15 June 2024
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What is a Chatbot: How Can Chatbots Improve Customer Service for Businesses

What is a Chatbot How Can Chatbots Improve Customer Service for Businesses

A chatbot for website is a software performing an automated task. It is a kind of artificial intelligence chat that can strike up a conversation with humans. Why chatbots are important? They process your text, infer what you want and then offer an appropriate response using complex algorithms or chatbot technology.


What is a chatbot? Chatbots are like a talking robot and can improve businesses to a great extent, so check out why chatbots are important and how they can help in better customer service.


Your company image depends a lot on your customer service, as dissatisfied customers may never use your products/services again. According to Lee Resources 91% dissatisfied customers never come back.



A chat robot answers customer queries consistently and efficiently simulating human conversations over the Internet. customer service within the next two years 85% customer service operations will be done using chatbots or virtual assistants. This shows the necessity or increasing demand for a robot chat system in your business.


What are Chatbots: How a Chatbot Can Help Improve Customer Service


What is a Chatbot - How Chatbots Improve Customer Service

(Source: ibm.com)


#1. Quick Response with AI Chatbot


  • Chatbots reply immediately so a customer is not kept waiting.
  • They are also able to solve an issue much faster.
  • The customer does not need to even begin the process, as the bot is able to start the conversation if necessary.
  • No more on hold music that frustrates customers.


#2. Saving Costs Using a Talking Bot


Businesses spend more than $1.3 trillion on customer service calls every year. Save on such costs by using chatbots on your website.


  • Agents are free to attend to other, more challenging tasks, instead of spending time on routine FAQs, thus saving money for your business. Bots tackle repetitive tasks, so that human agents can tackle more complex problems. The combination improves efficiency and employee retention.
  • Why do companies use chatbots? The cost per query for a human agent could be anywhere between $15 to $200, whereas it just costs $1 for a virtual chatbot.
  • You can reduce the number of agents used at call center floors by letting your visitors talk to a chatbot.
  • It can save you the costs of a contract with a BPO center provider.


Note: Chatbots Magazine claims that you can reduce customer service cost by nearly 30% using chatbots based on conversational AI.



#3. 24/7 Service Support with Live Chatbot


  • Customer service means convenience, which means you need to offer 24/7 support. The chatbot never sleeps and is able to offer this effectively, which makes using chatbots for customer service very effective.


Note: Autodesk is a famed 3D computer designing company that makes use of a chatbot called AVA, which answers customer queries round the clock.


live chat bot

(Source: wpxhosting.com)


#4. Dealing with FAQs/Routine Requests


  • Chatbots help businesses get rid of routine tasks.
  • It can simultaneously process multiple routine requests from different users.
  • Customers no longer have to search for answers in long and confusing FAQ lists or scroll down several pages containing instructions.


#5. How Chatbots Help Businesses in Analysing Customer Data


Normally, people do not spend much time completing surveys and answering questions. A chatbot can do the work for you by introducing the questions naturally in the conversation.


  • Chatbots can gather information, which you can then feed for learning algorithms and enhancing their intelligence.
  • It is a great conversation catcher, as people, especially this generation like to solve their problems by communicating with chatbots.
  • The recorded interaction can be a storehouse of real data. For instance, by looking at the questions that the chatbot has not answered, developers can add more triggers and assign answers to improve the bots’ capabilities.
  • You can detect trends and analyse demographics. If you can learn how to create a chatbot, you can get better insights into consumer requirements and can improve their future strategies.


#6. Increasing Engagement in Social Media


  • Chatbots can be used for chatting with people on social media like Facebook, answering queries.
  • Chatbots for business makes sense, as customers can even make purchases from chat bots.


Note: For Instance, at a single point of time, literally hundreds of customers can place order on Dominos or McDonald’s through the app or on the Facebook page. The page uses chatbots to deal with all the orders simultaneously.



Also See | The Importance of Customer Satisfaction for Your Business Success


#7. Increased Traffic Flow/Leads/Conversions


In most websites, 97% of the visitors end up without purchasing. With chat bots:


  • Visitors no longer have to enter a text in a separate field.
  • They can directly talk to chatbots to get answers in real time.
  • One of the business benefits of chatbots is that it increases conversion rates on landing pages.
  • Chatbots offer users a unique experience, allow them to access content relevant to their requirements and create smooth contact points for visitors.
  • When chatbots are used as landing pages, it increases engagement with visitors. In a normal landing page, visitors must find information by themselves, which could be confusing for some. With chatbots, there is no distraction and users get information as per their request.


Note: There are some chatbots that are capable of recognizing human emotions, such as anger; confusion; fear; joy etc. When it detects these emotions, it seamlessly transfers the conversation to humans for assisting the customer.


#8. Accurate and Personalized


Interacting with someone who knows your name could completely change the way a visitor perceives your product/service.


  • Why use a chatbot? Chatbots’ knowledge base keeps accumulating and improving with more interactions.
  • Chatbots offer an AI customer service that is able to integrate with the social media and collect personalised data, so they are able to give more accurate answers and give personalised advice regarding shopping etc, based on the visitor’s previous history, preferences, etc.
  • They provide a more contextual and relevant customer experience.


Note: A great example of proactive chats is Erica, a chatbot for Bank of America, assisting customers with balance checking; making payments; and even giving advice using predictive analysis and Ai.


What are Chatbots - How a Chatbot Can Help Improve Customer Service

(Source: dyernews.com)


  • Advances in technology have made chatbots better listeners.


Note: In a study done by PwC, 27% consumers stated that they were not sure whether the interaction was with a chatbot or a human. You can even build a chatbot or create chatbot using some popular platforms.



#9. Sending Relevant Notifications


Customers don’t want irrelevant information and notifications regarding all your products or every event taking place in your business.


  • One of the benefits of chatbots in customer service is that they are able to send personalized and relevant notifications to customer emails and using social media.


Last Word


Chatbots today have advanced in technology and can offer enhanced customer service. Artificial intelligence and machine learning abilities have improved to such an extent that chatbots can optimise your customer service operation and bring unlimited benefits to your business.


Earlier, chatbots had received a rap for inaccurate routing, but with improved data and AI, modern chatbots are able to deal with customers more efficiently and can enhance customer satisfaction.


However, there are some disadvantages of chatbots as well. There is the issue of rogue chatbots, which can convince a user to share his/her personal information. Again, they are only able to handle conversations in a routine or expected path, as they are pre programmed.


The best solution would be that chatbots and humans can complement each other. Chatbots can handle simple, frequent queries and help humans find answers quickly, while humans can deal with complicated issues and upset customers by bringing humanity into the equation.  So, the future of your business customer service is here, are you ready for it?


chatbots for business

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Gaurav Jain
Article by Gaurav Jain
Hey There! My name is Gaurav Jain, a full time affiliate marketer since 2007. The reason for starting eMoneyIndeed.Com blog is to help you Save & Make Money Online. I write about Blogging, Online Marketing, Webhosting, SEO, Affiliate Marketing, Startups, Social Media, Email Marketing and more. Hope you enjoy the posts on eMoneyIndeed.com

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