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Published Sep 23, 21
12 min read

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What Is A Chatbot? How Is It Changing Customer Experience

But with Replika bot it is all about chatting. And, believe it or not, forming a (romantic) relationship with AI. While this may sound a little bit dystopian and scary, millions of users believe it works. They chat with Replika for fun, to blow off steam, or to find a reliable companion.

They are bound to stay with us and will grow in popularity with the increasing adoption of messaging apps and new digital communication channels. You should get used to them as more and more companies are choosing chatbots for marketing purposes and to automate customer service. While—at least in theory—nothing can replace interaction with another human being, chatbots are all too convenient.

Whats A Chatbot

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A chatbot -- sometimes referred to as a chatterbot -- is programming that simulates the conversation or "chatter" of a human being through text or voice interactions. Chatbot virtual assistants are increasingly being used to handle simple, look-up tasks in both business-to-consumer (B2C) and business-to-business (B2B) environments. The addition of chatbot assistants not only reduces overhead costs by making better use of support staff time, it also allows companies to provide a level of customer service during hours when live agents aren't available.

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A stateless chatbot approaches each conversation as if it was interacting with a new user. In contrast, a stateful chatbot can review past interactions and frame new responses in context. Adding a chatbot to a company's service or sales department requires low or no coding. Today, a number of chatbot service providers allow developers to build conversational user interfaces for third-party business applications.

If the user interacts with the bot through voice, for example, then the chatbot requires a speech recognition engine. Business owners also must decide whether they want structured or unstructured conversations. Chatbots built for structured conversations are highly scripted, which simplifies programming but restricts the kinds of things that the users can ask.

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In sales, a chatbot may be a quick way for sales reps to get phone numbers. Chatbots can also be used in service departments, assisting service agents in answering repetitive requests. For example, a service rep might provide the chatbot with an order number and ask when the order was shipped.

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Chatbots such as ELIZA and PARRY were early attempts at creating programs that could at least temporarily fool a real human being into thinking they were having a conversation with another person. PARRY's effectiveness was benchmarked in the early 1970s using a version of a Turing test; testers only made the correct identification of a human versus a chatbot at a level consistent with making a random guess.

What Is A Chatbot And How Does It Work

These bots interact with users through a set of predefined questions that progress until the chatbot has answered the user's question. Similar to this chatbot is the menu-based chatbot that requires users to make selections from a predefined list, or menu, to provide the bot with a deeper understanding of what the customer is looking for.

Customizable key words and AI are combined in this bot to provide an appropriate response to users. Unfortunately, these chatbots struggle when faced with repetitive keyword use or redundant questions. These chatbots combine elements of menu-based and keyword recognition-based bots. Users can choose to have their questions answered directly, but can also access the chatbot's menu to make selections if the keyword recognition process produces ineffective results.

What Is A Ai Bot

They use ML and AI to remember conversations and interactions with users, and then use these memories to grow and improve over time. Instead of relying on keywords, these bots use what customers ask for and how they ask it to provide answers and self-improve. This type of chatbot is the future of chatbot technology.

They can be created using text-to-speech (TTS) and voice recognition application program interfaces (APIs). Current examples include Amazon Alexa and Apple's Siri. Examples of chatbot uses Chatbot use is on the rise, both in the business and consumer markets. As chatbots improve, consumers have less to quarrel about while interacting with them.

What Is Chatbot Platform

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Chatbots have been used in instant messaging applications and online interactive games for many years, but have recently segued into B2C and B2B sales and services. Chatbots can be added to a buddy list or provide a single game player with an entity to interact with while awaiting other "live" players.

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In sales, chatbots are being used to assist consumers shopping online, either by answering noncomplex product questions or providing helpful information that the consumer could later search for, including shipping price and availability. Chatbots are also used in service departments, assisting service agents in answering repetitive requests. Once a conversation gets too complex for a chatbot, it will be transferred to a human service agent.

Step 1: Understand Your Goal Behind Making the Chatbot, Before you start to make a chatbot, it is important to understand what you want your chatbot to do. Determining this can help you select the right chatbot platform for your business. This information will also guide you to create conversations that can address your end goals.

You don’t need to leverage artificial intelligence for this. However, if your end goal is to pitch products and engage customers to increase sales, then you need to make an AI-powered chatbot. Your chatbot should have the ability to deliver the right solutions to a variety of questions that your customers may ask.

Dom allows you to place orders and repeat previous orders without you having to create an account. You can place an order from the entire restaurant menu without having to leave the comfort of your favorite app. Image source – Digital Marketing InstituteStep 2: Examine the Communication Habits of Your Customers, They way your customers interact with your business serves as a primary factor for deciding how you should design and develop your chatbot conversations.

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Step 3: Design a Chatbot Conversation, Chatbot conversations need to be accurate, interesting, and engaging. The way your chatbot communicates is the differentiating factor that decides the quality of customer engagement it can deliver. Due to advancements in natural language processing (NLP), chatbots are now able to understand user intent.

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Why Chatbots Are A Must-have For Businesses

Chatbots — automated conversation systems — have become increasingly sophisticated. Should you design and deploy one that can interact with your customers? If you’re an executive making that decision right now, you may feel caught between A.I. hype on the one hand, and the fear that machines might not treat your customers right on the other.

