Eric Kades On AI & Chatbots (Hint: Humans Still Matter)
Most business websites have live chats ready to answer inquiries from customers. However, this tool rarely addresses such concerns properly because of its lack of human intervention, with so many questions left unanswered. Chad Burmeister interviews Eric Kades, Founder of TextChat.com, to discuss how they put the human into their business chat boxes by giving users remote access. He explains how artificial intelligence typically found in chatbots must be utilized in automating processes and filtering which queries require human attention. Eric also looks forward and predicts the possible evolution of websites into conversational interfaces, making them more efficient and engaging hubs of business-related information.
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Eric Kades On AI & Chatbots (Hint: Humans Still Matter)
I've got an interesting guest. He is the CEO of about 3 or 4 different companies and a founder. JetSense is the company that he's been working on since 2013. He discovered an interesting product that we're going to dig into called TextChat.com. Anyone who's been in and around call center or chatbots, you’re going to find the nuance of what this does is different than anything else you've ever seen. If you're an investor, you might actually want to send him a check and be an investor in the company. Before we get into that, let’s meet Eric. Welcome to the show.
Chad, thanks for having me. You're too kind. It’s great to be here. I'm excited to talk about sales, AI, chatbots and the whole thing. I'm certainly happy to go into TextChat a little bit as well.
It's such a growing space. I managed a team in Manila. I flew there 2 or 3 times with a software company and telecommunications. The biggest frustration I had is that you would teach these folks, “Use this one. Copy and paste.” Eight days later, I get back stateside and everything that I did is out the window. The chatbot capability is extremely important in this environment. Before we get into technology, I like our readers to understand who you are. How did you come about getting into this business? The best way to do that is to rewind the tape and understand when you're 6, 7, 8 years old. What got you up in the morning? What were you passionate about?
It was probably around nine that I gravitated towards business. By the time I was eleven, I was reading books like Think and Grow Rich and How to Win Friends and Influence People, all those books that anyone in sales read when they were a kid. From there, I went on to the candy store in my basement to the lawn mowing business. After that, when I was about 14 or 16, I had a car detailing business and then went off to college. I started a couple of businesses while I was in college to make some extra money. That was it. It was born into me. Both of my parents were entrepreneurs. My mom owned a flower store for 25 years. My dad started out as an insurance salesman and built a money management firm. I was around that. I don't know if it was because I grew up in that household or it literally is in my DNA that I like to create things and start them.
Similarly, I started with magic tricks. It then led to selling suckers on the bus. One thing led to another. I remember doing research in high school about entrepreneurship. I'm like, “That's a long word. How do you even spell it?”
My parents are always telling me not to go that route. I wish they were telling me to stick with it because I was fighting against them all the time. I broke through anyway. Maybe it was good to have that resistance to prove myself.
You're right. There's definitely something to be said about that. All of that entrepreneurship as a nine-year-old led you to the path that you're on. What do you love about being an entrepreneur?
When I was younger, it was the allure of making money that I could buy that Nintendo machine or whatever it may be. As I got older and matured and experienced lots of different types of businesses, mostly contact center-related, I started seeing how I felt when I improve someone's life by something that I had created. I think that passion to first create money then take an idea, prove that you can turn it into a business and then seeing how you can help people, that’s what it's all about. What drives me to save people’s time. I happened to lose my mom at a young age and I learned that time is our only non-renewable resource. That is filtered into everything we do at JetSense.ai and with our TextChat.com product and our JetSpring company. It's this passion for using technology to save people time.
Let's talk a little bit about TextChat. I ran a team in the Philippines with twelve people and it grew to 18 or 20. I had people in Denver in North Carolina in Belmont. A team of 100 with 20 offshore in Manila and the Manila team, I'd fly out and get there at 2:00 AM and work at night to everyone else's day. Every single time I went there, I'd roll out the new training on how to do the chat. Literally, 8 to 12 days later, I'm back stateside. It was great. I feel good then I'd go in and chat with the team on the website.
