How to Cash in on Conversational AI

Richard Dumas

By Richard Dumas, Chief Marketing Officer, Inference Solutions

Two years ago, Gartner predicted that by 2020, 25% of customer service operations will have adopted virtual agents, which use natural language to automate routine (and increasingly complex) customer interactions over voice and chat. Recent trends certainly support this prediction, as Siri and Alexa bring conversational artificial intelligence (AI) experiences increasingly mainstream, and service managers seek solutions to support a growing number of customers across a growing number of channels.

Consumers are getting used to interacting with brands more naturally, via voice-driven, screenless experiences. And the technology that drives these experiences has become more accessible as Google and other API providers move speech and natural language processing to the cloud and reduce the cost of implementing conversational self-service.

It isn’t surprising, then, that Gartner has also predicted that virtual agents will drive $1.2 trillion in business value by 2030. Channel companies can capture a piece of that market by partnering with cloud-based virtual agent providers to add conversational AI to their service roadmaps. Here’s what you need to know to cash in.

Virtual agents solve key problems for your customers

Intelligent virtual agents (IVAs) can address many of the major initiatives on service managers’ agendas. Examples include:

Underlying each of these initiatives is the challenge to reduce costs while maintaining or improving customer satisfaction. Using virtual agents to automate routine customer requests such as order lookups, frequently asked questions and appointment booking helps organizations significantly decrease support costs.

A recent report found that nearly four out of five businesses are saving more than 20% in customer service costs and four staff hours a day as a result of adding a virtual agent to interact with customers. Plus, satisfactory customer experience (CX) now includes the expectation of an immediate service response anytime, anywhere and on any device. Nearly 70% of customers would rather help themselves through self-service for simple issues, and IVAs allow brands to better deliver on those expectations. Furthermore, Gartner research indicates that organizations that implement virtual agents “report an increase in customer satisfaction and save 33% per voice engagement.”

You can sell virtual agents for more than live agent seats

The economics of virtual agents enable you to charge more for a virtual agent than you charge for a live agent seat. What’s even more impressive is that you can do this while lowering the total cost to serve for your customers. The price of virtual agents will vary based on their skills, but, generally, a virtual agent will cost a customer service organization less than 10% of what a human agent would cost.

In the U.S., the average annual salary for customer service agents is around $28,000. The fully burdened cost is much higher when you include onboarding, training, benefits and equipment. Let’s assume it’s closer to $40,000 per year. The cost for 100 agents…

…would be more than $400,000 a year. Assume that the customer is also paying its provider $200 per agent for the software. The total cost is $20,000 for software plus $400,000 for labor.

On the other hand, if live agent tasks can be automated by virtual agents, the customer could eliminate labor costs. This enables service providers to charge significantly more for virtual agents because even if the cost of the virtual agents increased by almost 10 times, to $200,000 (or $2,000 per virtual agent), the customer still sees its service costs cut in half.

Virtual agents drive more revenue by adding value to your services

Intelligent virtual agents provide an attractive opportunity for channel partners to offer new product lines that will drive additional streams of revenue. They can help channel companies sell more services to existing customers and sign new customers who need advanced self-service or interactive voice response (IVR) capabilities. Because virtual agents can be configured with different classes of skills, you can package, price and deploy services with a level of granularity that is highly unique and deliver them at multiple price points.

Virtual agents can be configured with very basic skills — the most basic agent might simply answer the phone, ask the caller if she wants to maintain her place in queue and schedule a callback. An advanced agent might have the skills to understand human speech in multiple languages, determine intent using natural language processing, process PCI-compliant payments and respond in multiple languages over the phone, via chat or SMS.

Additional advanced skills include:

Virtual agents are sticky

Not only can virtual agents help you win more deals, they can also help you retain more of your existing customers.

Because advanced self-service and natural language are becoming increasingly required for midmarket and enterprise UC and contact center deals, virtual agents offer mission-critical capabilities. They become trusted and valued “members” of service teams, and once deployed, service organizations will focus on how to use more of their services. In fact, research shows that more than three-quarters of organizations using conversational AI have realized quantifiable benefits, and more than half say that these benefits met or exceeded their expectations.

Bottom Line

Advances in conversational AI are creating opportunities to drive enormous business value, particularly for channel companies. Adding virtual agents into your service solutions can help you bring the most advanced real-time self-service capabilities to market quickly and easily. Partnering with providers of these solutions can help you retain your most demanding customers by meeting complex technology requirements; pull through more sales by meeting prospects’ needs for advanced IVR/IVA and real-time customer service; and demonstrate the future of AI-powered self-service to your customers. It’s time for channel companies to cash in on the promise of conversational AI.

As CMO, Richard Dumas is responsible for all aspects of Inference Solutions‘ worldwide marketing. He has more than 20 years of experience managing enterprise marketing programs for customer service solutions. Follow him on LinkedIn or on Twitter @InferenceSol.