We’ve all seen chatbots on the bottom right. If we engage with them, sometimes they work pretty well and other times…well, not so much. The New York Times recently wrote an article on chatbots where they described trying and failing to find a solution with a chat bot as a “spiral of misery”.
But we also know that chatbots can be super effective (just ask WebsiteClosers.com clients). So how can we use chat bots effectively?
Joe Bush is the CEO of The Chat Shop, which harnesses the power of conversation and defines the nature of every visitor’s online journey.
Joe Bush: People are realizing is what has the potential to be a profit center rather than a cost center. And actually, if you start to think about that full customer lifecycle, and you know, the pre, during and post purchase journey, it has a really, really strong potential to drive some amazing, amazing revenue figures for you.
Izach Porter: All right, you’re listening to the Deal Closers podcast, brought to you by websiteclosers.com. A show about how to build your e-commerce business to be profitable, scalable, and one day even sellable. I’m Izach Porter and on the show today, the CEO of The Chat Shop, Joe Bush tells us all about how Chatbots and Chat should be used in ecommerce and technology businesses. We’ve all seen Chatbots in the bottom right hand corner of various websites. If we engage with them, sometimes they work pretty well. And other times, maybe not so much. The New York Times recently wrote an article on Chatbots, where they described trying and failing to find a solution with a Chatbot as a spiral of misery. We know that Chatbots can be super effective, and it definitely has worked well for a lot of our clients at Website Closers. And you know, for example, now even the IRS is getting into the action, opening up Chatbots for the first time on irs.gov. So let’s bring in our guest today, Joe bush. Hey, Joe, how you doing?
Joe Bush: Hey Izach, it’s great to be here.
Izach Porter: Yeah. Glad to have you, man. So, Joe, can you give us the origin story of The Chat Shop, I read that you started this business in 2011, which I think if we convert that into ecommerce years, I think are like dog years. So that would make you about 77 years old
Joe Bush: So trying to grow a beard back then. So the idea came up in 2011. Really from an organization called Rackspace, who I believe you have in America, as well as here in the UK. They were one of the only firms at the time using Chat to drive revenue. And we just kind of felt like, there was a lot of opportunity here, you know, a lot of brands have moved online. And they felt like it was great, you know, it’s cheaper to market and sell. But you lose that kind of human interaction component, the kind of the shop assistants, the individuals who can help you find what you want. And so we set out to try and resolve that challenge, that opportunity, and bring Chat to organizations in a nice scalable manner. We found those two main reasons why people weren’t using that. One, they didn’t realize it existed. And two, have really difficult to manage, you know, you need someone there. 24/7 ideally, volumes come in peaks and troughs. And it’s a tricky thing to get right. You know, you don’t have any tone of voice and the body language. And that’s really where the business was born.
Izach Porter: Gotcha. Interesting. So, you know, as you know, our audience is really comprised mostly of owners who are looking to sell their ecommerce businesses or buyers who are looking to buy an E commerce business. And one of the main focuses in that process is cashflow and the profitability of the business. Can you give us some stats on The Chat Shop and your products and services? You know, how does it increase purchases or conversion rates or AOV you know, how do you think about the utility of your technology?
Joe Bush: Good question. So it varies a lot across different brands, different markets, different levels of consider purchase. So I’m always a bit hesitant to give you fixed figures, what we do find is that people we speak to convert on average, five times higher, five times more likely to convert, and they typically spend between 10 and 20% more within that transaction. Obviously, we don’t speak to everyone online. So we find that tends to translate to between a 10 and 20% increase in revenue.
Izach Porter: Gotcha. Well, that’s significant. And just out of curiosity, what’s the cost structure like if you’re comparing it as a percentage of revenue?
Joe Bush: So I mean, for the way we structure our costs, we find that, it cost maybe the 10% of the revenue driven. Oh, wow.
Izach Porter: Oh, wow. Okay. So is there any reason that anyone wouldn’t want to have Chat or does it not work? Are there any industries categories or sectors you know, within ecommerce or technology I guess that this product doesn’t work for?
Joe Bush: Its best place within the considered purchase market. You know, the things that you take a bit more time to decide, you know, the right product for you. If you’re buying an everyday items, which it’s super easy to understand, super easy to compare, Chat often doesn’t make that much sense in a pre-sales journey. If you’re something you take a bit more time to consider, and it’s much more personal decision, whether that’s B2B or B2C, Chat has a really good opportunity to add in a decent amount of value.
Izach Porter: So sometimes, you know, I think it’s a great point around kind of the complexity of the purchase and the maybe the product that’s being sold. And I think sometimes people just want to speak with a real person. So, you know, is there a way that your technology can integrate and provide that capability you know, at some point in the Chat funnel?
