10 Benefits of Using Chatbots for Your Business

More and more businesses are beginning to appreciate chatbots. The ability of AI chatbots to mimic human conversations and provide instant digital connection has paved their way to success. Modern chatbots handle online requests 24/7, create brand engagement, reduce human errors, and save costs of customer service. Apart from that, chatbots particularly appeal to “speedy” Millennials by keeping them constantly “updated.”

Even business giants such as Sephora and Marriott already see the benefits of chatbots for business process automation (BPA). At the same time, chatbots are also available to start-ups as they can be easily integrated into websites and messengers, including Slack and Telegram. Obviously, self-help services, including chatbots, will make up the future of customer service.

An Oracle survey is one that shows us the emerging demand for AI chatbots for business – it predicts that 80% of companies will use chatbots by 2020. According to Gartner, 85% of customers will bypass human interaction in business transactions roughly at the same time.

What is a chatbot and how does it work?

In a nutshell, a chatbot is a relatively small piece of software that performs pre-written sequences of actions in response to user’s requests. Even simpler—it’s a piece of code that is able to talk to people. It can be one of the chat app features or a part of a website.

There are two main chatbot types: rule-based and AI-based. The first type understands only a range of choices that it has been programmed with. They are easier to build but less capable. The second type is more sophisticated. Artificial intelligence inside the bot is trained by machine-learning algorithms meaning they can understand more than the words. It’s able to identify the context and intent and replies accordingly.

Both types are popular among social media and messenger apps because they are helpful in customer support and outreach. There is quite a list of platforms that implement them: Facebook Messenger, WhatsApp, Slack, Telegram, Kik, and so on. Even your website can have one!

What are the benefits and risks of chatbots for startups?

Are you a startup owner without a proper budget for online customer support? Then implementing a chatbot into your business might become a good solution.

Benefit #1: Saving costs

A chatbot might save your budget on customer support agents. McKinsey estimates that companies already save up to 29% on customer services’ salaries by employing chatbots instead. The research “Chatbots: Retail, eCommerce, Banking, and Healthcare 2017–2022” even predicts that by 2022, chatbots will save up to $8 billion per year for business—a tremendous increase from just $20 million per year in 2017.

Apart from that, chatbots for small business websites can simultaneously engage in instant conversations with thousands of clients. No matter what time of the day, each customer will receive an immediate reply from a friendly chatbot.

Benefit #2: Customer satisfaction

A single chatbot can increase your customers’ satisfaction. Chatbots efficiently reply to customers’ simple queries in the politest way, no matter how roughly a customer behaves. Chatbots also create a unique perception of 24/7 engagement with customers, which is particularly relevant to the behavioral traits of “I want it now” Millennials.

Using AI-based chatbots for business and interaction with Millennials remains especially beneficial as 65% of US millennials prefer getting online support instead of calling, reports an IBM survey.

Benefit #3: Task automating

Chatbots reduce the risk of human errors by performing the most boring, automatic repetitive tasks. While Slack bots engage with mundane operations, such as confirming orders in online stores, your customer support agents will save their work time for more important tasks. Furthermore, chatbots never catch a cold or require a coffee break—they tirelessly perform their automatic functions without any kind of procrastination.

For example, Globe Telecom has increased its employees’ productivity by 350% after the launch of a Facebook Messenger Chatbot. Moreover, the chatbot helped the company to decrease call volume by 50% and simultaneously increase customer satisfaction by 22%.

Undoubtedly, chatbots cannot fully replace customer support agents at this point. At the same time, however, they provide numerous advantages to start-ups: reduce costs of hiring customer support staff, increase customers’ satisfaction, and improve productivity.

Even despite these advantages, there are some risks to take into account when applying chatbots to your customer service.

Risk #1: Lack of emotions

Unfortunately, unlike humans, chatbots are emotionless. Even though their responses can sound humanly enough, they are a piece of code and that may disappoint some customers. Your live agents are better at understanding clients’ emotions and respond accordingly. With pre-written conversations, chatbots successfully handle only conversations that follow a specific flow. But they can struggle with unexpected turns and pivoting.

Risk #2: Limited responses

Chatbots may be faster in overall customer service, but they are not capable of covering all the issues. Simple chatbots are limited in capabilities and have a little number of responses for customers. Thus, some customers won’t get the answers to unscripted questions.

Risk #3: Maintenance

To make chatbots highly conversational and context-aware, you have to make them more complex. The more complex a chatbot is, the more problems it can solve. Some AI-based solutions cost like a whole app. Also, it will need way more time to learn conversational patterns.

Such a sophisticated chatbot requires constant review and optimization so they can grow their knowledge base by getting new requests and questions. You will have to retrieve them from the conversations your bot already has and determine the most common queries they face. Research takes time and effort, so be sure you have enough resources for it.

Benefits of chatbots for business

Do you still doubt the pros of using messenger or voice chatbots? Let’s get to the arguments and cases.

1. Chatbots show better results than emails in e-commerce

According to SocialMediaToday, messenger chatbots show higher open and click-through rates in comparison with regular emails. In particular, chatbots have CTRs ranging from 15%-60%, while an average email marketing CTR equals only about 4%. Consequently, a range of online marketers uses chatbots for delivering information to their websites visitors via pop-ups. Some analysts already predict that the clash between chatbots versus email marketing may become the biggest digital battle of the century.

2. Chatbots create brand stories

Interactive chatbots create personalized content and efficient storytelling. Several popular brands, from Call of Duty to Starbucks and National Geographic, have used “friendly” bots to engage with fans and build communities. For example, the National Geographic’s bot Genius (who looked like a little Albert Einstein) answered tough questions about physics and philosophy. Call of Duty used a range of bots–“male” and “female”, depending on the games’ settings, to make a personalized gaming quest with fans. As a result, such “friendly” chatbots have created personal stories for each customer and thus increased brand loyalty.

