Independent study finds IBM Watson Assistant customers can accrue $23.9 million in benefits
Same independent study finds Watson Assistant had an ROI of 337% over 3 years
Companies increasingly understand the importance of the customer experience, and are focusing on greater customer-centricity in how they interact, engage and serve customers. Yet customer service continues to fall short of consumer and buyer expectations, with limited service hours, multi-step routing journeys, and long wait times. Besides the immediate frustration relayed to contact center agents in the short term, the compounding effect of these experiences is a poor perception of the brand in the long term.
Understanding the impact of AI on the customer experience
For organizations considering AI as the remedy to these customer care challenges, IBM commissioned Forrester Consulting to conduct a Total Economic Impact ™ (TEI) study to examine the value of an investment in IBM Watson Assistant. Forrester interviewed and surveyed four, long-time Watson Assistant clients about the benefits, costs, risks and flexibility they experienced using the chatbot technology for various aspects of the customer experience.
Forrester found three typical use cases where organizations applied Watson Assistant successfully. The starting point was customer self-service, providing AI-powered automated assistance to customers through web, mobile and/or voice channels. The second use case was employee self-service, bringing those capabilities in-house to support employees 24/7 by answering their HR/IT questions more quickly and minimizing time away from their priority work. The last use case was agent assist, enabling human agents to better handle customer inquiries by helping them find answers to complex questions.
Quantifying the value AI brings to customers, agents and employees
While each of the organizations interviewed had unique operations and industries, Forrester was able to glean common advantages and benefits of conversational AI. Some of these key findings from The Total Economic Impact™ of IBM Watson Assistant for a composite organization based on the interviewed customers included:
1. Cost savings of $5.50 per contained conversation with Watson Assistant. Continual training of Watson drives increasing containment rates each year, that is the number of conversations that don’t need to go to a voice or chat agent, providing growing cost savings. Over three years and a conservative 25% containment rate, the cost savings was worth more than $13 million to the organization.
2. Employee self-service drives 40% containment and reassignment of 40 HR and IT help desk agents. Watson helps contain internal questions enabling the organization to consolidate internal help desk agents and saving $3.2 million over three years.
3. Chatbot-augmented agents reduce handle time by 10%. Customers measured agent productivity improvements in several ways, such as the ability to handle greater volumes of chats with the same number of agents and avoiding the costs of additional hires. Another organization used Watson Assistant to augment their sales team, providing greater capacity to the agents and driving incremental revenue. After a single year of deployment, the improvement was worth over $1.0 million to the organization.
4. Correctly routed conversations saved $7.75 per correctly routed call. By using a chatbot to gather upfront information, Watson Assistant routes calls to the appropriate human being, when escalation is required, more effectively, reducing transfers and time to resolution. The improved routing is worth more than $6.7 million over three years.
Understanding the value beyond the numbers
While the numbers above clearly show the quantifiable value to organizations using Watson Assistant, there were additional, harder-to-quantify benefits that are worth noting. The most striking benefit is the impact to the agent was specifically that providing a better customer experience resulted in fewer mundane, tense, or abusive conversations with frustrated customers. One interviewed client stated, “The people we have now are helping with the more complex questions and they love their jobs because they are not dealing with the routine stuff. It’s very boring to keep answering a question over and over again.” Beyond creating a better work environment, this could impact other costly areas like attrition, recruiting and training.
Another important follow-on benefit was the perception of the organization as more innovative due to their use of AI for customer service. While this is hard to assign a specify monetary value, it creates a positive perception of a brand as forward-thinking and a leader in its industry.
Factors that lead to adoption of IBM Watson Assistant
The four clients also cite the ability to scale as a deciding factor when adopting the technology, stating they valued the ability to tailor Watson Assistant to a variety of use cases deployed in any sequence.
One thing is for certain: the benefits of chatbots in customer service are seen the most when human agents are involved. One interviewed client states, “I think it’s very important to have a human that people are talking to. But no matter how much you train a person, they would not be familiar with 100% of the nuance that’s involved to sell a mortgage. Watson has been very helpful to our frontline person who’s dealing with the customer on a potential mortgage to answer these questions immediately as opposed to telling the customer, ‘Let me look into that, I’ll get back to you.’”