Insights

Chatbot Automation 101: The What, Why, and How

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Insights
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7 mins to read

In 2016, the chatbot market had a mere value of $190.8 million. It was impressive, but not as much. By 2025, this value is expected to reach $1.25 billion, a humongous leap. 

The growth in the industry's value is a testament to the importance and increasing adoption of chatbot automation. Customer service has always been and will always be crucial for businesses. Chatbots only make it better and quicker. 

In this guide, we take you through the basics of chatbot automation. We explain a few types and give you a step-wise approach to using one for your business. 

What Is Chatbot Automation?

If you ask IBM, they would say that a chatbot is a ''computer program.'' We have to agree. A chatbot acts as an alternative to human conversation. Instead, it's a computer program that talks to the end user. 

A common misconception about chatbots is that all of them have artificial intelligence (AI) capabilities. That's not true. Although many chatbots are AI-empowered, most only follow a pre-programmed set of rules. 

Modern chatbots use conversational techniques such as natural language processing (NLP), machine learning (ML), and deep learning to simulate human conversation and provide accurate and efficient responses. 

Chatbot automation simply means using these chatbots to automate certain tasks or processes. For instance, in customer service, this could mean using chatbots to handle common inquiries. What does that do? It frees up human support agents to handle more complex and critical issues. 

Similarly, in e-commerce, chatbot automation can assist in product recommendations or order tracking. Chatbots used in telemedicine aid patients in appointment scheduling. The options are endless. 

Examples of Chatbot Use Cases

Speaking of options, here are a few types of chatbots used in different industries: 

  • Customer Service Chatbots: As mentioned earlier, these chatbots help customers with common questions and issues. You usually ''train'' these chatbots with a set of FAQs and responses. When a customer asks any of the questions in the chatbot's data repository, it will provide the appropriate answer. Goodbye, wait times and frustrated customers! 
  • Appointment Booking Chatbots: Have you ever booked a dentist's appointment online, only to realize you have to call their office to confirm your booking? Yeah, it's not fun. But with appointment booking chatbots, you can book and confirm appointments seamlessly through a quick conversation via messaging platforms like Facebook Messenger.
  • Product Feedback Chatbot: These chatbots collect customer feedback. For instance, they may automatically send a feedback form to someone who has made a purchase on your website. 
  • Finance Chatbots: Nowadays, the banking sector is also using chatbots. If you log in to your online banking portal, it will likely have a chatbot that can assist you with basic tasks like checking your balance or transferring funds.

Other use cases include sales chatbots, HR chatbots for employee onboarding, travel chatbots for flight and hotel bookings, and education chatbots. 

Types of Chatbots in Customer Service

There are a few different types of chatbots in customer service. You should be familiar with their working mechanism to decide which one to use for your business. 

Rule-Based Chatbots

Rule-based chatbots are the earliest form of chatbots. They are also called scripted chatbots. These chatbots are fed predefined scripts or rules that determine how they respond to customers' queries. 

They use simple if-then statements to select the appropriate answers from their database. For example, if a customer asks about the store's opening hours, the chatbot will say, ''Our store is open from 9 a.m. to 6 p.m. from Monday to Friday.''

When to Use: These chatbots work well for businesses that have a limited number of customer inquiries or frequently asked questions. 

Self-Learning Chatbots

Self-learning or adaptable chatbots use AI systems to ''learn'' through human interactions. They enhance their knowledge and conversational skills over time. 

When to Use: It's best to employ self-learning chatbots for businesses with complex product/service offerings. For example, an e-commerce store with a diverse range of products might need a self-learning chatbot to assist customers with specific product inquiries. 

Task-Oriented Chatbots

As the name gives away, task-oriented chatbots handle specific tasks only. For example, they may: 

  • Help with employee onboarding processes, like filling out forms
  • Assist customers with reserving a table at a restaurant
  • Book a flight ticket for the customer 
  • Help schedule appointments 

When to Use: Businesses should use these chatbots to automate repetitive tasks. 

