ChatbotStrategy

MarketResearchReport

November2016

Methodology

3

Methodology

Businesssurvey Consumersurvey

•  Intotaln=84completes•  Allbusinessesinvolvedinthestudysellproducts/

servicesonlineorcustomerscancompleteapplicaBonsonline

•  Allbusinesshadatleast100employees

•  EmailinvitesweresentouttotheFiFhQuadrantnewsleHersubscribersandtoTEGrewardspanellists

•  5minuteonlinesurvey

•  Surveyswerecompletedbetweenthe17th–23rdNovember

•  Intotaln=528completes•  Allrespondentswereconsumerswhohave

abandonedanonlinepurchase/applicaBonprocessinthepastthreemonths

•  Allrespondentscompletedthesurveythroughourpanelpartner(TEGRewards)

•  5minuteonlinesurvey

•  Surveyswerecompletedbetweenthe17th–22ndNovember

4

Oursample:Oursamplecomprisesofawiderangeofbusinesses,acrossallindustriesandsizes

Industry

14%

13%

11%

10%

7%

6%

6%

5%

5%

5%

5%

14%

Government

Retail

BankingandFinance

EducaBon

Health

Transport&Freight

Wholesale

ConstrucBon

Hospitality,TourismandEntertainment

Manufacturing

TelecommunicaBons

Other

Numberofemployees

13% 17% 15%33%

21%

100-199 200-499 500-999 1,000-4,999 5,000andover

29%

19%

13%

12%

7%

5%

5%

4%

2%

5%

CEO/CFO/COO/CTO

DivisionalGM/Director

Sales/BDManager

HeadofCX/CustomerService/ContactCentres

ProjectManager

CMO/DirectorofMarkeBng

HeadofDigital

Research&Development

Headof/SeniorProcurementOfficer

Other

PosiIon

5

Oursample:AbroadcrosssecBonofconsumersthroughoutAustraliaparBcipatedintheresearch

Age

27%

24%

24%

25%

18-34

35-49

50-64

65+

Gender

Male,50%

Female,50%

28% 27% 23%12% 10%

NSW/ACT Vic/TAS QLD SA/NT WA

LocaIon

ResearchFindings

7

Consumers:Q1-Haveyouabandonedanonlinepurchaseorapplica9onprocessforanyofthefollowingreasonsinthepast3months?n=874(thosewhohavenotabandonedanonlinepurchaseorapplica9onprocesshavebeenscreenedoutfollowingthisques9on)Consumers:Q1.Haveyouabandonedanonlinepurchaseorapplica9onprocessforanyofthefollowingreasonsinthepast3months?n=528

ComplicatedprocessesandwebsitenavigaBonarekeyobstaclesprevenBngcustomersfromfinalisinganonlinepurchaseorapplicaBon.Theseissuescanbeovercomebyprovidingconsumersimmediateonlinehelptocheckthroughdetails

•  Onaverage,theseconsumersclaimto

haveleFmorethan2.5onlinepurchase/applicaBonprocessesinthepast3months

•  73%ofconsumershaveabandonedanonlineprocessmorethanonceinthepast3months

Mainreasonswhyconsumersabandonthepurchase/applicaIonprocess

41%

38%

37%

36%

28%

22%

PricenotcompeBBve

Complicatedcheckoutprocess/poorshoppingcartfuncBonality

Securityconcerns

ComplicatedwebsitenavigaBon

LackofinformaBonabouttheproduct/service

LackofpaymentopBons

60%ofconsumersstatethattheyhaveabandonedanonlineapplicaBonorpurchaseprocessinthepast3months:

8

Similarlytoconsumers,mostbusinessesbelievethatimmediateonlinehelpwouldenablethemtoincreaseonlinesalesconversaBonrates

Consumers:Q3-Doyouthinkthatifyoucouldaccessimmediateonlinehelp,youwouldcompletetransac9onsmoreoMen?n=528Businesses:Q9-Doyouthinkthatifyourcustomerscouldaccessimmediateonlinehelp,youronlinesalesconversionratewouldimprove?n=84

85%ofbusinessesbelievethatimmediateonlinehelpwouldimproveonlinesalesconversaBonrates

