52: What are Chatbots & Why You Should Care with Chad Oda (Part 2)

In this episode, we enter the cutting-edge world of chatbots. Chad Oda, an expert in chatbots explains how to set up chatbots to engage with your customers so that you don’t have to. From how much they cost, to the different types and the platforms that you can use them on, Chad covers everything you need to know.

He also shares his relatable struggle of how to navigate unchartered waters in this groundbreaking industry, and how to create a framework to assess which opportunities to go after when you have so many potentially amazing offers.




My Guest: Chad Oda

Chad Oda is an expert in chatbots and how brands can pragmatically leverage this paradigm-shifting technology to engage customers with innovative, intuitive, and personalized experiences. He has extensive insight & expertise into the design, development, and implementation of these immersive conversational interfaces. From conversational copywriting to natural language processing, and multi-modality, Chad has his pulse on the ever-evolving conversational ecosystem.

Chad has collaborated with the top technology companies such as Oracle, Microsoft, Amazon, LivePerson, and Google. He also speaks internationally at the leading conversational conferences, Chatbot Summit & Business of Bots.

Currently, Chad is managing his chatbot company, Chat Mode, that provides chatbot solutions for enterprise e-commerce companies. Furthermore, he hosts “The Bot Podcast” where he interviews startup and enterprise innovators in the chatbot & voice space. Chad also manages the 700+ member Chatbot & Voice meet-up in Seattle.


Pivotal Moments:

Became interested in chatbots in 2016 when Facebook opened their messenger API.
At the time, was running a hammer and nail software development agency.
Came across a client who looked like he would benefit from using chatbots and pitched the idea to him.
The client accepted the offer, throwing Chad into a steep learning curve so that he could actually deliver on his offer.
During the learning process, he needed help and advice about chatbot best practices, but didn’t find any established networks or communities to turn to.
Hosted a weekly meet-up where anyone who was interested could come and discuss chatbots, initially attracting 50 people, but growing over the years to a current 700 attendees.
Chad is currently managing his chatbot company, Chat Mode, hosting his podcast, The Bot Podcast and also hosts his Chatbot & Voice meet-up in Seattle.


The Advice:

Types of Chatbots
There are two types of chatbots:
  1. Decision Tree Chat Bots: Decision tree chatbots are pre-programmed, button-driven and don’t have any artificial intelligence. Conversations with these chatbots can go down various paths, depending on what the customer responds to. The way that the conversations are crafted for this type of chatbots is meant to convince people to click through or convert.
  2. Artificially Intelligent Chat Bots: Artificially intelligent bots can write natural language by extracting the intent of the user. The bot then uses this information to move on to the next step of the conversation. These bots can answer with multi-sentence responses and have fluid conversations that mimic human conversations more closely, but they are more expensive to purchase and run.


Chatbot Success
Chatbots are becoming an increasingly common form of marketing because they can provide the following marketing attributes:
  1. Personalization: Chatbots allow brands to personalize marketing efforts for different segments of their target market.
  2. Intimacy: Chatbots allow personal conversation between a brand and a potential customer.
  3. Scalability: Both personalization and intimacy are easily scaled at a cost that is proportionate to the gain that it brings.
Chatbots are showing to be very popular with high success rates. Click through rates are higher than almost anything else, and open rates are currently at an average of a huge 30-40%.


Chatbot Engagement
There are four different ways that people can engage with a chatbot:
  1. Through a Facebook fan page.
  2. Chatbots can be integrated into a Facebook Ad. These ads are built for conversion to open up a chatbot.
  3. Posts can be set up on social media in a way that a chatbot automatically opens up on Facebook messenger for anyone who comments a specific keyword (as specified in the post).
  4. Facebook allows people to interact with their messenger chatbots on any website. This can be set up using a Facebook widget, that is simply an HTML code that is pasted into the coding of a website.


Chatbot Platforms
Chatbots can be deployed over multiple platforms including Facebook and Slack.
Facebook is testing out chatbots on Facebook Messenger, before deploying them across the other platforms that they own. Therefore, chatbots on WhatsApp and Instagram are more in their infancy than on Facebook. However, Direct Heroes provides an automated chatbot that can be integrated into Instagram.


Chatbot Investment
There are many free or cheap chatbots that you can use for testing before investing money. Once you have tested and are ready to invest, you can expect to pay $1000 for the initial set-up of a  basic bot. But, prices do go up to about $10,000 for the initial set-up of super-integrated, sophisticated bots.
When purchasing chatbots, it’s important to keep in mind that only about 20% of the success of a chatbot comes from the technology of the bot itself. The other 80% of the success depends on the following:
  1. Optimizing and implementing your bot correctly.
  2. Using split testing and analytics to understand where and how your bot is succeeding.
  3. Having a sound marketing strategy that gives the foundation for what the bot is used for and how it is deployed.
  4. Having fantastic conversational copy that achieves high conversion.


The Struggle:

The chatbot industry is still in its infancy. This brings a double challenge for Chad. On the one hand, since there are no best practices and established norms which Chad can use for guidance, he is out there in the testing ground trying to figure things out totally on his own. But the freshness of the industry also means that there are so many opportunities knocking on Chad’s door and it is difficult to know which ones to take up and which ones will lead him down rabbit holes.


The Breakthrough:

Chad’s double struggle needs a double solution.
Firstly, through his Seattle-based meet-up, Chat & Voice, Chad is working to build a collaborative community where all those who are involved in chatbots can come together to learn from each other. He also has his podcast, The Bot Podcast, which provides invaluable information to his audience, himself and his guests, and helps to ease the burden of figuring everything out on his own.
Secondly, to help himself choose the right opportunities, Chad needs to build a business strategy that maps out his goals both in terms of business profit and personal goals/lifestyle. This will allow him to build a framework for assessing opportunities and rooting out those that will bring the most success for his business.



Strategy without tactics is the longest route to success. But tactics without strategy is the noise before defeat.


Resources and Links:


For Part 1 of this episode, where you can hear about Chad’s steep learning curve when he entered the world of chatbots, go to estierand.com/52-1

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About the author, Estie Rand

I love turning ideas into money, and helping others do the same. I help small business owners with everything from marketing to fiscal management, business plans to staffing, database architecture to work/life balance coaching and I love it all! What do you need help with today?