A Chatbot is a compilation of computer programs that substantially mimic the functionality rather than the personality of their human counterparts in assisting the customer (or user) by either providing information or completing basic tasks. These bots either function on a set of rules (Command based Chatbot), or operate on Artificial Intelligence (machine learning-based Chatbot). Command based chatbots use a databank to come up with their responses, ensuring better grammar and more reliable answers to questions. However, they are limited to their dataset and will require manual help for question beyond what information they were set up with. AI-based chatbots, on the other hand, can answer vague questions utilising a technique called NLP (Natural Language Processing), allowing for more user error contingencies. Unfortunately, they require a lot more data to work with and also struggle with larger strings of sentences.
A chatbot is mostly applied to different messenger apps or website chat boxes, where users can have a one on one conversation with these AI.
The prime significance of using a chatbot is its 365 days a year, 24/7 availability. Call centres integrating chatbots could benefit greatly as they can also simultaneously hold multiple conversations.
Moreover, they can be cost-effective for your business as you can cut down on the amount of workforce required to handle repetitive tasks for your business. Chatbots like ‘Trim’, which operate to manage personal finances can also help in the organisation of a company’s basic accounting.
For the people already working in your business’ management or customer service, a chatbot can efficiently cut down on the time they spend handling mundane issues – thus increasing productivity and creativity within your organisation. ‘Eva’, a chatbot by HDFC is used to answer millions of customer queries across multiple channels, reducing the workload severely for all live agents.
Using chatbots essentially future proofs your business. Companies like WeChat and Facebook have and continue to invest millions in the development of Chatbot functionality in their individual app spheres, allowing businesses to utilise the chatbots to integrate them in consumers’ social and personal world permanently. By doing this, both Facebook and WeChat have provided several services within the confines of their single app, making life easier for consumers, increasing their accessibilities, and from a purely business perspective – reducing the need for competition in the market.
Having a representative for their brand always available at the push of a button also enables businesses to target marketing campaigns to the consumers, providing a more personal touch as the chatbot can take away more interactive insights from the consumers’ responses. Sephora uses a bot in its messenger app to act as a cosmetic assistant who also asks the user a quiz to better understand their preferences.
Chatbots are the next step in information technology after the advent of websites and apps and are easier to maintain and upgrade if built correctly. Furthermore, consumers prefer conversing with a chatbot than a customer care operator as revealed in a study conducted by Opus Research and Nuance Communications which found that 89% of users prefer chatting with an AI for their queries rather than having a live conversation. This is because chatbots are easier to converse with, have a quicker response time and are more convenient to get information from on the users own terms.
Although chatbots have in many ways shown potential to revolutionise specific sectors of business industries, they aren’t infallible. If the design of the chatbot is improper, without a purpose or lacking a personality, it could very well damage the business’ favourability and frustrate the consumers. Making sure that a chatbot has a clearly defined purpose and ensuring personalisation of the AI-consumer relationship can only boost the amount of use you can garner from using a chatbot.
Chatbots may not be the saviour of small businesses as many claim it to be – due to some drawbacks caused by limitations of a fledgling technology – and is in no way a replacement for live agents, it is most definitely a must-have for any company planning to run a long-term business.