2017 FORRESTER REPRODUCTION PROHIBITED WEBINAR The State Of

© 2017 FORRESTER. REPRODUCTION PROHIBITED.

WEBINAR The State Of Chatbots Julie A. Ask, Vice President, Principal Analyst Michael Facemire, Vice President, Principal Analyst Andrew Hogan, Analyst February 6, 2017. Call in at 12: 55 p. m. Eastern time © 2017 FORRESTER. REPRODUCTION PROHIBITED.

We work with business and technology leaders to develop customer-obsessed strategies that drive growth. © 2017 FORRESTER. REPRODUCTION PROHIBITED. 3

What is a chatbot? © 2017 FORRESTER. REPRODUCTION PROHIBITED. 4

Bot Chatbot Virtual assistant Virtual agent © 2017 FORRESTER. REPRODUCTION PROHIBITED. 5

Why is there so much hype around chatbots? Or isn’t it hype? © 2017 FORRESTER. REPRODUCTION PROHIBITED. 6

Are consumers using voice or conversational interfaces today? © 2017 FORRESTER. REPRODUCTION PROHIBITED. 7

Consumers do use voice for simple tasks © 2017 FORRESTER. REPRODUCTION PROHIBITED. 8

And, they are increasing adoption of virtual assistants Virtual agent use grows from 28% in 2012 to 37% in 2016. Amazon Echo sells 5 M+ 2016 holiday sales up 9 x. Source: Forrester’s North American Technographics® Customer Experience Online Survey, Q 4 2012 (US) and Forrester’s Consumer Technographics North American Retail And Travel Customer Life Cycle Survey, Q 1 2016 (US) © 2017 FORRESTER. REPRODUCTION PROHIBITED. 9

Are brands using chatbots and/or conversational interfaces today? © 2017 FORRESTER. REPRODUCTION PROHIBITED. 10

Fewer are braving the scary new world of chatbots 13 out of 128 Fortune 500 companies had a Messenger chatbot. Virtually no use of Alexa or Kik 4% say they use chatbots today, but 35% plan to pilot this year. Source: Forrester Research Benchmarking Study, December 2016 and Forrester 2016 Global Mobile Maturity Executive Survey © 2017 FORRESTER. REPRODUCTION PROHIBITED. 11

A presence on Facebook Messenger far outweighed use of chatbots Source: Forrester Research Benchmarking Study, December 2016 and Forrester 2016 Global Mobile Maturity Executive Survey © 2017 FORRESTER. REPRODUCTION PROHIBITED. 12

Businesses are trialing conversational interfaces today — mostly on Facebook Messenger Source: Forrester Research Benchmarking Study, December 2016 and Forrester 2016 Global Mobile Maturity Executive Survey © 2017 FORRESTER. REPRODUCTION PROHIBITED. 13

What do chatbots do well today? © 2017 FORRESTER. REPRODUCTION PROHIBITED. 14

Today’s “chatbot line” Conversation “appropriate” Customer care Large consultative purchases Product research Price estimates Info collection (e. g. , forms) Commerce Info requests (e. g. , flight time) Inventory search “One-step” tasks (e. g. , replenishment) Content delivery Content Chatbot “appropriate” © 2017 FORRESTER. REPRODUCTION PROHIBITED. 15

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How should you approach building chatbots today? © 2017 FORRESTER. REPRODUCTION PROHIBITED. 19

What’s inside that chatbot Messaging app Chat client federator Natural language processing (NLP) Chatbot Machine learning/artificial intelligence Data access layer © 2017 FORRESTER. REPRODUCTION PROHIBITED. 20

What it means › Chatbots have three primary parts: • Client interface, NLP, and data access and logic › Platforms can help, but the market is equally immature for them. › Artificial intelligence and machine learning aren’t an initial requirement. © 2017 FORRESTER. REPRODUCTION PROHIBITED. 21

What makes for a great CX within chatbots or conversational interfaces today? © 2017 FORRESTER. REPRODUCTION PROHIBITED. 22

Set expectations about capabilities. Don’t impersonate a human, do have personality. Use clear language to guide customer actions. © 2017 FORRESTER. REPRODUCTION PROHIBITED. 23

Combine text and images to convey the point. Frame the experience with known info. Use clear language to guide customer actions. © 2017 FORRESTER. REPRODUCTION PROHIBITED. 24

Explain errors and how to fix them. © 2017 FORRESTER. REPRODUCTION PROHIBITED. 25

Questions? © 2017 FORRESTER. REPRODUCTION PROHIBITED. 27

Julie A. Ask jask@forrester. com Michael Facemire jask@forrester. com Thank you FORRESTER. COM © 2017 FORRESTER. REPRODUCTION PROHIBITED. Andrew Hogan ahogan@forrester. com