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When humanlike chatbots miss the mark in customer service interactions

When customers are angry, deploying humanlike chatbots can negatively impact customer satisfaction, overall firm evaluation, and subsequent purchase intentions. Why? Because humanlike chatbots raise unrealistic expectations of how helpful they will be. 

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Photo by Volodymyr Hryshchenko from Unsplash.com

Researchers from University of Oxford published a new paper in the Journal of Marketing that examines the use of chatbots in customer-service roles and finds that when customers are angry, humanlike chatbots can negatively impact customer satisfaction, overall firm evaluations, and subsequent purchase intentions.

The study, forthcoming in the Journal of Marketing, is titled “Blame the Bot: Anthropomorphism and Anger in Customer-Chatbot Interactions” and is authored by Cammy Crolic, Felipe Thomaz, Rhonda Hadi, and Andrew Stephen.

Chatbots are increasingly replacing human customer-service agents on companies’ websites, social media pages, and messaging services. Designed to mimic humans, these bots often have human names (e.g., Amazon’s Alexa), humanlike appearances (e.g., avatars), and the capability to converse like humans. The assumption is that having humanlike qualities makes chatbots more effective in customer service roles. However, this study suggests that this is not always the case. 

The research team finds that when customers are angry, deploying humanlike chatbots can negatively impact customer satisfaction, overall firm evaluation, and subsequent purchase intentions. Why? Because humanlike chatbots raise unrealistic expectations of how helpful they will be. 

The researchers conducted five experiments to better understand how humanlike chatbots impact customer service.

Study 1 analyzes nearly 35,000 chat sessions between an international mobile telecommunications company’s chatbot and its customers. Results show that when a customer was angry, the humanlike appearance of the chatbot had a negative effect on the customer’s satisfaction. 

Study 2 is a series of mock customer-service scenarios and chats where 201 participants were either neutral or angry and the chatbot was either humanlike or non-humanlike. Again, angry customers displayed lower overall satisfaction when the chatbot was humanlike than when it was not.

Study 3 demonstrates that the negative effect extends to overall company evaluations, but not when the chatbot effectively resolves the problem (i.e., meets expectations). More than 400 angry participants engaged in a simulated chat with a humanlike or non-humanlike chatbot and their problems were either effectively resolved or not during the interactions. As expected, when problems were not effectively resolved, participants reported lower evaluations of the company when they interacted with a humanlike chatbot compared to a non-humanlike one. Yet, when their problems were effectively resolved, the company evaluations were higher, with no difference based on the type of chatbot.

Study 4 is an experiment with 192 participants that provides evidence that this negative effect is driven by the increased expectations of the humanlike chatbot. People expect humanlike chatbots to be able to perform better than non-humanlike ones; but those expectations are not met, leading to reduced purchase intentions. 

Study 5 shows that explicitly lowering customer’s expectations of the humanlike chatbot prior to the chat reduces the negative response of angry customers to humanlike chatbots. When people no longer had unrealistic expectations of how helpful the humanlike chatbot would be, angry customers no longer penalized them with negative ratings. 

The researchers say that “Our findings provide a clear roadmap for how best to deploy chatbots when dealing with hostile, angry or complaining customers. It is important for marketers to carefully design chatbots and consider the context in which they are used, particularly when it comes to handling customer complaints or resolving problems.” Firms should attempt to gauge whether a customer is angry before they enter the chat (e.g., via natural language processing) and then deploy the most effective (either humanlike or not humanlike) chatbot. If the customer is not angry, assign a humanlike chatbot; but if the customer is angry, assign a non-humanlike chatbot. If this sophisticated strategy is not technically feasible, companies could assign non-humanlike chatbots in customer service situations where customers tend to angry, such as complaint centers. Or companies could downplay the capabilities of humanlike chatbots (e.g., Slack’s chatbot introduces itself by saying “I try to be helpful (But I’m still just a bot. Sorry!” or “I am not a human. Just a bot, a simple bot, with only a few tricks up my metaphorical sleeve!”). These strategies should help avoid or mitigate the lower customer satisfaction, overall firm evaluation, and subsequent purchase intentions reported by angry customers towards humanlike chatbots.

