Summary

1 Chatbots have been on the rise since a couple of years and have already faced a wide
adoption. They are bringing a new way for businesses to communicate with the world and
most importantly with their customers by the help of the exploding popularity of messaging
applications, the accelerated development of all kinds of sensors and wearables, and the
rise of emerging technologies and Artificial Intelligence (AI). A chatbot is a program,
powered by rules and AI, which simulates a real interaction with users via a chat interface.
In other words, it is a service that can have a conversation with users just like a real person.
Chatbots utilise Machine Learning to gather conversational cadences that allow them to
copy human conversations and react to written or spoken requests to deliver a service.
They comprehend language, not just commands, since they use AI. Therefore, the more
conversation chatbots have with users, the more intelligent they become. There are
several benefits of chatbots and ways in which they can contribute to businesses.
2 A report from Business Insider shows that messaging applications such as WhatsApp,
Messenger, WeChat, and Viber had reached more users than social media networks such
as Facebook, Instagram, Twitter, and LinkedIn in the first quarter of 2015. Often,
customers prefer to interact with brands via chat as it is easier and faster to use. By
enabling businesses to be present on messaging platforms, chatbots not only allow
businesses to keep up with the trends, but also provide businesses with the opportunity to
reach more customers.
3 Chatbots also help businesses to improve customer service by enabling businesses to
provide extensive customer assistance. A majority of online shoppers need support and
assistance during shopping. Customers may require help in selecting products which fit
their needs or budgets at any time of the day. Other shoppers may face difficulties finding
what they are looking for due to navigation issues when they are on a company’s website.
Others may have registration, payment, checkout and delivery questions. In all these
situations, chatbots can provide real-time assistance like a sales person in a physical
store. Moreover, chatbots can offer interactive communication where they also ask
questions to understand the real problem. Along with text and voice, they can present
customers rich content with product pages, images, blog entries, and tutorial videos based
on the customer’s responses to help them through their journey.
4 Chatbots make it possible for businesses to provide always-available customer support,
as well as improve the customer support process. Customer service is vital to the success
of a business. For both international and local businesses, the ability to provide good
customer service 24/7 has a positive impact on a business’ customer satisfaction.
Chatbots can be programmed to give automated answers to repetitive
questions immediately and forward the request to a real person when a more complicated
action is needed. This enables human customer service representatives to save time and
attend to more important cases instead of spend time on time consuming simple tasks.
5 Many companies do not initiate communication with their customers. They only respond
to customers when contacted. In competitive businesses, especially with a remarkable
percentage of millennials as customers, none of the brands have the luxury to act passive
anymore. Since most organisations do not have sufficient manpower to initiate a
communication with all of their customers periodically, chatbots facilitate proactive
customer interaction. This allows organisations to start a conversation with each customer,
regarding any issue, any time of the day. This will make customers feel that the brand is
one step ahead, similar to a friend who is available 24/7, and improve the customers’ brand
perception in the long run.
6 It is important for businesses to keep customers engaged with the brand, as customers
who connect with businesses over social media spend more money with those businesses
(Barry, Markey, Almquist & Brahm, 2011). Chatbots facilitate increased customer
engagement and contribute by making the engagement more interactive, with the
additional element of humor. A conventional customer service interface usually provides
more information than it receives from the users. Chatbots, in contrast, give only a slice of
information at a time and can lead the interaction based on the input the user provides at
each specific time. Therefore, chatbots do not bore customers with irrelevant and
unnecessary information, keeping customers on the business’ platform longer and keeping
the content flowing by maintaining the conversation.
7 Chatbots are great tools to communicate with customers, and the information gathered by
chatbots enable businesses to monitor consumer data and gain insights on their
customers. With the feedback that chatbots collect through simple questions, businesses
can make improvements on their services or products and even optimise their website by
adjusting low converting pages. For example, if a business’ landing page generates a good
amount of organic traffic but does not convert well, the chatbot can reach out to customers
visiting this page with a survey to collect more information on why they are leaving the
page without purchasing. By monitoring user data, companies can track the commands
and responses given by their users to the chatbot and direct the bot to suggest a different
or a more convenient product or service to the users in addition to notifying sales and
marketing departments for personalised services.
8 Chatbots provide businesses with an easier approach to global markets. Regardless of
whether a company is an international brand with customers all over the world, or a local
brand who is ready for global business, chatbots can solve customer care problems in
multiple languages and 24/7, 365 days a year. This allows a business to scale up its
operations to new markets without having to worry about multiplying incoming requests to
be handled.
9 The implementation of a full functioning chatbot provides businesses with cost savings as
it is much cheaper and faster than creating a cross platform application or hiring
employees for each task. Businesses have a variety of options from ready-made software
developed by Facebook, Microsoft and other large IT companies. Since chatbots are
automated solutions, they allow organisations to handle many customers at once, and
simultaneously. By “employing” chatbots that complement human agents, businesses will
not only save on employee costs but also avoid the problems caused by human errors.
Because customers can easily access chatbots within seconds and start interaction
immediately, user acquisition is also associated with lower cost.
10 Chatbots provide great speed, are cost-effective, and are easy to implement, maintain and
use, making them a great back-up for employees for relatively basic and repetitive tasks.
The biggest challenge businesses need to pay attention to, is the conversation capability
or “personality” of their chatbot in order to increase or even just retain their brand
perception and customers.