First, what is a chatbot? Basically, a chatbot is an automated program that chats with your customers. It is usually used for resolving a complaint or answering questions or giving explanations. Most people see chatbots as a way to get help quickly.

Using a chatbot is like a tennis match. There is back and forth action and sometimes you hit, other times you miss. The good news is that chatbots are improving all the time.

There are 2 kinds of chatbots: simple and smart. Simple chatbots are programmed to work using pre-programmed text that they understand. This type of bot usually displays so users can respond in a linear fashion.

Smart chatbots are used to answer or to provide more detailed information. They rely on artificial intelligence (AI) to communicate with user. Unlike simple chatbots, the smart variety can understand trigger words and sentence structure. They will then provide answers based on the topic.

Sounds good on paper but the reality is, chatbots have high failure rates. Smart chatbots are prone to more mistakes because there is more room for error.

Best Use For Chatbots

Chatbots are most often used for customer service. According to 2018 State of Chatbots report, 35% of respondents said they would use a chatbot for resolving a complaints or problems or for getting detailed answers or explanations. In other words chatbots are used by people to get answers or help quickly.

For example, many of us have called customer service only to be put on hold for long periods of time. After waiting for hours, many of us are told to go to a specific page in their website which can resolve the issue. All of this can be resolved by using a chatbot.

A good starting point is to look at what your customers are looking for when they go to your website. For example, restaurant customers go to their website in order to book a table, find the menu, operating hours or delivery availability. For an online clothes shop, a chatbot can be used to check for stock availability or delivery options. Keeping chatbots simple and helpful will make customers thank you.

Online Shopping

Chatbots are also great at online shopping. Tell it your size, color preference and occasion and it will quickly find something for you. Additionally, chatbots can be programmed to remember customer preferences so they will be able to suggest something helpful the next time customers visit.

Answer Common FAQs

FAQs and chatbots are a bit tricky. Customers usually go to the FAQ page in order to find questions to their answers. However, not all customers are willing to scroll through the FAQ page in order to find their answers. This is where your chatbot comes in. For example if you want to find out how much shipping costs for Melbourne, you can simply type in this question instead of scrolling.

Reasons To Use A Chatbot

Why use a chatbot and not a customer service representative (CSR)? According to IBM, businesses spend $1.3 trillion on 265 billion customer service calls each year. This means 504,185 per minute. Can you imagine the number of people needed to answer these calls or the backlog it would cause? Chatbots can be used to answer questions for many of these calls leaving your customer service representative to answer more complex calls.

Chatbot Magazine reports that businesses can save up to 30% on customer service costs by using chatbots. Aside from cost savings, chatbots can also operate 24/7 in order to provide instant answers and assistance. This means you’re saving money while keeping customers happy.

However, using chatbots does not mean that you won’t need your CSR anymore. Customers should have the choice between talking to a real person and a bot. Introducing chatbot will give them a wider choice and time poor customers will be grateful.

Chatbots can also help you reduce expenses. In Australia, the average CSR can cost a business up to $50,000 annually in salary while a chatbot costs around $2,400 annually. Depending on the size of your business you can hire 1 or 2 CSR and then let the chatbot handle the rest.

Chatbots can also help drive sales. For example, you can create a series of ads targeting existing customers and then introduce them to your chatbot. This means that you can drive up engagement in channels where you use chatbots like Messenger and other social media platforms.

Wrap Up

So, do you need a chatbot? It depends on your business. If you and your CSR team find that you are spending a lot of time answering common questions then a chatbot can make your lives easier. Chatbots are also a good idea if you want to increase sales, raise brand awareness or make your customers happier.

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