Informative Chatbot Statistics and What They Mean for Your Business

How Big Is the Chatbot Market?

A market research report published in November 2019 by research provider Markets and Markets estimated the chatbot market was worth $2.9 billion in 2019 and projected growth to $9.4 billion by 2024, representing a compound annual growth rate (CAGR) of 29.7%.

A study released in February 2021 by business intelligence provider Insight Partners projects a CAGR of 27.9% to 2027 with an estimated market size of $9.4751 billion.

Why is the chatbot market growing so rapidly? Markets and Markets identified several contributing factors:

• Advances in chatbot technology, including the emergence of chatbots capable of more natural conversations
• Growing consumer demand for self-service
• Businesses need to provide support 24/7 at lower costs, reflecting a growing focus on consumer engagement and retention
• Increased chatbot adoption in specific industries, including banking, media, retail, travel, telecommunications and healthcare

These are some of the most significant forces which will drive chatbot future trends.

How Many Companies Use Chatbots?

Chatbot adoption statistics show that usage is growing faster among large companies than smaller ones. Usage is increasing among companies that sell business to business (B2B) faster than those which sell business to consumer (B2C). Certain industries are seeing larger chatbot adoption than others. Businesses in English-speaking companies are adopting chatbots at a higher rate than other countries.

Chatbot Adoption by Company Size

A 2018 survey by Internet technology social media company Spiceworks found 40% of businesses with more than 500 employees planned to adopt chatbots and intelligent assistants over the next 12 months, compared with 25% of midsize companies and 27% of small businesses. Companies are using chatbots and intelligent assistants for purposes such as voice-to-text dictation, team collaboration, calendar management, customer service and help desk management.

Despite the higher adoption rate among large companies, the sheer number of small businesses, which make up 99.9% of U.S. firms, means that the largest share of sites with chatbots is still made up of small businesses. According to a study of data from website source code analytics provider NerdyData analyzed by logistics company Boomtown, the vast majority of sites with chatbots represent companies with 250 or fewer employees, with the largest share going to firms with 10 or fewer employees.

The size of businesses hosting sites with chatbots breaks down as follows:

• 1-10 employees (39.2% of sites with chatbots)
• 11-50 employees (32%)
• 51-250 employees (16.3%)
• 251-1,000 employees (3.6%)
• 1000 or more employees (8.9%)

As this indicates, chatbot technology has become affordable even for the smallest companies.

B2C vs. B2B Chatbot Adoption

The impact of chatbots is shaping B2B companies faster than B2C companies, according to Boomtown’s study. The analysis found 58% of companies that use chatbots on their websites are B2B companies, while 42% are B2C.

Chatbot Adoption by Industry

Chatbot adoption is highest among companies that sell Internet and software services, which account for 65.1% of sites with chatbots, according to Boomtown. Other industries adopting chatbots include:

• Professional services (8.4%)
• Health care (6.6%)
• Vendors who sell non-essential (consumer discretionary) products (3.9%)
• Media companies (2.7%)
• Consumer staples (1.9%)
• Hotel and leisure (1.7%)

An additional 9.7% of sites using chatbots fall into other industry categories.

Chatbot Adoption by Country

Boomtown’s data shows that the U.S. hosts far more sites with chatbots than other countries, with 15,515 sites compared to second-place Australia at 1,009. The next 3 countries in the top 5 also host English-speaking populations, namely the U.K., the Netherlands (where Dutch is the official language but most residents also speak English) and Canada. 

Other countries leading in chatbot adoption include France, Germany, Brazil and India. Markets and Markets expects the North American market to continue to lead in the immediate future, but foresees strong growth in Asia, led by China, Singapore, India and Japan.

How Many Customers Prefer Chatbots?

A survey by customer engagement provider Pegasystems found 65% of consumers prefer human support to chatbots. Some 16% of consumers give chatbots a high-quality rating, while 58% find them merely adequate and 18% find them ineffective or annoying. About 43% of consumers find chatbots comparable to human support, while 34% don’t.

A 2019 survey by business software provider Computer Generated Solutions (CGS) revealed similar sentiments. Among consumers seeking customer support through a text-based application, 86% prefer help from a live agent, while 4% prefer automated help. Another 10% say they can’t tell the difference.

