What Is a Chatbot and How Can You Use One?

Anyone who’s spent any time on the web in the last few years will have inevitably come across a chatbot. These little pop-up digital assistants are fast becoming standard for companies to include on their website or social media channels as an automated solution to customer interaction. As artificial intelligence has evolved and developed, chatbots have become more advanced, broadening their practical applications so they can be used for a bunch of different, sophisticated functions. We’re long past the days of Clippy — the irritatingly obtuse Microsoft paperclip everybody loved to hate — and now chatbots are exceptionally effective at handling a lot of time-consuming tasks. (Thanks to Smore, you can resurrect Clippy as your website’s virtual assistant for some support chatbot nostalgia.)

But what exactly is a chatbot? And why are they so effective in enhancing the customer experience?

What Is a Chatbot and What’s It Used For?

In the simplest of terms, a chatbot is a computer program that simulates human conversation through text or voice interactions. Chatbots are used in both business-to-consumer (B2C) and business-to-business (B2B) environments as virtual assistants to handle simple tasks. This can have a bunch of great applications to complement how your business operates, improving service quality, productivity, and cost-effectiveness.

One of the most common uses for chatbots is as part of a digital-first approach to customer service. If you’re not sure what chatbots are, this is the most likely way you’ll have encountered one. You know that little chat icon often floating at the bottom right of a website? This customer service chat feature has been around for a long time, but in more recent years they’re not always immediately managed by an actual person. Instead, an AI program is your first point of contact. Only if your query is too complex for the automated responses to handle will you be put through to speak to a customer service representative.

Chatbots are a great tool for making your website more accessible and intuitive for users. They allow businesses to provide a responsive, live chat emulation for customers looking to get more information than they can find on your web pages — without needing to delve deeper into FAQs, other places on your website, or via additional online searching. Because a chatbot is automated, it can be adapted to work across various digital channels, including social media. Businesses are therefore able to offer 24/7 support to customers through a series of engagement mediums without needing a night shift of heavily caffeinated staff.

Basically, chatbots shift customer service closer to self-service through machine learning (ML), which is apparently what customers tend to prefer. Microsoft’s 2018 State of Global Customer Service Report showed that 66% of customers would try to use self-service first — and that was before the pandemic and remote working! Since then, online interaction has grown, unsurprisingly, which is probably why Salesforce found that in 2020 38% of businesses asked were using customer service chatbots. That’s a big increase over the 2018 figure of 23%.

What Are the Benefits of a Chatbot?

Chatbots can help companies automate a load of different functions, solving various challenges businesses face when trying to keep up with the rapidly accelerating digital world. They offer great benefits for a whole range of industries and services. Here are some examples of why chatbots can be an effective way to enhance how an organization operates:

Keeping customers (and staff) happy

In a lot of cases, customer queries don’t necessarily need to be answered by an actual person. Questions regarding shipping or return policies, for example, are pretty standard, so instead of your service staff having to repeat themselves for the millionth time, a bot can do it for you. Not only does this allow your team to work on more complicated issues, but it also means a customer will get the information they need almost instantly without having to wait around for a member of your team to be available.

For more complex queries, initial conversation with chatbots allows customers to provide useful background information for customer service teams. They can use that data to find suitable answers quicker, without having to go back-and-forth over all the points with the customer, so their own jobs are more manageable. Plus, with the bot handling all the simple stuff, your team will be more available to customers with difficult problems, so they won’t be waiting in a queue for ages.

Snapping up sales

In sales, as with much of life, quality over quantity yields the best results; nurturing the most viable leads while not wasting time on the unsuitable ones is key to success. No salesperson wants to go through the rigmarole of chatting with a potential client for ages, only to realize it’s not going to be worth pursuing. Likewise, prospects who can quickly establish whether your product or service is right for them are going to be much happier, even if the answer is no. Chatbots can be used to ask qualifying questions and generate a lead score, helping the sales team decide whether a lead is worth chasing and quickly giving the prospect a good idea of whether your business can accommodate their needs.

No more onerous order management tasks

A lot of the process for managing orders is repetitive and fairly simple. Just like with customer service queries, much of this doesn’t need actual human interaction because it’s a case of just taking information from the customer and applying it to the order details. So why not have a digital underlying do it instead? Machine learning and natural language processing (NLP) means a chatbot can be integrated with your ERP or CRM to capture and generate a whole array of information without the need for staff. This can include logging product names, order numbers, and status, as well as producing send receipts, labels, order confirmations, and invoicing.

