Professional service providers wear multiple hats, including marketing, sales, customer service, and more. They focus so much on bringing in new clients but often forget about the cost efficiency of their business. Saving costs increases the business profit margin similar to increased sales volume. So, you need to adopt new ways to reduce costs and earn savings from them, to stay competitive in the market.
What's Cost Reduction?
Cost reduction is the act of reducing expenditure, typically by cutting back on spending. When you focus on cost reduction for your business, you may be able to pass some savings onto clients. This can generate some goodwill and more new clients who are interested in your services.
Why is it Important to Reduce Business Costs?
Every business, no matter the industry, needs to think about cutting back on unnecessary expenses. It's just as important as generating revenue. You need to keep your costs lower than your income, and the more you can reduce your costs the more money will be left on your business bank account.
How You Can Reduce Business Costs?
Although there are many ways you can reduce your business costs, one of the most noticeable recent technology advancements that allow saving time and money is the automation of repetitive tasks that require cognitive abilities. Chatbots are well equipped to serve these needs and act as your digital business representative that performs the mundane work to the highest standard. This can lead to many benefits.
Top 5 Benefits of Reducing Costs with Chatbots
1. Higher Profit Margins
Cost reduction causes a definite increase in profit margins, which is usually the most sought-after advantage. By having a higher margin you can afford to lower the prices if you need to and put pressure on competitors.
2. Business Expansion
Increased competitive strength stimulates business growth. Additional profits can be invested in the development of new services and expansion of the organisation to new markets or locations.
3. Demand Generation
The saving in cost may also be passed to consumers in the form of lower prices or more quantity at the same price. This in turn can create more demand for your services.
4. Increased Productivity
Chatbots can handle high-volume, repetitive inquiries, leaving you and your employees free to address client requests that need your expertise. your employees free to address client requests that need your expertise. Free up your time to handle more challenging, thought-provoking work with customers on complex and unique cases.
5. Improved Standards
Chatbots allow a better understanding of customers' wants and needs. They enable continuous improvement of repeatable customer interactions, which improves standards and overall customer satisfaction in the long run.
Innovative Cost-Saving Ideas
Small to medium-sized companies continue to adopt new ways to automate high volume, repetitive tasks. Chatbots can enable you or your employees to focus on important, high-value activities without the expense of hiring extra help.
Chatbots don't need sleep, lunch breaks, vacations, or time away from work for training. They rarely make mistakes, and they never get stressed out by high interaction volumes. All of this helps you to reduce labor costs, which helps to decrease operating expenses.
Juniper Research data indicates that by 2023, businesses in the Americas will save around £2.13 ($2.956) billion by diverting repetitive calls and live chats with human agents to chatbots and their European counterparts will save about £1.66 ($2.36) billion.Here are seven scenarios where automating online conversations with chatbots can cut costs across your business.
1. Answering Common Questions via Natural Language Knowledge Base Queries
Imagine you're buying a new house, and are evaluating mortgage lenders. One mortgage broker's website has a full page of FAQs about their services, with multiple levels of nested terms and conditions. The other offers a concise page of content, with a chatbot offering assistance to any questions or concerns a visitor may have. Even if both lenders offer comparable services, a long Q&A list can also give the impression that one of them offers more complicated services.
Offering a self-service knowledge base is a great way to leverage support cases that have been resolved before. It can provide resolutions or workarounds your agents or other customers have discovered, upgrades, or fixes that address the defect.
You can "feed" a chatbot a one-time feast of simple answers to frequently asked questions in conversational language. The chatbot will then deliver these answers to your customers every time without wasting your team's precious time and energy on this time-consuming task. This improves operational efficiency without the extra workforce costs, helping you reduce your operating expenses in the long run.
2. Generating Suitable Business Opportunities
Live agents aren't always confident enough to make sales offers during a service call. Or sometimes, they might miss the subtle cues that tell them when and what a prospect might need. A routine vehicle service appointment for an older vehicle with high mileage might be a good time to offer a comprehensive vehicle inspection or maintenance service, for example.
You can build an efficient online customer support chatbot to offer complementary services and increase transaction size. These chatbots are coded to watch for keywords and clues, which can be very effective to uncover cross-selling or upselling opportunities.
