3-Step Formula for Calculating Your Chatbot ROI
If you’ve ever worked from home with kids, you know how difficult it is to stay focused. In between juice cup refills, answering questions about life and clicking away YouTube ads, you need to get work done.
I bet you see where I’m going — customers’ repetitive questions and simple tasks also distract employees. Similarly to children, answering customers grows a bond. But unlike with children, you can use AI to respond and still foster a valuable relationship.
Businesses are leaning in to support automation more each year. The chatbot market has not only skyrocketed since 2016, but is predicted to reach 1.25 billion by 2025. Which leads to the bigger question — “How much money will can my business save and earn with an AI chatbot?”
In this post, we’ll share the simple three-step equation you can use to calculate how much money and time you can save with a chatbot.
- What is the ROI of a chatbot?
- How to calculate your chatbot ROI
- Get a high chatbot ROI with Userlike
What is the ROI of a chatbot?
Chatbot ROI (Return on Investment) refers to the financial gain or cost-effectiveness of implementing a chatbot in your business or customer service. It measures the value generated by the chatbot compared to the initial investment and ongoing costs of its development, deployment and maintenance.
This gain can vary depending on certain factors or goals set by your business. For example, improving your response times or collecting more leads.
The actual savings (in terms of money and time) will vary depending on how you use your chatbot, and how much.
With our formula, you can get an impression of how much your business can save by using an AI chatbot.
How to calculate your chatbot ROI
For the best result, we highly recommend having several months experience with website chat for an accurate calculation. That way you have a clearer idea of how many common questions you receive on a weekly basis.
Of course phone and email inquiries will also give you a sense, but chats are easier to determine if they’re eligible for chatbot takeover. Plus customers will be more likely to use your new chatbot if they’re already familiar with the nature of website chat and messaging.
1
Calculate number of inquiries that can be answered by a chatbot
Chatbots are ideal for answering simple questions to free up your agents’ chat slots and capture more leads. Here’s how to quickly get an idea of how many chat inquiries a chatbot can take over per month.
For a fast, general calculation, you’ll need the average number of inquiries you receive per month.
Chatbots handle an approximate average of 20% support requests from start to finish, so you can use this number to do a quick calculation:
Let’s say a business receives an average of 1,300 support requests per month: 20/100*1300 = 260 inquiries that can be handled by a chatbot.
We’ll call this chat volume (V).
Pretty simple, right? But what does this mean in terms of time and cost savings? Keep reading to learn how much your business can save.
2
Determine time saved with a chatbot
Those FAQs your agents are taking over can be costly, both in money and time. This next step in determining your chatbot ROI will help you calculate how much time your agents can save answering common questions.
First, you’ll need your average handling time (AHT). This is the average time it takes for your agents to resolve a request. For our sample calculation, we’ll use an AHT of 10 minutes.
Then, you’ll use the average chatbot handling time (CHT) of 3 minutes (average length across industries) to determine time saved. So the calculation will look like the following:
(AHT - CHT) * V
Using our example numbers, here is the result:
(10-3)*1300=9100 minutes saved per month (151 hours)
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3
Calculate money saved from using a chatbot
This is perhaps the biggest question of all for businesses: How much money can I save by using a chatbot?
Determining a ballpark amount is easy if you’ve calculated your support volume and time saved.
To figure out your savings, we’re going to use our chatbot solution as the base for your calculation. Userlike’s AI Automation Hub is all-in-one automation software that powers several AI modules, including a chatbot, on your website. It costs an extra $200 as an add-on to our Corporate plan, which is $290 a month. So for $490 you get advanced website chat, messaging, automation and more.
To calculate your monthly savings, you’ll also need the average salary of your support agents, plus your total number of agents.
As an example, let’s say a business has 10 support agents who make $2900 a month:
1300(support requests)/10 agents = 130 requests per agent If a chatbot takes on 260 per month (according to our first calculation) then this is the equivalent of two agents (2900*2 = 5800)
That’s $5800 spent on questions a chatbot could take over in a month. Userlike’s AI Automation Hub costs just 8.5% of that.
4
Choose your chatbot provider
Now that you have an idea of how much time and money your business could save by using an AI chatbot consider the type of chatbot provider you need. This will determine implementation and maintenance costs.
Let’s consider the potential monthly costs for an AI chatbot.
Here’s a simple breakdown of what monthly costs could entail:
- Monthly fee: Often starting at $300+ per month
- Extra chats costs: e.g. $10 per 1,000 chats per month
- Labor: Consider the hours spent on development times employee salaries (unless you hire a development team for a set amount)
Your costs will also vary if you plan to hire a team or the chatbot provider to build and integrate the chatbot for you.
Another chatbot option is a bot that is already integrated into your website chat.
Userlike makes AI automation accessible and affordable for businesses. You get all the benefits of a website chat and messaging platform coupled with modern AI modules, such as an AI chatbot and a smart, interactive FAQ page and contact forms.
The AI Automation Hub is powered by a central knowledge base that works out of the box, or can be improved with your business’ existing data.
There’s not many other providers who offer AI automation mixed with chat and messaging, but here are some we can recommend if you have an existing chat solution:
For a full overview, check out our post, “Conversational AI platforms: An essential guide for businesses.”
No matter which provider you choose, we highly recommend connecting your chatbot to your website chat solution. In our research , we learned that customers are okay with talking to chatbots first as long as there’s an easy way to escalate the conversation to an agent. A chatbot tied to your website chat/messaging solution is going to have more value than just a standalone chatbot.
Get a high chatbot ROI with Userlike
If you need help driving organic traffic to your website and/or find that a healthy selection of your inquiries are FAQs, then a chatbot may be a good fit for your business. Chatbots are there for your customers 24/7 and can help answer simple inquiries, freeing up chat slots for your agents. By guiding visitors through your website, your chatbot can help turn curiosity into legitimate interest and generate hot leads for your agents to focus on.
As chatbot enthusiasts, we’ve read many chatbot success stories in our years of research and have since created our own solution. Userlike can help get you started with our AI Automation Hub so you can provide intelligent, 24/7 support for your customers.
Sign up with Userlike and contact our customer service team if you’re ready to talk bots 🤖
