3 Reasons to Consider Chatbots

By Venkata Phani Abburi 3 min read

In 2016, companies spent a total of $88.3 million on chatbots. Some industry experts believe that the industry will continue to grow at an annual rate of 36 percent, eclipsing $1 billion by 2023. If your company hasn’t considered purchasing a chatbot yet, it’s likely that you will in the next few years.

What Are Chatbots?

Chatbots are computer programs that respond automatically to user text input. Using machine learning, text recognition and a set of pre-written responses, a chatbot can carry on a simulated conversation — in a format similar to that of an instant messaging session — with a customer. Companies ranging from Pizza Hut to Overstock use chatbots to handle routine customer service inquiries, increase brand engagement, answer product questions and more.

Three Benefits of Chatbots

Free to Try

Since many chatbots run as cloud-based services, they’re available to try for free. You can start a trial subscription for a chatbot service and see if it’ll meet your company’s requirements before buying it. Although many companies use chatbots to handle customer service issues, there’s no limit to what a skilled programmer can do with them. You could use a chatbot to deliver a guided virtual tour of your website, for example, or integrate a chatbot with a mobile application.

Some of the world’s most versatile chatbots are free to try, including:

  • Amazon Lex
  • IBM Watson
  • Microsoft Bot Framework

Availability and Accessibility

Hundreds of software development houses are now working on chatbots because the industry is in a state of rapid growth — so there are plenty of chatbots from which to choose. Both free and paid chatbot solutions are available. Although having experienced developers within your company can help, creating a chatbot routine is actually easier today than it was in the past. Machine learning has helped to create chatbot engines with enhanced text recognition capabilities. A chatbot can understand the intent of a customer’s question even if you haven’t included the exact question as part of the chatbot’s routine. Chatbots can even recognize positive and negative sentiment in customer inquiries.

Reduced Customer Service Expenses

Having a chatbot available to answer customers’ questions can lower your customer service expenses by reducing the need for human intervention in answering simple questions or resolving routine problems. Simple tasks such as walking a customer through setting up an electronic device, changing the delivery information for an order or booking a ticket to a sporting event are easy to automate and can potentially reduce your company’s call center expenses by hundreds of hours per year.

Some of the most common uses for chatbots include:

  • Creating conversational user interfaces such as Apple’s Siri
  • Querying a database to generate reports
  • Displaying a customer’s transaction or purchase history
  • Answering questions about products
  • Soliciting feedback from customers

Challenges of Using Chatbots

Chatbots have the potential to improve the customer experience by giving customers faster access to help. That doesn’t mean, though, that chatbots are right for every business or application. It is also important to consider the ethical implications of using a chatbot rather than a human in a given situation. Should you create a chatbot that impersonates a human agent, or should you create a chatbot that clearly identifies itself as such — knowing that some customers will opt to avoid the chatbot and speak to a human instead? When creating a chatbot’s conversational routine, it is also important to consider the potential for abuse. You wouldn’t want to create a chatbot that simply repeats user input, for example, or you may end up with a chatbot sending racist tweets.

Explore Additional Resources

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Venkata Phani Abburi

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Venkata Phani Abburi

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