This is a big website. This is a company that's growing 100% year over year. They do $1 billion in sales. They did $300 million at the time I was there. Every single time I'd go there, I'd go in the chat, all of a sudden, it would divert back to something else other than what I had rolled out. It was frustrating. Because bringing the human into the equation seems to me to be one of the most important parts. As you automate a lot of this stuff, it comes back to a physical, human-to-human conversation. How does TextChat work? What role does AI play? Tell us a little bit more about it.
I got the chills when you said that because you understand as well as anyone. I've suffered through the same things that you have. I've been in the contact center business for twenty years. We had five contact centers with 2,200 employees at one time and you're hitting the nail on the head. It is about human contact. When I talk about AI, when I talk to my customers, we're 10 to 20 years away from where AI is going to be able to sell. A chatbot-driven on conversational AI is going to be the same thing as talking to a human.
A chatbot is never going to sell as well as a human.
What I've learned about technology is the technology is phenomenal. I love technology. We build chatbots for higher education institutions. There are situations where it's better for a chatbot to handle the conversation. A student wants to redo their password or they need a FAFSA ID for the school, automation and AI can answer that instantly. There’s no need to hold on to the phone or talk to a human but a chatbot is never going to be able to sell as well as a human.
Everything in our company is about using technology to drive one-to-one human communication. That's what it's about. That's what TextChat is about. We've made it super easy for a visitor on a website to connect with a knowledgeable salesperson and close a deal. The first thing that got me into the live chat business and we all have bad experiences. We have someone that goes through websites and tests to see if they're actually answering the live chat. We've gone through thousands and 80% do not answer live chat.
When they don't do that, they are not only hurting their brand. They're breaking a promise because they're saying, “Let me have your name and number and I'm going to get you to someone.” They then hit you with a message that they're going to get back to you in 24 hours and no one ever gets back. I'd say 9 out of 10 shoppers have never gone back to that store are never thinking about talking to that B2B company again because they had a horrible experience. Right off the bat, you're hurting the brand by setting the tone that, “I walked in your store, yet you don't want to talk to me.” It's all about using technology to foster human communication.
I've used a handful of the different chat tools that are out there. As the CEO of a small business, unfortunately, I can't afford three people staffing the chat channel all day or even one. That would be a $30,000 to $40,000 a year job. I'm not going to spend $40,000 to handle two or three chats or even five a day or something like that. I’ve had to go to the plugin where there's a simple auto-response. They know it's canned and it's been extremely frustrating because I've delivered a better experience in that. As a small business owner, it's hard for me to do. Tell me, what's the breakthrough that you discovered that solves that business problem?
My situation is even worse than yours because I was a live chat company that couldn't answer our own live chat. That was what caused the breakthrough is the bane of my existence for the better part of a decade. The problem is these chatbots and live chat companies are building for robots. They're not building for humans. They're building for call centers. They're not building for small businesses. They're all in a feature race and no one is focused on making it easy to answer. That's what we focused on TextChat.
It only came about by accident. I was in the proverbial in the shower frustrated with when a customer would come on our website. I have a contact center where I could have someone answering. They would ask a difficult question that only an educated salesperson who is answering chats over and over about a specific topic 100 times a day would be able to answer. They would come in and ask this difficult question. My agent would say, “That's a good question. Can I get your name and number and someone will call you back?”
We were a live chat company. I would get an email 5 to 10 minutes later, “We're not hiring you because you don't know your own product.” I would shut it down. We would be a live chat company without live chat. I would tell my customers to go to the secret shop on colleges and universities that we're answering for. I make up some excuse why we couldn't answer on live chat. I went to all of the other players out there and said, “I need a solution. I need my sales guys answering it.” Every single one of them has an app for that. I said, “Great. We'll use the app. We'll give it to the sales guys.” Lo and behold, another prospect comes on my website. They're waiting and waiting. I'm on my phone. Brandon's getting in his car.
