By Bethany Handy in blog — May 2, 2020

An Easy Guide to ChatBots and Conversational AI in Business

Chatbots and conversational AI are taking over the way we do business. In a survey of chief strategy officers, senior marketers, and sales executives, 80 percent said they already use chatbots or they plan to use them by 2020. That’s a huge number. Because of the ubiquitousness and importance of this new technology it’s important that it’s understood. Here is your guide to chatbots and conversational AI for use in business.

What are ChatBots?

A chatbot is an artificial intelligence program that uses text or audio to conduct a conversation. For example, have you ever visited a webpage and had a little bubble pop up with a message, such as, “What brings you to our site today?” or “Can I help you find something?” These programs invite you to start a conversation via text message, and can help businesses gather information to better serve their customers. Chatbots are usually governed by a set of pre-programmed rules (If the customer says this, you do that).

What is Conversational AI?

Conversational AI is a broader term that encompasses chatbots, virtual-assistants, such as Amazon’s Alexa or Apple’s Siri, and messaging apps. It’s a type of artificial intelligence that enables software to understand and interact with people naturally, and create a personalized customer experience.

How are ChatBots and Conversational AI Different?

Conversational AI refers to all artificial intelligence programs that interact with humans, and are able to carry on a two-way conversation. Chatbots are just one kind of conversational AI.

All conversational AI has the potential to revolutionize the way we do business, but each kind has its own best uses and correct areas of application. For example, virtual-assistant technology has the ability to analyze the intricacies of natural language and tone. It can therefore pick up on human emotions, where chatbots do not currently have this ability.

Who are ChatBots Best For?

Chatbots are best used for information gathering. They can both help customers find information, and supply businesses with useful feedback about the way customers use their site. For this reason, they can be great for use in customer service. Customers are able to interact with chatbots to ask simple questions about a product, find information on company policies, or even book appointments. Chatbots can help steer customers through the sales funnel, and provide an exceptional customer experience.

Because chatbot rely on a pre-programmed set of rules, they are great for directing customers and providing information, but they cannot provide general chatting. For example, you can’t interact with a chatbot like a human by asking about their day or what they plan on eating for dinner. Unless the programmer thought to program answers to questions like these, it will become confused. These nuanced conversations are better left to virtual-assistants or human agents. Chatbots are best used for specific tasks. Here are a few examples of the ways a chatbot can be used:

As a Greeter or Director

A chatbot can be programmed to help customers find their way around your website. Similar to the way a receptionist would greet a customer in a brick office. A chatbot can greet your customer upon landing on your webpage. It can then ask what they are looking for, and direct the customer to the appropriate page. It can also direct a customer to a human agent if needed. For example, you might have the chatbot gather information about the customer, name, account number, etc, and then place them in line to chat with a human agent. In this way, when the customer reaches the agent, all of the routine information has already been collected, saving the agent time.

For Status Checks

Routine account questions or status checks can be provided by a chatbot. For example, if the customer tells the chatbot they are looking for order tracking, the chatbot can gather account information from the customer and check on the order status. This kind of information can also be done through webpage forms, but chatbots provide a more personalized experience that’s closer to the experience of interacting with a human. It saves your human agents time, by avoiding having them preform routine tasks, but customers still feel that they have received a personalized experience. It’s a win-win.

As Shop Assistants

Provide a fluid and conversational shopping experience by using a chatbot to direct shopping. Customers can tell chatbots what type of product they’re looking for, and they can then ask questions about the product. Straightforward queries, such as, “What are the dimensions of this product?” can be answered by pre-programming frequently asked questions, and their answers, into the chatbot. Chatbots can also add items to the customer’s cart, take payment information, and complete the transaction.

Who are chatbots good for? Any company website that uses the above functions. This can be online stores, service websites, or any site that interacts with users. Chatbots can gather information, direct customers, and provide a customer service experience that mimics human interaction.

Who aren’t ChatBots Good For?

Since chatbots work on a basic input-output method, any website that deals with complicated queries or questions with detailed nuances that chatbots can’t pick up on, probably won’t have a good experience with chatbots. In these cases, a human may still be your best bet. Remember that chatbots are best used in simple transactions.

How Much do ChatBots Cost?

The cost of building a chatbot for your website is going to vary based on a number of factors, such as the complexity of the chatbot, the programmer you choose, and market conditions. According to CMS Wire, the cost of a chatbot could range from around $3,000 to upwards of $50,000. It all depends on the industry, company size, and requirements of the bot.

How are ChatBots Different from Facebook Messenger Bots?

Facebook now allows companies to build bots that interact with their customers using Facebook Messenger. The main differences between this and your own chatbots is that they live on an owned platform on your website, and your customers have to be on Facebook Messenger to use it. Because of this, an important thing to consider before you go with Facebook bots, is whether or not your audience is on Facebook. You can gauge this by taking a look at the user metrics on your Facebook page.

Pros of ChatBots and Conversational AI

Faster Customer Service: Unlike humans, chatbots are available 24 hours a day, and seven days a week. They answer questions quickly, because they’ve been programmed with the correct answers, so there’s no waiting on a human to look information up.
Lower Labor Costs: After the initial cost of setting up your chatbot, maintenance costs will be minimal. Unlike human customer service reps, which are a recurring cost, and also require benefits and vacations.
Increased Customer Satisfaction: Your customers will receive speedy, accurate information, and that leads to happy customers.

Cons of ChatBots and Conversational AI

Chatbots Can Frustrate Customers: Chatbots work with a limited amount of information, and isn’t able to improvise. If the customer asks something the chatbot doesn’t understand, it can become confused and run in a circle. Chatbots also don’t recognize slang or sarcasm. If a customer uses this, they may not get the results they were looking for. Both of these issues can lead to the customer becoming frustrated. According to DigitasLBi, 73 percent of Americans said they wouldn’t use a company’s chatbot again after a bad experience.
Loss of Jobs: Because the use of chatbots may replace some of your employees, if you find that you have to lay people off, and this will likely make your employees very unhappy. How much of an issue this causes will be up to the individual company.
Invasion of Privacy: Some customers are very uncomfortable with the idea of artificial intelligence gathering their information, and in some cases, they may refuse to use the technology.

The Do’s and Don’t’s of ChatBots and Conversational AI

Do aim for human-like conversation. Try to anticipate questions your customer may ask, and program the answers. Everything from standard questions, like, “How are you?” to specifics for your industry. For example, if you sell jellies and jams, your customer may ask what type of peanut butter it recommends.
Don’t trick your customers into thinking they are chatting with a human. According to a report by Mindshare, 75 percent of consumers said that they want to know when they’re speaking with a bot, and 48 percent said they consider it “creepy” when a bot pretends to be human.
Do take advantage of the chatbot’s information gathering abilities. For example, if a customer is ordering pizza, make sure your bot remembers what they ordered last time, since there is a high probability they want to the same thing again.
Don’t use chatbots in emotionally charged situations. If a customer is upset over a bad experience, or needs a refund, make sure your chatbot knows to transfer the customer to a human. This avoids the customer becoming even more frustrated.
Do let your chatbot make recommendations. If a customer buys paint, ask if they need paintbrushes as well. According to DigitasLBi (linked above), 37 percent of all consumers, and 48 percent of millennials, are open to receiving recommendations or advice from chatbots.
Don’t program your chatbot to respond only to rigid cues. People use a variety of language and conversational tones to ask the same question. Make sure your bot can understand the question, no matter what type of language the customer uses to express it.

Chatbots and conversational AI can transform the way your website does business, but it’s important to know the complexities of the technology. Let ClosedWon be your partner in navigating the industry. Contact us today to discuss your needs.