For this series of blog posts, I interview professionals working in the exciting world of chatbots. Last week I talked with Jason Reuter and Peter Preston, founders of Chatbot Concierge: a chatbot agency focussing on the hospitality business.
Company: Chatbot Concierge
Based in: Miami, USA & Brisbane, Australia
Start date: December 2017
Barend: So, you guys live in different continents. How did you meet?
Peter: Yes, I'm in Australia and Jason's over in the US, and It's a LinkedIn story basically: I was looking at people in the digital space to connect with and I think I hit Jason at the right time. He wanted to start a new business in chatbots space so we started messaging and it's been a romance ever since :-)
Jason: I was just finishing up the agency job I had for 18 years. We were focused on hospitality, helping businesses with all their digital marketing efforts, mostly websites and, I think it was two years prior to meeting Peter, I suggested to my team we should start offering chatbots as a service. I was ready for my next thing and I truly believe in the potential of chatbots and I feel this is something that could possibly power me through my next three decades and beyond. The internet is catching up to what we already have in our home and phone: the possibility to have conversations with computers via devices. Usually the internet is the innovator but in this case it's still behind.
Barend: Peter, can you tell us a bit about your other company: Localtag?
Peter: Localtag helps the construction industry with ramping up their marketing and sales. We are primarily reselling Hubspot CRM to support the client's processes.
I started looking at chatbots as another channel we could use to help people and I started inbound bots after doing a lot of educating myself on bots, playing around with them, building a few for clients and some for fun. Inbound bots were related to the Hubspot and inbound marketing methodology. Since connecting with Jason, I've kind of shelved that and we've been busy launching Chatbot Concierge.
Barend: Jason, you were already focussing on hospitality so for you it was a logical move to go targeting hotels I guess?
Jason: A hundred percent! With a name like "concierge" we show it is something that adds value and answers questions to anything in the hotel space. If you need help with housekeeping, some new towels or need to know what the best steakhouse is in the local area: our chatbot can give the answers.
Around 80 percent of my LinkedIn contacts are in the hospitality space, from directors of sales at medium-sized hotels all the way up to a hotel ownership group. So it was a logical step indeed.
This kind of boutique companies that create great value for the hospitality were popping up everywhere. And that's what I felt was missing in my old company: having something a little bit more unique to offer. At a certain point everybody was offering web development and we weren't unique anymore. With chatbots, I feel like I am at the same spot where I was 20 years ago. Back then we had the Yellow Pages, the book, and I had to tell hotels what a website was and convince them that they needed one. And now everybody knows they need one and with chatbots it's the same thing: we're in the first inning of a nine.
Barend: What are the differences between the US and Australia in adopting new technologies?
Peter: Yes, there's a big difference! I don't want this to sound derogatory at all, but Australians tend to be a little bit slower to adopt new technologies and newer ways of going about their business, marketing and sales. And that's not to say everybody here is slow to adopt, but in general as a market, it is five to ten years behind typically. They like to look and watch and see what's working and then start to adopt.
It's also just a significantly smaller market while culturally and geographically they are similar in a lot of ways. Here we have around 25 million people and in the US it's 340 million. The smaller population size just lends itself to be a bit more cautious and deliberate. Of course, there are some risk takers and early adopters in Australia but you'll find a lot more of those in the United States. I don't know if that's just by the sheer size and volume or people have a different kind of willingness to jump in and try new things.
Barend: I sometimes get the answer from businesses: "No, a chatbot, I don't need that for my company." How do you respond when a hotel owner says that to you guys.
Jason: Barend this would be pretty awesome podcast by the way!
But to answer your question: I usually start talking about conversational devices like Amazon Alexa and I explain that conversational experiences are already here with our phones and home devices and the internet is far behind. I tell them that when I go to a typical hospitality website and I have to actually look around for the answer I need I'm kind of bored. That's hard for me to admit because websites were the love of my life for so many years but it would be really awesome if chatbots start helping more people out on a site.
Let's say you're visiting a park in the midwest and you don't know how close you are to Yellowstone. Then you just want to get the answer really quick. They say you have about 15 seconds to get someone's attention on the website. That's really not a lot of time before they are off to the next website so why not having a bot there waiting to answer your questions?
I think the DotCom is slowly turning into a bot versus a website because pretty much everything you can put on a site you can store in a chatbot. It's awesome technology but we just have to tell everybody ;-)
Peter: It's a difficult sales approach and you're looking for the pain points so you can sort of slot your solution in for them. We discuss the problems people have on their website. We will never say a chatbot is the silver bullet for your business. It's not going to make your business go from not making money to making money. It's another piece of the puzzle and it's a new thing that for sure can help. If they've got really high bounce rates or things like that on their website, a bot can help fix that. So Barend, what do you find in Europe? What's the adoption like there?
