Intelligent Virtual Agents

When IBM’s supercomputer, Watson, went head to head with human competitors on the game show Jeopardy, everyone witnessed a huge leap in the computer’s ability to respond, react, and adapt to human interactions.

Watson was the clear evidence that technology has developed to a level sophisticated enough to give companies and their customers the best of both worlds: superior, accessible, natural language–based online customer interactions and at a fraction of the cost of a live person. This has resulted in the aggressive adoption of intelligent virtual agents (IVAs) that are as effective and engaging as your best customer service agent, your brightest marketing whiz, or your most successful brand strategist.

Adding to the increased demand for IVAs are today’s Web-savvy customers, who expect to manage their personal and business engagements online with minimal human contact.

While originally adopted for online customer service, virtual agents have recently morphed into a new marketing engagement model. Deployed on Web sites, mobile devices, and social media such as Facebook, intelligent virtual agents are providing a distinctive marketing advantage to companies, allowing them to engage, converse, respond, and listen to their customers in unprecedented ways. Some examples of how virtual agents are being used to engage customers include:

• Brand awareness: Michelin uses its virtual agent to communicate information about its brand and product tips, while a utility company leverages its virtual agent to disseminate information to consumers on how to be more green.
• Product personalization and selection: Various divisions of L’Oreal use virtual agents to guide consumers in selecting the beauty products that best meet their individual needs (e.g., the right moisturizer for oily vs. dry skin). They not only ensure customer satisfaction, but also build brand loyalty.
• Merchandising: Virtual agents are also used to facilitate consumers signing up for online loyalty and personal accounts that drive regular customer engagement. Companies can use IVAs to fulfill consumer inquiries and engagement around merchandising promotions such as free T-shirt giveaways or to drive membership in higher-end premier clubs. For example, one high-end coffee company uses its virtual agent as a concierge to assist its premier members in selecting the ideal coffee bean for their sophisticated tastes.
• Assisted selling: A leading software provider in Europe uses its virtual agent to qualify customers for upsell and cross-sell opportunities.

Marketing and the Virtual Michelin Man
Giving their original icon a branding boost, Michelin customers can now interact with the Michelin Man as an intelligent virtual agent on the company’s http://www.michelin.com/corporate Web site. Conversing in both English and French on approximately 10,000 topics each month, this IVA helps visitors find their way around the site and answers questions about the company as well as questions about the Michelin Man himself—his hobbies, favorite foods, etc. An iconic brand mascot since 1898, the Michelin Man is uniquely recognized as the company spokesperson and an expert on its history and business, and is the natural frontrunner to building digital customer relationships.

The virtual agent solution that powers the Michelin Man’s persona resembles artificial intelligence and automatically “learns” from each interaction, so he is increasingly effective and accurate. A collaborative effort between VirtuOz and video interface designer Cantoche, the Michelin virtual agent can access and communicate a high level of information within a sophisticated interface, with an expressive range of animations.

Customer conversations with the Michelin Man average seven minutes, more than twice the average time spent on other marketing-focused Web pages that do not use a virtual agent. A likeable avatar with a friendly demeanor, the Michelin Man IVA has improved customer satisfaction, increased brand visibility, and offers a bit of refreshing comic relief to users navigating the Michelin Web site.

Gartner Research (Key Considerations for Virtual Assistant Selection, July 2010) predicts that in two to four years, IVAs will become the industry standard method of online customer interaction. Proving this point, in 2010 VirtuOz IVAs processed a record 144 million conversations.

Independent analyst firm CCM Benchmark predicts a 100 percent increase in IVA implementations in 2011, with that number skyrocketing to 400 percent by 2014.

Today’s IVA can be deployed in six to eight weeks, serve customers immediately, and learn with every conversation—building a digital customer relationship that is not a singular event, but rather an ongoing relationship between the consumer and the organization.

---

Steve Adams is CEO and president of VirtuOz, a provider of intelligent virtual agents. He is responsible for the overall vision and strategic direction of the company, as well as leading the company into the next stage of growth.

---