77%ofconsumersbelievethatimmediateonlinehelpwouldincreasetheirlikelihoodofcompleBngtransacBonsonlinemoreoFen

9

Businesses:Q7-Howdoyouthinkthefocusononlinesalesconversionrateop9misa9onwillchangeinthenext12monthswithinyourorganisa9on?Q8.Whatwillyourorganisa9ondotoimproveonlinesalesconversionrates?n=84

Accordingly,opBmisingonlinesalesconversaBonratesisanincreasingfocusforthemajorityoforganisaBons.BusinesseshavearangeofiniBaBvestoimprovesalesconversaBonrates,includingimplemenBngwebchattoofferimmediatehelp

FocusononlinesalesconversaIonrateatbusinesseswill…

2%

17%

43%

38%

Becomemuchmoreimportant

Becomemoreimportant

Staythesame

Becomelessimportant

MainwaysorganisaIonswillimproveonlinesalesconversions

(top10iniIaIves)

45%

40%

35%

27%

25%

24%

24%

20%

19%

18%

ImproveonlinefuncBonalityandnavigaBon

Morecustomerfeedbacktoimproveuserexperience

Implementwebchat

Simplifywebforms

Upgradetechnologyplamorm

Improvesecurity

ProvidebeHerinformaBonabouttheproduct/serviceReducecomplexityintheproduct/serviceofferImproveshoppingcart/checkoutfuncBonality

ProvideFAQ’sonthewebsite

81%ofbusinessesbelievethatthe

focusingononlineconversionrateswill

becomemoreimportantinthenext

12months

10

Businesses,howeverarechallengedatvariouslevelswhenitcomestoprovidingimmediateaccesstohelponline,withthelackofintegraBonbetweensystemsbeingthebiggestissue

Businesses:Q10.Whatpreventsyourorganisa9onfromprovidingimmediateaccesstohelponline?n=84

42%

26%24% 24%

21% 20%

15%

LackofintegraBonbetweensystems

Lackofskilledresources

LackofcollaboraBonbetween

departments

OtherprioriBes CurrentonlinesoluBonsdon’tworkverywell

Lackoftechnology

Tooexpensive

ReasonswhyorganisaIonsarenotprovidingimmediateaccesstohelponline

11

2in3businessdecisionmakershaveverylimitedknowledgeaboutChatbots.Consumersareevenlessawareofthistechnology,withonly1in5claimingtohavesomeknowledge

Consumers:Q5r-Howmuchdoyouknowaboutthefollowingtopics?n=528Businesses:Q11r-Howmuchdoyouknowaboutthefollowingtopics?n=84

KnowledgearoundAI,Chatbots,ConversaIonalCommerce

7%

23%

40%

36%

40%

30%

42%

24%

23%

15%

13%

7%

ArBficialIntelligence

Chatbots

ConversaBonalCommerce

Neverheardofit KnowthetermbutveryliHleknowledge

Somewhatknowledgeable Veryknowledgeable

Knowledgeofbusinessdecisionmakersaround…

19%

55%

80%

46%

26%

16%

31%

16%

4%

4%

3%

ArBficialIntelligence

Chatbots

ConversaBonalCommerce

Neverheardofit KnowthetermbutveryliHleknowledgeSomewhatknowledgeable Veryknowledgeable

Knowledgeofconsumersaround…

12

WeshowedconsumersandbusinessdecisionmakersthefollowingdescripBonofChatbotsbeforeaskingthemfurtherquesBonsaboutthistechnology…

ChatbotsthatusearBficialintelligencearenowbeingadoptedtoimprovecustomeracquisiBonandretenBoninleadingorganisaBonsthroughouttheworld.Chatbotsarebeingusedtoguidecustomersfromlandingpagetopurchaseonbothmobileanddesktopdevices.Chatbotsunderstandlanguage,notjustcommands,andconBnuouslygetsmarterastheylearnfromconversaBonstheyhavewithcustomers.Accordingly,thecustomerisassistedthroughthebuyingprocess,withtheChatbotprovidingrelevantinformaBontothecustomerthroughoutthejourney.Thismakesiteasierforthecustomertobuytheproductorservice,ulBmatelyincreasingconversionrates.Ofcourse,ifthecustomerwantsassistancefromapersonatanystagethroughoutthejourneyitiseasytoswitchtohumanassistance.WitheachcompletedinteracBon,Chatbotsintelligentlylearnmoreabouthowyourcustomersandemployeesinteract.Thisallowstheprocesstobeautomated,meaningyouremployeesarerequiredlessoFen,ornotatall.