As businesses expand and receive more orders, doing all that work manually takes up a lot of time and effort that could be better used elsewhere — like handling bigger, customized orders or making a cake for everyone in the office. Moreover, AI tools are also less likely to make mistakes. As workloads increase, humans are more likely to have little slip-ups or lapses in concentration and judgment, especially while repeating mundane tasks. We are only human, after all (well, we assume). Having a chatbot shoulder the responsibility for basic stuff both takes the pressure off your people and ensures better accuracy. Win-win.

Keeping up with the social media Joneses

Managing business social media accounts is more than a full-time job. Even with just one account on one platform, staying on top of everything that’s going on is a challenge. If you’re lucky enough to have a dedicated social media team, chances are they spend a lot of time responding to queries or pushing out promo posts. That’s all useful activity, of course, but the primary value of social media specialists comes from their expertise in how the platforms and their communities work, and how to use them strategically.

Social media chatbots are a great way to improve your social media strategy. You can automatically communicate important company information, promote services or products and drive leads and sales through promotional codes. By setting your chatbot to doing the legwork for these activities, your social media experts can spend more time figuring out your next moves to remain relevant, keeping customers engaged across multiple channels, and finding the silliest memes. And to do that effectively, you’ll need data.

Understanding your customers better

Another great way to use a social media conversational chatbot is to start a dialogue with your customers through interactive prompts that help you get to know them better. User activity is one of the best ways to analyze your customers and find out what makes them tick. When you combine their activity data from Google Analytics with the direct insights from chatbot interactions, you can build a clearer picture of who your customers are and what they want. This allows you to adapt and evolve the customer experience you offer to better meet, and even exceed expectations.

Robots never sleep

To provide awesome customer service on a global scale, you need to be able to communicate with customers when they’re awake — which is tricky when everyone’s in different time zones. Fortunately, a chatbot can work through the night so anyone on the other side of the planet that wants to get in touch will still have someone to talk to. (Well, something, at least.) When your teams turn up for work in the morning, they won’t be faced with a backlog of queries that came in overnight. Instead, they’ll only need to deal with the more tricky ones the bot wasn’t able to resolve.

Cost savings

This automated problem-solving may mean you don’t need so many operatives in your teams. An AI chatbot can pick up the slack on numerous simple inquiries and tasks all at once, whereas each member of staff can only handle one at a time. By investing in an intuitive AI chatbot, businesses could make significant savings on their operational costs, while increasing efficiency, reducing wait times, and improving customer satisfaction.

The Challenges of Using a Chatbot

As with any new and emerging technology, there are some tricky aspects of chatbots that must be considered when deciding how to implement one for your business. Before leaping into anything, it’s important to understand that there are primarily two types of chatbots: rule-based and artificial intelligence. They both have their purposes and work quite differently to achieve their goals. Determining which would be best for the intended outcome requires a bit more understanding of what they each are and how they work.

Rule-based chatbots

Rule-based chatbots, also known as “flow-bots,” provide branching questions for visitors to choose from. The bot can discern an answer to a question through a process of elimination, or gather information for a human to jump in and resolve once all the facts are in. This way, you can craft a conversation script that specifically guides a user to limited pieces of information, but if a customer asks complex questions that aren’t covered in the script, the bot won’t be able to answer.

Think of it kind of like an interactive FAQ: it’s great for covering basic common questions, but it’s not going to be able to tackle anything more taxing, nor will it be able to accurately replicate human conversation. And this won’t change over time, either. Rule-based chatbots don’t have built-in ML, so they’re limited entirely to what you tell them to say. If a customer asks something outside the remit of what the bot is programmed to know, it’ll just give a mechanical “does not compute” sort of response. That’s usually the point where the chatbot will then ask the customer if they’d like to speak to a member of staff.

A couple of great examples of rule-based chatbots in action can be found on Impulse Creative’s website and through Amazon’s Help section. Both of these use strategic messages and multiple choice options to navigate customers to where they need to be or compile information that a human customer service operative can use to resolve queries.

Artificial intelligence chatbots

AI chatbots, on the other hand, use ML algorithms to develop a wider understanding based on compiled data. So, in time, they can handle a much broader range of open-ended queries. These bots can comprehend orders and understand the language used. They learn from its interactions with users to continually improve, the same way humans learn how to comprehend and communicate.

An intelligent chatbot has the capacity to understand language, context, and intent, which it then reacts to accordingly. But conversational AI needs some time to learn to emulate natural language. Eventually, it could be amazing at chatting away in a very humanistic way, but at first, it’s going to be a bit clunky. 

All that said, it’s worth noting that chatbots are continually being developed further, and are far more capable than ever before. Plus, they’re much easier to build and implement now, thanks to a whole array of simple development tools.

