In modern businesses, chatbots have the potential to revolutionize the customer experience. They can provide instant and round-the-clock support, reducing response times and improving customer satisfaction. Chatbots can handle repetitive tasks, such as answering FAQs, processing orders, and providing product information, freeing up human agents to focus on more complex issues.

With the advanced capabilities of tools like Openai’s GPT-4, chatbots can generate accurate and natural responses, making customer interactions more human-like and engaging. By utilizing these tools using large language models, businesses can efficiently handle inquiries, deliver personalized experiences, and elevate overall customer satisfaction.

What is a chatbot? - The Ultimate Guide to Choose the best AI chatbot

Chatbots are computer programs built to simulate human conversations— whether on a website, a messaging app, or a virtual assistant. With today’s customers expecting immediacy and personalization in their interactions with brands, the addition of chatbots as a communication channel has become critical to business growth.

In its simplest form, chatbots can be programmed to answer specific, frequently asked questions, offering an easy way to engage with visitors. On the other hand, Artificial Intelligence (AI) - powered chatbots can learn from user behavior and previous agent interactions to predict visitor behavior and offer relevant information. AI chatbots can help automate interactions and offer instant accessibility across sales, marketing, and customer service functions. 

How do AI chatbots work?

The purpose of a chatbot is to improve the productivity of customer-facing teams and reduce the workload caused by live chat. This can be achieved through training an AI chat bot using machine learning, NLU and NLP (Natural Language Processing) to spot patterns, language intent and identify the most appropriate response without human involvement. 

If this sounds technical, let’s take a step back and see how a chatbot processes a conversation.

Step 1: Train for relevant topics

When the chatbot is being set up, you can teach it topics you think your customers will ask about. For example, if a common customer query is, “On what days is the clinic open?”, you can program the ai chatbot to understand this question and similar rephrased questions like: “Will the clinic be open on the weekends?” or “When is the clinic closed?”. This helps the bot address the same concern, in whichever phrasing the customer uses, and offer the relevant information.

Step 2: Learn from Multi-channels

The chatbot learns from emails, chats and your knowledge base to understand intent whenever a visitor asks a question. From the example above, if the visitor asks, “Is the clinic open on Sundays?”, the AI chat bot will recognize the intent, based on the information available in its database, and provide the appropriate response. 

Step 3: Predict the next step

Once the chatbot knows what the customer’s goal is, it’ll prompt them to take the next step. In the above case, it can then ask them, “Do you wish to book an appointment on Sunday?”. This way, it nudges the visitor to take action. By offering a CTA, the chatbot not only personalizes the attention given to the visitor, it will also collect the necessary details needed to book an appointment without any agent intervening.

What are the benefits of a chatbot?

AI Chatbots are a one-time investment that can offer instant self-service, deflect a significant number of inquiries, and can quickly scale as your requirements grow. Chatbots can increase customer satisfaction through frictionless support. It can offer precise answers to questions and point customers in the right direction. Moreover, smart chatbots can offer contextual advice and escalate conversations to a live agent when necessary.

So if you are evaluating the implementation of chatbots for your customer service, you should be aware of some major AI chatbot benefits that will help you make better business decisions.

Save Responding Time

Common questions like “What’s your refund policy?” shouldn’t need a support agent to intervene. Chatbots can understand the intent of the questions and give a direct answer. It can also help customers with troubleshooting workflows to solve their queries themselves.

Available Anytime and Anywhere

The most important benefit of implementing a chatbot is that it can offer round-the-clock support. Also, chatbots are a low-friction solution as they are available on every screen and in messenger apps like Facebook Messenger, WhatsApp, and Apple Business Chat. 

Improve customer engagement

Your business should be able to engage with your customers at every step of their journey. Chatbots can help personalize conversations, nurture your leads better, and improve engagement across your funnel by urging customers to participate in discussions that can help them build a connection with your business. 

Personalize conversations everytime

Chatbots allow you to share updates and notifications to build brand loyalty quickly. At scale, it’s difficult for your business to engage with clients at a personal level. However, chatbots can understand your customer’s intent, order history and personalize outreach to improve engagement quality.

Nudge towards actions

Chatbots close the loop with your customers. They can trigger actions and flows like booking appointments, making payments, or collecting feedback. So the visitor won’t have to leave without taking a step towards a purchase.

What are the types of chatbots?

The growth in chatbot technology has been as dynamic as the evolution of AI chatbot capabilities. For now, chatbots can be broadly categorized into three types. The three types are differentiated by their technical complexity, namely:

What are the benefits of using conversational AI in chatbots?