We would lose the customer. I get another email right after that where they would call us and say, “Look, it took three minutes to answer your live chat. We can't hire you.” I would shut it down again. One day, I'm sitting here thinking to myself, “What if you could answer a live chat with a text message? We could send that live chat out to multiple salespeople at the same time with a text message notification and whoever picked it up first could answer it.” We built a prototype. We used it internally. We started closing sales left and right. Literally, 50% of our chats became closed leads because we picked it up quickly.
I had never thought of it being a product until a small eCommerce store heard about it who had used these other live chat companies. He asked if he could have a trial of it. I gave it to him. He called me back ten minutes later. He had closed an $800 sale and said, “I want to invest in your company.” I was like, “Maybe there's a product here.” By the way, we're only going back about a year in 2021. We raised a seed round in May of 2020. We’re a new company. We further developed it. I gave it to another buddy. He called me back in two minutes and said, “I want to invest in your company.” That's how we created this solution, “It's not a live chat. It's not text messaging. It's text cha, where you're answering live chat via text message.” That's the solution.
It's what's parallel for me. I used to be the Head of Sales and Marketing for a company called ConnectAndSell. They’re live agents that are calling into B2B and then someone picks up. The highly-trained salesperson has the cold call, not the junior-level, SDR-prospector type. It's a similar thing. It's solving the last mild problem. If I'm going to cold call you, me as the CEO or the Managing Director or VP, the highest-end resource should be doing the cold call, not the guy that goes, “I'm glad I got you on the phone, Eric.” They don't know what to say and how to say it. Let’s have a business dialogue. It's interesting that the market is leaning in on this because there’s much clutter and noise out there and answers to questions that don't work. The time and the need for this are huge.
We're excited. We're starting to have a lot of success. Every one of our customers has used other live chat platforms in the past and they'll never go back. A perfect example is one of our clients is a ticket broker. He got a text chat at 10:30 PM on a Sunday, in bed laying down. It’s the CEO of a big Fortune 500 company that wanted a suite to the Super Bowl for his team. Josh answered the chat in bed. He had $375,000 wired into his account on Monday morning. In less than 24 hours, he closed the $375,000 deal because he could answer intelligently and sell that suite where some lower-level ticket broker is not going to be able to sell that suite.
Chatbot and live chat companies are building for robots. They're not building for humans.
The perfect customer, you've described some small businesses and it makes sense. I get it. They don't have a team that values propositions easily. Putting my creative hat on, I wonder if there's an after-hours support option. Maybe I've got another one of the companies deployed and it's integrated deeply into all my systems and processes. You're not ripping that out. However, is there a case to be made that from 7:00 PM until 2:00 AM or whatever follow the same process we have? Is there a way to plug in TextChat to that case or is it an all-or-nothing?
Anyone can use it anytime they want to use it. I leave mine on until 11:00 PM and I then turn it off. I have other people on the sales team that do the same. We have clients that compete over the TextChat leads because they know, if someone's on your website, they're in shopping or buying mode. That's how they got to your website. If you get them at the exact second that they're interested, you have a 400% better chance of closing that customer than otherwise. What got me into the live chat business originally was this statistic. I was looking at the contact center market a few years ago. The web is coming on much digital focus, much money being spent to bring people to websites to fill out a form or to hopefully call a number and get picked up which we all know doesn’t happen.
I read a statistic. There was a study done at MIT that said, “The chances of connecting with a lead form dropped by 100 times from 5 to 30 minutes. People are spending millions and billions of dollars to have people fill out these lead forms where your shot of getting this person back on the phone is not only expensive and time-consuming but the likelihood it's even going to happen is slim. The other statistic that blows my mind is 78% of consumers buy from the first company that they speak with. If you're that guy that can connect immediately, you're going to close that customer. When you're looking for a plumber or a landscaper, you got a problem, the first guy you talk to is likely the guy you're going to hire.
