Ro­bots raise the stakes

The Southland Times - - Business - Mike O’Don­nell

My old mate Pete just got back from Las Ve­gas. And he’s in love with a lo­cal named Rose. Pete’s a poker player. He’s quick to point out he’s a game fan, not a gam­bler. He gets to­gether ev­ery week with a group of men and women en­thu­si­asts, plays for chips and tries to hone his skills.

Poker has re­ally taken off over the past decade. Pre­dom­i­nantly it’s no-limit Texas hold ’em, a game high­lighted in the movie Rounders and which has also started fea­tur­ing on the Amer­i­can Travel chan­nel.

To­gether with a di­verse group of Ki­wis, Pete flew to Ve­gas to play Texas hold ’em last month at the Vene­tian Poker Tour­na­ment. In Ve­gas he met Rose.

Rose works for the iconic Metropoli­tan Ho­tel in Ve­gas. She’s an in­sider who can give you all the tips on what to drink, where to go and even de­liver you a burger to your room at 3:47 in the morn­ing.

The self-con­fessed mis­chief-maker is a bit of a flirt and warns you ‘‘watch out, we’re in for a wild ride’’.

Rose is a chat­bot. When you check into the ho­tel you get her text num­ber. You can then ask her any­thing – from the best free break­fasts on the strip, through to the hippest drinks or the best hang­over cure. She also pro­vides room ser­vice, taxis or a hu­man-less check out.

Flip across to the com­mer­cial side of the equa­tion and Rose av­er­ages 7.7 con­ver­sa­tions with 3000 guests ev­ery three days. That’s more than 22,000 cus­tomer re­quests dealt with in a per­sonal man­ner, with 90 per cent cus­tomer sat­is­fac­tion. And she could do twice that num­ber with­out break­ing a cy­ber sweat.

Two years ago I opined on the likely im­pact of ar­ti­fi­cial in­tel­li­gence-driven chat­bots – com­puter pro­grammes that sim­u­late con­ver­sa­tions with peo­ple and can ini­ti­ate dig­i­tal ac­tions as a re­sult, be that book­ing a ta­ble at a restau­rant or sign­ing you up to a loan.

Since then, the up­take of chat­bots has been ex­po­nen­tial. In Septem­ber 2016, there were 33,000 bots on Face­book Mes­sen­ger. Last year that passed 100,000 and it’s picked to pass 200,000 this year. The fric­tion­less dis­tri­bu­tion and cus­tomi­sa­tion abil­ity of bots is dis­rupt­ing the heck out of a lot of in­dus­tries, in­clud­ing home loans, real es­tate and travel.

Dig­i­tal home-loan bro­kers with bot front ends now act as fee-free mort­gage bro­kers in Europe and the US. Strike up a con­ver­sa­tion with the bot front end of com­pa­nies like Trus­sle or Habito and they will anal­yse ev­ery mort­gage in the mar­ket and find the best one for your cir­cum­stances and prop­erty.

Some can even drive con­veyanc­ing, push­ing the dis­rup­tion into the le­gal in­dus­try as well as mort­gages.

Open­door is a plat­form in the US which of­fers AI-driven house buy­ing. Home­own­ers want­ing a firm and fast exit from their homes sim­ply pro­vide their ad­dress and com­plete a few short ques­tions to then get a firm of­fer on their prop­erty.

For sell­ers, this means trad­ing time and un­cer­tainty with a bank cheque and cer­tainty, sub­ject only to a prop­erty in­spec­tion.

For this cer­tainty they get charged 6 per cent of the pur­chase price. When you con­sider the av­er­age fi­nal com­mis­sion for a house sale through a real es­tate agent is around 3.4 per cent, that means you are pay­ing 2.6 per cent ad­di­tional mar­gin along with any ad­di­tional pre­mium a good agent can de­liver.

HiJiffy is a lit­tle like Rose, it’s a vir­tual concierge for the trav­eller. But rather than be­ing be­spoke and text-driven, it’s a com­mon plat­form that pro­vide scale across ho­tel chains. HiJiffy sits in Face­book Mes­sen­ger and acts as per­sonal but­ler, re­cep­tion­ist, room ser­vice and dis­tri­bu­tion ser­vice.

It al­lows trav­ellers and tourists to check into ho­tels and their rooms via their phones, and in­cludes in­te­grated pay­ment and book­ing. While not as sul­try as Rose, it’s a scal­able plat­form and is cur­rently be­ing tri­alled across the Mar­riott chain.

Back here in Aotearoa we’re still play­ing catch-up. Air New Zealand was one of the first out of the blocks with Os­car chat­bot. First in­tro­duced 18 months ago to han­dle flight, bag­gage and Koru in­quiries, Os­car is now hav­ing more than 1000 con­ver­sa­tions a day in 380 sub­ject ar­eas.

Most banks have got beta ver­sions of chat­bots in play in­clud­ing ANZ’s Jamie, a dig­i­tal avatar of a young brown-haired, be­spec­ta­cled woman who has 30 sub­ject ar­eas of knowl­edge. She’s slightly creepy but still im­pres­sive for first-gen­er­a­tion video-re­spon­sive tech­nol­ogy.

Mean­while, the reg­u­la­tors are catch­ing up fast. Back in May, Kiwi Wealth be­came the first fi­nan­cial ser­vices provider to be ap­proved by the Fi­nan­cial Mar­kets Au­thor­ity to de­liver per­son­alised robo fi­nan­cial ad­vice. They won’t be the last.

But the in­ter­est­ing part to me is the sales po­ten­tial of chat­bots. The big­gest drop-off rate in dig­i­tally driven sales fun­nels is the fi­nal stage of signup. Typ­i­cally com­pa­nies can’t af­ford per­son­alised ser­vice at the point of con­ver­sion, at least not for nar­row mar­gin prod­ucts.

Chat­bots change that equa­tion. My mate Pete found him­self want­ing to please Rose, the Ve­gas bot. If you could make a sales con­ver­sa­tion bot that in­voked the same re­sponse and could com­fort­ably carry on the process with 3000 prospects a day, you would fun­da­men­tally change the sales en­vi­ron­ment.

Com­bine that with Google Du­plex, their out­bound voice in­ter­face for phones, and you know Rose is right. We’re all in for a wild ride. Bet­ter buckle up.

Mike ‘‘MOD’’ O’Don­nell is a pro­fes­sional di­rec­tor, ad­vi­sor and writer. His Twit­ter han­dle is @mod­sta and he’s got the bot. While this col­umn is his per­sonal opin­ion, for full dis­clo­sure it’s noted MOD is a di­rec­tor of Kiwi Wealth.

Chat­bots with the per­sonal touch could fun­da­men­tally change the sales en­vi­ron­ment.

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