The financial benefit of a chatbot
By adopting our chatbot service, your company can potentially save £379,200 annually, a combination of reduced costs and increased revenue. Let’s break down the financial benefits with some concrete examples based on a small or mid-sized business (SME)
that interacts with a large volume of customers regularly, likely in a sector where customer support, sales, and service efficiency are key to maintaining competitive advantage:
Summary of Potential Financial Benefits
| Benefit | Estimated annual savings / Revenue increase |
|---|---|
| Reduction in labour costs | £ 160,000 |
| Increased revenue via upselling | £ 57,600 |
| Scalability during peak seasons | £ 120,000 |
| Reduction in error-related costs | £ 21,600 |
| Improved customer retention | £ 20,000 |
| Total potential savings & revenue | £ 379,200 |
Scenario 1:
Significant reduction in customer service labour costs
- Current staffing:
- Your company has 10 full-time customer service agents who handle an average of 100 enquiries per day. Each agent costs the company £40,000 annually in salary and benefits.
- Total annual cost for 10 agents: £400,000
- With Chatbot integration:
- Our chatbot can handle up to 80% of basic and repetitive enquiries (e.g. order status, returns, FAQs), significantly reducing the volume of tasks your agents need to manage.
- Assuming the chatbot handles 80% of 1,000 daily enquiries (800 enquiries per day), only 200 complex or escalated issues require human attention.
- If your remaining agents can now handle 200 enquiries daily with greater focus, you might reduce the need for 4 agents (assuming efficiency gains). This, your staffing requirement drops to 6 agents.
- Annual savings:
- Savings in staffing: 4 agents x £40,000 = £160,000 annually
By implementing our chatbot, your company could save £160,000 per year on labour costs – while still maintaining a high level of customer support.
Scenario 2:
Increased revenue through 24/7 customer engagement and upselling
- Current staffing:
- Your website receives 1,000 visitors per day, with an average conversion rate of 2%. This means you convert 20 visitors to sales each day.
- Average order value: £80
- Daily revenue: 20 x £80 = £1,600
- Monthly revenue: £1,600 x 30 = £48,000
- With Chatbot integration:
- Our chatbot can engage visitors immediately, offering personalised recommendations and assisting with product discovery. By leveraging AI-driven upselling and cross-selling, conversion rates can increase by 10-15%.
- With a 10% boost in conversions, you can expect to close an additional 2 sales per day. So:
- Additional daily revenue: 2 x £80 = £160
- Additional monthly revenue: £160 x 30 = £4,800
- Annual revenue gain from chatbot:
- Additional annual revenue: £4,800 x 12 = £57,600
This means that through automated upselling and 24/7 customer engagement, your company could generate an additional £57,600 in revenue annually.
Scenario 3:
Scalability without additional hiring
- Current staffing:
- Your business experiences a spike in customer enquiries during peak seasons (e.g., holidays or sales). To manage this, you need to hire 5 temporary agents at a cost of £24,000 each for a 3-month period.
- Total temporary staffing cost for peak season: 5 x £24,000 = £120,000
- With Chatbot integration:
- Our chatbot can handle an unlimited number of enquiries at scale. During peak seasons, your chatbot can manage thousands of enquiries without the need to hire additional staff.
- The cost of scaling up with a chatbot? Zero.
- Savings:
- By automating customer service, you can eliminate the need for temporary staff during high-demand periods, saving £120,000 each peak season.
This savings can be repeated every year during seasonal spikes, leading to substantial ongoing savings.
Scenario 4:
Reduction in error costs and operational mistakes
- Current staffing:
- Errors in customer service can lead to costly mistakes, such as incorrect orders, missed refunds, or miscommunication about return policies. Assume your company experiences 5 errors per month, and each error costs the business an average of £400 to resolve (including the cost of rectifying the mistake and handling customer dissatisfaction).
- Monthly error-related costs: 5 x £400 = £2,000
- Annual error-related costs: £2,000 x 12 = £24,000
- With Chatbot integration:
- Chatbots eliminate human error in routine transactions, providing consistent and accurate information every time.
- If the chatbot reduces errors by 90%, this could save £21,600 annually (£24,000 x 90% error reduction).
By minimizing human error, the chatbot could help you save £21,600 per year in avoided operational mistakes.
Scenario 5:
Improved customer retention leading to increased lifetime value (LTV)
- Current staffing:
- Your business has a 10% churn rate, meaning that 10% of your customers stop purchasing within the first year.
- Your average customer generates £400 in revenue annually.
- If you have 1,000 active customers, your churn costs are:
- Lost revenue due to churn: 10% x 1,000 customers = 100 customers
- Lost revenue: 100 customers x £400 = £40,000 annually
- With Chatbot integration:
- A chatbot can proactively reach out to customers, handle common issues, and ensure personalised interactions that improve retention. Assuming the chatbot improves retention by just 5%, this results in:
- 50 fewer customers churning.
- Retained revenue: 50 x £400 = £20,000
- A chatbot can proactively reach out to customers, handle common issues, and ensure personalised interactions that improve retention. Assuming the chatbot improves retention by just 5%, this results in:
- Annual retention benefit from chatbot:
- Increased retention revenue: £20,000
By increasing customer retention, our chatbot can potentially save or generate £20,000 in retained revenue every year.
Stages of work
- Design
Free consultation on chatbot solutions and how they can be implemented into your business - Development
We dive into you’re the specifics of your business, gather requirements, and create a prototype. We work closely with you to refine the project - Launch
We develop the chatbot, integrate it with necessary systems, and test it using real-world scenarios to ensure functionality - Support
We hand over the completed chatbot, train your team, and ensure a smooth transition to full use - Consulting
We continuously monitor chatbot performance, make adjustments as needed, and optimise for ongoing efficiency
Phone:
Email:
Follow us:
Connect with Us
The form has been submitted successfully!
There has been some error while submitting the form. Please verify all form fields again.