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Chatbots have been the buzzword for some time now, and the technology used in creating them has now been brought to the forefront of marketing.
Chatbots are especially beneficial for small and medium-sized businesses by providing customer support around the clock. The benefits brought by chatbots to small businesses have no indication of slowing down. In fact, 62% of consumers now consider chatbots to be the future of customer service.
As the chatbot trend continues to grow, it’s now easier than ever to work with a chatbot development company to develop your own chatbot that fits your specific needs. Around 70% of millennials have reported positive experiences with chatbots and 83% of online shoppers have had queries resolved via chatbots. With this in mind, it’s undeniable that the technology is already adding value to businesses, and it’s only getting started.
This article will dive into how chatbots work and the role the technology plays in small and medium-sized businesses.
How do chatbots work?
A chatbot is a program powered by rules and, more recently, AI that resembles communication with users through a chat interface.
The set of rules are input into each chatbot’s workflow as a series of questions and answers in the form of buttons that users interact with. These answers lead users to different links, educational documents, and a form to trigger a notification. A human can then take over the interaction, or a form may trigger the sales team to contact the lead. These virtual assistants interact with your website visitors around the clock, improving their experience and providing information no matter their global time zone.
AI chatbots use input from a variety of different sources to track repeated questions and provide correct answers. An AI chatbot may learn from website messages, direct messages, and email to provide accurate output to the user. Just like any AI program, it takes time to combine large amounts of data with iterative processing and intelligent algorithms. This means the program will continuously improve and learn from patterns to become more effective.
The technology offers a range of user experiences aligned with a growing businesses’ goals. All of these come with their own range of benefits.
Let’s explore some key benefits of chatbots
Your growing business may consider adding a chatbot to your website or social media pages to increase customer engagement or offer support. Here are some benefits of chatbots for small and medium-sized businesses:
Collect consumer insights
Chatbots can instantly gather insights from interactions. This may be one of the leading answers to the question, why do we need chatbots? The more data a business has, the better it’s able to customize offers, promotional codes, newsletters, and understand shopper trends. This personalization can assist companies in marketing their products and knowing which products may require a relaunch or should be removed.
Cut costs
Having employees dedicated to solely answering repetitive questions from customers via email is hardly cost-effective and has become a thing of the past. One of the main benefits of chatbots is their ability to replace inefficient practices with automated rapid responses, day and night.
Chatbot workflows can be created to ask a series of questions about a product or service before providing predefined answers. For example, if a user asks: “Which color frames do you offer for these sunglasses?” A chatbot will answer: “These glasses are available in red, tortoiseshell, navy, and black.” This automated response is fast, efficient, and doesn’t require a human to spend time on the interaction.
Engage visitors with personalized customer support
Chatbots make it simple to personalize interactions with website visitors. Users may start their interaction by filling in their names or logging in with Facebook. The chatbot will then display items and suggestions based on the consumer data received. The great thing is this analysis happens within seconds, whereas it would have taken minutes for a human. As your business grows, it may become more difficult to keep conversations personal. That’s where a chatbot comes in. They allow your business to scale while you stay focused on creating personalized engagements with your clients.
Our chatbots now handle routine queries 24/7, drastically reducing response times from 10-15 minutes to just seconds, while our recommendation engine analyzes customer behavior to provide tailored suggestions, boosting average order value by 15%. Sentiment analysis helps us address potential issues early by reviewing feedback in real-time, contributing to a 20% increase in customer satisfaction. Since implementing AI, we’ve seen an 85% drop in first response times and faster resolutions for common inquiries.
– Raimonds Lauzums, President & CEO of Poggers
Limitations and chatbot error-handling
Even though adding a chatbot to your website may sound like a dream come true, it’s not without its disadvantages. Below we list some chatbot challenges.
May sound mechanical
Chatbots are, of course, not humans. This makes it difficult for the program to have a tone of voice and personality. Many consumers may not mind, as long as their questions are being answered. However, others may prefer to speak directly to a human. Chatbot best practices include keeping the tone of voice in mind to make it sound friendly and informative.
Answer limitations
Chatbots are built to only answer questions they have been programmed to answer. The program won’t be able to answer detailed questions or phrases if it hasn’t previously been programmed to do so. It is relatively easy to overcome these chatbot problems by providing the chatbot with predefined queries.
It’s not for everyone
Chatbots aren’t the best solution for every business. Some template-based chatbots are far too complex to be useful. Building an intricate chatbot may take many hours, making it expensive and unfeasible for growing businesses. Be sure to know your business and consumer needs to avoid these chatbot risks and ensure your customers are well taken care of.
Chatbot examples
There are many chatbots out there to draw inspiration from. Below, we have listed 3 chatbot use cases.
Spectrum — cable/internet provider
Goal: Decrease time spent on requests. Faster query handling
By using a chatbot, Spectrum was able to increase their ROI within 6 months and decrease their live chat volume by 83%. This chatbot is a great example of an automated system which resolves customer issues quickly and effectively. According to Spectrum, 83% (166,000 requests) were handled by the bot. Simple requests such as ‘forgotten login details,’ which took up 38% (76,000) of the requests, were now handled by the bot.
Baby Centre — online media company
Goal: Increase checkouts
Baby Centre used a custom chatbot that linked their customers via Facebook’s chatbot. By using the chatbot and including creative chats, they were able to boost customer interest. They tracked an increase in their click-through rate by 58%.
Mobile Outfitters – mobile phone accessories
Goal: Assist customers with product challenges
Mobile Outfitters reached out to Scopic to create a chatbot for their online store and website. A 24hr technical support chatbot was developed that could answer questions, provide helpful information from the troubleshooting guide, and add client personalization. The chatbot collects information about the customer and creates conversion logs for review.
Snickers — candy bar
Goal: Brand awareness
Snickers used a chatbot to create brand awareness via the Snickers Hunger Road Trip interactive chat experience. The bot took the user, along with their friends, on an adventure and gave Cruisin’ Credits for right answers while deducting points for wrong answers. The fun and interactive chat lasted for one month with an average of 4.7 minutes spent chatting to every user and a total of 97 messages per user. This is a great example of not necessarily having an end goal of creating new customers, but of providing the user with a memorable experience while learning more about their behaviors.
Is a chatbot right for your business?
Many types of chatbots come with their advantages and disadvantages. It’s good to start your chatbot journey by asking which pain point you would like to solve in your business. Are you looking to increase customer engagement, offer 24hr support, or personalize offers and information?
Whether you’re looking to solve customer support issues, personalize the shopping experience, or increase productivity, it’s possible to create a simple chatbot workflow yourself with existing services. However, if you’re looking to create a custom chatbot, reach out to a software development company that shares your values and approach.
