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8 Main Advantages of Chatbots in Customer Service That Improve Your Business’ Grow

chatbots and customer service

It doesn’t matter if you’re a B2B enterprise, mom-and-pop E-commerce shop, or an entrepreneur scaling a startup from scratch--using chatbots in customer service is becoming a prerequisite for doing business. 

Chatbots have evolved from friction point to one of the most powerful tools in the tech stack--with the data to prove it:

The stats don’t end there, but the point is, If you deal with customers, you should invest in a customer service chatbot. Bots can serve your business needs in areas such as Customer Support, Sales Channels, Information broadcasting, Financial Transactions, Questionnaire Management, etc.

Below, we'll examine some of the advantages of chatbots in customer service and how companies can use them to power up their business strategy from all angles.

What is a Customer Service Chatbot?

Chatbots are a type of messaging software designed to interact with website visitors, provide support, and capture critical insights about what’s driving user behavior and why.

A customer service chatbot is used to enhance the customer experience using AI, machine learning, and natural language processing (NLP). They provide an interactive, conversational experience, much like what you’d get by chatting with a live agent.

And in our special article, we share experience on how to create a chatbot from scratch; please find it out here.

How Can Chatbots Improve Customer Service?

Chatbots allow a company to automate the "live chat experience," but that’s just the tip of the iceberg. Like their human counterparts, bots can proactively engage visitors, answer questions, and draw from historical insights to personalize the experience. 

They also capture unique insights combining anecdotal data from individual interactions, as well as big picture patterns and trends, allowing brands to understand the “why” behind satisfaction scores, abandoned carts, and conversions.

Chatbots in Customer Service: Myths vs. Reality

Before we dig in, let's debunk some common myths that still shape our beliefs about bots.

1. All Chatbots Are the Same

There are two main types of chatbots: rules-based chatbots and AI-driven chatbots. Most customer service bots are AI chatbots, which simulate the experience of texting a live person. AI bots also capture data from several sources, automate workflows, and surface actionable insights.

Over time, bots get “smarter." As they gather more data, they get to know your customers better and develop a deeper understanding of what shapes their experience with your brand.

Rules-based chatbots aren’t AI-driven at all. They do allow users to automate processes using flowcharts, if/then statements, and triggers to guide users to the right information.

According to a Kayako survey, a third of respondents find scripted, impersonal chatbots frustrating as they don't understand language and rely on canned responses and pre-programmed sequences to answer queries. They’re better used as a self-service tool than an interactive support agent because they’re:

  • Keyword-driven and follow a script
  • Triggered by manually programmed rules
  • Incapable of “learning” and thus require continuous monitoring and upkeep to optimize the customer service experience

That said, it’s not the technology that’s causing problems, it’s that the technology is often misused, and as a result, creates friction.

Shortcomings aside, rules-based bots have their place. Broadly speaking, they make the most sense when used in situations where the best possible outcome is an instant, accurate response. They’re good for providing straightforward answers and helping customers complete simple tasks like processing a return.

Here’s an example of how E-commerce brands might use rules-based bots to provide shipping updates:

customer service chatbot solution for e-commerce

They also give organizations more control over chatbot responses, don’t require extensive training, and can be implemented quickly. But, they don’t understand nuance or context and don’t do well in open-ended conversations.

Ultimately, both types are useful--it’s just that organizations need to be really intentional about matching chatbots to specific business goals and customer needs.

2.  People Don’t Like Talking to Chatbots

Most customers think they prefer human agents to algorithms because the bad ones stick out in the worst possible ways.

While customers may have been wary of chatbots early on, the tides are turning for a couple of key reasons:

  • The technology is getting better. Today’s bots engage customers and answer questions like their human counterparts—but with a few key enhancements. According to a 2019 study by Google and Stanford University, NLP is now better at interpreting text than humans.
  • Perceptions are shifting as people become more comfortable with bots. According to a LivePerson survey, 38% of respondents said they felt positive about past chatbot experiences, while just 11% reported having negative feelings toward them. The remaining 51% said they hadn't interacted with chatbots enough to form an opinion.