3. Chatbots reduce an HR team’s work

As recruiting experts observe, as many as 75% of job applications come from underqualified job seekers. Can you imagine poor HR officers wasting their time screening thousands of irrelevant applications? Nevertheless, AI bots have already simplified the work of many recruiters across the United States by doing various pre-screening, training, and recruiting tasks.

For example, the US Army uses the SGT STAR chatbot to recruit soldiers. SGT Star answers questions about Army careers, education, and training. Another remarkable AI chatbot Mya automates outreach and communication across the end-to-end candidate lifecycle and increases HR departments’ productivity up to 144%.

4. Chatbots save money

Sure, implementing chatbots requires investments. Still, this way is way cheaper than hiring a whole customer service team. Infrastructure, salaries, training—all these will be gone (at least partially) once you start working with a chatbot.

Several pieces of research prove this point. For example, IBM says that chatbots are able to reduce customer service costs by up to 30% thanks to speeding up response time and automating the process.

5. Chatbots offer customer support

Some people believe that a chatbot is only capable of answering simple queries. But a well-built chatbot can provide customers with value-driven and context-based support that will make a positive impression.

AI-based chatbots are the best for this approach. It uses the available data to build a relevant answer that makes chatbots go beyond answering pre-written questions. It enhances analytical possibilities and creates new opportunities for business development.

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Benefits of chatbots for customers

Here is what your customers will get if you implement a chatbot.

1. Chatbots are great at customers’ personalization

Thanks to artificial intelligence and automation, chatbots provide a tremendous personal appeal by using customers’ names in conversations or advising products based on past purchases. Taking into account a rather stagnant atmosphere of the whole Internet, users spark their interest only in special stuff, for example, something tailor-made to their specific needs.

Accenture’s report confirms that consumers will 91% more likely buy from an e-store that calls them by name or provides personalized recommendations based on past purchases. For example, 35% of Amazon’s consumer purchases result from tailor-made product recommendations such as “products related to this item,” reports McKinsey.

2. Chatbots instantly warn customers about dangers

This is particularly relevant to the fin-tech and hospitality industries. Due to chatbots’ instant messaging feature, banks and travel companies might quickly warn their customers about dangers or force majeure situations. For example, in the case of unauthorized transactions on a bank account coming from London, an AI chatbot sends an instant message to find out whether a customer is indeed in London. Travel companies’ chatbots might warn their customers about hazards and weather changes.

Some fin-tech bots go even further. The Bank of America chatbot “Erica” suggests for customers what to do with their money, while the HiCharlie bot warns about the upcoming banking charges. At the same time, customers always have an option to turn off a chatbot in case they find it annoying.

3. Chatbots are available 24/7

Unlike live customer support agents, chatbots are always available. They do not depend on the time of day, weather, or the current load of the call center. Chatbots let you manage a never-ending stream of queries from clients and give them an immediate response without any waiting time.

4. Chatbots save money on lawyers

Numerous law firms, B2B giants, and public services companies already make huge savings on lawyers by using AI chatbots. For example, with DoNotPay chatbot, one can challenge parking tickets from around the United States. Visabot helped with numerous migration issues, Lexi creates non-disclosure agreements, and Parker answers questions about data breaches and privacy law.

5. Chatbots make a personalized coffee

A Berlin-based start-up company Bonaverde has recently launched an IoT chatbot that can make a cup of coffee via text. The Bonaverde Berlin smart coffee maker roasts, grinds, and brews coffee from a smartphone command. Users can schedule coffee as well as select roast profiles and grind settings through the chatbot. At this time, the service remains available only in Berlin.

Our experience

At Yellow, we have worked on the AI chatbot with a distinct Belarusian name “Alesya,” which aimed to simplify monthly utilities’ payments. Whenever a customer decided to pay his/her monthly bill (Internet, TV, utilities) with a bank card, our chatbot “Alesya” would typically inquire about a customer’s location and a bill’s name. Based on this data, “Alesya” would provide a customer with a correct payment ID.

From the technical side, we designed “Alesya” as Yellow’s original dialog flow–a conversation model, which allowed configuring proper interaction between a user and a bot. Whenever a user gave an input, for example, “pay utilities,” our dialog flow would immediately start parsing that input. Consequently, the dialog flow’s agent (a module responsible for the transformation of users’ requests) returned the relevant response. In the case of “Alesya,” two intents mapped users’ inputs to responses—a location and a tax (bill) name.

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Final thoughts

In conclusion, chatbots appear to be conquering the world at tremendous speeds. Messenger chatbots are successfully applied in e-commerce, online marketing, customer service, the fin-tech industry, the hospitality industry, recruiting, as well as in legal services. Voice-activated chatbots are also quite popular and used in many devices, for instance, in Apple’s AirPods and Amazon Echo. Chatbots for businesses efficiently serve both small and large companies, as well as B2B and B2C.

The key benefits of chatbots include:

• increase in customers

• budget’s reduction of staff

• a rise in customers’ loyalty

• automation of routine tasks

Apart from that, the use of chatbots in business provides high open and click-through rates, create brand stories, rise personalization levels, and guarantee instant communication. At the same time, it is too early to talk about chatbots replacing humans. So far, chatbots only remain efficient and speedy support tools.

We hope you liked this post. If you are interested in learning more about how you can benefit from implementing chatbots into your business call us or drop a line. We'd love to help you.