What is a Chatbot and How Can It Help Your Business?

Artificial Intelligence (AI) has progressed dramatically in the past decade, and one of the most useful products of this AI revolution is AI chatbots. They can help reduce the time taken to resolve queries of customers and also lessen the load on customer service agents.

According to Gartner, nearly 15% of all customer service operations will use chatbots in 2021. A major reason for this is the fact that brands are investing in improving the customer experience. As many as 84% of organizations were expected to increase their investments in customer experience technology in 2017. The chatbot market is forecasted to reach $1.25 billion by 2025 as well.

Now that we know why chatbots are popular with marketers, let’s take a closer look at what they are.

What is a Chatbot?

In simple terms, a chatbot is a virtual assistant that communicates with your customers through text messages. You can integrate it into your website, apps, or even instant messengers, such as Facebook Messenger.

Chatbots can help you get closer to your customers without any manual intervention. The chatbots act automatically when a user messages them.

While they don’t completely remove the need for human customer service representatives, they can drastically reduce their workload.

Here are some of the major reasons why people prefer to interact with chatbots:

• Entertainment – Interacting with a chatbot is entertaining for many people. They also help people kill time when they have nothing much to do.
• Curiosity – Chatbots are fairly new for people, and this sparks their curiosity. People want to test the ability of these chatbots and understand how they react to different messages.
• Social factors – They can help improve social experiences and also drive conversions for your business. People can talk with chatbots without the fear of being judged, and this can be comforting for many.
• Productivity – Whenever people need some assistance, they need it quickly, and chatbots do just that.

They’ve become one of the biggest automation trends of recent times. In fact, chatbots have become so popular that Facebook Messenger hit over 100k bots in 2017. Additionally, about 35% of consumers want to see more brands using chatbots.

Now that you have an idea of their importance, let’s take a look at how they can help your business thrive online.

How Can Chatbots Help Your Business?

1. Always Available

It can be frustrating for customers to see that there’s no one online to assist them with their queries. Chatbots can be extremely useful in such cases. They can be present throughout the day and night and are always available to solve the customer’s concerns.

People don’t like to wait for a long time to have their concerns addressed. In fact, about 37% of customers want quick answers to their questions. Instead, you should try to resolve their queries at the earliest and chatbots can help you do exactly that. This is perhaps the reason why they are quickly replacing other forms of customer support, such as live chat and calls.

Unlike humans, you can have a chatbot work 24×7 to solve your customers’ queries. This can help improve your overall customer satisfaction.

2. Saves Money

When you have a customer support team, you need to pay them salaries every month for their services. Without a chatbot, you’d need a huge staff to respond to your customers quickly and efficiently. And as your business grows, these expenses will only keep on adding up.

Chatbots may require a big one-time investment, but they help reduce your recurring expenses even when your organization grows. When your customers have some simple queries, you won’t need any intervention by the customer support team. Instead, the chatbots will handle the conversations with them and solve their problems.

This allows you to reduce the number of customer service agents required for your brand. Additionally, you can have them solve only the complex queries rather than wasting their efforts on simple ones.

The reduction in staff size can help you save money.

3. Improves Customer Satisfaction Levels

For a business, it is critical to improve customer satisfaction levels. When it comes to customer service agents, their conversations with customers depend upon their mood. If they are in a good mood, they can solve the customers’ queries easily. However, if their mood isn’t right, they may not be able to give the customers a satisfactory experience.

Chatbots, on the other hand, are bound by rules of code, and they obey them perfectly. They always treat customers in the most polite manner possible regardless of how the customer talks to them. This can help improve your customer satisfaction.

Additionally, you may have customers who speak multiple languages. It can be difficult for your agents to speak in different languages with your customers. However, a chatbot can easily do so without any mistakes. This can help improve communication with them as well.

4. More Avenues for Marketing

Chatbots are not merely tools to help you improve your customer service. You can use them for marketing your brand and products too.

For instance, you can use them to send out offers to your customers. This can be a more personalized method of reaching out to them.

Here’s how they can help you:

• Increased engagement – By personalizing the communications with your customers, they can improve your engagement rates. They can even help your customers with simple tasks such as showing them their purchase history.
• Improved reach – You can reach out to your entire customer base through chatbots, especially on social media. It wouldn’t be possible to achieve this manually.
• Seamless guidance in the sales funnel – Unlike humans, chatbots won’t keep your customers waiting for responses. This enables a smooth transition between stages of the sales funnel. Through this method, you may be able to improve your conversion rates.
• Push notifications – Chatbots can predict customer behavior, and this makes them very handy tools for marketing. You can send out push notifications to your customers based on their actions. This helps you reach the right people at the right times and can help with conversion rate optimization.

This way, you can use them to market your brand and products in a more personalized manner. When the message reaches your audience at the right time, it can make a significant impact as compared to passive marketing.

In fact, 77% of consumers said that positive conversations with the chatbots made them purchase more frequently from brands.

5. Personal Assistant

People can use bots as personal assistants for simplifying their tasks. The bots can send them suggestions or tips related to the topic they are looking for.

For instance, you can get travel tips or fashion recommendations from bots. They can even order food for you easily.

For instance, Mastercard came up with their own chatbot for Facebook Messenger. This chatbot makes banking easy for their customers by telling them how much they spent each month and showing their transactions. This makes banking extremely simple for their customers.

Image via Mastercard

Similarly, they came up with solutions for merchants that have made it possible to conduct transactions directly from Facebook Messenger. It is possible now for consumers to directly order food from the likes of Subway, FreshDirect, and The Cheesecake Factory.

By enabling direct purchases from the interaction with the chatbot, you can make the buying funnel extremely short. This, in turn, can increase your chances of getting conversions.

6. Showcase New Products and Services

Through chatbots, you can showcase your latest products and services to your audience. They maintain a friendly tone at all times, and this allows you to announce your latest products and services easily.

The best part about these forms of notifications is that they are highly targeted in nature. You can select which notifications should be sent to whom. This can make your relevant customers feel special, and you won’t irritate those who don’t find the product or service relevant.

Now that you know how chatbots can help your business, let’s look at how you can build one.

How to Build a Chatbot

1. Define Your Goals

Before you set off to develop your chatbot, you need to figure out what your end goals are. List the functions that the chatbot will serve for your brand clearly. This will help give you direction for designing it.

2. Decide on a Channel

You need to decide which channel to use to communicate with your customers. This could be Facebook Messenger, your website, app, or even WhatsApp.

3. Choose Your Method of Creation

There are two ways in which you can build your chatbots. The first is that of creating a custom chatbot from scratch. The second, more simpler form of creating chatbots is by using readymade software.

4. Customize and Launch

Regardless of your method of creation, you need to customize your chatbot to fit your requirements. You should develop a database of answers to your customers’ questions and describe the actions the chatbot has to take. Finally, you should test the chatbot to see if it works well.

Final Thoughts

Chatbots can help you amplify your marketing efforts by making your marketing more direct and personalized. You can also improve your customer experience by giving them solutions quickly with the help of chatbots. Additionally, chatbots can reduce your operational expenses and even drive more conversions.

What are other ways in which chatbots can help a business? Let us know in the comments.