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Recently I was working on the use case of chatbots for a startup company. They were interested in any interesting ideas despite its feasibility. I tried to separate chatbot use cases into independent components so that the owners could choose what is important for their business. I was suggested to analyze their issue using the value discipline model. It is a relatively simple strategic framework that, in my opinion, is a perfect model to explain use cases of chatbot for businesses. This blog is mainly on how you can leverage chatbots to excel in customer intimacy.
What is the Value Discipline Model?
Value Discipline Model is a strategic framework conceptualized by Michael Treacy and Fred Wiersema in their book: The Discipline of Market Leaders. This model consists of three competitive areas: product leadership, operational excellence, and customer intimacy. As the name suggests, if your focus area is product leadership you should lead the market with the best product. For achieving operational excellence your organization's focus area should be leading in reliable products with the lowest cost and minimum inconveniences. Finally, for customer intimacy, your business must focus on understanding the individual customer in detail.
According to the authors, businesses should do well in all three areas but to stay ahead of the competition they should excel in at least one area. Also, generally speaking, it is impossible to excel in all areas. How your business can improve in each of those dimensions and which area you should focus is out of the scope of this blog. I will assume you have decided to excel in customer intimacy, and you want to know how a chatbot can help you.
Customer Intimacy with Chatbots
Excelling in customer intimacy could be the most challenging among the three principals. The idea is to build an organizational culture that prioritizes customer satisfaction over anything. Also, a business model that approaches customers as a long-term value creator, not on transactional bases. How to build and run a customer-centric organization is a well-researched and well-known topic in business management. Establishing an efficient communication channel with your customers is an important component of this philosophy. Whenever your customers have a question, complaint or feedback, responding to their needs and rewarding them can go a long way. That is where the chatbot can serve you the most. Below are some use cases of chatbots for excelling in customer intimacy.
Be responsive to your customers
Chatbots are way smarter and advanced than they were a few years ago. You can train them to understand the basic human language and identify the important components in a sentence. This capability can help you reduce the friction that customers experience with your customer support services. Additionally, chatbot can operate 24/7 and give instant response to customers. For example, an e-commerce business can use chatbots for their customer support service. The chatbot can narrow down the customer’s issue and collect necessary information in the process. If the problem is simple chatbot can resolve it, if not then the conversation will be handed over to the person in charge. Customer’s issue could be about the product, payment or delivery. By asking a few simple questions you can identify what your customer needs and automate the process for resolving it.
Continuously measure your customers’ satisfaction
Customer intimacy is a long-term business goal. Before you can see the ROI of your hard word in your revenue, you would need KPIs to measure your performance. In addition to social media reviews, you can use chatbots to measure your business’ Net Promoter Score (NPS). NPS indicates your customers willing to recommend your service to a friend. As an example, you run a restaurant and your customer made reservations through chatbot. An hour after their visit, you can send them a message asking them to score their willingness to recommend your restaurant to their friends. They are more likely to respond a number from 0 to 10 on the private message than going to Google Map, finding your restaurant and writing a review.
Reward your loyal customers
Do you remember the Pareto principle or 80-20 rule? In the context that I want to apply it, 80-20 rules state that again generally speaking, for many businesses, 80% of the revenue comes from 20% of loyal customers. These loyal customers deserve special treatment and care. You probably use Customer Relationship Management (CRM) software for tracking and managing those customers. All you have to do is to connect your chatbot to your CRM and whenever one of your loyal customers has a query you can act faster for them. Also, you can use chatbot to inform them about your new products, discounts and events through their most frequently used social messaging app.
There are many other ways that chatbots can help you excel in your customer intimacy leadership approach. For many businesses, chatbots can contribute to your operational excellence and product leadership by automating internal workflow and reducing operational costs. We will probably cover those topics in more detail in our future blogs. If you want to know how chatbots can help your business check our Marketing Chatbot offering on our website.