But, brands should be transparent about the use of chatbots.

As Verizon's VP of Digital, Ashok Kumar told CMS Wire, “I would never advise a bot to pretend that it is human.” The logic there is, concealing the bot's "true identity" can cause misunderstandings. 

Kumar says, “Machines have limitations. By pretending that you're human, you're going to somehow, somewhere disappoint your consumers.” And it's not necessarily a trust issue. It's about ensuring customers receive accurate information.

According to a recent study, even the best AI bots are prone to bias due to factors like language, age, culture, intellectual ability, etc. that prevent algorithms from understanding every user equally well.

Obviously, AI interpretations that result in a fruitless errand aren’t a big deal. But, when we’re talking about high-stakes use cases like AI loan approvals, screening job applicants, or identifying suspects in a serious crime--the societal implications get pretty scary.

The takeaway here is, customers don't hate chatbots. They hate bad chatbots. And--they’re understandably unsure if they can trust the information they receive.

3. Customer Service Chatbots Are CX’s Responsibility

Chatbots can use conversational insights, purchase history, and other data points to personalize responses based on what's most likely to resonate with individual customers, which in turn, increases conversion rates and revenue. 

They can also anticipate customer needs and provide proactive guidance. 

But—those benefits are only possible with tight alignment between support, sales, and marketing--and close collaboration with IT and development teams. 

According to Forrester, CX teams say one of the biggest challenges in using AI and automation to personalize the interactions is a lack of autonomy over the tools they use. 

More than 50% of participants say they rely on solutions designed and implemented by IT teams that don’t understand customer needs in context. At the same time, more than half of respondents said they didn’t have the technical skills to implement solutions on their own. 

To develop features that address problems and pain points, organizations need to build a chatbot strategy based on the unique needs of their audience.

A few examples:

  • A financial services company might use chatbots to handle questions about transferring money between accounts, as seen in the example below. In this case, humans can’t offer more value than chatbots. 
advantages of chatbots in customer service for banking app
  • LiveTiles offers a chatbot solution designed specifically for inventory management, which enables human workers to keep up with standards set by giants like Amazon.
  • Kia’s “Kian” is a Facebook Messenger bot that guides customers through the car-buying process. Within four months of implementation, website conversions increased by more than 300%.
  • Cardinal Health trained IBM's Watson voice assistant to respond to customer habits by mapping the customer journey to the self-serve options they were already selecting--anticipating and answering common questions like “how to reset a password.” They also reengineered the Watson Assistant to support internal IT teams and answer customer questions about orders.

CX leaders need to work with IT, as well as sales, marketing, finance, HR, etc. otherwise, they won’t be able to unlock the full potential AI bots promise.

4. AI Chatbots are Replacing Real Customer Service Reps

AI isn't technically coming after our jobs, but it is changing the way we work.

Bots should be considered collaborators rather than rivals. They’re designed to help us overcome our shortcomings. Think-running hundreds of QA tests simultaneously or analyzing massive amounts of big data.

In many ways, using chatbots for customer service is about unburdening human reps so they can better focus on the stuff they’re best at: i.e.: creative thinking, problem-solving, empathy, etc. The problem is, to get the most out of this partnership, humans must bone up on their soft skills and learn how to use AI insights effectively. Many organizations aren’t proactively helping workers improve their data literacy, use new technologies, or refine skills relationship-building that set them up for success.

Advantages of Chatbots in Customer Service

According to a recent study, chat is the most-used support channel. 93% of customers say real-time, chat-based support improves the purchasing process. 42% prefer chat to social media, email, or phone.

It’s easy to see why. Bots offer convenience, speed, and personalized support--on customers’ terms. 

If you deal with customers directly, you should invest in a customer service chatbot.

