Chatbot Business Models

Whether a given use case for any software is deemed feasible, depends on the economics of that use case. The project at hand will be considered viable if the software will achieve an adequate return on investment. This applies to chatbots as well.

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How to establish if your chatbot business model is viable?

In order to be economically viable, the cost of creating the chatbot must be less than the incremental profit it is expected to generate. While the cost is determined by the complexity of the use case and the efficiency of the chatbot development platform, the incremental profit is driven by the customer.

The customer has to complete many steps when completing a task. For example, if they want to use a new device, they will:

1. Search online for devices in the relevant category.
2. Identify a few options and research these more deeply online.
3. Find out the relative pricing and benefits of the device with different vendors.
4. They may visit a store to try out the different devices.
5. Choose the best business package for them.
6. Go through the payment process with the chosen vendor online or in-store.
7. Set up the delivery details.
8. Take delivery of the device.
9. Set up the device by carrying out the instructions.
10. Use the device.

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The chatbot (or any relevant software) could be introduced by a business as part of a service if it was possible to make any of the above steps easier for the customer (without adding excessive costs or introducing disadvantages).

The first condition is that it is possible to create a business service for an existing step that results in better customer experience than the current proses and secondly the chatbot needs to be the best model of technology for that service.

It is also important to consider that different customers may have different priorities. Some customers may be more price sensitive and therefore value a cheap price over convenience while others might value convenience over price.

A chatbot could be a good model for the customer who values convenience over price (for example when shopping for a present) as this customer wants a quick good enough outcome over shopping for exactly the right model and price combination. The person who values price or is searching for exact features is likely better off with a graphical interface where they can filter options with more granularity.

Possible business models and roles of a chatbot in an enterprise:

1. Search online for devices in the relevant category. Provide a list of curated options.
2. Identify a few options and research these more deeply online. Allow users to request more details on curated options.
3. Find out the relative pricing and benefits of the device with different vendors and businesses. Integrated with curated vendors.
4. They may visit a store to try out the different devices. Each device in the store has a voice assistant next to it that can be asked questions.
5. Chatbots can choose the best business package for them. Allow users to speak their preferences and present an appropriate list of options.
6. Go through the payment process with the chosen vendor online or in-store. Payment happens on chatbot.
7. Set up the delivery details. Chatbot communicates with the user on WhatsApp to arrange delivery.
8. Take delivery of the device. Chatbot alerts user on WhatsApp that delivery in on route.
9. Set up the device by carrying out the instructions. The user scans QR code on the device to bring up the chatbot that can take the user through the configuration process.
10. Use the device.

Of course all the chatbot business models above are brainstorming. There are likely to be many ideas for each step in the process. It is up to you to assess the value and feasibility of the ideas presented but hopefully, it gives you some idea as to what may be possible with chatbots.

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