The benefits of a chatbot for airlines

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Oct 29, 2019
James Eisner
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Chatbots for airlines are becoming more and more common. With fierce competition, increasing customer support costs, and shrinking margins, airlines are being forced to rethink their approach to customer service. Chatbots have proven to be a powerful tool in this evolution.

The success of chatbots in the airline industry has been driven by two factors. First, bots provide significant customer support savings. The cost reductions can reach up to 60% per call. The second reason is demographics. More consumers are tech-savvy and prefer automated support options, like social media or other messaging platforms, over speaking with a human on the phone.

How exactly are AI-powered chatbots making an impact in the air travel industry?

Reducing call center costs

Most airlines use call centers to provide support. The problem is that call centers can get expensive. Each support call costs, on average, $2.20. If an airline receives millions of calls a year, the costs add up quickly. This labor-intensive approach to customer support leads to overworked customer service representatives who, to answer as many calls as possible, provide less-than-ideal service.

Frustratingly, the vast majority of calls that airlines receive are fairly mundane. Usually, they're related to questions around flight information, boarding passes, check-in, or something else that doesn't necessarily require help from a support agent.

Airline bots are a cost-effective solution to solving this problem. A chatbot automates many support requests that would have otherwise been handled by an agent. If an airline can automate 60% of its passenger requests, the impact can be massive. By shrinking their call center's support loads, an airline can significantly reduce the number of agents they need which, in turn, brings down the average cost per call.

Types of requests that should be automated

Types of Requests That Should be Automated

Freeing up support agents

When agents spend less time answering basic questions, they have more time to spend on important calls. With a chatbot platform handling simple inquiries, airlines can free up their human agents to deal with only the most urgent, complex issues. Agents have the bandwidth to spend more time properly resolving each passenger's request while passengers spend less time waiting to talk to an agent.

Moreover, agents who had spent most of their time answering general questions can focus more time on sales calls. With agents booking flights instead of resolving basic inquiries, airlines can generate more revenue from their call centers.

Selling ancillaries

Cutting costs isn't the only benefit of deploying a chatbot. Bots can also sell. Ancillary services are a key driver of profitability for airlines. They can represent up to 50% of total revenue.

To improve ancillary sales, the purchase process needs to be simple and spontaneous. Chatbots do an excellent job of automatically selling ancillaries throughout a passenger's journey. With the help of artificial intelligence, bots can offer passengers personalized ancillary services like seat upgrades, extra checked baggage, and priority boarding. They're also able to answer questions and reduce the number of steps needed to complete the purchase.

Increasing customer lifetime value

Improving customer loyalty and influencing their preferences is a priority for airlines. However, modern consumers have little tolerance for friction and expect to be helped immediately. Airlines need to provide excellent travel experiences and even better customer service experiences.

Speed is especially important. A study conducted by Twitter and Applied Marketing Science found that the faster an airline answered a passenger, the more that passenger was willing to pay for their next flight. Chatbots allow airlines to employ instantaneous, 24/7 customer support to meet passengers' expectations without needing to hire hundreds of support agents around the globe.

Faster replies lead to more revenue

Faster replies lead to more revenue

Airline chatbots are more than a cost-saving measure

Chatbots blur the lines between customer support, sales, and customer experience. While the most obvious impact is cost reductions, bots also have a positive impact on sales revenue. In the case of airlines, chatbots address some of their most pressing challenges: support costs, ancillary sales, and customer loyalty.

From the perspective of passengers, instant, self-service support results in an easier, more personalized, and overall better customer experience. A better customer experience not only impacts the conversion rate, but it also leads to a higher customer lifetime value.

However, not all chatbot solutions are created equal. To maximize ROI and customer satisfaction, technological and industry expertise are critical. This is why it's crucial to partner with someone who knows your industry's use cases and the channels where you serve your customers.

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