Conversational commerce: when machines sell

In conversational commerce, conversation is used to guide the consumer toward making a purchase. The trick here is that company’s do not have people conduct the conversations, but machines. They take on the role of the salesperson and provide their dialog partners with the necessary information. “Conversations for more conversions,” is one way to sum up this new magic formula.

The term “conversational commerce” was first described by Chris Messina in 2016:

“Conversational commerce (as I see it) largely pertains to utilizing chat, messaging, or other natural language interfaces (i.e. voice) to interact with people, brands, or services and bots that heretofore have had no real place in the bidirectional, asynchronous messaging context.”

That which only took place between people thus far is now taking on a new dimension with chatbots. Suddenly machines can communicate with the customers. This can be done either by keyboard or voice input and is not limited to a single device. However, the trend towards mobile shopping suggests that the smartphone plays a special role here.

The advantages of conversational commerce

For consumers, this form of communication with the intention to buy primarily has practical advantages. They can reach the bot anytime and from anywhere without having to worry about business hours. Especially when it comes to simple purchase processes, a bot can often help potential customers faster than human customer support could. In the best case, the bot has real-time access to the merchandise management system and can quickly provide delivery information. Chatbots are also immediately available and therefore long waiting periods on telephone hotlines are no longer necessary. If the chatbot is based on Facebook Messenger or WhatsApp, then the customer can also communicate in their own familiar environment. They feel comfortable here and know their way around so they don’t have to learn to use a new communication medium. Above all, this increases convenience and saves time for customers.

The advantages for companies, on the other hand, are cost savings. Human communication is still a major cost factor and is difficult to plan accurately. Long waiting times as well as overstaffing in the customer center can be the result and incur costs. Chatbots offer a highly scalable alternative. They work 24/7, never get sick, do not take vacation and are not members of a trade union. If the number of customer inquiries changes, only the technical resources need to be adjusted. Another major advantage: instead of having to attract customers to the point of sale (PoS), conversational commerce simply takes the PoS to the customer.

The disadvantages of conversational commerce

When it comes to more complex customer requests, chatbots quickly reach their limits. For example, if a question is not understood, it is usually not due to the question but to a lack of programming. Most chatbots work according to the if-then principle and therefore depend on a database with corresponding “ifs” and “thens”. If an “if” is missing, no “then” can be output. Another problem includes cases, in which different options are queried and the customer suddenly decides to change an option that has already been queried. Often the chatbot can then only go back to the very beginning and the customer has to go through the entire process again.

This lack of flexibility can seriously disrupt the customer experience and permanently cloud the overall impression. At the moment, conversational commerce is therefore an option in cases, in which a human operator could step in if the bot reaches its limits. It should also be noted that not every consumer likes to communicate with machines. One should resist the temptation to conceal the use of bots. That would only jeopardize trust. Transparency, on the other hand, creates trust and could even help generate a certain level of tolerance for the bots’ weaknesses.

A lot of work is still required before it becomes a real game changer!

“The future belongs to conversational commerce,” is a recurring theme. So does that mean every sales manager should respond immediately and leave the selling to machines? No, we’re not there yet. This could actually happen at some point in the future, but in the present and immediate future the bots are still too limited in their possibilities. Only once they are able to help consumers quickly and flexibly and therefore be better than human agents, can they become game changers.