What is a Chatbot and Do I Need One?

Businesses want to answer questions and solve problems for their customers as quickly and efficiently as possible. For the first time, people are spending more time on messaging apps than on social media apps. In order to take advantage of this, and better serve clients, many see Chatbots as the future of customer service and management. The first chatbot was ELIZA, built in 1966, by Joseph Weizenbaum of MIT. No longer standalone programs, chatbots now are part of messenger platforms, using simple texting medium so no new skills are needed in order for customers to utilize the technology.

Unlike apps, there is no need to download chatbots and they can easily assist your online channel efforts. Chatbots can provide information, solve problems, sell products, and entertain, all while using a customer’s name to maintain a personal touch. While it requires careful planning to design, launch, and train a chatbot, they are an amazing way to keep customers engaged in meaningful conversations at a greater convenience and with lower operating costs.

What are Chatbots?

Most simply, they are the thing that pops up when you log onto a website and are prompted to connect to a customer service agent via online chat. More fully, chatbots are automated computer programs that can have a real conversation and can be used with almost all popular messaging apps. They are capable of robotic textual or auditory responses that mimic human conversation, and can be given distinct personalities. Unlike humans, who can manage 2-3 conversations at one time, chatbots can operate without an upper limit. They are a digital employee that can answer customer service questions autonomously and hand over a customer to a live staff member when necessary. Some cannot only understand written and spoken text, they can interpret it, look up relevant information and deliver an answer to the customer.

There are two categories of chatbots: command based and AI based.

Command based chatbots function on a basic set of rules and rely on a databank of replies and heuristics. They have a limited set of questions and answers, and respond only to very specific commands. They cannot create new text but must, instead, select an answer that matches the context of a query. Command based chatbots are only as smart as they are programmed to be, but they do provide reliable and grammatically correct answers.

Artificial Intelligence based chatbots understand language, not just commands, and can answer ambiguous questions. They create replies from scratch using natural language processing. AI based chatbots become smarter over time as they are able to learn from past questions and answers/conversations. On the downside, this type of chatbot requires a vast amount of learning data and struggles to form longer sentences.

Business Uses

Chatbots can be integral to the growth of your business online. They allow you to handle more customers and help reduce the number of steps in a process, from start to finish, by doing some of the “thinking” for your customers. They can also be programmed or taught to upsell. International businesses, and others, benefit from the cost-effective 24/7, 365, productivity of chatbots. And since they can mimic conversations that reflect the brand’s identity, chatbots continuously engage customers with your brand.

Chatbots can help increase organizational efficiency by taking over specialized tasks. They can handle inventory management and ordering as well as other tedious, repetitive tasks so employees can engage in more interesting and challenging work. Interactive chatbots can assist in onboarding versus providing stagnate user manuals and if you do business with Millennials…chatbots are a definite plus. 69% of Millennials want to solve customer service issues without speaking to anyone and they don’t like waiting to be served.

In regards to answering routine inquiries, chatbots are able to offer quicker and more accurate customer service than humans. As a first point of contact, chatbots can screen customers and direct them to human agents when needed. They are an efficient way to handle repetitive questions, especially if you receive a large volume of calls about business policies (returns, hours, locations, etc.). Considering that 85% of online shoppers require support while shopping, chatbots can assist customers in getting the correct product or service, especially if there are similar options available. They can provide knowledgeable assistance on a set scope of questions and are extremely helpful if your products or services are complex. They can break things down and explain industry jargon to bewildered customers.

A hybrid approach may be best for now, using chatbots for simplest tasks with human back up to handle more complex requests. The technology is evolving rapidly and changes will occur in the next 3-5 years that will make chatbots more readily viable for small businesses. They are not yet as clever as we want them to be, but there is much potential!