Joe Bush: Yeah. I mean, throughout. So we tend to try and look at organizations in three different areas. See, but the pre purchase journey, the sorts of kind of thoughts and questions that people have before they commit to a purchase, you’ve got the during purchase journey, you know when you’re halfway through the checkout, and the discount code doesn’t work, or you want to find out a little bit more about the refund or return policies. And then there’s the post purchase journey. So when someone has an issue, or need some additional support, and those are kind of the three core areas that we tend to look at.
Izach Porter: Cool. So if I’m in just to continue that thought process a little bit further, if I’m in the mid-purchase journey, you know, kind of in the middle of the process there, and I want to be able to get a real person, is that an option that your clients are able to give to their customers?
Joe Bush: Most definitely, most definitely. And one of the key components to the success of any Chat program is around identifying at what point a customer potential needs some support, some help, some assistance. And the beauty of online is, every interaction an individual has with their website is trackable. And so some of the work we often do is looking at around at what point did people drop out of the funnel. And often it is around things that delivery, returns, discount codes, when they’re partway through the cart. And so we often track that behavior, and use it as an opportunity to resolve that challenge at that point in time. And to go back to an earlier question around, you know, the impact on conversion rate and average order value, the amount of times people drop out of a basket for various different reasons is high. And the beauty of all things conversation is you can resolve those challenges in real time in the moment while they’re there and ready to purchase, and that’s one of the key reasons why drives such good return.
Izach Porter: Totally, that makes a ton of sense. I mean, just as a consumer myself, I do almost all my shopping online, and I put stuff in the cart, and then walk away from it for various reasons usually, because I had some question that wasn’t answered, and maybe I go to try to figure it out and come back later or something. But if it, you know, if I had a point of contact right in that moment, it would be really helpful. So interesting. So what makes an effective Chatbot versus a lousy one? You know, how do you differentiate on your technology, and does it get smarter for a particular customers company and the questions that their clients are asking on a regular basis?
Joe Bush: So I mean, you’re right in terms of the Osco, how loud, how nice bots are lousy, there’s no doubt about that. I feel like a lot of brands, they focus too much from internal, what’s going to help me as a business perspective, rather than thinking about the customer. And how can we assist them and support that customer at that point in time in the best way possible? Within the bot space, there’s typically two broad approaches, there’s menu based, which is much more like an IVR system where you show to the user options that they can click on and work their way through. These are simpler and easier and more foolproof, much easier to get right first time, there’s then more of a kind of the natural conversation side of things, which are typically provide a better customer experience but they require so much more effort to not just build, but then optimize over time. And I think that the mistake people often make is they build something, they test it, they launch it, and then they kind of consider it done. Whereas in reality, it’s a continuous process and we all talk in different ways, we will have different needs. And the way we approach things has to adapt to the vast array of different customers and inquiry types.
Izach Porter: Yeah, that makes a lot of sense. So that adaptation over time. Is that something that you do for your clients at The Chat Shop, or are you looking for their feedback? Is it kind of self-managed or how does that actually work?
Joe Bush: In most cases, we own and deliver the whole process end to end. And in other cases, we might assist and support that process. The main thing is that there is someone there looking at it to improve things over time.
Izach Porter: Awesome. Let’s talk about a couple of case studies. If you don’t mind, can you give us some examples of some ecommerce or technology companies that you’ve worked with, how they’ve utilized your products, and what the outcome has been for them?
Joe Bush: So I think quite a good one to talk about. And it’s not American base, but there’s a company called CVS Bahamas, and they are the kind of the biggest home improvement store.
Izach Porter: Like Home Depot in the Bahamas, right?
Joe Bush: Exactly that. For UK listeners, they’re kind of B&Q or home base. It’s a country, which is quite slow to adopt digital. And they reached out because it had some challenges with driving sales. For the last 12, 18 months, we’ve been working together and driven some amazing, amazing results for them. They’re using a kind of a hybrid solution. So a combination between a Chatbot and a human team, both available 24/7. But it enables us to capture the full customer lifecycle, you know, pre and post purchase inquiries. And drones have amazing results. You know, I think they’re looking at just over 20% Chat to sale conversion rate. And what’s more impressive out of normal hours, they’ve seen a five times increase in sales just by having someone there available, who knows what they’re talking about and it’s delivering a great experience. In other markets, you know, there’s a lot of brands I can’t talk about, because of confidentiality reasons. But we have quite a lot of customers in the high end jewelry space, in a building customer engagement rings, or kind of personalized jewelry. And this is an interesting one, because there’s often a hybrid between lead generation and online sales. It’s quite a technical product range, which is a very kind of personal emotive and quite an unusual process people to go to, you know, a lot of people only get engaged once, not everyone. But a lot of people only go through that that process once. And so it’s a perfect case whereby having someone there who knows what they’re talking about, you can just augment that experience and guide you through the process and just build that confidence and comfort and results for them for everyone that we represent and that space have been particularly good.