For companies with online chatbots to support their service pages, a well-instructed bot can be very effective at leading a prospect through a series of qualifying questions. That way, agents don't have to spend hours with a prospect only to realise that they're in the wrong segment of the market and aren't interested in your services. This helps minimise the cost of lost hours on unsuitable opportunities.
3. (Re)scheduling Appointments & Cancellations
Let's say you just remembered your child has football practice on Tuesday, which means you'll have to reschedule your dentist appointment on that day because you'll need to pick them up. Instead of going through the trouble of calling the practice and possibly waiting on hold, wouldn't you rather chat with a bot that will simply switch dates without complaint?
Providing self-service access to calendars and appointment settings is convenient for customers. It also enables field service professionals to better manage their time by automating time-consuming tasks. Consider enabling customers to arrange or reschedule appointments by interacting with a chatbot that knows your availability. That way, you can cut back on the cost of missed appointments.
4. Appointment Reminders & Confirmations
In the appointment scenario above, a chatbot could have sent an automated reminder text of the appointment well ahead of time. This could've given you ample time to make arrangements to have your spouse or a teammate's parent pick up the kid. No lost appointments!
Whether you're scheduling service appointments at your establishment or visits to a client's home, it's cost-effective to have automated workflows to confirm and send reminders about the meeting. Scheduling these messages to go out automatically will minimise last-minute cancellations and wasted calendar time. It also relieves employees of this repetitive administrative task and ensures everyone has all of the details for time, place, and agenda for when they need it.
5. Coupons & Promotions
Small businesses can't afford to miss out on prospects that are keen on their services. For example, a landscaper might get a prospect inquiring about their seasonal gardening services at midnight on a Sunday in an interaction with a chatbot. They're interested but find the pricing a bit too steep.
Before they go looking somewhere else, the chatbot offers them a 10% discount that they can use for their second appointment. This type of relevant promotional offer could influence their decision at that moment.
By building the promotional offer into the conversation logic, your marketing team can identify which prospects qualify for the campaign, instead of making it a blanket offer. Protect your profit margins, and build loyalty with existing customers.
6. Feedback & Reviews with Sentiment Analysis
John is disappointed with his attorney and is planning to cancel his retainer and get representation from another firm. Yet as he interacts with a chatbot on his current attorney's website about canceling, it offers him a free consultation, provided he continue to retain their firm. This sparks John's renewed loyalty to the firm, as he wasn't feeling his business was sufficiently valued.
Most people don't realise that in customer service, you’ll earn about 9 times more revenue by elevating the positives (e.g. get a customer's rating up from a 4 to a 5), that you will eliminate the negatives (e.g. get a customer's rating up from a 3 to a 4).
In the scenario above, the chatbot helps to put up a defense against losing a client, setting the stage for the attorney to "delight" John again.
The chatbot can end the conversation with a short survey of the customer experience or even conduct an automated sentiment analysis of the conversation. This will help the law firm understand the kinds of win-back offers that are most effective, and the best language to position it. So they can perfect the process and language to avoid losing clients while minimising retention costs.
7. "Thank you" Messages & Referrals
Whether a "thank you" message is to wrap up a service inquiry or a follow-up to an in-person appointment, a chatbot message will deliver the messaging it is programmed to, at an appointed time.
This is a great way to ensure your last contact with a client is positive, concise, and consistent, which will help you generate repeat business and referrals.
Before asking for referrals, it's good to assess the level of customer satisfaction to determine the best next steps. If they had a positive experience, it makes sense to include a refer-a-friend promotion into your thank you chat dialogue so you can save on marketing costs. When the client wasn't satisfied for some reason you can quickly escalate to a human representative to mitigate the risk of disappointed customers spreading negative feedback, which can be very costly to recover from.
Are Chatbots Cost-Effective?
Conclusion
Over the past few years, consumers and business people have become more comfortable interacting with chatbots. Some even prefer to interact with bots for simple questions. Are you looking to educate your website visitors about the services you offer, when your prospects need the information most? Want to help your clients better navigate your website to find the solutions they need?
Chatbots are built to manage high volumes of simultaneous interactions for repetitive enquiries. They can help you focus on the work you enjoy doing and delighting customers. That means you reduce the costs and time spent on answering mundane questions or giving free advice to those who say they want to "pick your brain".