Conversational Chatbots

A conversational chatbot talks to you. That's right. It can hold conversations, tell jokes, and even make small talk. A good example of a conversational chatbot is the Snapchat AI. 

When to Use: SaaS businesses can use conversational chatbots to engage with customers and improve brand experience.

Why Use Chatbot Automation in Your Business?

Be it conversational or task-oriented, a chatbot can help in many business domains. The following benefits of chatbot automation should convince you to invest in one. 

Cost-Savings

It's quite simple to grasp how chatbots help businesses save costs. A chatbot does what ten human employees may have been previously doing. That means you don't have to pay salaries, healthcare benefits, and other costs associated with human employees. 

Also, chatbots can reduce customer churn and improve retention by providing timely and accurate support. That ultimately translates to more sales. 

Consistency in Answers

A rule-based chatbot will always answer a question in the same way. It cannot deviate from the script. But a human agent can. They may even give inaccurate answers. 

Multi-channel Support

Chatbot automation also allows businesses to provide customer support across multiple channels. Customers can reach out to a chatbot on social media, company website, through email, or even via SMS. 

Multilingualism

Modern chatbots can speak multiple languages. If you have an international customer base, it would be wise to invest in a chatbot that can engage with them in their native language.

Not only will it help improve customer experience, but it will also make your business appear more welcoming and inclusive. 

Lead Generation and Customer Insight

The data you collect from chatbot interactions can help identify customer preferences and buying patterns. You can also find your audience's pain points. It's first-party data that can help you improve your offerings. 

Round-the-Clock Availability

Human support agents have to go home at some point. If you outsource customer service to agents in a country with a different time zone, you can provide 24/7 support. But that comes with additional costs. 

The alternative is a chatbot that provides support round-the-clock. It doesn't sleep or get tired. So it can handle customer issues at any time. 

How to Use Chatbot Automation in Customer Service?

Given the benefits of chatbot automation, using them in customer service is a must-do today. Here's how. 

Step 1: Identify Why You Need a Chatbot

Start by asking yourself why you want to introduce a chatbot into your customer service. Do you want to provide basic support? Will the chatbot handle FAQs? Or will it focus on lead generation? 

When you know the purpose, you can make a list of requirements. Then, you can use them to select a chatbot platform. 

Step 2: Determine the Type of Chatbot You Need

Now, choose which type of chatbot you need. If your customer service is simple and straightforward, a rule-based chatbot will suffice. But if you want advanced AI capabilities, choose a machine-learning chatbot. Just know that the latter will cost more. 

Step 3: Choose the Right Platform or Tool

Remember the list you created in Step 1? It's time to put it to use. 

Search for chatbot platforms or tools that meet your requirements. Some factors to consider are: 

  • Type 
  • Cost
  • Ease of use 
  • Integration capabilities
  • Customer support 

Step 4: Develop and Train Your Chatbot

Once you select the platform or tool, it's time to get your hands dirty. The next step is to develop and train your chatbot. Here are some steps: 

  • Start by creating conversations for your chatbot. List down all possible customer queries and create responses to them. 
  • Add some personality to your chatbot's responses. An emoji here and there wouldn't hurt. 
  • Teach it specifics. Train your chatbot using existing customer interactions. 

Step 5: Integrate with Existing Systems

Integrate the chatbot with the customer service platform you're currently using. When you're in Step 3, don't forget to check the integration capabilities of the chatbot. Only choose a chatbot if it will work seamlessly with your existing solutions. 

Step 6: Test and Monitor Performance

Use the chatbot yourself and with a few others to test its performance. Check if it can handle various types of queries. 

Then, roll it out to the public. Monitor your chatbot's performance over time and make changes to the script if required. 

Step Up Your Customer Service With Automated Platforms

Chatbot automation can change the game; we're advocates for it. But don't disregard human interaction altogether. You need a blend of human support agents and chatbots to provide efficient customer service. 

How do you accomplish this? Using a customer service tool like JustReply that lets you handle the human side of things. The tool's minimalist inbox, speedy macros, engaging help center, and AI-supported smart editor make customer service a breeze. Check it out today. 

Experience magic with JustReply.

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