Preference for chatbots is higher when customers are seeking support for quick questions rather than complex questions or high-stress issues. For quick questions, 29% of consumers prefer to use chat support, which drops to 16% for complex questions, according to CGS. For high-stress scenarios such as questions about health-care claims, billing issues, technical support or banking concerns, 12% of customers turn to chat, compared with 71% who prefer phone or voice support.

What Are Chatbots Good At?

According to Pegasystems, consumers only prefer chatbots for certain simple issues, led by:

• Tracking orders (where 60% of consumers prefer chatbots)
• Finding basic information (53%)
• Asking basic questions (49%)

Chatbots also can be used to automate sales transactions. A survey by chatbot provider Drift found that 13% of consumers anticipated using chatbots for chat-based commerce.

These types of applications involve routine problems that can be solved by simple, standardized procedures where exceptions to rules don’t normally come into play. Such standard procedures lend themselves to automation, making chatbots an efficient solution. Chatbots are capable of resolving 40% to 80% of common customer service issues, according to IBM.

What Do Chatbots Fail At?

According to Pegaysystems, consumers voice several common complaints about chatbots:

• They aren’t smart enough to answer questions effectively (cited by 27% of consumers)
• They’re unable to interpret the context of conversations (24%)
• They engage customers robotically without human qualities (14%)

These complaints highlight a limitation of chatbots. Because they are computer software programs, chatbots are efficient at handling routine procedures, but they run into difficulties when encountering situations not anticipated by their programming. Support issues that involve exceptions to rules, unusual situations or contextual considerations can be challenging for chatbots to resolve. Chatbots also lack the human touch and empathy which a live agent can provide.

What Are the Benefits of Chatbots?

Consumers surveyed by Pegasystems rated the top benefits of chatbots as:

• Fast service (56%)
• Ability to access support on their own schedule (37%)
• Convenience (36%)

As these results reflect, the most direct benefit of chatbots is saving time for customers and support teams. A study by chatbot provider Intercom summarized by technology site TechRepublic found customer support teams that use chatbots are 60% more likely to report an improvement in customer resolution time than those which do not. The report also found that 73% of companies that use chatbots to automate support see an increase in ticket resolution.

By saving companies time, customer service chatbot applications also save businesses money. The average chat support session costs companies $8-$10, compared to $35 to $50 for the average phone support session, according to enterprise contact center solutions provider Aspect. A study by technology market research firm Juniper Research projects that chatbots will save the banking industry 862 million hours by 2023, equivalent to $7.3 billion in cost savings. These time and cost savings help account for the rapid growth of business chatbot adoption.

How Do Chatbots Affect Customer Satisfaction?

Despite the general consumer preference for human assistance, the improvement in resolution times and rates that chatbots deliver promotes higher customer satisfaction. Intercom’s study found that support teams that use chatbots are 30% more likely to experience an increase in customer satisfaction than those which do not. Teams that use chatbots are 27% more likely to meet rising expectations from customers who have grown used to the speedy support delivered by tech giants such as Amazon.

Are Chatbots Replacing Human Support?

While chatbots are growing in popularity, they are not a complete replacement for human support. Chatbots are useful for handling routine service issues, but more complex or customized situations can require human assistance, and customers can become annoyed when they are unable to reach a live representative in these situations.

A survey by consumer advocacy nonprofit Consumer Reports found that 75% of consumers complain about being unable to reach a human representative on the phone, making this the most common customer complaint. Consumers have similar complaints about chatbots, according to a survey by mobile customer service provider Helpshift. American consumers’ biggest complaint about chatbots is that they prevent them from reaching a human representative, a concern cited by 51% of survey respondents. When customers have to type more than 4 responses to a chatbot, 77% become annoyed.

The real value of chatbots lies not in replacing human support, but in enhancing it. Chatbots are most useful for speeding up service on routine tickets that don’t require human help. This frees up time for staff members to handle inquiries that truly call for live assistance. The best uses of chatbot technology lies in a strategic integration of chatbots and human support.

What Do Chatbot Statistics Mean for Your Business?

The chatbot facts cited here show that chatbots are becoming an increasingly important part of the customer service landscape, helping companies handle routine support tickets more efficiently while freeing live staff to help customers who need human aid. 

Would adopting chatbots improve the efficiency of your own customer service? Review your customer service procedures and performance to evaluate whether investing in chatbot technology makes sense for your company. If you need financing to cover the cost of chatbot software, consider applying for a business line of credit or another small business financing option.