What Is An AI Chatbot? How It Can Be Beneficial To Your Business

Chatbots have sprung into the mainstream. In the past, they were simplistic recognize-and-return systems that would ask for specific entries from the user, and return with either another question or the most relatable answer it could find based on meta tags and content.

But people weren't exactly thrilled with the bots when they came out. Compared to working with a human representative, chatbots could be difficult for users, requiring specific search entries, being inflexible, and even occasionally getting stuck in a loop.

However, with a recent projection stating that the chatbot industry would reach a market value of $9.4 billion by the year 2024, it's clear that chatbots have been evolving into a successful option for online customer service.

The technology has advanced to incorporate artificial intelligence instead of using a virtual call-and-response script system, pushing chatbots closer and closer to a convincingly natural conversation.

So how exactly have chatbots grown from when they first started, and how beneficial could they be to your online business?

What is an AI Chatbot?

An AI Chatbot is a small virtual assistant window that appears on your page when someone visits or specifically seeks out a chatbot — for instance, a customer support page. The chatbot will typically ask your customer if they need help finding anything or have any questions. These inquiries are all pre-determined by the company whose website the chatbot is on.

Once engaged with the user, the chatbot will then converse with them, analyze the user's request, and respond with what it believes to be useful and accurate results. From the user's point of view, a chatbot can almost seem like another human on the other end, which isn't how it's always been.

One of the biggest developments in the world of chatbots was the switch from automated bots to artificial intelligence bots. Automated bots would follow pre-built scripts that would "respond" with pre-built answers. These are the bots people are more than likely to think of first.

But the advancing technologies in artificial intelligence and machine learning gave us chatbots that aren't just looking for extremely particular string questions anymore. It uses its knowledge base to answer customer questions with the most current information, making it a powerful extension of your team and system while enhancing the customer experience with analytics and real-time insights into key topic themes, trends, and consumer inquiries.

Ultimately, AI Chatbots have the potential to boost customer engagement while retaining data on shopping behavior at the same time. Using analytical capabilities, they can quickly review data and make decisions based on user intents.

Instead, today's chatbots can mimic an actual conversation and personalize the experience with the user.

Artificial Intelligence

While artificial intelligence might sound like a notion taken from science fiction movies, in reality, it's becoming a regularly used and potentially major factor in the future of global society.

Predicted to contribute a whopping $15.7 trillion to the global economy by 2030, it's no surprise that artificial intelligence can be found in more and more technology we use every day — specifically machine learning in this instance.

Machine learning is the process of taking in data, analyzing it, and cataloging it, then executing a function based on the collected data. This may sound similar to automation, but the key difference is that machine learning bots are constantly adding data to their index. Bots that are regularly updating, collecting, and learning are more likely to understand different questions and be able to supply much more informed answers to the user.

Two examples of an AI chatbot outside that's been growing in popularity and functionality are Siri and Alexa.

Siri is able to listen and actually understand the language of its user, but it can't do so without learning it first. By taking in some test samples, the system can build an understanding of the user's questions and the context behind the user's statements.

The more you use an AI chatbot like Siri or even one embedded on your website, the more it will understand. Data is collected, information is parsed and logged and then used to reproduce answers to user questions.

Natural Language Understanding

AI chatbots still follow scripts and tend not to stray from them. But the complexity of natural language understanding brought by AI advances the flexibility in the bots' understanding and the accuracy of its results. Natural language processing analyzes user inputs through utterances, entries, and intents.

It takes in information from previous searches, related search results, and existing related content to analyze the consumer's query and then responds with the best results it can find.

The Benefits of Chatbots

While chatbots aren't quite the same as speaking with a human representative, they do have some major benefits to your company. And with the way technology and software have been advancing, these are only the beginning. Moreover, you can design automated conversations for WhatsApp, Skype, or Facebook Messenger and integrate them with the tools you already use.

24-hour Availability

Unlike humans offering live chats, chatbots don't have anything to take care of besides customer support. This might seem obvious, but the benefit of having a round-the-clock support team available is tremendous.

Chatbots take away the worry of different time zones or having employees with staggered shifts covering every hour. You never know when a customer is going to be visiting your site with a question. The 24-hour availability is beneficial to your company, your employees, and your customer.

Zero Wait Time

While the human agent has a few upper hands over the chatbot, the AI can shine.

Because they're virtual assistants, chatbots have lightning fast access to the entire internet and can answer questions significantly faster than a person would be able to.

Not to mention, chatbots are always available, no matter how many users you have with questions. So while you may run out of customer service representatives and have to put some users on hold, that's not a concern that exists for chatbots.

Straightforward Answers

As we've mentioned, chatbots are, of course, connected to the internet and are able to access all types of information. This makes them particularly useful for answering any basic questions users might have.

While a human representative may be able to take care of more complex issues and help the user get what they need to be solved, chatbots are a great solution to users with simple questions regarding products, content, availability, or research.

This helps free up the human customer service representatives by creating a chain of escalation. Instead of taking up the time of the live support team, chatbots can handle the lower-level questions and escalate those who need human assistants to available representatives.

Connection to a Human Agent

Users are more likely to use chatbots if they believe that a person is waiting to speak to them if the bot can't handle the question. Even as recently as 2019, 71% of users claimed they would be hesitant about a website that only had chatbots available for customer service and no human agents.

While this is understandable, having chatbots before human interaction is still valuable. The time saved by the user taking advantage of the chatbot's immediate assistance instead of waiting for a human representative to be available alone is incredibly valuable.

To learn more about how we use AI to power our search platform for customer support teams, visit our Support Answers page.

Resources

1. Global Chatbot Market Anticipated to Reach $9.4 Billion by 2024 – Robust Opportunities to Arise in Retail & eCommerce | Business Insider
2. PwC's Global Artificial Intelligence Study: Exploiting the AI Revolution What's the real value of AI for your business and how can you capitalise? | PWC.com
3. CGS Survey Reveals Consumers Prefer a Hybrid AI/Human Approach to Customer Service. Is there Chatbot Fatigue? | CGS.inc