How NRMA’s Arlo the Koala chatbot won over customers

The chatbot, designed to engage customers and produce positive brand sentiment, has helped NRMA extend into another insurance category, with better than expected results.

IAG’s NRMA insurance achieved record online customer engagement and successfully reached business objectives thanks to its Stevie award-winning ‘Arlo the Koala’ chatbot, an extension of its ‘Arlo the Koala’ advertising campaign that made headlines across marketing and media press.

Best known for car insurance, NRMA wanted to expand into home insurance, but it needed something recognisable and positive to extend the brand into the new insurance category. NRMA tasked Nuance Communications with revamping traditional consumer interactions in a bid to increase its recognition in the home insurance category, by encouraging customer sentiment to extend beyond the car.  

IAG content and social media lead, Sinead Hoffman, explained to CMO that when ‘Arlo’ was initially conceived, the team was working on ‘Home Insurance for Koalas’ campaign, which focused on koala habitat conservation. But the team saw an opportunity to take the character further into a chatbot.

“We wanted to build brand trust in a traditionally untrusted product and service category through sparking meaningful conversations about conservation – ultimately feeding into the NRMA Insurance brand purpose which is to ‘help’, and the IAG purpose of ‘making your world a safer place’,” Hoffman said.

“We felt there was no better way to do this than through one-on-one interactions and Facebook Messenger was the perfect tool to drive deeper engagement. However, we quickly discovered that while social media is a great way to communicate with audiences, it is fairly limited to ‘snackable’, individual messages rather than meaningful discussion."

Sinead HoffmanCredit: Sinead Hoffman
Sinead Hoffman

NRMA explored new formats on the platform, eventually landing on creating a virtual assistant with Nuance that would enable deep conversations, facilitate richer engagement and convey a more complex message.

“We knew we needed Arlo to be intuitive and easy to use as our audience base is an older generation and often aren’t tech-savvy. So it was important to provide meaningful information about our campaign in a conversational manner by allowing audiences to ask questions in a way that is natural to them,” Hoffman told CMO.

Researching the options for chatbots and virtual assistants, NRMA ascertained a bespoke and intuitive virtual assistant was the right solution for its audience.

"We needed a messaging assistant that could easily respond to complex customer statements and offered a personalised, proactive and engaging interaction with our audience," Hoffman said. 

The Arlo bot

Arlo was the Koala star of NRMA’s television commercial, so he was the natural choice for the avatar and “is obviously a fitting representative to talk to our audience about koala conservation,” noted Hoffman.

Arlo’s aim was to answer customer questions, but also provide insights into koala conservation through intelligent, automated and deep conversations. The idea was to provide dynamic conversations to keep customers engaged for longer, potentially talking about home insurance. Arlo was also equipped with conversational abilities, including jokes, quizzes as well as the ability to ‘boop’ the koala’s nose and give him a hug.  

Hoffman said the goal was to design Arlo to be as seamless as possible. Starting with the core idea, the team mapped out different conversation trees to build the user journey, with each component prioritised and mapped to each other to create smooth conversation flows.

“We made sure to test and iterate every conversation to find any unwanted loops or dead ends, trialling the technology with dozens of users ahead of the launch date in order to train the chatbot’s artificial intelligence. Nuance was with us every step of the way, ensuring that once live, we were able to apply analytics to tweak conversations and include new questions and conversation lines as they emerged,” she said.

“This ensured any conversational dead ends were addressed in real-time and a smooth user experience was maintained – the most challenging aspect in deploying the chatbot.”

During the bushfire crisis at the start of the year, 80 per cent of users wanted to know if Arlo was “okay”. Nuance then pivoted Arlo’s conversations to tell users how they could help bushfire-injured koalas found in the wild, including links to volunteer and donate through charity partners.  

The results from the Arlo chatbot introduction speak for themselves, with 1931 new home insurance policies purchased, 90 per cent click through rate, 6532 unique conversations on Facebook (objective was 5000), almost double the goal conversation length and 1931 trees planted from August 2019 to this January.  

“We knew the deployment was about the quality of conversations not quantity. We wanted our audience to feel encouraged to spend an ample amount of time having meaningful conversations with Arlo, so they’d understand the importance of our messaging,” Hoffman said.

“Users enjoy interacting with the content we’re delivering in our conversation trees, but also love the unique ability to go off on tangents with Arlo. We’ve seen some interesting conversations occur and people genuinely love talking to him – we even had one user announcing to him she was pregnant.

“Achieving a positive sentiment score in the financial services category is incredibly challenging as most of the time, people use the channel for service queries. We delivered an incredible 85 per cent positive sentiment across the whole campaign, four times higher than the ambitious target we set of 20 per cent.”

In April 2020, Arlo 2.0 was launched, with refreshed content to create new customer experiences. Within two weeks, Arlo had already facilitated 5500 conversations, with 5286 new users. Hoffman said the plan is to continue developing Arlo as a platform for having meaningful conversations about conservation into the future.

“As things become progressively more digitised, people crave more and deeper connections. We find that audiences prefer physical representatives over machines, and naming a bot allows us to bridge that gap and create a social dynamic and relationship with the technology,” Hoffman said.

“Creating this sense of warmth allowed us to create more fruitful connections and have more meaningful conversations."

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