Understanding Chatbots and How They Work

Many years ago, business owners thought that chatbots were a way to palm customer service off onto technology. In reality, chatbots are effective communicators and improve the experience for all customers. As artificial intelligence and machine learning improve, it’s making more and more sense for businesses to implement this technology. Here’s everything you need to know! 

What’s a Chatbot?

As the name suggests, this is a bot…that chats. Thanks to AI and machine learning, the technology can simulate natural human conversation and communicate with customers. Let’s say that a consumer has a question; they click onto the chatbot and ask the question. Because of the way that the chatbot has been programmed, and the questions it has answered before, the chatbot attempts to steer the consumer in the right direction. 

Over the years, plenty of misconceptions have developed around chatbots. This includes: 

• Customers want to speak to real people
• Chatbots can’t answer questions
• People get frustrated when the chatbot can’t answer their question

 As you’ve probably guessed, these are called misconceptions, so they aren’t quite accurate. Firstly, many studies and survey results have shown that customers are more than happy to communicate with a chatbot. For example, a Userlike survey recently revealed that nearly 70% of people prefer chatbots because they can get quick answers to questions. 

Just in case you’re interested in other statistics, over half of all businesses using chatbots boost the number of high-quality leads they receive. Elsewhere, they can reduce your customer support costs by around 30% and save many hours each day. 

Secondly, it won’t surprise you to hear that chatbots are adept at answering questions and people don’t get frustrated (you’ll learn why in a moment). 

How Does a Chatbot Work?

If you’re interested in the technical explanation, a chatbot operates independently of the customer support team. Rather than a member of the customer support team answering all questions, this technology takes over instead. It processes questions, considers the request based on previous interactions, and responds just like a real person.

As a business, you’ll set the chatbot up with certain scripts to follow. However, machine learning allows the technology to continually improve its service to all customers. It was mentioned earlier that consumers don’t get frustrated, and this is because the chatbot passes consumers on to real customer support members if it cannot answer the question or request effectively. 

Benefits of Chatbots

The first and most obvious benefit is that everybody wins with a chatbot. The customer gets a better experience (and questions answered quickly), members of the customer support team suddenly have more time to complete other tasks (and they aren’t constantly answering the same questions), and the business saves money. 

For the longest time, businesses assumed that chatbots were an example of escaping one’s responsibility. In reality, it allows for a better user experience for all customers. Rather than having to wait for a real operator, they can ask the chatbot simple questions. 

As you’ve probably guessed, this should lead to more sales too. Even while the whole business is asleep, the chatbot generates sales through simple conversations with customers. For example, somebody on a shopping binge at 2am can ask the chatbot questions and receive good answers. Now, you’re generating sales even while no employees are awake. Without a chatbot, customers with questions outside of opening hours will go elsewhere instead. 

Finally, chatbots continually improve thanks to machine learning. Therefore, they only ever get better at adhering to requests and providing the right response to customers. If it can’t help, it encourages them through to real members of staff. If you need help getting started, King Kong in NZ has extensive experience in this area.