DescripIonofChatbotsforbusinesses

ChatbotsthatusearBficialintelligencearenowbeingadoptedtoimprovethecustomerexperienceinleadingorganisaBonsthroughouttheworld.Chatbotsarebeingusedtoguideyoufromlandingpagetopurchaseonbothmobileanddesktopdevices.Chatbotsunderstandlanguage,notjustcommands,andconBnuouslygetsmarterastheylearnfromconversaBonstheyhavewithcustomers.Accordingly,youareassistedthroughthebuyingorapplicaBonprocess,withtheChatbotprovidingrelevantinformaBontoyouthroughoutthebuyingjourney.Ofcourse,ifyouwantassistancefromapersonatanystagethroughoutthejourneyitiseasytoswitchtohumanassistance.

DescripIonofChatbotsforconsumers

13

DespiterelaBvelylimitedknowledge,aFerhavingreadthedescripBonofChatbots,3in4businessesbelievethatChatbotsarerelevanttotheirbusiness,andthesameproporBonofconsumerswouldfeelcomfortableusingChatbots

Consumers:Q6-HowcomfortablewouldyoubeusingaChatbotforassistedservicewhencomple9nganonlinepurchaseorapplica9onprocess?Basen=420,NotsureanswershavebeenexcludedBusinesses:Q12-Basedonwhatyounowknow,doyouthinktheuseofChatbotswouldberelevantinyourorganisa9on?Basen=84

RelevanceofChatbotstobusinesses

7%

20%

55%

18%

Notatallrelevant

Notveryrelevant

Somewhatrelevant

Veryrelevant

73%

4%

19%

67%

10%

Veryuncomfortable

Uncomfortable

Comfortable

Verycomfortable

Consumers’levelofcomfortusingChatbots

77%

14

ThemajorityofbusinessdecisionmakersbelievethatChatbotswouldimprovetheirkeyKPIs,parBcularlyaroundonlinesalesconversionrates,customersaBsfacBonandoperaBonalefficiency

Businesses:Q14r-AndwhateffectdoyouthinktheuseofChatbotsmighthaveonthefollowingKPIs?n=84

55% 55% 54%49% 48%

44%

36% 34% 32% 30%

Onlinesalesconversion

rates

CustomersaBsfacBon

OperaBonalefficiency

Abilitytoup-sell/

cross-sell

CostpertransacBon

Renewals/CustomerretenBon

InformaBonsharingacross

businessunits/

locaBons

AgentsaBsfacBon

Corporategovernance&regulatorycompliance

Onboarding

ImpactofChatbotsonKPIs(%Improve)

15

11%

67%

19%

3%

Definitelywouldimprove

Probablywouldimprove

Probablywouldnotimprove

Definitelywouldnotimprove

1in5consumersthinkthatChatbotscouldprovideabeHerexperiencethanhumansandthemajority(78%)believethatChatbotswouldimprovetheiroverallonlinepurchase/applicaBonexperience

Consumers:Q7-Basedonwhatyounowknow,doyouthinkaChabotwouldimproveyourexperiencewhentryingbuyaproductorcompleteanapplica9onformonline?Basen=528Q11-DoyouthinkaChatbotwouldprovidebeZerservicethanahuman?Basen=528

Levelofserviceprovided:Chatbotvshumans(Consumers)

ChatbotsbeYer,21%

HumansbeYer,79%

LikelihoodofChatbotsimprovingtheonlinepurchase/applicaIonexperience

(Consumers)

78%ofconsumersbelieveChatbotswouldimprovetheir

experience,withnodifferencebetweenage

groups

16

ConsumerswhobelievethatChatbotswouldimprovetheirexperienceunderstandthatitwouldenablethemtocompleteanonlinepurchaseorapplicaBonprocessmoreefficiently,withimmediatehelpwhenneeded

Q8-Whydoyousaythat?n=409(wouldimproveexperience)

WhydoconsumersthinkthatChatbotswouldimprovetheirexperience?

