JONATHAN ELCOCK: Businesses must board the smartbot train or risk failing

There’s a demonstrable reason the name “Kodak” has faded from recent memory: a failure to adapt. But let’s wind back to about 135 years ago when the company’s catchy advertising slogan, “You press the button, we do the rest” became widely synonymous with the democratisation of photography. 

Before Kodak, photography was frustratingly complicated and highly technical, requiring bulky equipment, glass plates and chemical processing. That changed in the late 1880s when Kodak introduced the first-ever hand-held camera for everyday use. Its promise? You take the pictures and send the camera back to Kodak to develop the film, print the photos, reload the camera and send it all back to you.

For nearly a century Kodak dominated the global film and camera market, becoming an unimpeachable household name. From supplying film for movies and photography to being one of the most valuable companies on the New York Stock Exchange, Kodak appeared too big to fail.

Until the seeds of the digital revolution were starting to be sown.

During the 1970s, a Kodak engineer developed the first digital camera prototype, but company executives shelved it, fearing the invention would cannibalise their profitable film business. Meanwhile, Kodak faced stiff competition from Fujifilm and its cheaper, high-quality film, and by the time Kodak officially entered the digital camera market in the 2000s other brands like Canon and Sony had already established their association as pioneers of the product.

Kodak’s failure to timeously transition from a product-based company to a service-based digital ecosystem compounded its demise. While it was still trying to catch up on other digital camera brands, digital photography had already transitioned to smartphones like the iPhone and BlackBerry. Failing to capitalise in this newer market finally led to its demise and filing of bankruptcy in 2012.

The Kodak story remains one of the best analogies for the chatbot industry. Many businesses today remain resistant to embracing smartbot (AI-powered chatbot) technology and prefer to continue holding onto traditional customer sales channels such as SMS, email and call centres, which are perceived as a cheaper alternative to newer technologies.

However, these channels are not providing the sales results needed to keep businesses profitable. In fact, when businesses try to call their customers, they fail to reach 30%-40% of them. This results in a low return on investment, forcing businesses to invest more heavily in top-of-funnel activity by allocating more resources to increase customer leads to counterbalance the lost conversions. This effectively becomes a vicious cycle of profit burning and risks the business becoming redundant. 

But while businesses cling to traditional tactics like Kodak clung to film, smartbot technology has already moved to mainstream platforms such as WhatsApp, where the customer’s entire interaction with the business — whether through queries or sales — can be hosted.

Today’s innovation is tomorrow’s commoditisation. A business can only grow at the speed of their customer’s trust. Using traditional channels of communication erodes trust because trust is now linked to response time. Relying on a human to respond to email or SMS queries always guarantees some length of delayed feedback, which in result fails to respond to a customer’s primary need: convenience. One would not trust a doctor who takes a week to respond to an appointment request via email, so why would a business avoid suffering the same fate? 

WhatsApp smartbots are giving businesses the quality results that traditional methods have been unable to do. While emails and SMSs can provide quantity-based data such as click-through rates, these do not go further and offer more granular customer insights. If the click rate is low for emails, a business may assume the email addresses are wrong or are no longer active. This could end up being fundamentally false, but the data is insufficient to know the true reasons, as it only informs you of the “what”. 

WhatsApp smartbots, on the other hand, provide qualitative and behavioural data, which can tell you the “why”. With AI embedded in the entire journey of the customer’s online interaction, the business can see where exactly the breakage occurs and why. While your traditional e-commerce technology can only indicate that 80% of customers abandoned their shopping carts, WhatsApp smartbots can identify that 60% of those customers had asked a question that was not answered. This data can give insight into what exactly discouraged the customer, and how to optimise the breakage to improve the experience for the customer the next time.

Smartbot technology is also increasing profitability by reducing wastage and helping businesses with more efficient use of resources. Think of a company that provides tertiary education loans, but with prerequisites such as a threshold on monthly income. The WhatsApp smartbot would pre-qualify customer leads in a chat by asking the potential customer a series of questions, before handing over the hot lead to a contact centre agent to lock down the sale with a personal, human touch. Without the smartbot’s presence in this sales process, call centre agents would inevitably waste time trying to make contact with leads and disqualify 60% of them.

Kodak’s parochial business attitude provides the product- and services-centric businesses of today a valuable lesson: technology changes with time. New innovations arise and automatically update older practices. We need to continue adapting to the trends. You can either embrace it or wait for your next competitor to come along and take your place.

• Elcock is cofounder & CEO at rather.chat.