What Is a Chatbot?
A chatbot is an artificial intelligence (AI)-powered software that companies use to interact with customers through live chat, website-based instant messaging platforms, mobile applications, or telephone calls. Many chatbots use technologies such as machine learning, natural language processing, and natural language understanding (NLU) to generate human conversation and engage with clients in real-time.
Chatbots are often considered an advanced application of artificial intelligence. When businesses incorporate chatbots into their customer service offerings, shoppers can immediately connect with the bot, eliminating the lag-time inherent with live staff members. However, chatbots are also known to be a significant source of customer frustration, too.
The quick assistance – along with the personalized aid provided by some chatbots – can result in a slight boost in customer satisfaction and user experience. That said, chatbots vary in ability. Companies can opt for basic answering services that follow a strict, limited script. However, businesses may also choose a more advanced digital assistant that delivers relevant, human-like responses based on the context of the conversation.
Why are Chatbots Important for Customer Service?
Chatbots were once considered a “nice to have” feature. In recent years, chatbots with human support have become a necessary addition for companies that want to gain a competitive edge in their market while ensuring that their customers can enjoy a consistent, satisfying user experience. As a result, Forbes estimates that the chatbot market will reach a valuation of $1.25 billion by 2025.
With that in mind, instant messaging chatbots benefit customer care departments in several ways, including:
1. Reduced Costs
Chatbots help reduce customer service costs by as much as 30%. The conversational system does so by aiding customers in reaching a suitable solution through self-help resources, scripted answers, and escalation to a live agent when needed.
As a result, organizations can hire fewer agents to manage the same number of support requests. In addition, agents can prioritize sensitive tickets while the automation program handles minor issues and common questions.
2. 24/7 Support
Unlike their human counterparts, chatbots work 24/7 to assist shoppers through phone calls, computer-based instant messaging platforms, mobile applications like Facebook Messenger, and other communication channels. Customers can ask a question and receive immediate assistance with purchasing problems, order inquiries, or other concerns.
3. Advanced Lead Qualification
Chatbots are well suited to busy customer care departments. However, businesses can also use them to qualify leads through an automated sales funnel. Further, the bots provide AI-powered presale assistance and other automated marketing tools that increase conversion rates.
4. Improved Engagement
Chatbots help improve customer experience through personalized, real-time, and relevant assistance. Firms can program chatbots to initiate conversations at certain times, encouraging customers to interact with the bot and take the next step on the buyer’s journey.
5. Increased Customer Satisfaction
Chatbots can help boost customer satisfaction through friendly, customized conversation and immediate assistance. Customers can access chatbot technology at any time and from any location through social media sites or instant messaging platforms like Facebook Messenger.
Additionally, chatbots store user history and past conversations, making it easy to retrieve customer information for a seamless, personalized experience.
How Do Chatbots Work?
Many chatbots use technologies such as machine learning, natural language processing, and natural language understanding (NLU) to generate human conversation and engage with clients in real-time.
They allow interaction between a human and a machine, which happens via text messaging or voice command. Chatbots work independently from a human operator, providing responses based on a combination of predefined scripts and machine learning applications.
Bots can integrate into a variety of technologies and channels in order to deliver a seamless experience. They can connect to ticketing systems, helpdesk platforms, order management systems, ecommerce platforms, and more in order to provide friction-free resolutions for customers and increased efficiency and productivity for businesses.
An added benefit for businesses is that all of the data collected from integrated technologies provides a more detailed, full picture of the customer experience… Which is key to generating more revenue and customer loyalty!
Types of Chatbots
Chatbots vary in ability. Companies can opt for basic answering services that follow a strict, limited script. However, businesses may also choose a more advanced digital assistant that delivers relevant, human-like responses based on the context of the conversation. Generally speaking, businesses can choose from two types of chatbots, including:
1. Data-Driven Chatbots
Also known as virtual assistants, data-driven chatbots combine sophisticated AI with increased contextual awareness to deliver a personalized, human-like experience. Data-driven chatbots are powered by pattern recognition, machine learning, natural language understanding, and natural language processing.
The bots combine the AI processes with predictive tools and data analytics, resulting in a fully personalized customer care experience.
2. Task-Oriented Chatbots
Task-oriented, or declarative, chatbots typically perform a single function: generating short, scripted responses to FAQs or simple requests. Task-oriented chatbots use NLP to ensure that their answers are conversational. Despite their limited functionality, task-oriented chatbots are the most commonly used bots.
What are Chatbots Used For?
Chatbots are used to improve business efficiency by automating the routine task of interacting with customers. Chatbots are used by enterprises across a variety of industries to answer customer inquiries, provide customer support, generate sales and revenue, and much more.
Here are some specific use cases for how chatbots can be used:
1. Customer Service Support
Retail and ecommerce brands can use chatbots to help with everything from pre-sale service like answering product inquiries to post-sale service like processing a return or exchange.
2. Enterprise/Tech Support
Chatbots can help enterprises scale. Bots can send customers automatic responses to their questions and collect information with in-chat forms. They can also close tickets or transfer customers over to live agents when needed.
3. Virtual Assistant
Thanks to advancements in voice recognition, chatbots can crawl through existing resources and offer assistance for a wide range of requests. Popular virtual assistants include Amazon Alexa, Apple’s Siri, and Google Assistant.
Why Businesses Choose Chatbots for Customer Support
Businesses across virtually every industry use chatbots to enhance customer satisfaction, streamline the buyer’s journey, and create a more efficient customer care department. The bots can handle as many as 80% of customer requests and reduce customer support costs by as much as 30%, helping businesses save money while increasing scalability and minimizing customer churn.
The Evolution And Future of Chatbots
Over the last 50+ years, chatbots have continued to evolve and improve thanks to advancements in NLP and AI. Today’s chatbots have a much wider range of capabilities than the first-ever chatbot ELIZA, which was developed by Joseph Weizenbaum in 1966. ELIZA employed pattern matching and substitution methodology to come up with responses to text input from humans.
Programmers built off of ELIZA’s foundation to develop chatbots capable of increasingly advanced functions. The introduction of AI and open source development of chatbots in particular played a critical role in the speedy improvements and widespread adoption of the technology.
Looking ahead to the future, chatbots will continue to bridge the gap between robotic and human verbal and textual conversation, becoming even more emotionally sensitive and autonomous. Thanks to the evolution of voice, bots will be empowered to hold human-like conversations, building upon past dialogues, context, and meaning. The growing popularity of messaging apps will make chatbots fully ubiquitous to the point that consumers will interact with the technology multiple times throughout the day to accomplish everyday tasks.