Call it a bot or a chatbot, but what exactly is it?

A chatbot is a computer software interface that simulates human conversation, usually through text or voice interactions. Chatbots are designed to help customers perform transactions and resolve simple issues quickly, without the need to wait for or speak to a live human agent. Bots are considered to be self-driven, empowering users to drive the conversation. They act as self-service customer options that guide and direct interactions in a more conversational manner. In essence, they mimic human interaction to provide the end-user with a pleasant, effective experience. And when done correctly, the experience can surpass that of an actual human interaction. Again, when done correctly.

Over the past few decades, we’ve become accustomed to the self-service concept where you as a customer can independently manage transactions on your own, any time you want. This empowered self-managed experience includes paying a phone bill or obtaining an account balance through IVR phone prompts or through web transactions – as customers we have all become more and more accustomed to managing tasks without human intervention. It’s even taking place at your local grocery checkout counter!

Let’s take Apple’s Siri or Amazon’s Alexa as voicebot-styled examples. These voice-activated assistants perform tasks such as setting alarms, sending text messages, and conducting internet searches. These and other AI-powered voice assistants have greatly simplified our daily lives, managing critical operations such as controlling smart home devices and security applications.

Advances made to chatbot technologies have propagated the use of artificial intelligence (AI) assisted bots in almost every aspect of our lives. Open any website and you’ll be greeted by a helpful (and sometimes adorably cute) popup asking if they could assist you. While some of these chatbots may be more decorative than functional, when companies understand the true power of the bot, they invest in the development of customer-driven, value-based applications that guide and improve the customer experience.

How do bots work?

Chatbots use natural language processing (NLP) to understand human speech and respond in a way that simulates a human conversation. AI powers the chatbot to handle more complex queries and understand the customer’s intent, so it can provide a relevant response – learning and adapting with each interaction.

As we’ve discussed in previous blog articles, the best-of-breed bots have smart humans behind them that design, analyze, tweak and modify the way the bot interacts with customers to continuously improve the customer experience. This is necessary to ensure that the bot understands what is being asked of it, and can direct queries to the right avenue with the ultimate goal of transaction resolution.

What’s the difference between a chatbot and AI?

The terms “chatbot” and “AI” are sometimes used interchangeably, but they actually refer to two different things.

Chatbots are powered by artificial intelligence (AI), but AI is not limited to chatbots. AI can power anything from simple tasks like file management and bookkeeping to more complex functions like identifying cancer cells in an X-ray.

In other words, AI is the brainpower behind the chatbot – it’s what enables the chatbot to understand human speech and respond in a way that best satisfies the customer’s goals.

Why are AI-powered chatbots so popular?

There was a time when chatbots were seen as a gimmick, a cool “marketing ploy” on a website. Many a person (with too much time on their hands) would even try to trick up the chatbot by asking silly questions to see how it would react. But we’ve come a very long way since those early applications! Today, both businesses and customers can see the outlining benefits that a well-designed, well-managed chatbot can provide.

For companies that value and prioritize the customer experience, a chatbot can help to:

• Reduce customer support costs by automating a wide range of tasks
• Reduce live agent support
• Reduce customer service wait times
• Increase customer satisfaction
• Improve customer retention
• Provide customers with the ability to self-manage
• Provide customers with additional services
• Generate new leads
• Boost sales
• Support and enhance the company brand

Chatbots understand natural language and provide answers to customer questions faster because they are “hooked into” the data, and use AI to make accurate decisions based on customer intent. This is a huge advantage over human customer service reps, who can mishear or misunderstand customers and need to take the time to access the required data in order to find the best possible solution for the customer based on what their understanding.

Chatbots never have a bad day, or call in sick. They can be designed to communicate with individual customers in a personalized and proactive way, while strongly supporting the company brand.

Chatbots are also scalable, which means businesses can add more bots as needed, without having to hire more human customer service reps. This makes chatbots a very cost-effective solution for businesses looking to improve self-service automation and the customer experience.

As you can see, there are plenty of reasons why businesses should consider using chatbots. And with continuous advancements being made in AI and NLP technologies, chatbots are only going to get better at understanding and responding to customer queries, providing new functionalities and applications that can only serve to boost the customer experience.

But let’s be clear. A chatbot will not replace live human agent support. Much like your IVR, website, email and social media channels, the chatbot is one more tool in your omnichannel communication toolbox to interact with your customers. Combined with all your communication touchpoints, your chatbot is meant to complement your services by providing a unique self-service option for customers. Depending on your industry or intended use, the chatbot can be the customer’s first interaction in their customer journey.

For all these reasons, it’s no wonder that more and more businesses are turning to AI-powered chatbots to handle their customer service needs. And because they’re constantly learning, chatbots can only get better with use over time.

But what about the customer? It’s clear why businesses love their bots. But why do customers often prefer to interact with a bot over a human?

Chatbots are available 24/7 which means customers can get the help they need anytime, day or night – really, at their convenience, not when the company decides is best or more convenient for them. They never get tired or need to take a break, which means that they can always be there for your customers. They’re also faster and more efficient than human customer service reps, which means customers can get their issues resolved and perform self-service tasks quickly, without have to wait on hold in long queue lines that serve to increase tensions.

Chatbots provide consistent service. They never have a bad or off day, and always respond in a consistent manner. Customers will always receive the exact same level of service on a Monday morning as they would on a Saturday afternoon. It also levels out the playing field as customers never feel like they got a “bad agent” or feel the need to call back to get a “good agent.” …Yeah, we’ve all done that…

Chatbots are much faster than human agents. They can handle multiple queries at the same time and often provide instant responses. This is a huge advantage for customers who need help to solve their issues and self-service tasks in an expedited manner – especially when their query is something minor and can and should be quickly solved. What could take seconds to be resolved by a bot could take a live human interaction much, much longer.

Chatbots are more accurate than human agents. But, even the best AI-powered bots make mistakes at times, or lack the information required to solve a particular intent. Well-designed bots recover from these misunderstandings, and know when it’s best to transfer the conversation to a human agent. The bot can then send the human agent the information learned from the conversation thus far – saving time and effort, without the need to repeat what was already communicated to the bot.

Chatbots can personalize their interactions with each customer. They can remember previous interactions and use that information to provide a more proactive, intelligent experience. This can make your customers feel valued and appreciated, which will keep them loyal.

Finally, chatbots are cost-effective. They don’t require salaries or benefits and can be implemented rather quickly, providing significant savings.

Of course, there is also one big reason why customers prefer bots over human interactions. People don’t always feel like dealing with other people. We can try to phrase it in a more pleasant way, but the truth is, it is simpler, easier and less of a hassle to “speak” to a bot than it is to muster up pleasantries with a human agent. There we said it! ?

There are many more reasons why customers prefer chatbots, but these are some of the most cited ones. If you’re not already using a chatbot, now is the time to consider doing so. Your customers will thank you for it.