Barend: Well, airlines are first movers and banks and insurance companies are also building bots or talking about building them, they realize it's the future. SMBs, on the other hand, are harder to convince them but I only started like six weeks ago. Decided to change my "career" also from web development to chatbots. I have a website builder, that transforms Facebook pages of small businesses into a website but I didn't get as many small businesses on it as I wanted. So I decided to become a freelancer for now, focusing on mid-size and large companies. The website building platform is still up and running.
I work in a co-working space and I hosted a couple of chatbot workshops for the tenants and they were really amazed and they "see the light". It's crucial to let them talk to a bot right away and even let them build a simple bot so they understand the power of the low cost of development, because compared to web development it's a huge difference, right?
Peter: It also depends on the size of the bot and we see the need to create niche bots for the hospitality. I don't know if smaller boutique hotels can afford a bot that can do everything like reservations because it requires some sort of intelligence but the pricing must be right. But offering a more simple Social Media bot that can answer all basic questions might be a good approach because it's more budget friendly for them.
Barend: Exactly. It doesn't have to understand natural language to be useful right?
Peter: Correct, at least, not as a starting point.
Barend: Although I do think a lot of frustration and misunderstanding comes from the fact that people expect every bot to understand everything that they say to them.
Peter: Indeed this miscommunication occurs because when you talk about a bot people have the expectation that if you say "what the weather is like in Singapore?". We moved away from sending demos to people because you can't make a chatbot that's going to be able to do everything. If we do and send it to a potential client they will inevitably break it because that's what we all do: try how many questions it takes to break a bot.
It's important to make people understand most bots have a purpose in mind and there is an intent to help you with a particular service. So whether it's a wine sommelier or it wants to help you book a hotel room. Usually there's one goal that it has for you, that's one type of bot but Alexa and Siri are assistants that want to help you with a variety of things.
Barend: Do you guys have help from other people at the moment or is it just you two?
Jason: We are creating a network of other developers, most from my previous job, so we can easily scale up if a project requires it. One of the first hotels we were talking to is actually a hotel just off the Strip in Vegas and their website gets almost 60,000 uniques a month, so that would be one where we would need to scale up big time. So I like the agency size remaining, the core team remaining small and then just being able to bring some people on board for big projects as needed.
Barend: What's your strategy? Cold calling, emailing, stopping by?
Jason: It's been kind of like the chicken or the egg with that one because I want to make sure that when I contact the hotels that I've worked with for nearly two decades, our website contains enough content. Some of the people that are higher up in the hospitality that could bring us more clients at once, so it's really important they find a decent amount of high-quality content on our site: free podcasts, blog posts and things like that.
I don't want to say: "Hey, I'm just starting off", our first impression needs to be good. We're getting there with more than 30 podcasts and Facebook live sessions and Peter's doing an awesome job of helping out with the blog and we're growing. People are knowing our name more and more and it's really cool to see the connections on social media and how many other bot companies are out there doing great things.
Barend: I think the ecosystem is growing exponentially. Chatbot Concierge just started last December, right?
Jason: Yes, exactly. Peter and I connected early December and we had our first call in January and then for me it was a matter of wrapping things up at my old job.
Barend: Have you already spot some competitors who also focus on the hotel business with chatbots?
Jason: We had five main competitors at my old company and they were the ones that I would think would be the innovators. I visit their sites pretty regularly but I haven't seen anything about bots yet. One of them told me they had an internal team working on bots for a year now. We choose to launch and iterate from there and gain traction from there.
So, we haven't seen companies yet saying we do bots for hospitality. I'm sure we could have missed a few but I think we were first in this space. Looking at competitors is not that important because in when you do a great job hospitality they refer you like crazy. Hotels have a restaurant on site that is independently owned or there's a golf course nearby that they're affiliated with. They might have a need for a bot as well, how cool would that be: "Hey bot, I'm at hole 3, 100 yards away and the wind is blowing from easy. What club should I take?" There are so many cool things that can be done and it's wide open so that's why at this point we don't really care about competition or sharing information with other bot builders. We are all evangelists in a way.
Barend: What technology do you use to build bots at the moment?
Peter: We use several platforms like ManyChat, ChatFuel and Motion.ai which was acquired by Hubspot, so that one's kind of in flux at the moment. But were are also getting into Natural Language Processing (NLP) engines like DialogFlow and Aspect a startup that developed a Natural Language Understanding platform. We're spreading out trying to find the ones that that suit our needs. Hospitality has a unique toolset, they don't typically use standard massive industry tools like Salesforce or anything like that. This means we have to connect our bots to the software they use for i.e. managing properties like hotels. It's a unique little ecosystem we plug into to build fun and useful bots for our clients.
Jason: To get back to landing clients: I think it only takes one, just like with websites back in the days. Hotels managers have their networks and LinkedIn where they meet and say: "That's really cool. Where do they get that?". And then they give the credit somehow to us so it could take one good client to grow. In hospitality it's also about the return on investment: did the bot increase your occupancy or room nights you might not have had otherwise? Until now there's not a lot of engagement happening on hotel websites. With a bot there in the corner that says "Hey, welcome! Can I answer any questions?".That is the essence of hospitality.
