Last year, I made a great hiring decision.
After years of rapid growth and global expansion, our customer support team at Laybuy were finding themselves under increasing pressure to respond to a growing number of customer enquiries.
As one of New Zealand’s leading Buy Now, Pay later providers, we had expanded into Australia and the UK just as the popularity of BNPL was about to explode off the back of the pandemic.
We quickly found ourselves with close to a million customers. With growing customer numbers, unsurprisingly the demand on our customer support team also grew.
As we headed into the Christmas period, the situation was unsustainable and we had to act. That is why he hired Hugo.
Hugo (or Helping Users Get Organised) is a digital chatbot developed by Ambit, a New Zealand startup that specialises in conversational AI automation.
Within three weeks of being employed, Hugo was answering seven percent of Laybuy’s customer enquiries – around 1,400 queries a day.
And as we have continued to grow, Hugo is continuing to prove his worth.
Today, he is one of the most important members in our customer support team, answering more than 70% of our customer enquiries – providing instantaneous answers to common everyday questions, such as “how do I reset my password” and “how do I return an item”.
By managing these high volumes, but simple, enquiries, Hugo is allowing the rest of the team to focus on those customers who have more complex questions and need more dedicated support.
This is important because in a competitive retail environment, reputation is everything.
If you don’t answer questions quickly and leave customers waiting, you risk them taking their their business elsewhere. No business can afford to let their customer service slip.
Hugo is ensuring that we are in a better position to meet and exceed our customers’ expectations – answering questions and delivering the highest standards of customer service everytime they make contact with us.
Thanks to Hugo, we have been able to reduce our response time by 75 hours and increase our customer satisfaction by 30%. And as we continue to grow, Hugo is able to grow with us thanks to the user friendly platform developed by Ambit.
This means that we can train Hugo internally, so that he can instantly answer an ever growing range of customer enquiries on our website.
To support this, we created a dedicated support role – a Customer Support Optimisation Specialist – to train Hugo on five to ten conversations a week.
Because there are many ways to ask the same question, this role helps ensure Hugo has the help and support that he needs to continually learn and respond to the questions our customers want answers too.
And when something occurs that we suspect might trigger an influx of customer enquiries, we can quickly arm him with the answers he needs so he can answer these questions.
But Hugo is also helping deliver significant savings for the business. Prior to his employment, the only way we could meet the growing demand on our customer support team was to employ more staff, who are not only increasingly scarce but come at a significant cost.
By contrast, it is estimated that AI chatbots such as Hugo have a cost to serve per customer of only 47c and they can help reduce customer service costs by nearly a third.
The success of Hugo can also be seen in our deflection rate, which is the percentage of emails deflected to our customer support team because Hugo wasn’t able to provide an answer. Between October 2021 and July 2022, the monthly number of support tickets deflected to the team fell by 61%.
We also saw a marked difference during our Laybuy Mania sales event earlier in the year. During the 24-hour sale, we processed more than 21,500 transactions but received fewer customer support tickets than we had in the same event last year.
Cleary Hugo is having a positive impact on our business. Our philosophy is to be better every day and Hugo is helping us do just that.
But we’re just getting started and we are looking forward to seeing what more Hugo can bring as we continue to look for new ways to make our customers’ lives easier.
Gary Rohloff is co-founder and managing director of Laybuy.