Tech & Innovation

5 Tech trends that will shape businesses in 2022

Here are the tech trends that businesses need to look out for this 2022 as listed by SAP SE. 

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Over the last two years, organizations of different sizes and industries have realized, even more, the critical role technology and innovation play in business and society. The latest developments in technology provided more ways to ensure more connected enterprises, enabling them to survive and thrive amid the ‘never normal.’

However, these advancements in technology have just begun. As organizations prepare for the post-pandemic world, technologies that have been introduced in recent years are expected to continue evolving. The latest advances will also further transform how people interact and work. 

Here are the tech trends that businesses need to look out for this 2022 as listed by SAP SE

Embracing Digital Transformation

Since the pandemic started, the speed at which digital transformation is fundamentally changing the business landscape has dramatically increased. The developments that could have happened in a decade or so were made possible overnight in many industries.

In the Philippines, the digital sector contributes significantly to its economy. This reality indicates that organizations in the private and public sectors will continue strengthening their digital transformation initiatives. Backed by strong government support, these transformations can unlock PhP5 trillion worth of economic value by 2030, according to a recent AlphaBeta and Google report.

Nurturing Sustainability

Nowadays, embracing sustainability has become an integral part of organizations, with business leaders considering it a strategic priority. Aside from top and bottom-line, forward-looking organizations add sustainability and even purpose as dimensions to driving business success. 

Among these organizations is Metro Pacific Investments Corporation (MPIC). As a leading infrastructure investment company, MPIC commits to contribute to the achievement of the 17 United Nations Sustainable Development Goals (SDGs), particularly SDG 9, which seeks to ‘build resilient infrastructure, promote inclusive and sustainable industrialization, and foster innovation.’

Recently, MPIC strengthened its digital core as it embraced cloud solutions that can help consolidate, modernize, and standardize its enterprise resource (ERP) systems on a single platform. The integration into the cloud is part of the group’s sustainability philosophy of integrating business and environmental stewardship into their investment strategies. It helps improve its operations and augment sustainability initiatives, especially since SAP, MPIC’s technology partner, embeds sustainability into its core business processes.

Meanwhile, consumers are making apparent shifts to more sustainable products and services. According to a Kantar report, 75 percent of Filipino consumers seek out brands that offer ways to alleviate impacts to the environment. Even employees now make career choices based on their employer’s responsibility towards the planet. Thus, it is now even more integral to invest in innovation that considers environmental welfare while fostering economic and social development.

Integrating Decision Intelligence, Hyper-automation

In the Philippines, the Department of Trade and Industry noted that Artificial Intelligence (AI) adoption can increase the country’s gross domestic product (GDP) by 12 percent or equivalent to $92 billion by 2030.

Digital tools like AI, including augmented analytics and simulations, make “Decision Intelligence” a realistic approach to improve organizational decision-making. Each choice or decision in such a system result from multiple process iterations, refined with the help of analytics and data intelligence. With these digital tools, decision intelligence may support and enhance human decision-making and potentially automate it, hence augmenting organizational processes to be more efficient.

Meanwhile, scalability, remote operation, and business model disruption are also becoming possible with the use of Hyper-automation. Before the pandemic, businesses have been automating many processes through technologies like Robotic Process Automation (RPA). This trend will continue to grow for automating business and IT activities using a disciplined, business-driven approach. 

Rising Low-Code, No-Code Tech 

As content creation becomes even more relevant, graphic and website designs have been streamlined so users can simply “drag” and “drop” elements to create engaging content. This trend will extend to no-code AI, where users can create systems by simply “dragging” and “dropping” ready-made modules, removing the “programming language” barrier through simple interfaces. Consequently, it will allow users to create complex and robust AI systems.

Ensuring Total Experience (TX) 

Due to the pandemic, organizations needed to have an excellent Total Experience (TX) strategy or a holistic program that combines customer, user, and employee experiences. With this strategy in place, organizations can help enhance customer satisfaction and employee productivity. 

Organizations need to focus on weaving in these experiences instead of working on them individually to help ensure that they will be more satisfied as teams that work as an integrated unit. This trend is expected to continue as businesses eliminate communication and process silos and emphasize providing unified experiences to their employees remotely working while interacting with customers.