While channels like email, social media, and phone are here to stay, the advantages of chatbots in customer service extend beyond what you’ll get from other communication channels.

Below, we’ll look at four key benefits of using chatbots in customer service.

1. Engage with Brands in Real-Time, On Any Channel

Spoiled by the likes of Amazon, Uber, and other customer-obsessed tech giants, we've all gotten used to instant access, next-day deliveries, and high-velocity social feeds. Unfortunately, those conveniences come with some trade-off. Customers now hold all brand interactions to the same standards as multi-billion dollar companies that not only have access to the best talent and cutting edge tech--they've also been doing the AI-big data thing for more than a decade longer than everyone else.

Today’s customers aren’t willing to wait around for a brand to respond to an email or get back to them with a quote within the next business day - or several. 

According to HelpShift, 37% prefer an immediate response from a chatbot to waiting three minutes for human assistance. They also expect brands to offer support on their preferred channels--chat, social media, email, and so on. And, they expect brands to understand which channels make sense based on individual preferences and context.

According to Salesforce, 76% of customers prefer different channels depending on the context of the situation. Customer service chatbots make it easier to meet rising expectations and offer support on par with what you might find at a larger organization. 

Brands can deploy chatbots on multiple channels from websites and mobile apps to Facebook, WhatsApp, and Slack--while bots can respond to all incoming queries in real-time, and on any connected platform.

What’s more, you can program them to use different tones or personalities depending on the platform, the person, and the context of the interaction.

2. Smarter Self-Service 

When customers arrive on a website, it’s a safe bet that they didn’t expect to conduct a full-scale search mission for one simple price sheet. Often, visitors prefer to help themselves, but get frustrated when it's not clear how to do so or where to begin their search. 

According to Gartner, customers can get overwhelmed when presented with multiple options. 

When live agents aren't available, using chatbots for customer service can provide some much-needed guidance. For example, chatbots can present the best solutions for each user and share select information that helps them make a decision on their own.

Additionally, some customers may not want to deal with a human agent at all. A recent Helpshift survey found that 94% of customers dread contacting support, and 70% would rather use chatbots to resolve issues to avoid those dreaded interactions.  

Chatbots can be embedded into apps to onboard new customers and provide ongoing support when users run into trouble.  You can also use them on key pages (ie your knowledge base, FAQ page, etc.) to streamline the search process.

For example, when a customer asks a question, it doesn't just spit out a list of articles Google-style. Instead, it analyzes intent data, behavioral insights, interaction history, etc. from all connected sources against the initial query to deliver the best answer at the moment.

3. Chatbots Enable Proactive, Personalized Support

The demand for personalization has redefined the digital buying process at all levels--and is now considered a basic competency for brands of all sizes, regardless of industry.

With AI-enabled chatbots, customer service, sales, and marketing teams can provide a personalized experience, using contextual data to respond to customers’ needs in real-time--whether they actively ask a question or not. 

Chatbots can be programmed to reach out proactively at key moments to help customers navigate your website, provide personalized product recommendations, and recommend resources they might find useful.

According to Gartner, most customers say they prefer a more reactive form of customer service, however, researchers found that proactive support produced better outcomes--including higher NPS, CSAT, and CES scores. Here’s a breakdown of those findings:

Customer-Centric Metrics

4. They’re Friendlier Than Traditional Lead Gen Forms

Brands have long relied on landing pages and forms to capture new leads and learn more about their interests. Unfortunately, forms don't tell you much about those leads, beyond say, their name, industry, or contact details.

Forms also act as a deterrent. Many website visitors immediately bounce away the second they encounter a few form fields and a big CTA button to avoid giving out their email just to read some white paper.

There's also no real incentive for visitors to confirm they’ve entered the information correctly unless they're absolutely sure they're ready to talk to a salesperson. Additionally, forms are too static to provide a truly personalized experience. 

While you'll set rules for how you want your bot to behave ahead of time, it also adapts its approach based on what's happening the exact moment a visitor does something to trigger a response.