Chatbots equipped with conversational AI  can help businesses deliver faster, more personalized, cost-effective customer support, improving customer satisfaction and loyalty. Some of the major benefits of using conversational AI in chatbots are:

Better customer engagement

As Conversational AI chatbots can understand user intent and don’t rely on rule-based answers, they can proactively engage with a user and start a conversation. Once the conversation is initiated, a conversational AI chatbot can further help users with related resources, additional product information, and the next possible steps. This way, conversational AI chatbot helps businesses proactively engage with customers and improve the overall customer experience.

Personalization

Personalization features within conversational AI help chatbots learn from the historical context and remove the need for a customer to repeat themselves now and then for the same issue. It also provides chatbots with the ability to provide recommendations to end-users, allowing businesses to cross-sell products that customers may not have initially considered.

Consistent customer experience

Since most interactions with support are information-seeking and repetitive, businesses can program conversational AI to handle various use cases, ensuring a comprehensive and consistent customer experience. This creates continuity within the customer experience and allows valuable human resources to be available for more complex queries.

Scalability

Adding support infrastructure using conversational AI is cheaper and faster than hiring and onboarding new employees. This helps businesses scale the support function quickly, especially when products are expanding to new geographical markets or during unexpected short-term spikes in demand, such as during holiday seasons.

Cost efficiency

Staffing a customer service team can be quite costly, especially when you seek to answer customer queries outside office hours. Using conversational AI chatbot software, businesses can build intelligent bots that will help reduce support costs, can respond instantly, and provide 24X7 support to their potential customers.

AI Chatbots vs Virtual Assistants

When it comes to chatbots, their main purpose is to simulate human conversation and provide automated responses. On the other hand, virtual assistants take things a step further. Here are the key difference between a conventional chatbot and a virtual assistant.


AI Chatbot
Virtual Assistant

Technology

  • Rule-based program

  • Machine learning

  • Natural Language Processing

  • Machine learning

  • Natural language processing

  • Natural language understanding

  • Artificial emotional intelligence

Core-functionality

  • Assists business and customers

  • Serves as an experimental platform

  • Assists user with everyday tasks

  • Engage in casual or fun conversation

Channels

  • Website 

  • Support portals 

  • Messaging channels

  • Mobile applications

  • In-app chat widget

  • Mobile phones 

  • Laptops

  • Smart speakers and interactive devices

Interfaces

  • Conversational user interface

  • Chat like interface

  • Voice commands

Must-have chatbot features

Chatbot features

The very first chatbot, ELIZA, made in 1966 by Joseph Weizenbaum, was built as a therapy robot, to offer scripted responses to therapy-related questions. It was linear and structured and didn’t understand intent.  Chatbots have come a long way since then. 

Today, there are several chatbot software available in the marketplace, built for many reasons. When deciding to buy a chatbot, look for the features that boost your workflows, including :

#1. Omni-channel

Having a chatbot on your website is not enough. People are engaging more on messaging apps than social media, which means your business needs to engage with your audience where they prefer to communicate. Check whether the chatbot integrates with messaging services such as WhatsApp and Facebook Messenger.

#2. No code 

Chatbots can seem complex and technical, but the reality is, you don’t need an army of developers to create chatbots or write code. Find a chatbot provider who can help with managing chat conversations across platforms and has a customizable chat widget. This way, all you have to do is integrate it with your website and train it to answer your most common questions. 

#3. Affordable 

Chatbots themselves are cost-saving channels for businesses, so they shouldn’t be expensive to implement either. Look for a chatbot that covers the basic features that your business will require. If all you need is a rule-based chatbot, you don’t need to invest in purchasing or building an AI chatbot.

#4. Teachable 

Your AI chatbots will also need to be trained before they can interact with customers, so you need to find one that allows you to do this with ease. Unless you require it to perform highly complicated functions, find a chatbot that doesn’t require too much technical expertise. The more complicated the functionality, the more time you will need to spend writing code to train your chatbot. 

#5. Artificial intelligence 

Not all chatbots are AI-enabled, but those with AI are more likely to give precise answers. They can understand the intention of the customer and learn to have better conversational flows to customer queries. Not only can they trigger actions, they also know when to hand over the chat to a team member. Both these features offer uninterrupted communication flows between the business and the customer.

#6. Sentiment analysis 

Find a chatbot that can analyze human intention. Chatbots should know when to interact with the customers and whether their intent is positive, negative or neutral. Customers prefer quick conversations with bots but, at times, will want to talk to an agent. Your chatbot must be able to detect nuances and proceed.

What are the myths and misconceptions around chatbots?

Myth 1
Chatbots are just for marketing teams

Depending on the journeys you create, chatbots can lend a strong hand to your marketing team, sales agents, product teams and customer support.

Myth 2
Chatbots are only for websites

Although we are most familiar with chatbots on web pages, they also integrate with messaging apps such as Facebook Messenger, WhatsApp, and other business messaging apps.