If you want to see a great AI chatbot in action, take a look at KLM’s BlueBot, which helps thousands of customers stay on top of their bookings in multiple languages each week. It’s Facebook Messenger compatible, which boosted KLM’s Facebook message volume by 40%!

Because of its adaptability, you can use an AI chatbot for a whole bunch of different jobs. Beauty behemoth L’Oreal used the Mya chatbot to automate large parts of their recruitment process, taking a lot of the admin out of finding and hiring the candidates.

AI chatbots are evolving rapidly, we’re seeing technology giants like Microsoft, Google launching their own chatbots or partnering with an already popular one like ChatGPT.

You may also be interested in knowing: How ChatGPT could Affect Domain Names?

How Do You Make a Chatbot?

Building a chatbot used to mean hiring a super-smart developer to do some super-smart things with code and whatnot. Thankfully, other super-smart developers have gone one step further and created off-the-shelf drag-and-drop bot editors you can integrate into your website or social media channels pretty easily. So all you’ll need to do is follow a series of steps to create your own chatbot.

1. Determine its purpose

Do you want a chatbot for customer support automation, improving customer experience, or lead generation? Or maybe all of the above? Think about the main feature of a chatbot that would be helpful for your business. Once you know what you want it to do, it’ll be much easier to identify the features and types of chatbots you’ll need.

2. Assign its location

Chatbots can go on your social media channels or on your website. Figure out where your customers are more active in their communications with you and then go for a solution that allows you to capitalize on that already existing connection.

3. Pick a platform

If you’re au fait with coding, you might be happy to go for a chatbot AI framework, like Google’s Dialogflow, IBM Watson, or Microsoft Bot. These require a lot of technical know-how and time to create something that works well. Alternatively, if you’re not so tech-savvy you can use a more accessible chatbot builder, like Tidio, ChatBot, or HubSpot, to name just a few.

Just be sure that whatever option you go for, it has the ability to fulfil your intended purpose on the platform you want.

4. Create your chatbot

For those of you using an AI framework, it’s time to get coding! If you’re sufficiently clued into the mysteries of coding to do this, you already know what to do here.

For the rest of us, chatbot builders work with drag-and-drop function blocks that allow you to construct pathways for users to follow, including action nodes, customized messages, and response buttons. You can create various chatbots to fulfil different purposes, such as promotion codes, newsletter subscription prompts, FAQs, helpdesk navigation for users, and many more.

A couple of things to remember: keep the flow simple. It’s less likely to go wrong if you don’t overcomplicate it. And talk like a human. You want to emulate human conversation in the way your bot responds to custom queries, so keep the tone casual and friendly.

5. Testing, testing… 1, 2, 3

Most chatbot builders will have a built-in test function, which gives you a preview version of the chatbot so you know what it’ll look like. It also allows you to run a logic test on the bot you’ve just created, simulating all the different routes a user might take when using the chatbot to make sure they all lead somewhere suitable. You wouldn’t want customers getting frustrated when they run into a digital dead end.

6. Train its brain (if it has one)

If you want your chatbot to have conversational AI, you’ll need to feed it data to know how to react to whatever your customers say. You’ll need to analyze customer conversations to establish popular queries and common issues, then create a pool of related words and phrases that the bot can pick up on. The chatbot will then recognize similar queries that can appear in future conversations. The more phrases you add, the better! To broaden your bot’s brain, tools like Free Word Generator can be helpful for expanding word pools.

7. Room for improvement?

Once your bot is up and running, you’ll want to monitor how it’s performing. Gather data directly from customers with a satisfaction survey. Actively monitor activity to assess your chatbot’s performance, then make adjustments to flows and word pools to enhance it over time. Remember that data is key. The more information you have, the better decisions you can make about improving it.

Choose the Right Chatbot Platform for You

Hopefully, we’ve given you a good initial insight into the world of chatbots and how you can get started using one for your business. Of course, it’s important to remember that every company, website, social media channel, and customer expectation is different, so all the advice here should be taken with a pinch of salt. The pivotal point when it comes to implementing a chatbot is finding a solution that’s right for your specific business needs. By following the steps above, you’ll be able to figure out what it is that you want your chatbot to achieve, and, with any luck, a good way of making that a reality.

Just remember that, much like the rest of your website, a chatbot is a work in progress. It’s going to take time to bed in, and you’re inevitably going to need to make adjustments over time. Make marginal improvements based on performance data and customer feedback for better results over time. Patience and perseverance is king. After all, an awesome website (much like Rome) isn’t built in a day!