Here’s how it might look if you’re using a chatbot to capture feedback (image source):

feedback form chatbot

For example, you might have multiple customers within a specific segment asking the same question; however, they may be looking for different answers. 

Instead, brands can provide real-time answers and solutions that speak directly to individual needs while visitors are on the site--and later, use data from chatbot interactions to personalize marketing materials and sales tactics.

Additionally, chatbots allow brands to nurture relationships with repeat visitors. For example, if someone bookmarks a page, the chatbot knows this person has been there before and can present them with resources that build on their existing knowledge.

At the same time, it’s worth hanging on to some forms, as chatbot interactions are optional, and not every visitor will choose to engage.

Feeling inspired? Feel free to contact us, with pleasure will discuss your project.

How Using Chatbots for Customer Service Benefits the Enterprise

Chatbot benefits for customer service go beyond the customer - they’re good for your team and the bottom line. 

Chatbots allow businesses to automate the “live chat experience,” provide instant answers to consumer queries and proactively engage with website visitors. What’s more, customer service chatbots have been shown to boost conversions, reduce churn, increase spending, and turn neutral customers into brand advocates.

While this isn't an exhaustive list, here are some of the key advantages of using chatbots in customer service.

1. Create a More “Human” Customer Experience

Using chatbots for customer service also helps you build better relationships with consumers and understand what they’re looking for. It enables you to convert more visitors into customers and generate more revenue.

According to Salesforce, companies overwhelmingly fall short of customer expectations. 66% of customers expect brands to understand their unique needs and 68% expect to see brands express empathy. In reality, just 37% of brands are seen as empathetic and 34% treat customers as individuals.

Customer service chatbots are one example of how brands are embracing technology to connect with their audiences on a personal level. While bots may seem like an unlikely solution, many offer AI-driven guidance, real-time customer data, and explainable insights, technology is finally helping brands get back to their “human” roots — this time at speed, scale, and on multiple channels. 

Human reps receive detailed information and recommendations and from there, can use those insights to deepen their understanding of individual needs and offer advice that speaks to their unique situation.

2. Become “Data-Driven” 

Chatbots streamline the information-gathering process by capturing and analyzing thousands, even millions of data points and serving up real-time, prescriptive insights instantaneously.

With good data and the right chatbot solution in place, brands no longer need to worry about making sense of all the data they collect. Over time, AI chatbots get better at spotting warning signs early — allowing you to find out what went wrong and how to fix it.

Instead, brands gain easy access to accurate insights that they can apply to just about any strategic goal. Companies now have the potential to create products, services, content, ads, etc. that aligns perfectly with the needs of each customer segment.

Additionally, many solutions automatically alert users when there’s a problem and recommend the best course of action based on trends/relationships hidden in your data ecosystem. For example, unhappy customers usually abandon ship without warning--leaving brands wondering what factors caused them to churn. 

3. Automate Manual Processes

According to IBM research, chatbots are great for quickly responding to simple service requests--like logging sales data and booking appointments. In fact, they may even reduce customer service costs by as much as 30%.

Customer service chatbots can be used to automate service tasks like password recovery, updating account information, or scheduling appointments. They can also answer common questions like how to return a product or use a specific feature--giving human agents more time to focus on answering complex questions and providing personalized recommendations and support visitors can’t find in the FAQs. 

Chatbots can also be used to automatically screen users at the beginning of an interaction to determine if a situation demands human support. By asking a few quick questions, the chatbot can qualify the request and route the customer to the best person to answer their question.

Agents can then quickly respond to customers with contextually relevant information. For example, if a customer wants to speak with a live agent person, the bot can automatically share key details, allowing reps to skip the "discovery" portion of the interaction and get straight to the point. 

4. It’s Good for the Bottom Line

Of course, one of the biggest advantages of chatbots in customer service is the potential impact on the bottom line. 