Collaborating with a Technology Partner

As these trends arise, organizations need a technology partner to help them achieve their business goals this year and beyond. For SAP, embracing technology means ensuring that the organization becomes an intelligent enterprise. 

As a technology partner for businesses in the country, SAP helps make it easier by offering solutions like Rise with SAP, an intelligent enterprise framework to help kickstart businesses’ digital transformation journey. In the Philippines, MPIC is the first organization to adopt this cloud technology through this Business Transformation as a Service (BTaaS), offering consolidated solutions and services needed for business transformation in one package.

Rise with SAP also includes SAP and its whole ecosystem of partners assisting organizations in changing at their own terms and pace to be an intelligent and sustainable enterprise by simplifying engagement and providing a guided journey.

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Strategies

Bad news? Send an AI. Good news? Send a human

For a marketer who is about to deliver bad news to a customer, an AI representative will improve that customer’s response. This would be the best approach for negative situations such as unexpectedly high price offers, cancellations, delays, negative evaluations, status changes, product defects, rejections, service failures, and stockouts. However, good news is best delivered by a human.

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Photo by Alex Knight from Unsplash.com

Researchers from University of Kentucky, University of Technology Sydney, and University of Illinois-Chicago published a new paper in the Journal of Marketing that examines the customer response and satisfaction implications of using AI agents versus human agents.

The study, appearing in the Journal of Marketing, is titled “Bad News? Send an AI. Good News? Send a Human” and is authored by Aaron Garvey, TaeWoo Kim, Adam Duhachek.

Are we more forgiving of an artificial intelligence (AI) agent than a human when we are let down? Less appreciative of an AI bot than a human when we are helped? New research examines these questions and discovers that consumers respond differently to favorable and unfavorable treatment at the hands of an AI agent versus another human.

Consumers and marketing managers currently are in a period of technological transition where AI agents are increasingly replacing human representatives. AI agents have been adopted across a broad range of consumer domains to handle customer transactions, including traditional retail, travel, ride and residence sharing, and even legal and medical services. Given AI agents’ advanced information processing capabilities and labor cost advantages, the transition away from human representatives for administering product and services is expected to continue. However, what are the implications for customer response and satisfaction? 

The researchers find that when a product or service offer is worse than expected, consumers respond better when dealing with an AI agent. In contrast, for an offer that is better than expected, consumers respond more favorably to a human agent. Garvey explains that “This happens because AI agents, compared to human agents, are perceived to have weaker personal intentions when making decisions. That is, since an AI agent is a non-human machine, consumers typically do not believe that an AI agent’s behavior is driven by underlying selfishness or kindness.” As a result, consumers believe that AI agents lack selfish intentions (which would typically be punished) in the case of an unfavorable offer and lack benevolent intentions (which would typically be rewarded) in the case of a favorable offer. 

Designing an AI agent to appear more humanlike can change consumer response. For example, a service robot that appears more humanlike (e.g., with human body structure and facial features) elicits more favorable responses to a better-than-expected offer than a more machinelike AI agent without human features. This occurs because AI agents that are more humanlike are perceived to have stronger intentions when making the offer. 

What does this mean for marketing managers? Kim says, “For a marketer who is about to deliver bad news to a customer, an AI representative will improve that customer’s response. This would be the best approach for negative situations such as unexpectedly high price offers, cancellations, delays, negative evaluations, status changes, product defects, rejections, service failures, and stockouts. However, good news is best delivered by a human. Unexpectedly positive outcomes could include expedited deliveries, rebates, upgrades, service bundles, exclusive offers, loyalty rewards and customer promotions.”

Managers can apply our findings to prioritize (vs. postpone) human to AI role transitions in situations where negative (vs. positive) interactions are more frequent. Moreover, even when a role transition is not entirely passed to an AI agent, the selective recruitment of an AI agent to disclose certain negative information could still be advantageous. Firms that have already transitioned to consumer-facing AI agents, including the multitude of online and mobile applications that use AI-based algorithms to create and administer offers, also stand to benefit from our findings. Our research reveals that AI agents should be selectively made to appear more or less humanlike depending upon the situation. 

