Why SMS + Chatbots = Game Changer

SMS and chatbots are becoming commonplace in B2C communication. So, what happens when we combine the two?

SMS

Short Message Service (SMS), or texting, has become ubiquitous in our personal lives and 97% of smartphone users regularly use it to communicate.

So, it makes sense that businesses have also adopted SMS to connect with customers; 52% of business leaders in North America say it’s already a major disruption in their industry, and there are no signs of this trend stopping anytime soon.

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The growth in business to customer (B2C) SMS is also supported by customer behavior which shows that 85% of customers prefer receiving text messages over a phone call or email, which contributes to SMS having higher engagement and open rates.

Chatbots

An emerging technology -- less familiar than SMS for many -- that has been gaining momentum in the communication space are chatbots, which are computer programs designed to simulate conversation with human users through text, speech, and other gestures.

While the word ‘chatbot’ is often used interchangeably with ‘conversational agent,’ chatbots are actually a subcategory of conversational agents/dialog systems. As with everything else in the tech world, the nomenclature can be confusing, so let’s clarify a little bit:

Conversational Agent / Dialog System - Programs that communicate with users in natural language (text, speech, or even both), through the use of word-classification processes and natural language processing. Dialog systems generally fall into two classes, task oriented and chatbots.

Task Oriented Dialog Agents - Programs designed and deployed to help users complete particular tasks, such as helping customers answer questions or address certain problems. These programs are capable of collecting information from users through short conversations. This category also includes the digital agents which have become commonplace in our cellphones and home controllers; think Alexa, Google Nest, Siri, etc.

Chances are, you’ve interacted with task oriented dialog agents via pop-ups on the bottom right hand corner of your phone or computer screen -- just this morning, I was browsing through my banking app when a message from “Erica,” Bank of America’s virtual financial assistant, asked if I needed assistance.

Chatbots - A mode of conversational AI technology, with programs more sophisticated than that of task oriented dialog agents. Chatbots are designed for longer, less structured conversations which imitate human-human interaction; they range in complexity but often include the ability to:

• Understand context
• Analyze emotion
• Learn from interactions
• Interact when needed: proactively, scheduled, on-demand

The Benefit of Dialog Systems

A study by Oracle found that by 2020, 80% of businesses plan to utilize dialog systems. There are two big appeals to this new technology, especially for customer service use cases. First, is the 24 hour availability of these systems, and the second is that it offers a less costly alternative to employing people for this role. Market research by IBM shows that chatbots have the potential to reduce customer support costs by 30% across industries.

Most businesses that currently leverage dialog systems are using task oriented dialog agents; this makes sense, considering these programs are being deployed with a certain goal in mind. These goals can range from helping a customer answer a specific question, or improving lead generation by engaging with customers as soon as they land on a page. In these instances, there may not be as much of a need for complex chatbots to be able to mimic unstructured, candid conversation.

SMS + Chatbots = A Game Changer

When we think of chatbots, we often think of the programs embedded in websites or mobile / web applications. But, what if we delivered the human-like intelligence of chatbots through text modality?

Enter: the SMS chatbot.

As mentioned earlier, SMS has been adopted heavily for B2C communication because of its ubiquity, scalability, and effectiveness in reaching customers. AN SMS chatbot combines conversational AI with the ubiquity of SMS -- this means that businesses can engage with customers naturally and intelligently through customers’ preferred channel of communication.

Current SMS use cases tend to fall under the following categories: alerts, notifications, marketing and special offers, customer support. Automated conversational experiences don’t make the list yet, but the adoption of SMS chatbots could change that; it’s not far fetched to say SMS chatbots could help shape a world where automated conversational experiences exist at our fingertips.

What would this world look like? Here’s a few examples of how an SMS chatbot can deliver value in these spaces:

Mental Health Service Delivery - The US currently suffers from an insufficiency in mental health services, despite 56% of people in the country seeking help in this space. Access to these services is extremely limited -- 96 million Americans have had to wait more than a week for mental health treatments -- due to the cost of hiring skilled staff, and the few options for treatment.

SMS chatbots can be leveraged to increase access and limit wait times for people in need of mental health services by engaging with, and conversing with individuals as a therapist would. While this may not be a permanent solution, it could be used as a temporary intervention in the interim while an individual waits for a face-to-face appointment. Compared to the current situation of having no intervention during this waiting period, individuals could benefit from the immediacy of a personalized treatment option.

Personalized Education - How many times in college did you wait outside of a professor’s office for an hour just to ask a few questions? Have you ever needed help during a time that fell outside of office hours? Speaking from experience, these things happened to me a lot. Even with teaching assistants, the limitations of the professor to student ratio is difficult to overcome, especially at larger institutions.

Now, imagine an educational experience where you simply pull out your phone to ask for feedback on your essays or to ask a quick question about how to find the best resources for your research paper. SMS chatbots could make it possible to provide personalized educational experience and deliver attention to students quickly on a one-to-one basis.

The Future of SMS Chatbots

Training chatbots to interact with people in nuanced, natural conversations is a difficult task, and as with any new technology, there are ethical implications that should be considered while building and deploying this tech. But if done right, SMS chatbots offer a huge potential to deliver value in spaces where our experiences are lacking due to access, deliverability, or other limitations to human interaction.

Integrating SMS chatbots to your business applications starts with a reliable CPaaS provider. Luckily, with our 24/7 support, privately owned network, and extensive inventory of numbers, Telnyx has you covered. Talk to our messaging experts for more information on how you can use our services to easily implement text enabled chatbots to enrich your customers’ experiences.