What's interesting is that I used to buy from InsideSales.com. They were part of a commissioning study. Dr. Oldroyd did that study. For the past decade, it worked to simply reply to an email and call the person pretty quickly. In this world, those problem has been generally solved although it's still a big problem. Honestly, 80% of companies even try to get there first and they don't. The better way to solve the problem is exactly what we're talking about here. It's to have the live chat with them in the communication channel they came to you in.
Because if I'm on the phone or my computer, I don't want to go to a phone conversation. You're going to sell me hard. I'm there to collect information. I want the information delivered to me in the format that I've gone in and in the channel that I've come to your website. It's the next level of where companies need to be. It's exciting. Tell us a little bit more about if your team is leveraging this and your sales process. What other AI tools have you seen that are piquing your interest? Because it's getting interesting out there. Have you seen anything that's piqued your interest?
Looking at what you're doing, AI for sales is the exact way you're attacking it with your business. Using AI to comb through the information and figure out who is your best sales prospects and all that information. Using machine learning to do that is interesting and probably the best use of it is for sales. When we talk about chatbots, the way I like to use them, AI for figuring out a cancer drug is different than AI for selling. Even conversational AI is a little bit different.
When we talk about conversational AI, there are two core technologies. There's natural language processing and machine learning. The natural language processing piece is the part that's trying to figure out what you're saying, trying to figure out what your intent is. Machine learning is the knowledge base that it’s tapping against to say, “This is the right answer for that type of question that we think this person's answering.” I also talk about wrong answer hell with conversational AI, which I've experienced on some of the biggest brands just asking simple questions like, “How much does it cost?”
A major car manufacturer, I was all excited about a new car that I read about on MotorTrend. I went to their website and I was asking how much it costs. The conversational AI couldn't figure it out. By the end of the wrong answer, I'm not even interested in this car anymore because this is such a bad experience. It's important to use AI and sales to filter out what needs to go to a human versus what can be handled by machine learning and natural language processing on my end of the spectrum from the contact center as part of the business.
I'm super excited about AI. I know it's the future. I love natural language processing technology. I love machine learning technology. What I don't love is treating customers like robots. Customers are human beings. They have mortgages and problems. Their time is limited. I said at the beginning, I'm all about saving people time. I like to use AI to save people time. How is that? If the person needs to speak with a human, get them to a human. If I can use AI to answer their question quickly and more efficiently than a human then answers their question that way.
We had a customer called MaxSold. Traditionally, people come to their site. They've got a chat. They've got an email follow-up and phone and all those core channels and someone fill out a lead form. They've got a high growth business. They come into a house and you say, “I need to sell everything in it because I'm downsizing.” They'll sell it all in eight days. It's a fabulous product and they'll maximize the cost for everything. They generally look for people who are going from 4,000 feet to 2,000 because they know half of your stuff has to go.
They started this new channel program and reached out to channel partners. They had a list of maybe 800 or 900. They were emailing them. They got 130 meetings. The guy was like, “This is crazy.” He goes, “Chad, I'm spending too much time with people who aren't the right prospect.” We said, “There's this little feature you can ask 2 or 3 quality questions in the email exchange.” We added it and we took the meeting count from 130 down to 30.
In the future, websites will be conversational interfaces. They won't even be websites anymore.
It carved out all that unnecessary banter of 30 to 60 minutes per because these were channel partners. It said, “How many moves do you do per month?” That’s number one? If it's 1 or 2, you're not a good channel partner. If it's ten or more you are. Number two, “How often are you going from 4,000 or more square feet down to 2,000 or less?” It’s either most of the time or none of the time. It could be a move from 4,000 to 4,000. It’s not a good fit. By adding those two simple questions, using very basic automation, they save this guy 75% of his time. They would have had to hire three more people.