Barend: About the software you use: I recently looked into Amazon Lex and I found out that their software is free to use for months. Can that be something interesting for you guys also to look into?
Peter: Yeah, that's on my radar but I have to be careful otherwise I will try everything and that will be all I'm doing. I'm sure you recognize this Barend, they are all fun toys for to use in our sandbox and that that's how I learned them but have to keep focus once we decided to use a couple of bot building tools.
Barend: Picking the right tools also depends on which messaging platforms you want to serve I guess?
Peter: Yes, that's part of the whole development process. I've seen a lot of people really dive into it, building chatbots and selling them. But they might forget this consideration side of the development that you take into account:
Peter: You can get very, very, very deep into facebook messenger but as we've just seen following all of the Cambridge Analytica stuff and the hearings, that they put a hold on building new bots? you can. It's somebody else's sandbox so you could get stuck. As the market matures we'll all get better at understanding what really needs to go into the thinking before we start building. And like you said, these different tools that we have at our disposal now come into play when you start deciding, ahead of time, where do you really want this bot to live?
Barend: How did the problems at Facebook impact your business?
Peter: It has impacted us in a way but in a good way. It's a worry that you have no matter what. If you're building on a platform like Facebook, you inherently know. We all three have been there, right? I mean, your website builder Zitecraft is also built on the big blue giant right?
Barend: Yes, it's also depending on Facebook.
Peter: Right, so you know somewhere in the back of your head that there's the potential for them to just pull the plug on you, or make one little change to their terms of service that means you can't do what you were doing. So it made us step back and really look at what are we trying to sell people here and is it just the Facebook Messenger bot or is it something that we can use more efficient like "build once and deploy everywhere".
Jason: It's hard to see Facebook struggling because when someone starts chatting with the bot within Facebook Messenger, you right away know so much intelligence on the person: you know where they live, how old they are and if the content in their profile is mainly public you can see so much more for example if they travel a lot. For the hotel business this is gold. I was really glad Facebook opened up the platform again last week for developers because I want them to come back with a vengeance, at least with the right privacy regulations in place.
Peter: Yeah, that's really cool!
Barend: Another technical question: do you use Zapier for connecting hotel information systems to your bots? Or do they offer an API you can plug into directly?
Peter: Not too many of the property management systems have an API yet because they are proprietary systems and I haven't seen any on Zapier yet or any of these tools like https://automate.io.
Barend: Maybe it's something for the future, but would you consider launching a chatbots marketplace for the hotel industry? What is your pricing model going to be like? Subscription based or project based or a mix?
Jason: I wouldn't oppose to a marketplace but for now we have to be project-based because the client can be a really nice large scale hotel or it could be a very small hotel so we have to be flexible.
Peter: As we scale up to bigger properties who have more diverse needs we can build modules based? Then we have reusable building blocks for a conversational booking flow, for finding a restaurant and so on. But when you get to like branded hotels, big names, they'll want to have a lot more control over what the experience is for the end user, for their guests and what the personality of the chatbot is. And so I don't see larger projects ever being really "templated".
Jason: Another thing we would really want is to become a preferred vendor for chatbots for one of the major hotel brands in the Intercontinental hotels group or Best Western for example. With one of those world-renowned brands we can remove our Chatbot Concierge branding and offer a white label chatbot experience.
Barend: It's hard to predict but what do you think the chatbot landscape will look like in two or three years?
Jason: I hope there's a lot more of them haha! I'd love to go to someone who's really bold, a dotcom that brings up a chat, especially on your smartphone. We now see more and more mobile redirects to websites. We need that for bots as well, that would be fantastic!
Barend: Yes, I think if you look at what's happened in China, we will just follow basically what happened there.
Jason: Yes, Michael Yang, the founder of ManyChat, has spent quite a lot of time in China because he sees a lot of learning opportunity to bring that over to the west. WeChat and everything it does over there is just amazing. I don't know if we are culturally ready for that yet for one platform to be everything. I mean we're getting closer and Facebook is certainly heading that way.
Barend: No, that's not ideal indeed.
Peter: There's a lot of exciting things happening and people will get used to using bots. Over the next couple of years is that people will become more and more accustomed and they are ok with the fact that it's a bot most of the times. One of the most important parts is having humans behind to still step in when needed and have that real connection. I think that's our job primarily right now to just talk about this and how we can use it best.
Barend: Yes and Natural Language Processing is also becoming better meanwhile.
Barend: Have you set any goals yet for Chatbot Concierge? Maybe for the rest of the year and 2019?
Peter: We've got a 12-month plan and it's an ongoing process we're still figuring out. We have our initial goals and benchmarks we would like to hit. As we get going and the more conversations we have, we'll figure out how realistic those are and where we need to spend our time. But for right now it's just trying to have as many conversations with the industry as we can and do a lot of learning.
Barend: Ok, that was my last question! Well, I had one more but that was to ask if we can do a Facebook live sometimes :-)
Jason: Yeah, we're up for it if you're up for being our podcast guest!
Barend: Deal, let's do that!