37%

29%

15%

13%

6%

Helpful/Useful

Easier/Faster/Moreefficient

AnyassistanceisbeHerthannothing

ProvidemoreinformaBon/answers

Boostsconfidence/encouragepurchase

Itwouldhelpmetogetthingsdone.

AtleastIwouldbeabletogetsomehelpandaskques9ons,but

possiblynotinfulldetail.

ItwouldensurethatImakeapurchase

withoutanyhiccups.

Itmakesiteasiertoaccessinstant&basic

help.

Wouldbeagreathelpandwouldavoidconfusion.

Anythingthathelpswiththeredtapeis

good.

Atleastthere'sguidanceifIgetstuck.

Anyhelpisaposi9ve.

ItwouldhelpstraightawayifIhadany

ques9ons.

BecauseifitcananswermyworriesIwouldcompletethepurchase.

Therewould/shouldbemore/beZerinfofordecisionmaking.

17

However,someconsumerssBllfindithardtograsptheconceptanddoubttheabilityofrobotstoprovidegoodcustomerservice.Hence,emphasisingthebenefitsofChatbotswhencommunicaBngwithconsumersisessenBal

Q8-Whydoyousaythat?n=119(wouldnotimproveexperience)

WhydoconsumersthinkthatChatbotswouldnotimprovetheirexperience?

34%

19%

18%

12%

9%

8%

8%

7%

Preferpersonal/nonrobotinteracBon

Notneeded/Won'teffectme/Nodifference

Technologyisnotreliable/intuiBve/realisBc

Itwon'tunderstand/havetheanswers

Don'tunderstand/knowenoughaboutChatbots

Securityconcerns

Poorpastexperience

Dependsonwhetheritworks/orcircumstances

I'vetriedthemonothersitesandtheanswersarelimited

IhaveinteractedwithJess-theJetstarChatbot-not

verygoodatall

IwouldprefertospeaktoapersonifIneedassistance.

Securityrisks.

IamnotsurewithChatbots.Englishisnotmyfirst

languagesoIdon'tknowhowwellChatbotswillunderstandwhatproblem/ques9onI

asked.Ifeelmorecomfortablewithrealhuman.

Ifitsetuprightitwillwork..lwillnotuseitanyway.

Theyarenotabletoanswerallques9ons.

Idon'ttalktorobots!

Unlikelyitwouldchangemyshoppinghabits.

Is9llpreferhumancontact.IdonotbelieveaChatbotcouldbeprogrammed

tocoverallconcerns.

BotsorChatbotsusedtherecannotalwaysdefineindividualrequirementsandthenitsoffto

MumbaiorthePhilippinesandwearereallyintroublewithourpersonalinforma9on.

18

ThereisarelaBvelyhighlevelofinterestinChatbots,withalargeproporBonofbusinessesseriouslyconsideringtheirdeploymentwithinthenextfiveyears

Businesses:Q15-WhendoyouthinkChatbotswillbedeployedinyourorganisa9on?Basen=84

TimeframeforChatbotdeployment

4%

11%

18%

12% 12%

5%8%

31%

Alreadydeployed

Currentlytrialling

Within12months

Within2years 2-5years Morethan5years

Never Notsure

19

BusinessesmostlybelievethatChatbotsneedtohaveayoungerfemalepersona,whoisknowledgeableandproblemsolving,butalsoprovidegoodcustomerservicebybeingfriendlyandpolite

Q17.IftheChatbothadapersonality,whichofthefollowingtraitswouldbemostappropriateforyourorganisa9on?Q18.Ifyourorganisa9ondidhaveaChatbotwouldyoupreferittohaveapersonathatwas?Basen=51(businessesthatgavea9meframeforChatbotdeployment)

PersonaliIesmostappropriatefororganisaIon

59% Knowledgeable

51% Helpful

51% Problemsolving

49% Friendly

47% Polite

Top5personalitytraits Genderandagepreference

33%

20%

20%

12%

12%

4%

Ayoungfemalepersona(upto35yearsold)

Anolderfemalepersona(over35yearsold)

Anoldermalepersona(over35yearsold)

Ayoungergenderneutralpersona(upto35yearsold)

