Chatbots are everywhere. A fast-growing communication channel for brands, AI-powered chatbots are being deployed by companies to handle everything from booking travel to refunding purchases to helping shoppers choose the right outfit.

When done right, they can drive sales and provide positive experiences that keep customers coming back. But poorly designed chatbots more often frustrate customers and drive them away—sometimes for good.

“AI used to be a tool in the back office. The consumer wouldn’t know much of what was going on under the hood,” Wharton marketing professor Stefano Puntoni says. “The arrival of generative AI gave us this interactive capacity, and suddenly everybody has a chatbot. Not all delight.”

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