Companies have started using AI chatbots for customer communications. On this wave, one can get carried away with creating new technological platforms. However, it’s better to focus on implementing existing technologies – but for increasing companies’ revenue. For example, following the model of this startup, which managed to raise 60 million dollars for this in just a year.
Project essence
The goal of ON is to “productize AI,” that is, to turn AI into a business product for brands in e-commerce, sports, media, and entertainment.
The tool to achieve this goal is a platform for implementing AI chatbots for communication with brand customers. Interaction with chatbots should bring a positive experience to customers and financial results to brands.
The ON platform can be integrated with any communication channels that brand customers may want to use – social networks, messengers, SMS, email, Discord, or chat on the website.
ON created its platform, confident that people love to chat about anything. However, ON’s main task is to use this desire of people not for abstract user engagement – but to improve conversions and business revenue.
Luxury clothing and footwear brands that switched to the ON platform see a 33% increase in chat communications with customers and a 92% increase in problem-solving speed. But most importantly, customers who start communicating with the brand in the chat are 3-5 times more likely to want to buy something – resulting in a 38% increase in revenue attributable to such communication.
Looking into ON’s press releases, one can understand that the above figures are the result of ON’s partnership with the brand A|X (Armani Exchange). Six months after the platform’s implementation, the volume of chat communication grew by 33% per month, and the revenue attributable to such communication – by 38% per month.
Sports brands that started using the ON platform receive ten times more clicks on web pages they send to customers in chats – including a 40% increase in clicks leading to sports event ticket orders. The increase in clicks causes a 69% increase in sports brands’ revenue due to selling more tickets, merchandise, and other products.
The implementation of the ON chatbot in the women’s basketball team Chicago Sky showed that 75% of chat queries related to event tickets ended with clicks on ticket purchase pages. Moreover, the chatbot managed to identify interest in purchasing products from which the team earns money, including merchandise with the club’s logo, in 20% of chat interlocutors.
ON has many more clients than the two examples above, as they have been on the market for about 10 years. However, until recently, they only worked with sports brands and were therefore called GameOn.
A year ago, the startup began launching its first pilots with e-commerce players, including luxury brands. Soon, it plans to start working with banks, healthcare, and legal companies. Due to such diversification, the startup changed its name from GameOn to just ON.
The most significant sizes of previous investment rounds in the startup were $7 and $10.5 million in 2020. However, at the end of last year, riding the wave of entering the e-commerce market, it raised $35 million, and now – another $25 million.
What’s interesting
The sharp surge in interest in chatbots over the past year is understandable – it was caused by a sharp leap in AI technology development, including the emergence of ChatGPT, which recently turned one year old.
In this regard, research company Gartner predicts that by 2026, the number of automated customer interactions using chatbots will grow to 10% from the current level of 1.6%.
In this sense, ON is smart. They quickly caught the trend, quickly decided to expand to other areas besides their traditional sports, and quickly ran for the money for this – which helped them raise $35 million last December.
However, their first main advantage is that they focused not on abstractly improving user experience, creating chatbots for support services, and percentages of solving customer queries – but exclusively on business indicators, including increasing conversions and revenue.
The second feature is that they decided to become a “horizontal” solution for a very diverse set of “vertical” industries. At first glance, what can be common between sports and selling branded clothing, let alone banks, healthcare, and legal services?
They are united by one thing – the desire of all these companies to earn additional money using new communication technologies with clients 😉 And the most interesting thing is that very similar tricks can be used for this – not too dependent on the specific industry. And that’s precisely what ON is doing today.
Regarding general methods that can be implemented in chatbots, one can recall the startup Siena AI, which I wrote about in November. They created an empathetic AI chatbot that reads the client’s emotions and can express emotions itself – and raised $4.7 million in investments in the first round.
But their main statement is, “we made a chatbot that makes customers smile.” And the main statement of today’s ON is, “we increase conversion and revenue.” Although it is not excluded that among the tools of the ON platform, there is also the ability of their chatbot to express emotions 😉
So the main difference of ON is not in the technologies they use – but in goal-setting and offer, that is, in the product they sell. Essentially, ON sells clients not a technological platform, but their competencies in the correct implementation of this platform to increase conversions and revenue.
Where to run
There is no doubt that the popularity of AI chatbots in companies will continue to grow sharply in the near future – because they help save a lot of effort and time, and therefore money, on interacting with customers.
Considering that AI technologies continue to develop, one can engage in creating new technological platforms on the wave of this interest.
Or you can approach the task from the other side – engage in the implementation of existing and emerging solutions to increase companies’ revenue. That is, to become something like a system integrator, capable of implementing technologies and best practices for solving the main task of any business.
This could be a very promising direction for possible movement.
The time for this is very suitable – technologies are actively developing now, so most startups are now focused on technology, not business. However, today’s ON example shows us that it’s easier to attract the interest of large clients (and investors) with promised business results, not breakthrough technologies 😉