Jun 10, 2021 8:43:00 AM
B2C vs. B2B: How Many Chatbots Does Your Company Really Need?
Chatbots have become a ‘must have’ item for most companies wanting to offer an ‘always on’ interactive element to their website. Chatbot vendors are also starting to create functionality that focus on one or more customer experience (CX) departmental use cases such as marketing, sales or service. Some companies are starting to ask themselves, “Which department should own the bot?” or “How many chatbots do we need?”.
After being in this market for a while now, I thought I’d share my thoughts on the subject. I can quickly summarize my thinking in two statements:
- There is no real conflict, because the typical company does not have the need for multiple use cases (I’ll get to why further on).
- B2C companies tend to need chatbots for customer service while B2B companies tend to need them for marketing and sales.
Disclaimer: This applies to probably 90% of companies, but not to international enterprises with a magnitude of products under the same umbrella-brand. Read on to learn why that’s the case.
Let’s Review the Departmental Use Cases
The core goal is to help direct visitors to the information they need to help them through their buying journey and to also use the insight of what content the visitors are consuming to provide salespeople with buyer intent for prospecting purposes.
The core goal is to sell or close business by either directly selling something in the chatbot (mostly B2C, transactional sales where “I know what I want”, like adding data volume to my mobile plan or buying a ticket for a zoo, but not consultative sales like fashion) or to use the digital intent information to know what the best follow up action or message to use in the prospect’s buying journey.
The core goal is to offer always-on service and save the end consumer's time (and companies money by having fewer service requests) by letting them resolve their issue as quickly and conveniently as possible in real time.
Customer Service vs Customer Success
In order to prove my point, we first need to understand the different dynamics at play between B2B and B2C companies.
In B2B, there is normally a long, considered sales cycle that involves sales and sometimes technical sales people to help explain how complex products can benefit an individual company’s needs. These types of sales tend to be higher value and require people to help guide customers through implementation and ongoing support as business needs to evolve and product’s are adapted to each company’s requirements. These longer-term relationships can involve many internal stakeholders.
In B2C, companies sell products that can easily be understood and purchased online directly to consumers at high volumes. In these industries, the chatbot’s main purpose is to offer convenience (as stated above in the customer service use case).
The following table illustrates the differences between both:
Let me highlight here that bots can automate customer service, but not imitate personal relationships. We need to wait until 2050 to get there… ;)
Wouldn’t Everyone Prefer a Human Touch?
So why isn’t everyone offering customer success managers? Because it’s not economically viable. In this blog post, I explained that every minute of a call center costs ~60 cents and that’s too expensive to offer at large volumes. In addition to that, a customer success manager’s salary is probably twice that of a service agent.
A company can only afford customer success managers once they have a certain customer lifetime value (CLV). The more CLV a company has, the more they can afford to spend on the post sale customer relationship.
Examples for a customer service use case:
- Paying $3 per month for my password manager
- Paying $10 per month for my Netflix
- Paying $50 per month for my telephone contract
- Ordering clothing online for $100
- Ordering furniture online for $1,000
- Getting an online credit of $10,000 (margins are very low here…)
For all of the cases above, there is customer service. But there are also some private transactions that could have customer service management like buying a kitchen for $10,000 or buying a car for $50,000 - the margins are good enough to maintain a personal relationship!
All of the above examples are B2C examples, but if we look into the B2B world, contract values are a magnitude higher - thus basically nearly every B2B relationship requires a customer success manager.
Some exceptions for high velocity B2B products or services exist of course but in these cases there is a difference. For example, if you have 5 G Suite users (and pay a few hundred euro per year), you aren’t going to get a customer success manager. If you have 50 users (and pay a few thousands per year) you will probably get a customer success manager.
B2C Companies Typically Have Customer Service - B2B Companies Have Customer Service Managers
In summary, chatbots can help automate repetitive tasks in customer service, but right now, chatbots cannot replace the need for a human to be a customer success manager.
No Sales Department in B2C and Marketing is Within the User Experience
In a typical B2C company, there is not even a formal sales department, usually a marketing or a “revenue team” is responsible for driving sales. Just think about buying online. Something like digital insurance, applying for a credit or purchasing a telephone contract. The typical buying journey and product to buy are not very complex. Marketing drives creating demand and users go through highly optimized checkout funnels. If you call those companies, you’ll mostly end up in the customer service department
As stated previously, there are exceptions (e.g. when buying a car) but I'd state that if you offer customer service, you are very likely to not have a sales department and marketing owns the revenue generation.
If we make the case for not needing chatbots to sell, what about the benefit of chatbots for the purpose of marketing in B2C companies?
I think it’s little, because finding information is already part of the customer journey. So in an ideal world, the relevant information should be given during the purchase process, e.g. on the product or checkout page.
Of course, there’s the possibility to train the bot to pop up on certain conditions (only on a desktop of course, not on mobile) to give some product advice to help make a purchase decision or to offer support on broader pre-sales topics, yet it mostly would be static content.
The bot would be displaying the relevant information, with the goal to lead to a bigger purchase or a higher conversion, but ultimately I personally think that a great UX is the best solution rather than building a supportive marketing bot.
So summarized: The value created from a marketing bot in a B2C company is significantly lower than it is for a customer service use case.
The below table sums it up and shows why there really isn’t a war as to who should own the chatbot within a company.
But Some Companies are Doing Both B2B and B2C
Fair point, but that’s rare! If companies have B2B and B2C target groups, they typically use different brands or at least different subdomains. However, if they cannot / do not want to differentiate users by domain or brand, I am suggesting that they are using two different bots in one chat widget. In order to decide, which bot takes over when, a third piece of software, a bot orchestrator is needed. But that's a topic of another blog post… I’d say that 95% of companies do NOT need this.
In summary, there probably isn’t a reason for a company to have more than one chatbot or really worry about which department should own it. As chatbots become more mainstream most companies will have them. One department will very likely lead based on the business need. And, if there are some opportunities where a chatbot can be used across departments in a secondary use case, then of course departments should collaborate and work together to get the most out of this great technology that is really just starting to come into its own.
Erik Pfannmöller is the CEO and one of the founding members of Solvemate. He is a serial entrepreneur with a deep passion for AI and Software. Erik started out as a professional sportsman in white water canoe slalom. His sports endeavors culminated in becoming World Champion in 2007. In 2015 he founded and became CEO of Solvemate. Prior to Solvemate, Erik founded an eCommerce platform.