When most people picture a chatbot, they typically imagine a simple online tool that exists to help them solve basic questions. But the truth is, thanks to advances in artificial intelligence (AI), the benefits of chatbots are far more wide-ranging than commonly realized.
The rise of conversational AI in particular is helping companies offer seamless customer support, better understand their customer’s needs and solve potential problems much quicker than has ever been possible before. So as technology rapidly evolves, the new possibilities of chatbots in customer service are critical to meeting consumer demand for personalized, frictionless and immediate experiences.
Understanding Chatbots: What They Are and How They Work
Chatbots are AI programs with text messaging or voice-based capabilities that help them simulate human conversations. Chatbots typically combine AI with natural language processing (NLP) to understand queries and automate customer communication.
Early chatbots were text-based programs that responded to a limited set of queries but couldn’t handle complex questions that developers hadn’t predicted. But the addition of NLP and natural language understanding (NLU) has seen chatbots become more advanced, more conversational and begin to understand the more complicated nuances of human language.
As a result, we’re seeing chatbots improve customer engagement.
AI chatbots can now:
Some of the most notable developments in the evolution of customer service chatbots include:
Widely considered the first-ever chatbot, ELIZA was developed in 1966 by MIT professor Joseph Wiezenbaum. ELIZA simulated human conversation using pattern matching and substitution methodology. Its capabilities significantly impacted future studies into natural language processing and the quest for more human-like conversational interactions.
Many more attempts at conversational chatbots occurred over the next few decades, but one of the earliest examples of building AI into chatbots was Creative Labs’ Dr. Sbaitso in 1992. Dr. Sbaitso had a fully voice-operated chat program that interacted with users like a psychologist.
A few years later, in 1995, chatbots’ conversational capabilities were advanced with A.L.I.C.E., which used AI markup language (AIML), heuristic pattern matching and universal language processing. The program simulated person-to-person chat, with “Alice” telling users about her hobbies and answering their questions.
Siri, Google Assistant, Cortana and Alexa
Today, the most recognizable chatbots include personal assistants from some of the world’s leading internet giants. The first was Siri, an AI personal assistant released by Apple for its iOS systems in 2010. Siri uses a natural language user interface that helps users quickly find information and solutions to their questions by speaking to their devices.
That was swiftly followed by Google Assistant and Cortana, which offer similar services for users of Android and Microsoft devices. Then, in 2014, Amazon released Alexa, which enables users to ask their smart devices to play music, perform a web search, set alarms, get weather reports, control their smart home systems and more.
Social Media-Based Chatbots
The rise of social media services like Facebook and China’s WeChat has seen developers design chatbots that help customers quickly find the assistance they need within the messaging platforms. This has seen online machine-to-human interactions evolve to the point that they’re almost indistinguishable from conversations with friends and family.
The AI capabilities of chatbots have gone mainstream with the launch of OpenAI’s ChatGPT in 2022. ChatGPT is a large language model that uses Generative Pre-Trained Transformer (GPT) architecture to create human-like text responses to user queries.
What Are the Different Types of Chatbots?
As chatbots have evolved, different programs have emerged to help businesses improve customer service. These include:
10 Amazing Benefits of Chatbots
As chatbots evolve in sophistication and offer new customer engagement capabilities, businesses can unlock a wide range of benefits, including:
By using chatbots to answer commonly asked questions, companies free up human agents to focus on more complex issues. This is crucial to ensuring job satisfaction and reducing agent attrition (a major pain point for contact centers).
Rapid Query Solution
Potentially the most significant benefit of more sophisticated chatbots is improving customer service and answering questions quicker and more effectively. Chatbots are ideal for swiftly answering basic questions like opening hours or when an order is due to arrive, which aren’t a good use of human agents’ time.
Employee Coaching And Onboarding
Onboarding and training employees can be challenging and time-consuming. But chatbots enable businesses to automate tasks, ensuring new users can get up to speed and start working as quickly as possible.
Customers are increasingly using more channels to interact with brands. As they do so, they expect brands to seamlessly track their interactions across email, social media and messaging services. Tracking customers across multiple channels can be challenging, but chatbots can provide quick, consistent and connected experiences to customers at scale—whether they interact via email, text message, a website, Slack or Twitter.
Faster Internal Processes
Conversational AI is crucial to helping companies ensure calls reach the right agent and achieve first call resolution (FCR). Chatbots can streamline companies’ internal processes and gather the information sales agents need about a customer before they begin a conversation. This process ensures the most appropriate agent takes customer calls, directs people to self-service or the sales team and achieves first call resolution.
Enhanced Sales and Marketing Opportunities
Chatbots can help businesses bring in new customers and promote new products or services to existing users. Chatbots can gather data needed to onboard new customers, provide website visitors with tips about product features or links to videos or webpages with more information and free up customer support teams to handle more complex tasks and queries.
From a marketing perspective, chatbots can promote products and services to customers or help a site visitor viewing multiple products to select the item that best fits their needs. They can also encourage people who linger on a product page to make a purchase by offering them a discount or shipping coupon.
Businesses across all sectors are under growing pressure to secure their data and protect personally identifiable information (PII). AI chatbots can help companies protect sensitive data during and after customer interactions, which is crucial to compliance and ensuring customer confidence.
Using a chatbot in customer service ensures employees spend less time on the phone with customers and guarantees better-qualified leads. Gartner's research finds that conversational AI platforms can increase operational efficiency by 25 percent. As a result, employees can focus on value-adding tasks, and organizations can allocate the budget they would spend on extra staff at busy times to grow the business.
24/7 Customer Support
Employing a team of customer service agents around the clock can be costly. But, luckily for your support team, chatbots don’t need to sleep. So they can handle questions from customers from all over the world at all times. And, if a query is too complex, the chatbot can gather the data that human agents will need to tackle the issue the next day.
Recognizing Customer Emotion
Understanding how people feel is crucial to successful customer engagement. Advances in emotion AI enable chatbots to identify and interpret customer sentiment in real-time and adjust a caller’s journey, inject empathy into interactions or transfer customers to a live agent, if needed.
Maximize the Potential of Chatbots
Chatbots and conversational AI are rapidly revolutionizing how companies operate, helping them to cut costs, become more efficient and maximize the potential of their people. These technologies enable businesses to automate customer communication and provide seamless customer support at every interaction.
However, organizations must focus on integrating chatbots with other technologies and systems to maximize their potential. Furthermore, as AI technologies increase in sophistication, organizations can use chatbots to establish stronger emotional connections and engagements with customers.