For consumers, these findings reveal a “blind spot” when dealing with AI agents, particularly when considering offers that fall short of expectations. Indeed, the research reveals an ethical dilemma around the use of AI agents – is it appropriate to use AI to bypass consumer resistance to poor offers?

“We hope that making consumers aware of this phenomenon will improve their decision quality when dealing with AI agents, while also providing marketing managers techniques, such as making AI more humanlike in certain contexts, for managing this dilemma,” says Duhachek.

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Strategies

GoDaddy shares web design trends and tools for your business in 2022

With this new year, GoDaddy, the company empowering entrepreneurs worldwide, shares some website trends and tools for 2022, to help entrepreneurs and small businesses stand out online. 

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With more digital space being taken up by entrepreneurs and creatives, it has also become increasingly challenging to cut through the online noise. Having a business website, once just enough to help a business stand out from the competition, needs to now become a business home on the internet with engaging and impactful web design features designed to capture and sustain the attention of a more active and discerning online audience. This moves engaging and impactful web design from a nice-to-have to a must-to-have for online businesses. 

With this new year, GoDaddy, the company empowering entrepreneurs worldwide, shares some website trends and tools for 2022, to help entrepreneurs and small businesses stand out online. 

Trend 1: Mini-Max Principle

While minimalism could be summarized as “less is more,” sticking exclusively to its core elements, such as clean lines and muted colors, could seem repetitive or even boring. 

However, using this principle, along with pops of color to help stand up and bring attention to areas of your website,  can be a welcome addition on a website. Experimenting with text, image and content sizes could also prove beneficial.  For example, attention to mall details such as bigger buttons, could go a long way in terms of user experience and making your business website more navigable and easier to use. Another detail that sometimes gets taken for granted is typography. Larger text in some sections for emphasis or for visual-break purposes, can help in making your website more unique and for some, easier to read. 

Trend 2: Have a Hero Visual 

Selecting a singular, strong image for your hero section, or the first page of your website that website users will see, can help you more quickly stand out. A key visual that evokes focus, as well as displaying your brand’s values and offerings, versus a clutter of images to fill up a web page, often will resonate better with your viewing audience. 

Image selection is crucial with using those images that feature and support your brand.  Integrating an appreciation for nature and the outdoors are also emerging as a top trend option for images. Influenced by a yearning for travel, or for being outdoors in general, lifestyle shots showing people engaged in activities or those evoking a sense of place, are becoming more popular and appreciated by audiences.  

Trend 3: Leverage a Little Throwback 

Trends come and never really go. Case in point: the staying power of the ‘90s in fashion. The same is true for web design, where we’ll see references that are retro in nature, with websites having helpful information and showcasing a business’ products and services in easy to find spots on a website, never really goes out of style. Be creative and on the lookout for elements that can harken back to times when the Internet as we know it was only beginning to take shape, when people were trying a variety of ideas and innovation in terms of web design, content, and web layout. Try a few web design ideas to see what works best for your business and your brand and engages with your customers.

Consider mixing in modern aspects with retro features, such as serif fonts and smoother textures for your website, along with white spaces, so as to mix modern and retro aspects to further engage with your audiences and tell the story of your business and your brand. 

Choose the Right Website Creator Tool

Using a robust website creator tool can help a business reflect current design trends into their design templates. GoDaddy for example, offers its GoDaddy Website Builder, an easy-to-use web-based tool that gets entrepreneurs and creatives started with a template they could choose from thousands of free options, along with high-quality images available. This tool also comes with a dashboard to manage everything website-related from one place, on a variety of devices, to keep your business running. 

“At GoDaddy, we offer an integrated suite of online tools to help empower entrepreneurs at every stage of their entrepreneurship journey online, helping turn their website into prime digital real estate. When it comes to staying current with trends, our tools are both easy to use, and have options to allow your business website to have a seamless user experience, whether you’re going for a contemporary, retro,  trendy, or some other look and feel that best matches your business and your audience’s preferences,” said Tina Shieh, Marketing Director for Southeast Asia, GoDaddy. 

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