Anoldergenderneutralpersona(over35yearsold)

Ayoungermalepersona(upto35yearsold)

20

Consumers,howeverdon’texpectChatbotstobefriendlyandpolite.TheyneedChatbotstobeknowledgeable,problemsolvingandresponsivetobeabletoassistthemthroughtheironlinepurchase/applicaBonprocessefficiently

Q9.IftheChatbothadapersonality,whichofthefollowingtraitswouldbemostappropriateforyou?Q10.Ifanorganisa9ondidhaveaChatbotwouldyoupreferittohaveapersonathatwas...?Basen=528

WhattypeofChatbotswouldconsumersprefer

62% Helpful

61% Knowledgeable

56% InformaIve

55% Problemsolving

48% Responsive

Top5personalitytraits Genderandagepreference

26%

20%

19%

19%

10%

7%

Anoldergenderneutralpersona(over35yearsold)

Ayoungfemalepersona(upto35yearsold)

Ayoungergenderneutralpersona(upto35yearsold)

Anolderfemalepersona(over35yearsold)

Anoldermalepersona(over35yearsold)

Ayoungermalepersona(upto35yearsold)

21

ConsumerexpectaBonsregardingthepersonaofaChatbotdifferbytheageandgenderoftheconsumer,andhencebusinessesneedtomakesurethattheirChatbot’spersonaisalignedwiththeirtargetaudience’sneeds

Q9.IftheChatbothadapersonality,whichofthefollowingtraitswouldbemostappropriateforyou?Q10.Ifanorganisa9ondidhaveaChatbotwouldyoupreferittohaveapersonathatwas...?Basen=52

TypeofChatbotsconsumerswouldprefer

Ingeneral,womenneedChatbotstobemorehelpful,knowledgeable,informaBveandproblemsolvingthanmen.Womenaresignificantlymorelikelytopreferagenderneutralpersona(52%)thanmen(37%),parBcularlywhenitcomestoayoungergenderneutralpersona(25%vs13%).Menaresignificantlymorelikelytopreferamalepersonathanwomen(21%vs12%),parBcularlywhenitcomestoanoldermalepersona(13%vs6%).

Olderconsumers(aged60yearsorover)needChatbotstobemoreknowledgeable(71%)thanthoseyoungerthan60years(56%)74%ofconsumersaged60yearsoroverwouldpreferaChatbotwithanolderpersona(vs45%ofconsumersyoungerthan60years):

•  34%oldergenderneutralpersona•  24%olderfemalepersona•  15%oldermalepersona

PreferencesbygenderPreferencesbyage

Appendix

23

Providingimmediateassistancetocustomerstoensurehighersalesconversionrates,improvedCXandmorecosteffecBveoperaBonsarekeyreasonswhybusinessesbelieveChatbotsarerelevanttothem

Businesses:Q13–Whydoyousaythat?Basen=61RespondentswhoselectedChatbotsaresomewhat/veryrelevanttointheirorganisa9on

WhydoyouthinkChatbotsarerelevanttoyourbusiness?

1.   AllowsforimmediateinteracIonwithcustomer

Ifthecustomersneedimmediatehelporwanttoaskaques9on,weareavailabletoanswer.

Itcanhelpcustomerswithsimplethings.

Consumerexpecta9onsofwhatbankingmeanstothemischangingrapidly.Inthefutureofbanking,itwillnotbeanadd-on,itwillneedtofitintotheeverydaylifeofconsumersi.e.notaconsciousdecision-Ineedtodomybankingbutjusthappensas

partofaconversa9on/interac9on.

Ourcorporateclientsare9mepoorandexpectquicksimplecommunica9ontoanswertheir

queries.

Immediateassistance.Reducestherelianceontelephones.

4.   Customersexpectit

ImproveCX=increasedsa9sfac9on=greatersales,advocatesetc.

Itcouldimproveouronlineinterac9onwithour

customers.

Allowscustomerstonavigateattheirownpace.

2.   ImprovedCX

It'lllowerourcosts. It’saresourceefficientop9on.

