The Beginner’s Guide To Chatbots In Customer Service

The world today is experiencing the magic of artificial intelligence and the customer service industry is no different. AI in customer service has been seen in the form of chatbots that are well equipped with conversational software to help navigate customer queries and has evolved to do so much more in recent years.
Gartner estimates that by 2022, 70% of white-collar workers will interact with conversational platforms daily, as chatbots are the ubiquitous and defining trend of industries this century. With Alexa and Siri becoming commonplace in smartphones, it's only natural that industries (both large-scale enterprises and small-scale start-ups) invest heavily in bots that can transform how businesses function. Let’s understand customer service bots and the types available with industry use cases to help you incorporate them into your business processes.

Also read: Customer Service: Are Chatbots Better Than Human Agents?

What is a customer service chatbot?

A customer service chatbot is an artificial intelligence intelligence-powered bot that communicates with users through a real-time chat interface to provide customer service without needing a human agent. A customer service chatbot can handle multiple user queries simultaneously, saving time for human customer service agents to deal with more complicated issues.

Customer service chatbots can directly impact customer experience by providing prompt replies and updates, resulting in higher conversions and superior customer experience. With the help of Natural Language Processing (NLP) and machine learning, these AI bots continue to learn and ensure multilingual support, 24/7 assistance, and consistent quality service, resulting in customer trust and loyalty.

Types of chatbots for customer service

Essentially, chatbots are AI-centric conversational systems that can interact with humans through message windows, websites, or apps in the natural language. The most common types of chatbots are:

  1. Rule-based chatbots 
    Most organizations prefer these as they're widely available and can be easily implemented into different systems and processes. These are distinctly known for their ability to provide pre-defined answers to specific questions. Also called scripted or button-based chatbots, these display different button options and are used for basic websites that rely on FAQs and support queries. Rule-based chatbots are the precursors to the modern and sophisticated chatbots that are the norm today.

  2. ML-based / Keyword-recognition chatbots
    These bots are a bit more advanced than the scripted ones. They are trained to understand specific keywords and phrases from sentences typed in by customers. Based on the keywords used, they 'listen' to the needs of the consumers and deliver appropriate answers in line with those queries. However, there is a possibility that different questions containing similar keywords are misunderstood.

  3. AI chatbots or contextual chatbots
    These sophisticated chatbots are used rampantly by big organizations, and they leverage the best of ML and AI tools. These
    AI chatbots retain information such as user preferences and previous conversation history. The combination of deep-learning modules, natural Language Processing (NLP) algorithms, and AI and ML tools helps make these extremely intelligent and capable of handling complex tasks.

Chatbots and the AI Hype Cycle

It’s interesting to note that Gartner enlists ‘chatbots’ at the peak of inflated expectations—this is a testament to the fact that use cases are on the rise, and customer success stories will soon dominate the enterprise scene.

Chatbots are equipped with advanced self-learning algorithms that enable them to learn continuously and improve responses with time.

Some of the most common uses of chatbots include:

  1. Analyzing and optimizing processes: Chatbots can easily identify areas for improvement in business processes by analyzing unstructured data and evaluating scenarios.

  2. Contact center support: Chatbots are extensively used in customer service industries, providing personalized responses from unstructured data. Their capability of engaging with users in real time and providing relevant answers makes them a viable and scalable customer service asset.

  3. Fraud and risk management: Using these intelligent bots in the BFSI industry has its perks, as it helps indicate early signs of fraud, which can be nipped in the bud.

Also read: 5 Lessons NFL Teaches Us About Customer Experience

Top 8 benefits of chatbots in customer service

In recent years, with chatbots entering mainstream usage, they have revolutionized customer service as we knew it. Let's take a look at how:

  1. Reduced wait time: Consumers wanting to contact customer service agents no longer need to wait endlessly by their telephones to connect with the team. A quick message from a smartphone can elicit an immediate response by the team.

  2. Improving customer acquisition and reducing churn: Given that chatbots can respond quickly and are available 24/7, enterprises can use them for a dedicated FAQ section. Customers could just approach the bot, and they'll be directed to the accurate responses in seconds. This will eventually boost customer satisfaction and helps them get acquitted to the brand more closely. What's more important is that a satisfied customer will not be at any risk of deviating from the brand.