The most powerful chatbots — and the ones that can actually make an impact on customers’ experience and company bottom lines — are virtual agents. These are chatbots powered by an artificial intelligence that can understand and answer a wide variety of customer questions. Virtual agents must scan the customer’s request, combine that with whatever other information is available to them (such as their past purchases, account settings, or geographic location), and then identify the customer’s intent: what she’s trying to accomplish.

Top Reasons Your Business Needs A Chatbot

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Just as Web automation in the 90s and mobile apps in the 2010s improved customer convenience, properly designed virtual agents can improve customer satisfaction. For example, at the U.S. satellite television operator Dish Network, customers already rate their satisfaction after chats with a virtual agent on par with responses from human agents, and those scores are improving as the virtual agent handles more questions more effectively.

When considering implementation of a virtual agent, business leaders should consider what kind of companies are best served by chatbots, how to integrate them into their existing customer service system, and which distribution channels are most fruitful. Virtual agents are most effective in customer service applications in service-heavy industries like financial services, retail, travel, and telecom.

What Are The Benefits Of Chatbot For Your Business

Deployments are most likely to pay off in companies fielding thousands of customer chats or calls via contact centers with hundreds of agents. There are two reasons for this. First, transcripts from those contact centers generate the masses of data needed to train the A.I. that powers the virtual agent.

If virtual agents can power customer service, can they also do sales? Despite the hype flowing around about “conversational commerce,” at this point, customer service applications are far more likely to be successful than sales applications. Only 2% of owners of Alexa-powered Amazon smart speakers have ever bought anything with their devices.

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We’ve seen sales applications flop; one large retailer had to scrap a virtual agent deployment because the decision process for what to do with the customer turned out to be too complex to automate effectively. Conversational platforms get all the press these days. Facebook and its Messenger application are ubiquitous, and Amazon announced that it had sold more than 100 million Alexa devices by the end of 2018.

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But typically, the harder problem — and the one with the broadest impact on your business and on customer experience — is serving the customers who you already have a relationship with. Serving those customers works far better right now in an environment where you have complete control, as Bank of America did.

Does Your Company Really Need A Chatbot

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Virtual agents are hampered in recognizing a customer’s intent if they aren’t wired into the systems of record that hold your customer information. At one hotel chain we worked with, it took a decision at the highest executive levels to persuade the IT folks to open up their systems to virtual agent interfaces.

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Start with small pilot projects where you can demonstrate success. Dish Network, for example, first piloted virtual agents specifically to help with the flood of orders for pay-per-view fights. Once the system had proven itself in that context, the company began to expand it to the broader set of customer service questions.

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The number of intents they can recognize will expand as your company identifies which questions are still getting handed off to human agents. A virtual agent system will keep getting better — especially if you’ve set it up in the right application, with the right objectives, and in the right channels to maximize success.

Even so, we think this sort of conversational interface to companies is destined to displace the current app and Web interfaces over the long term, simply because it’s faster and in many cases, better for the customer.

Reasons To Consider Using A Chatbot On Your Website

The online experiences businesses are providing no longer match the way people prefer to buy. In the on-demand, real-time world we live in, where everything seems to be just one click away, consumers expect to be able to find the information they’re looking for quickly and easily. When they can’t, they get frustrated, and could end up turning to competitors who are providing the type of online experience they’re looking for.

Image Source – IMPACTWhat are the different types of chatbot conversations? Structured interaction is a logical flow of information that works similar to the FAQs section on a website. It takes menus, choices, and forms into account and can be designed easily based on your analysis. In this case, you collect commonly-asked questions from your customers and then set their answers in your channel.

Also, if you want to store and analyze customer data, making a code-based chatbot will be your best bet. Design Elements to Use in Chatbots, In order to ensure that the chatbot offers a smooth and interactive user experience, it is important to include the right design elements. Of course, the design elements will depend on the platform you choose to build your bot on.

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1. Buttons, Buttons enable users to take action. When a user clicks any button, it prompts an action. It is a good idea to include interactive buttons to help users make decisions faster. You can add buttons to ask users to choose one of the multiple options you have to offer.

2. Cards, If there is any additional information (apart from the conversation) that you want to serve users, you can leverage cards. You can enter text, links, images, and buttons into cards which the user can view as a side column during their conversation. Users can click the cards relevant to them or they can choose to hide them.



Smart Reply, Smart reply is a feature that allows users to respond to questions asked by the chatbot without actually typing anything. You can use this design element when you can give a list of available options to the user. This can make it easier for users to interact with your chatbot.

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In addition to offering three responses to choose from, Gmail provides you an option to auto-complete your sentences without typing anything. The GIF below shows how this smart reply feature simplifies the lives of Gmail users. GIF source: Google BlogUsers can opt for this feature when they want to browse another feature of your chatbot that is not otherwise readily available.

1. The Chatbot Should Be Able to Direct Users, To give continuity and direction to any conversation, a chatbot should ask questions that are relevant to the conversation. They should also offer options that are easy to select with a “tap.”If a user does not know what they want, the chatbot should be able to provide directional cues to help them.

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This way, the user can easily figure out all of the options that the bot has for them. 2. The Chatbot Should Connect with Users on a Personal Level, You should make a chatbot that effectively incorporates personalization. Your bot should address users by their names, greet them when the conversation begins, and give personalized suggestions based on previous conversations.

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If the bot needs a certain amount of time to process a request, it is a good idea to use fillers to keep the user engaged for that time. If you leave a user waiting, it can break the flow of the conversation and, in the worst case, the user may also leave the conversation.

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