Izach Porter: Awesome. How can ecommerce companies or companies that you’re working with use chat on social media platforms? How does that integrate, and what would be the kind of the concept there?
Joe Bush: So the first question I would suggest people ask themselves is the way you know, what are you looking to achieve by using Chat or bots through your social channels? Social for me, I mean, I’m, I don’t really use many of the social channels, I guess, apart from LinkedIn is a bit of a funny place in terms of people go there for inspiration, and to engage with the brands that they that they love. And often for support more so than to specifically try and buy something through that particular channel. For I would always ask yourself, what are we looking to try and achieve and then crafting a solution around that if it’s mainly using as a support channel, then using a Chatbot is quite a good way of being able to provide those instant fast responses to your common queries. And then escalating over to a human if need be. One of the thoughts with toyed with I haven’t really done too much with is around trying to drive engaging interactive experiences through social channels, which is much more really what the channel is about. And with bots, you can craft flows and experiences which are designed to engage and warm up and excite the user gamify the experience, if you will, rather than to directly sell or support.
Izach Porter: Wow, that’d be, that’s pretty interesting. So you’re talking about gamifying social media by integrating Chat into the platform. So it’s more of a dynamic, customized experience.
Joe Bush: And that could form you know, a range of different ways of doing things regardless of or with being mindful of what your brand does as a business.
Izach Porter: Yeah, super cool, man. So I was checking out your website and your business uses the language of conversational marketing. It seems like your services really go beyond just a Chatbot on a website. So can you tell us kind of throughout the process throughout that sales funnel, how your services interact with your clients customers?
Joe Bush: So I think in our world conversational marketing is mainly referring to using live cash and Chatbots to be able to drive lead opportunities can regardless of whether you are looking to purchase something online and in an ecommerce journey. If you’re a b2b potential buyer looking to try and find out more about a product or solution, we will have the same needs and desires to kind of find out more about that particular product or service, what we find is websites have to be catered to the masses, they can’t be tailored to every single one of us. And we will have quite unique needs and desires. And so we look at conversation as a whole around, how can we augment and support that journey on a one to one and real time basis? Because our website, as I say, can only focus on the money on the average user. So we find this a great tool to take someone from that kind of awareness interest phase through to their desire and action phase.
Izach Porter: Gotcha. Okay. So yeah, and I guess, as they as they move through that the awareness phase into desired action, and they’re more likely to convert and spend more money as they do it?
Joe Bush: Yeah, but I think, you know, the way we kind of look at it is not every conversation has to end in a sale or a lead. It’s all around empowering a visitor to have the information, confidence and trust that they need to be able to move them along that journey, whether it takes one conversation, or ten is just about kind of augmenting that experience and empowering them with the knowledge that they need to be able to be confident in what they want to do.
Izach Porter: Yeah, it seems like a lot of your focus is around is customer centric, right? It’s understanding what the brand is trying to represent to the customer. And then communicating that back. In an interview last year, you said, or you were quoted as saying, we’ve spent the last 9 years and 3 million human conversation solving one problem, how we can take conversation up a level, and we’re still learning. So you know, how are you taking conversation up a level? How are your services, you know, continuing to iterate and improve on the conversations that you’re having?
Joe Bush: So I’m not sure what interview that’s from but I’ve said that a few times, for sure. So I think, you know, we as a business take quite as in quite a unique approach to how we how we do that. I don’t know if you’re familiar with the Japanese manufacturing term kaizen?
Izach Porter: Yeah
Joe Bush: Okay, perfect. The idea of making small incremental improvements ends up having a kind of profound net impact. And that applies across our organization. And so that is something we look at from the way we build a strategy for an account through to the technology that we use, through the optimization phase as well. You know, we have clients, we have prospects who have a particular problem. So one not too long ago was we have our main markets are America, but we also serve other languages, what can we do? So we build an application to enable human agents to be able to speak in any language by using some middleware which converts translates the language in between the agent and the customer. So nothing particularly groundbreaking, but it serves a very specific purpose, and adds value to the business and to the consumer, and suddenly opens up greater markets. One of the great projects we’re working on at the moment is the conversations generate a huge amount of data, you know, the 3 million plus conversations that we have in our in our database, there’s so much insight in there, which can serve every single stakeholder in the business, you know, from marketing through to product through to technology through to the board. But what’s really difficult is understanding what you can learn from that information. So we’re in the process, we’re kind of at the proof of concept stage at the moment of building a compensation insights platform, which will ingest all of your transcript data, and surface up relevant, insightful information for businesses to be able to take action based on so things like it may well tell you that customers are talking negatively, their sentiment is dropping once delivery information starts to get discussed in the conversation, something which you may be not noticed, because it’s spread across the last 1000 conversations, but something which you can fix, and then improve yourselves by having that information brought to you in a nice, easy to digest manner. And that sort of mindset is something that we apply across the business. Because we are there talking to customers and clients about their problems and finding useful, clever ways of resolving those challenges and opportunities.