According to Forrester, using conversational AI to personalize customer service has a direct impact on top-line revenue, regardless of industry.

AI chatbots reduce operating costs without cutting corners, improve loyalty and satisfaction, and enable teams to do more with fewer people on staff. They allow organizations to reduce spending on human labor by automating low-value tasks--data entry, answering basic questions, and searching for information.  And they also provide 24/7 support without hiring more people to manage support channels at all hours. Customers always receive the on-demand response they’re expecting—and if necessary, can book a meeting with a real person at a time that works for everyone.

Eager to develop a chatbot for your business? Do not hesitate to estimate your project.  Please fill out the form, it’s free and fast.

HuskyJam’s Experience and Advice

A chatbot is an excellent and effective means of communication. In our mind,  its most important advantage is the 24/7 service, getting an instant report and easy conversation! And that does sound good! 

In fact, a chatbot is one of the first interactions with the client. That’s why it is essential how exactly the chatbot will work! Its quality is determined by two factors - technology and content. And we strongly recommend paying so much attention to this point. 

Tips for content:

  • according to the research of psychologists, a person when communicating with a bot will trust him more if he thinks that he is communicating with a person, so let's chatbot names, for example, Siri, Alexa, etc.
  • When building a dialogue, do not promise functions that the chatbot will not be able to perform, the disappointment of the user, if his expectations from the dialogue turn out to be in vain, will be strong and most likely, you will lose this client.
  • humor and friendly tone of voice will also be an advantage in chatbots communication
  • do not forget to prepare all content before launching your chatbot

Tips for technology:

  • As we mentioned earlier, there are two types of chatbots: AI-Powered Chatbots and Rule-Based Chatbots, and their application are highly dependent on the task of the business. Software development companies who build chatbots usually know how to create both of them. But the key to success in both cases is 100% chatbot testing. For sure, this is the main thing.

As a software company, we understand that chatbots are still not perfect, so we pay special attention to the stage of designing chatbots and testing. At HuskyJam, we have some successful cases in developing chatbots, you can contact our team to see our projects. And here we just give some examples. 

In the financial sector, we created a chatbot for a banking app, it’s main task was to communicate with customers, understand their requests and correctly direct them to a specialized operator, that is, in fact, the Chatbot worked as a query router.

We also can recommend creating a chatbot for promo campaigns. It really works great because the beauty of having a chatbot is that it can work very fast and with lots of information. This chatbot helped people to register in promo-campaign and gather marketing information.

For our educational project for the famous Russian bank “Otkritie”  - the platform which offers free training for entrepreneurs or those who want to start doing business, new digital marketing tools, business automation, and process optimization in companies, we created a chatbot. Its mission was classical user support: helps to register on the Open Academy website and app, sends notifications, answers questions, and conducts some interesting tests.

Chatbot for app

For more projects, you can check in our portfolio or fill out the form, and we will contact you.

Final Thoughts

The benefits of chatbots in customer service prove that-done right-AI chatbots as perfect assistants and customer service make the perfect pair. They help customer-facing teams focus on high-value tasks and enhance the brand experience, navigate the digital business landscape with ease-enabling them to adapt to ever-changing customer needs and market conditions. And, of course, they reduce costs and boost profitability.

That said, organizations must get their data in order before implementing AI of any kind. Otherwise, you’ll amplify the impact of bad data -- losing customers at speed and scale. Everything must be done to prevent such an unsuccessful experience. We will be pleased to assist in the development of your project and to show how the advantages of chatbots in customer service can work for you.

At HuskyJam, we make sure the entire developmental process is rigorous and impactful. Our developers create not only intractable systems for our clients, but we also follow the necessary steps of thoroughly testing designed software to provide and assure the optimal quality of operations. Every interaction with a customer is a chance to build their opinion about your business. Let’s make it perfect and efficient!

Don’t know where to start and need a guide on your chatbot development journey? We will be glad to assist you. Contact our experts and we’ll return fast.

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