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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

Store-specific planogram: AI-driven trend that changes retail space planning

Through advanced tech, retail space planning driven by artificial intelligence is now possible. This is in the form of store-specific planograms. RELEX Solutions, a leading supply chain and retail solutions provider, shares its insights on this emerging trend.

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In the retail industry, customer expectations are straightforward: they want to easily find the products they need and enjoy a hassle-free shopping experience. If a store falls short in these aspects, it risks losing its place as a preferred shopping destination for customers. That is precisely why the foundation of a great customer experience lies in effective space planning.

Commonly referred to as a planogram, space planning involves optimizing a store’s layout and product placement to enhance customer experiences and increase sales. Effective strategies include positioning high-demand and seasonal items near the entrance, ensuring accessibility and visibility in key areas, and adapting layouts based on sales data and customer feedback.

In the Philippines, planogram preparation is mainly a manual process, although retailers use digital tools for sales data analysis. However, for larger retailers dealing with extensive data and numerous products, manual adjustments can become overwhelming. 

Through advanced tech, retail space planning driven by artificial intelligence is now possible. This is in the form of store-specific planograms. RELEX Solutions, a leading supply chain and retail solutions provider, shares its insights on this emerging trend.

“A store-specific or local planogram is one designed for a particular store or location.  Unlike a standardized planogram that may be used for multiple stores, a local planogram takes into account the unique characteristics of a specific store, such as its layout, customer demographics, and sales data,” said Donald “DJ” Felbaum, Head of Sales for the Philippines at RELEX Solutions. “It is tailored to the individual needs and conditions of that particular location to optimize product placement and merchandising to drive sales and improve customer service.”

However, it is often seen as challenging and time-consuming due to the anticipation of lengthy, costly, and uncertain implementation projects. For instance, imagine a retailer with 1,000 stores, each needing weekly updates to five planograms. If one planner creates ten planograms daily, it would require an impractical workforce of 100 planners, along with ongoing training. But the integration of AI and machine learning automation can address these challenges. AI-powered automation can help users configure parameters and apply them across thousands of planograms, saving costs and avoiding additional expenses related to inventory adjustments for layout and local consumer preferences.

The benefits of AI-generated local planogram optimization also include precise store shelf configuration and a one-touch replenishment model. This approach, which enables immediate stacking of incoming stock onto display units, facilitates one-way inventory that results in cost reduction by eliminating the need for staff to transport excess stock to back rooms, enhancing the efficient use of available storage space, and reducing restock frequency of fast-selling products. 

Furthermore, AI and machine learning automation usher in interactive, standardized merchandising reports. These insights unveil concealed issues and provide both macro and micro data perspectives, empowering retailers to proactively optimize product placement, fine-tune pricing, and enhance inventory management. 

Store-specific planograms epitomize the future of space retail planning, optimizing product placement, and enhancing customer satisfaction. Harnessing advanced technology in retail, this tailored approach allows retailers to adapt swiftly to market changes, leading to elevated customer experience, improved profitability, and fostering brand loyalty.

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Tech & Innovation

Concrete tips for effective SEO strategy

SEO is now more important than ever. More consumers are using the internet to research and purchase the products and services they require.

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The digital marketing industry is often clouded by myths and misconceptions, particularly when it comes to Search Engine Optimization (SEO). Geek Certified CEO Scott Wilson, SEO presenter with two decades of experience, is here to set the record straight with valuable insights and actionable tips for businesses looking to improve their online presence.

SEO is now more important than ever. More consumers are using the internet to research and purchase the products and services they require. At this very moment in time, someone is searching online, for the products you sell and the services you offer. Will they find you in the jungle we call the internet or connect with one of your many rivals?

Debunking Common SEO Misconceptions

In an industry rife with “snake oil salespeople” and misleading promises, Wilson emphasizes that despite the daily barrage of emails promising to elevate websites to the coveted number one spot for a fee, SEO is not an arcane art shrouded in mystery. Contrary to popular belief, search algorithms from Google and other search engines are not re-written on a daily or even monthly basis. Instead, updates are methodical improvements to refine the process of organizing global information.

Wilson states, “Search rankings among websites are quite stable. We track our customers’ results and their competitors’ monthly, and while there are fluctuations, the overall landscape remains consistent.” Scott’s team’s monitoring of search results over the past 20 years affirms the stability of search rankings when businesses provide an exceptional customer experience.

Truths About SEO: Stability and Quality Over Gimmicks

The core of Wilson’s message is that the quality of the user experience is paramount. Google and other search engines aim to guide users to the most relevant and valuable web pages for their queries. “If you prove to Google by providing an outstanding customer experience, your ranking results will be stable without the need for constant page reinvention,” Wilson advises.

He outlines three pillars essential for maintaining a robust SEO strategy:

1. Substantial Content

Wilson recommends having at least 1500 words of quality content to ensure depth and engagement on your web page.

2. Receiving Links

Just as social media teams request “likes”, Wilson suggests businesses should ask for links from related web pages within their business networks. Search engines treat each link as a vote of confidence.

3. User Interaction

By examining Google Analytics, businesses can ensure that their web pages facilitate interaction. Providing valuable downloadable content, creating smooth e-commerce experiences, and engaging visitors with videos are all strategies to keep users on your page longer.

Real Tips for Real Results

By following these tactics, Wilson promises businesses can achieve higher search engine rankings and attract more qualified leads. “It’s about building a digital space where users can find value and have their needs met effectively,” he explains.

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BizWiz

Micro-entrepreneur ‘hybrid-sells’ with the help of fiber broadband connection

Rogelia Dasco, a Cebu-based homemaker who buys and sells imported goods from the US, does her trade mostly online.

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The post-pandemic environment demands flexibility and adaptability from everyone but most especially entrepreneurs who are slowly recovering from the pandemic slump. One online Facebook seller is employing her business acumen not just in the virtual marketplace but in real life, as she does “hybrid selling” of her consumer goods.

Rogelia Dasco, a Cebu-based homemaker who buys and sells imported goods from the US, does her trade mostly online.

“The items, like lotions and perfumes, are from the US. My sister sends them, I take a picture of them, and I post them on Facebook Marketplace,” she shares.

However, unlike most online sellers, she doesn’t stop in the virtual world; When she gets to her buyer’s address, she then goes house to house in the community. The strategy pays off – she is able to sell out her goods in one afternoon instead of waiting for online sellers to finish off her inventory.

“When someone buys from me, for example, I go to their house but I bring my other items too. After I deliver to the buyer, I go to the neighbors and offer my other goods. Right now, I’m all sold out. The next shipment will come at the end of the month,” Dasco proudly says.

Supporting this diligent hybrid approach is BIDA fiber, the new mass market offering of Converge targeting the lower C and D income classes.

BIDA fiber is the most affordable postpaid broadband plan in the market today, and the cost savings makes a difference for smaller entrepreneurs.

“It’s so affordable and I’m able to save too. My old plan was priced at P 1,299 with an additional P 200 every month so that’s P 1,499. With BIDA, I’m able to save more than P 500,” said Rogelia Dasco.

The reliable connection – that can go up to 35 Mbps – also makes sure Rogelia keeps her ties with her supplier sister strong as every night they call each other through video. Even with a 3-hour video call, her husband watching YouTube videos, and her son playing Mobile Legends with friends at home, Rogelia’s connection never falters.

“I’ve really maximized my connection. It’s really good, even if we all use the internet at the same time,” she added. BIDA fiber is now available in more than 300 cities and municipalities in the Philippines and has more than 40 partner distributors selling the postpaid plan.

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