Izach Porter: That’s awesome. That can be really valuable information if you’re able to extrapolate it and quantify the conversation. Imagine you get all these. I guess in my mind, I’m envisioning the Data is just logs of all these conversations. But if you’ve got a technology that can pull out relevant trends and pieces of information, that can be incredibly valuable business knowledge to get direct feedback from customers?
Joe Bush: Definitely. They I think, you know, the data is there, processing it is perfectly doable. But then making it easy for stakeholders to understand is probably the tricky bit. And working out what of that data is worth pulling out and worth auctioning, but it’s a really interesting project and something that we’re super excited about.
Izach Porter: Very cool. So what’s the future of conversation marketing, and in Chat?
Joe Bush: There’s a few trends I feel, or at least I’m being exposed to. One is that conversation, people are realizing is what has the potential to be a profit center rather than a cost center. And that, you know, customer service is just a small portion of what conversation can bring. And actually, if you start to think about that full customer lifecycle, and you know, the pre, during and post purchase journey, and focusing on what the customer wants, and working out a way of serving those needs, it has a really, really strong potential to drive some amazing, amazing revenue figures for you. And a lot of people are starting to realize that. And I’ve quite scratched the surface with the customer service side of things. And then I started to expand out to the pre purchase journey as well. I think the second key trend, which is on its way is much more immersive experiences. So Chat, you know, runs online runs in your mobile, but it doesn’t just have to be text based, you can do a lot more within the window. We’ve just built a kind of payments and Chat application for one of the big kind of EU payment processes, which enables agents and customers to transact through a Chat window, which is really cool. There’s a lot more you can do in terms of bringing pictures and videos, links within Chat, and I think that’s going to increase over time. And I think the third and final one is around taking a more smart approach around the combination between humans and bots within a Chat window which is something that a lot of brands do. But it’s going to increase as time goes on. Especially as technology improves and people’s kind of awareness and interest in in the channel improves.
Izach Porter: That’s interesting. So how does that transition typically look like when you’re you go from Chatbot to a live agent on Chat? You know, I’ve been through a couple of purchase experience where that’s happened. And I think in those cases, it was, you know, the bot introduced himself as a bot. And then when I was training, I asked him a series of questions. And then they said we’re gonna transfer you to a live agent that was with Verizon, I just bought a new iPhone last week, actually. And then I had to leave the Chat. Interesting, he brought up payments, I had to leave the Chat to go check out on the website when I got my iPhone, and so how does that process sound to you and what can be improved on it?
Joe Bush: The main thing for me is to not try and hide the human side, make it super easy for customers to access the human side. And if they always go through the human side, then that probably tells you something about the way both Chatbots can be designed and should be designed to take the customer to the path or the outcome they want in as short and easy way as possible. But all too often people create hurdles that customers have to go through. So of course the human side of things is going to be easy. And also to be really obvious when you’re talking to a bot or a human because trust is everything in this world, not just on Chat.
Izach Porter: Yeah. Okay. Just curious, curious side question there. So, Joe, how can our listeners connect with you?
Joe Bush: So feel free to connect with me on LinkedIn, I go under a JoeBush. And if you’d like feel free to drop me an email as well. My email address is [email protected] always happy to share thoughts ideas, you know, to have jumped on the call and Chat through your goals and ambitions for a conversation. Not on a sales way, it’s just something I like talking about.
Izach Porter: All right, that was Joe Bush, CEO of The Chat Shop, which you can find at thechatshop.com. Thanks everyone for listening to this episode of the Deal Closers podcast, brought to you by websiteclosers.com. If you liked the show, be sure to rate us, write a review, press the follow button and share it with your network. And of course if you’re looking for help selling your e-commerce business, be sure to visit websiteclosers.com. This episode was edited and produced by Earfluence. I’m Izach Porter. Connect with me on LinkedIn, and we’ll see you next time on the Deal Closers podcast.