Dana Krook
Mar 29, 2018 · 6 min read
Cover photo by Monster Ztudio/Shutterstock.com

At a time when most companies are either investigating artificial intelligence (AI) for their business or already applying it, the chatbot is one solution in the spotlight. A recent report from the research firm Gartner estimated that about 25% of customer support operations will be using virtual assistants or chatbots by 2020, up from less than 2% in 2017.

Aside from the AI movement, why is there such a rapidly growing interest in chatbots?

For many companies, what’s behind the sudden move is a fundamental shift toward a more customer-centric approach to decision-making. With more access to customer data than ever before, companies can see exactly what impact a good or bad customer experience has on retention, reviews and recommendations — all elements that affect their bottom lines. According to research from the Temkin Group, customers who have positive experiences are 3.5 times more likely to make further purchases, while 22% of customers with bad experiences decrease their spending with that company and 19% stop spending completely.

It’s clear that the stakes around customer experience are high. But customer expectations are even higher. What makes a “good customer experience” is different now than it was even a year ago. Louise Hemming, Industry Manager Technology at Google, told attendees at a recent commerce event that today’s customers are “more curious, more demanding and more impatient.”

In response to increased expectations, many are turning to chatbots as cost-effective solutions that bridge the gap between rising customer expectations and a company’s current level of service.

What is a chatbot?

A chatbot is a computer program that can have a conversation with a human user through speech or text. It’s often used to perform requested tasks such as answering questions, accessing account information and completing transactions.

How chatbots work

There are two main types of chatbots. Rule-based chatbots are trained to answer questions based on a set of rules that have been written for them. If a customer’s question doesn’t use the same words or sentence structure as the rules in its programming, the chatbot won’t be able to answer. It has zero flexibility. As complex as this set of rules can get, it would take a very, very long time to program every possible scenario into the chatbot.

What we’re seeing a lot more of now are self-learning chatbots, which use machine learning (a sub-set of AI) to answer questions without explicit training for every scenario.

Self-learning chatbots come in one of two varieties. Retrieval-based modelsare trained with a set of questions and possible responses. When asked a question, the chatbot will use a machine-learning algorithm to find the most relevant answer within its training set. It doesn’t formulate the response but retrieves one that’s been carefully crafted. Generative models, however, use machine learning to analyze the question and generate a unique response. They can handle more complex and unexpected inquiries, but have higher rates of error, including spelling, grammar and context.

How are companies using chatbots for business?

Chatbots show up in a range of different industries and departments, carrying out simple tasks that can have a significant impact on how customers interact with a brand.

Customer Support: These chatbots provide a self-service option for current or potential customers with questions or issues, delivering instant answers to simple inquiries (such as FAQs). Customers get instant access to help for problems like troubleshooting, clarification of terms and connecting to a human agent if the issue needs to be escalated.

Check out: Mint SIM’s chatbot, Foxy (made with Ada)

Marketing: Often linked to a company’s customer relationship management (CRM) software, marketing chatbots deliver personalized campaigns based on someone’s preferences and past purchases. The conversations can be designed to drive awareness or move a customer directly toward a purchase.

Check out: Harper Collins’ Epic Reads chatbot

Sales: A sales chatbot goes one step further than marketing, collecting responses from users and then allowing them to complete transactions without going outside the chat interface.

Check out: Starbucks Barista bot

Human Resources: Used internally, HR chatbots help connect large and remote-based organizations by assisting with recruitment, onboarding, training, FAQs for company policies, benefit enrollment and employee assessments.

Check out: Intel’s virtual HR agent Ivy

Healthcare: Within the healthcare industry, chatbots are being used as virtual assistants for patients and their doctors. They can create helpful reminders to take pills, find a doctor and monitor a patient’s health, as well as take note of symptoms and book appointments within the appropriate amount of time.

Check out: the health assistant Florence

The most successful chatbots focus on one of these functions, rather than trying to be good at all of them. With machine learning, chatbots improve through increased use. The more training put into a specific function, the smarter (or more accurate) they get.

How chatbots improve customer experience

Chatbots are changing the game, equipping teams from customer support to sales with new abilities to not just serve customers but seriously impress them. Here are just a few ways chatbots can upgrade the overall customer experience at your company.

1. Deliver personalized messages that feel more meaningful

The best customer experiences feel personalized. Chatbots can apply user data to create that experience, delivering an infinite number of conversations, support and recommendations, each one tailored to an individual user. Receiving highly relevant information gives customers a strong connection to your brand, making them feel like they get their very own personal agent or assistant. To achieve a similar level of personalization by conventional means, you’d have to add hundreds or even thousands to your workforce. Since chatbots run these conversations simultaneously, they can also maintain that high level of personalization as your company brings in more and more customers.

2. Engage customers in the same platform they’re already using

Chatbots can live on all platforms, including websites, Facebook Messenger, SMS and apps, which means customers can get the information they need and interact with your brand wherever they are. They don’t have to move to email or open a different app or search for your contact information. They can just chat in a messaging platform like they do with their friends.

3. Remove wait times by providing instant access

It takes chatbots only a few seconds to respond to customers. This not only saves your customers time, it also prevents frustration from trying to extract information from your website, or reaching out to you directly and waiting in line to get what they need.

4. Cater to every schedule with 24/7 availability

Chatbots operate during and after company office hours, which lets customers shop, learn and access support whenever they need it. This caters perfectly to different schedules and time zones, which is especially beneficial if your operations are global.

5. Speak to them in their own language

Language doesn’t create barriers for chatbots, since many have multilingual options. Customers can easily choose the language they need, rather than trying to struggle through an conversation they don’t understand very well or at all.

6. Create a seamless journey that anticipates the next step

Chatbots are integrated into a company’s existing channels, so a customer can get additional help if they need it. Whether that means escalating their problem to one of your human agents or exploring products in more detail on your website, a chatbot can seamlessly direct customers to the right person or place.

Chatbots offer a range of benefits that can help your company take their customer experience to the next level, meeting and then exceeding the expectations of new and returning customers. Understanding the most immediate needs of your business is the best way to start planning where to introduce your first chatbot.

Originally published at ada.support.

Ada Support

Out-of-the-box AI chatbots for customer support | www.ada.support

Dana Krook

Written by

Ada Support

Out-of-the-box AI chatbots for customer support | www.ada.support

Welcome to a place where words matter. On Medium, smart voices and original ideas take center stage - with no ads in sight. Watch
Follow all the topics you care about, and we’ll deliver the best stories for you to your homepage and inbox. Explore
Get unlimited access to the best stories on Medium — and support writers while you’re at it. Just $5/month. Upgrade