Artificial intelligence (AI) services known as chatbots incur almost zero marginal costs and can outsell human employees by four times, but some companies are hesitant to use these services.
According to new research from Temple University, AI chatbots are four times more effective at selling products than inexperienced workers. However, when a customer is aware of the AI, they are much less likely to purchase anything.
Outlets such as American Eagle Outfitters and Domino’s Pizza use chatbots as do online outlets such as Amazon and eBay. These low-cost chatbots never have bad days or get frustrated or tired like their human counterparts. But when a customer knows about a chatbot before purchasing, sales rates decline by more than 79.7%.
Researchers randomly assigned 6,000 customers to either humans or chatbots and either told the customers prior to purchasing something they were conversing with a chatbot or told them afterwards.
"Our findings show when people don't know about the use of artificial intelligence (AI) chatbots they are four times more effective at selling products than inexperienced workers, but when customers know the conversational partner is not a human, they are curt and purchase less because they think the bot is less knowledgeable and less empathetic," said Xueming Luo, a professor at Temple University.
While chatbots offer enhanced technological benefits and lower labor costs on labor, it takes a lot to gain customer trust and that is a problem companies are still dealing with, research indicated.