3.   MorecosteffecIve

24

ComplexofferingsandqueriesaremainreasonswhyorganisaBonsdon’tbelievethatChatbotsarerelevanttothem.Also,similarlytoconsumers,somebusinessesdoubtthatrobotscouldprovidequalityhelp,andhenceeducaBngthemiskey

Businesses:Q13–Whydoyousaythat?Basen=23RespondentswhoselectedChatbotsarenotatall/veryrelevanttointheirorganisa9on

1.   Complicatednatureofqueries/typeofproductsoffered

2.   Customersneedarealperson/wouldnotsuittheirneeds

3.   Processiseasyenoughalready

WhydoyouthinkChatbotsarenotrelevanttoyourbusiness?

Therearealotofoutoftheboxqueries.

Itisahealthrelatedwebsiteandnotappropriatefor

Chatbotstoprovideorassistwithmedicalknowledgeor

treatment.

Becauseofthecomplexityoftheengineeredsolu9onsweprovide.

Wesellcomplicatedproducts.

Designingdoorscannotbelearnedandpeoplehave

differenttastesandneeds.Itwillhelpbutdefinitelynotthefinalsolu9onforoursales/customerservice.

Abilitytointeractisposi9ve,notsurehowtheChatbotwoulddealwithproductspecificenquiries.

Weareacustomerfacingcompany.

Itwouldn'tsuitourcustomers’needs&won'tinfluencetheircurrent

buyingpaZerns.Customerswanttotalk

toarealperson.

Wefocusonrela9onships.

Iwouldhesitatetocompletelyremovehumanoperatorsin

theprocess.

Applica9onprocessisstraightforward.

25

2in3businessdecisionmakersclaimthattheirCXprogramobjecBvesalignwiththeirorganisaBonalmission

Q20-Doyourcompany’sCustomerExperienceProgramobjec9vesmaptotheorganisa9onalmissionandvision?Basen=84

Doyourcompany’sCustomerExperienceProgramobjecIvesmaptotheorganisaIonalmissionandvision?

44%

20% 18% 17%

1%

Yes,ourCustomerExperienceProgramis

basedonourorganisaBonalmission

andvision

Yes,ourCustomerExperienceProgramis

definedinourorganisaBonalmission

andvision

No,wedon’thaveaCustomerExperience

Program

No,ourmissionandvisiondon'tprovide

guidanceforcustomerexperience

No,wedon’thaveamissionandvisionforour

company

64%

26

2in3organisaBonsbelievethattheirITsystemsallowthemtodeliverthedesiredCX

Q21-Doyoufeelyourcompany’sITsystemsallowyoutodeliverthedesiredcustomerexperience?Basen=84

Doyoufeelyourcompany’sITsystemsallowyoutodeliverthedesiredcustomerexperience?

43%

13% 11%18% 15%

Yes,wehaveenoughinformaBonandshareitacrossourorganisaBon

Yes,oursystemscollectdata,summariseitandprovideinsightsaboutwhat'shappening

Yes,wehaveinformaBonoverload

No,notevenclose No,informaBonaboutourcustomersiskeptonseparatespreadsheetsby

eachindividualdepartment

67%

27

Whilemostbusinesseshavemappedtheircustomerslifecyclejourneyorareworkingtowardsit,only10%claimthattheircustomers’journeyisunderstood,measuredandregularlyreviewedacrosstheorganisaBon

Q22-Haveyoumappedoutyourcustomers’lifecyclejourney?Basen=84

Haveyoumappedoutyourcustomers’lifecyclejourney?

10%

32% 30%

17%12%

Yes,thejourneyofourcustomersismapped,understood,measuredandregularlyreviewed

Yes,we’vemappeditoutbutnoteveryoneunderstandshowitrelatestothem

Weallunderstandthechannelsweimpactbutnothowitrelatestothe

lifecycle

No,butwe’reworkingtowardsmappingthe

journey

No,it’snotapriorityrightnow

FormoreinformaBonpleasecontact:T:+61299273399F:+61299273327E:info@fiFhquadrant.com.auW:www.fiFhquadrant.com.auLevel6,107MountSt,NorthSydney,NSW,2060,AustraliaF:www.facebook.com/fiFh.quadrantT:www.twiHer.com/5thQuadL:www.linkedin.com/company/fiFh-quadrant-pty-ltd ABN:53088072940|ACN:088072940