduce the churn on their own website, SnapEngage now fires off a proactive chat invitation whenever a user hits a 404 page, inviting them to discuss what they were looking for, rather than simply leave the page.

Online casino Betway uses a customer service live chat on its online portal to help customers quickly and efficiently solve any issues without them having to spend time in phone queues or navigate away from the gaming company's website to find the answers to any questions they might have.

Canyon Bicycles might be based in the U.S., but it operates globally, so the company has starting using live chat to provide multilingual customer service support, taking advantage of the fact that one customer service representative can manage multiple live chats to overcome the logistical problems of providing multi-language support.

By combining live chat and chatbots, companies can provide instant and accurate communications with their customers.

The greater utility of live chat also means that smaller numbers of customer service operatives need to be maintained and this, combined with the reduced cost of maintaining a live chat system, has seen more and more companies move away from BPO and reinstitute in-house native customer service teams supported by chatbot tech.