I have a similar story on how that automation can increase better conversion. I have a customer that runs a radio ad. It's not a TextChat thing. It’s a chatbot thing that runs a radio ad to text in to sign up for a school. We changed the lead form. It used to be in the link in the radio ad to a conversational interface. Instead of being on your phone, trying to get your name in the little corner and then your last name over here, it was, “Jack, can I have your name?” You then put in your name, “Can I have your last name?” Sixty-six percent more people started filling out the form. It is a multimillion-dollar campaign. They increased conversion so much that they sold the college because their projections went through the roof when they were getting 66% more leads out of the same.
We did a paid ad for the last three months and spent $3,000 a month. We're in 2.5 months and 1.2 million impressions and 3,500 clicks to the site. We then lose a little bit of trackability because of the codebase that's on the site. We're still working on that but it's converted to 30 to 40 leads a month, which is great. It’s a very good conversion rate for $3,000. To your point, one of the things we noticed is that 80% of the traffic is not on a computer. It's on a phone or an iPad. It's all mobile. Many companies are still optimizing for the wrong channel and you just exposed it. Do you want to grow your lead base by 66% with the same amount of spend? Optimize for mobile.
I believe in the day when I started JetSense that websites will be conversational interfaces. They won't even be websites anymore. Why do I want to spend my time searching through thousands of pages when I can ask a simple question and hopefully get a simple answer? While you're doing that, you can never forget the human component. Because when you don't answer it with your AI in your chatbot, you need to get into a human immediately. You'll then save that sale and you'll close that sale.
It's interesting because we've had two chat companies coming after us to do work with them. I now feel like I need to check out your website and plug it in especially as we're paying for these ads, as a small business, I've got a team of 4 or 5 sellers and myself and a CRO. Let's notify everyone. Let's fix this problem once and for all.
You're going to be elated. You're going to crush it. You don’t miss them. It's that easy.
It's funny. I’ll end this with my ConnectAndSell story, Shawn McLaren, the founder was always telling me, “Chad, don't put your junior-level reps on calling our inbound leads to our website. You're going to lose them at Hello.” He's like, “Send them to me.” I always had a problem with that. I’m like, “If I give them to you then my whole sales team that I hired is going to be ineffective.” Where they ended up taking it is, that his son, Jonti, works for Shawn. He's the SVP of sales. He replaced me when I went there. He gets then the inbounds. He talks to him for 10 to 20 minutes, gets them understanding the business value and then hands it off to a seller to take the final mile of closing the opportunity.
That's what TextChat helps you do. I still answer. If someone reading comes on and hits a TextChat, they're very likely to get me. It’s that easy. Why wouldn’t I? It's a thrill to talk to that person.
That's outstanding. This has been a fun conversation. I appreciate your time, Eric. If you want to reach Eric and TextChat, how would it be best for our readers to get ahold of you?
On our website and start a chat at TextChat.com.
I figured the whole time it keeps pulsing in and out, I love how that works, by the way. I've never seen that because it calls attention. It's there now and within about 30 seconds it's going to disappear and then it's going to come back. It’s like someone coming to me when I'm going shopping for shoes and then it's, “Can I help you now?” I love that feature.
Think about it, everyone with live chat now who’s not answering it, it’s the same thing as having someone walk into your store, ring the bell and you run in the backroom.
Eric, thank you for coming to the show. Thank you for joining and we'll see you next time on the show.
- Think and Grow Rich
- How to Win Friends and Influence People
About Eric Kades
Eric Kades uses the latest in AI and messaging platforms, combined with his extensive experience in the call center industry, to reimagine the way schools and businesses engage with target audiences.
He is the CEO and founder of JetSense.ai, a provider of bespoke communication solutions with a focus on chatbot creation, data analytics services, messaging technology, and customer support.
JetSense uses proprietary AI technology to provide clients with brand-specific chatbots, backed by human support, and sophisticated data analytics services. JetSense is rewriting the playbook on customer service and engagement with its message-based solutions.