Myth 3
Chatbots will replace humans

They are pre-programmed by a set of queries, so while the tone and feel maybe as a person they cannot have complex conversations on topics they don't know.

 

Myth 4
Chatbots are complicated to set-up

Contrary to popular belief, chatbots are fairly easy to deploy. You don’t need to have the technical knowledge or coding experience.

Myth 5
Chatbots are only meant to deflect

Chatbots are not just reactive in nature, they are a great way for all customer-facing teams to proactively engage with visitors.

How to add a chatbot to your website

 

1. Select a chatbot that works best for your business

There are two types of chatbots you can choose from - rule-based bots and AI chatbots. Rule-based bots are best for multiple-choice questions and information collection. In contrast, AI chatbots are best for real-time automated conversations based on the customer’s intent. You can choose to use a hybrid chatbot that combines the capabilities of rules-based bots and AI chatbots. 

Note: If you have built your own chatbot, you can connect it with a full-fledged live chat software solution to expand its capabilities, and use conversational APIs to enable agent-facing features.

2. Design conversations that deliver results

Set a goal for your chatbots and identify the best method to reach it. Your bots can simply answer frequently asked questions or undertake complex workflows that cater to your business processes. Either way, create chatbot templates that offer comprehensive solutions and the highest level of customer experience. To ensure success in the chatbot development process, understand how your visitors use your website - focus on the user experience, and you'll spend less time tinkering with your bot later.

3. Test and publish your chatbot

Once you’re done setting it up, don’t forget to test your chatbot conversations, both from a technical perspective, and a user experience perspective. Once that’s done, you can take your chatbot live. The best AI chatbots can also be trained through Machine Learning and Natural Language Processing systems to understand a customer’s intent, identify gaps in their workflows and if necessary, either request more information or transfer to a human agent, or come back to your chatbot regularly and fix the nooks and crannies that you might have missed out on. Read more

Common & Creative Chatbot Use Cases

Top 10 chatbot platforms in 2023 

#1. Freshchat 

Freshchat offers AI-driven, omnichannel chatbots for customer service. It's a great addition to your support strategy and enables your team to provide a delightful support experience every time. Here’s what you get with Freshchat bots. 

Pricing plans: 14 days free trial and billed based on monthly bot sessions. 

#2. Drift chatbot 

The Drift chatbot is primarily focused on lead generation and is more suitable for sales teams. 

Features include

Pricing plans: There is no free trial, and the pricing is available upon request. 

#3. Intercom 

Intercom offers chatbots for sales, support, and marketing. 

Their features include

Pricing plans: No free trial and pricing is calculated based on the volume of conversations. 

#4. Chatfuel 

Chatfuel is a chatbot platform that is specifically designed for websites, Facebook and Instagram. 

Features include 

Pricing plans: Free 50 conversations and three different plans priced on the volume of conversations. 

#5. Landbot.io 

Landbot is a chatbot platform best suited for independent and small businesses. 

Features include 

Pricing plans: Free trial and three different plans billed on the number of chats. 

#6. Mobile Monkey 

Mobile Monkey is a mobile messaging platform that focuses on Facebook Messenger support. 

Features include 

Pricing plans: Free trial and three other pricing plans depending on the use case. 

#7. Pandorabots 

Pandorabots is one of the oldest and largest chatbot service providers. 

Features include

Pricing plans: Free trial and three different plans based on the volume of messages. 

#8. Tidio 

Tidio offers chatbots that aim to improve customer experience. 

Features include 

Pricing plans: Free trial and two different pricing plans based on the volume of conversations. 

#9. Aivo

Aivo is a chatbot platform that offers both text and voice messaging for customer interactions. 

Features include 

Pricing plans: Free trial and four different plans billed per conversation 

#10. ManyChat 

ManyChat is a popular chatbot platform more suited for social media support. 

Features include 

Pricing plans: Free trial and two other pricing plans.

Why choose Freshchat chatbots?

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Why choose Freshchat chatbots?

Delight, not just deflect

Build bots that can detect intent, define its conversations using the powerful no-code builder. Setup flows to guide your customers through a step-by-step troubleshooting process to fully resolve their concerns.

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All your apps, in the mix

Set up APIs for your bot to trigger while in-conversation with customers. Your bot can fetch and push data to any of your 3rd party applications and internal systems to improve resolution rates.

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Make your bot polyglot

Upload scripts of your bot conversations in any language so your bot can speak in your customers’ preferred language!

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Retain your brand's identity

Own the look and feel of your chatbot widget so it reflects your brand values. Customize the shape, color, size, and everything about your widget with our simple CSS editor.

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Measure and optimize

Measure your bot’s performance and optimize its flows for higher efficiency. Create reports with attributes and visualizations of your choice to suit your business requirements.

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CHATBOT RESOURCES

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