  3. Analytical data: When used correctly, sophisticated chatbots can be built with analytical tools. Positioned rightly, as an insights generator, it can access large quantities of customer data, mine through this, and obtain extensive relevant data.

  4. Free up resources where it matters most: When chatbots are comfortably used as the first level of contact between customers and the organization, you can free up your employees' bandwidth for more strategic decision-making roles.

  5. Seamless integrations: In some cases, there's a possibility that the chatbot in an application might not be able to handle the customer queries due to some complications. In that case, the bot can directly transfer the chat to a human agent with the required background information so consumers don't have to re-explain their scenarios.

  6. Personalization is a plus: If bots are deployed to communicate with customers over queries, they can skip the basic questions such as contact information, past historical data, etc., and spend more time obtaining the relevant information.

  7. Scaled growth: Chatbots, as compared to customer service agents, can scale efficiently at a fast pace. So, if there's a high volume of customers reaching out to your enterprise, having intelligent virtual assistants works better than employees who have a fixed amount of time and patience. Moreover, the investment versus returns scale for chatbots is far more lucrative!

  8. Reduced operating costs: Traditional customer service centers have high turnover rates, and new candidates need to be trained well before assigning them with live projects and tasks. Adopting chatbots can, therefore, eliminate the pressure of operating costs.

Today, chatbots are synonymous with AI bots, virtual assistants, conversational agents, or digital assistants. To begin with, all enterprises adopting AI-based software should consider investing in chatbots. Chatbots have the power to anticipate incidents through predictive analysis and recommend resolutions even before problems occur. Chatbot research is now heading toward humanizing the bot to exhibit emotional intelligence and build relationships with users.

Chatbot use cases for customer experience

As enterprises embrace the AI hype and focus on solving contextual, real-world issues, it becomes essential to adopt the right technology while ensuring high returns. This is where AI chatbots become important—not only are they efficient and accurate, but they also justify the ROI.

Also read: How to Deal with Difficult Customers: 5 Tips

Let's take a look at how some enterprises have adopted customer service bots and the transformations that have occurred:

  1. An American insurance provider grappling with challenges in customer service and retention adopted an intelligent chatbot to transform its approach. The conversational chatbot ensured that customers who reached out to the support staff were directed efficiently and their requests were expedited without incurring a high cost. The benefit for customers? Access to information within minutes that would have earlier taken a long, long time.
  2. An enterprise that works with database platforms used chatbots to increase the number of conversations with prospective clients significantly. With increased conversations and an automated scheduling process, the company increased its lead generation by almost 70%, freeing employees to work on more complicated tasks.
  3. The travel industry can also benefit by adopting chatbots. A leading passenger railroad service got an intelligent bot to act as a 'self-service’ option on their website. The bot helped users pre-fill forms, informed them about luggage restrictions, and answered many other questions directed at the bot. In addition to answering queries, the bot also helped cross-selling additional services. As a result, the company generated 30% more revenue than usual and saved considerably in customer service.
  4. Similarly, a cable internet provider faced the ominous task of dealing with users who often forget their passwords and launch into the retrieval procedures every time they log in. The company switched to a chatbot service with a self-service option to retrieve their credentials. Not only did this lead to a respite for the support staff, who earlier had to handle more than seventy thousand such requests monthly, but the chatbot also reduced the time taken to sort out the login issues by 50%.
  5. A famous food company recently adopted a customer service bot to enliven the process of ordering food online. The bot made the entire process seamless—asking the right questions, showing the responses with tantalizing food options, and offering other support options such as customizing the dish and live order tracking. This goes a long way in creating a relationship with and retaining a customer.

Today, customer service chatbots are one of the leading AI solutions companies must embrace to stand out. With the right training and implementation, these conversational interfaces can be adopted into different industries and take the enterprise a step closer to completing its digital transformation.

ThinkOwl is an AI-powered cloud customer support solution with everything organizations need to deliver extraordinary experiences across the end-to-end customer journey. Whatever industry you may belong to, if you wish to foster a customer-centric culture and deliver the best service and support, do not hesitate to try ThinkOwl. Sign up now for a 30-day free trial.


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