Chatbot – A Revolutionary Trend powered by AI

Post Date: January 4, 2020   Tags: ,    Author: texol  

As you might already know, AI (acronym for Artificial Intelligence) has been with us for over a decade but it is only recently that AI has started to radically make some changes in human lives. Chatbot is one such technology powered by AI. 

What is a Chatbot?

In simple terms, a chatbot is a software program (powered by AI) that communicates with people through the internet by imitating human conversations. This conversation might be written, spoken or both. Chatbots are used to conduct conversations with people. The people who converse with a chatbot  won’t know that they aren’t speaking with a real person. Businesses like Bank of America, Dominos, Duolingo etc now regularly use chatbots to streamline their customer service, reinforce brand awareness and personalize the customer experience.

What exactly is a chatbot ? Well if to give an example,  chatbot is a chat based conversation via a website or a mobile application. For example, Domino’s Pizza uses a chatbot for customer service and this chatbot service presents a menu, takes orders from customer, and tracks delivery etc. Another example of chatbot would be the one used by Bank of America site that provides banking information to the bank customers. 

How does an AI Chatbot work?

Well if you ask me, the most simple definition of a chatbot is – a software program that can provide an artificial chat/conversation with a human being, without the latter being aware about it. For example, any human user could ask the bot an inquiry or a statement, and the bot will promptly respond to the query or perform an activity as appropriate.

Bot basically refers to a computer’s ability to recognize human speech or text, but apart from this, a chatbot is a computer program that can effectively simulate human conversations. It facilitates a sort of interaction between a human and a machine, the communication which happens via messages or voice command.

A chatbot works differently from a human being. A chatbot has a set of predefined scripts and machine learning techniques based on which it provides answer to queries just like a real person. 

When asked a question, the chatbot will answer based on the knowledge database made available to it at that point of time. If the conversation introduces a concept that a chatbot won’t be able to understand, then the chatbot will pass the communication to a human operator. The chatbot will also learn from that interaction as well as from future interactions; hence the chatbot will gradually grow in scope and gain relevance.

For example, Sharekhan is a prominent share trading site based in India. The moment I access this website on my browser, a chatbot will appear asking whether I’m interested to open an account with them. If I answer Yes, then the chatbot will give me instructions regarding the formalities to start a demat account with Sharekhan. Offering popular women’s necklaces such as pendants, chokers and chain necklace. Shop for jewelry in a variety of metals and gemstones to suit any occasion

What is the role of AI in a Chatbot?

AI entitles a chatbot to learn how to respond effectively to customer requests by recognizing certain patterns in the data. These chatbots will then apply these patterns to solve similar problems or questions. Hence this will eventually allow a chatbot to act with more a more tactful and intelligent approach when dealing with the customer.  Nowadays, AI powered chatbots are empowered to solve problems, manage information and perform certain tasks, all this without human intervention.

While the concept of AI chatbots might seem confusing and overwhelming to a few, there are many interesting features and benefits offered by chatbots if you just try to integrate them into your marketing strategy.

Advantage of using Chatbots?

Online chatbots automate customer support, hence they save valuable time and effort. Many online surveys forecasts that  over 85% of customer interactions will be handled by chatbots by 2020. Also chatbots provide a better customer service when compared with other approaches. Many recent online surveys have given an overall customer satisfaction rating of 70% and above for AI chatbots. Another advantageous factor  is that chatbots allow businesses to operate 24/7. These days most customers expect a business to be open 24/7, hence making use of chatbots will improve customer loyalty and hence stimulate brand awareness. Chatbots are capable of replacing much of the human effort involved in answering customer queries, hence this saves a lot of money for businesses. Many online surveys have come to the conclusion that chatbots can effectively reduce customer support costs by 30%. 

Nowadays most e-commerce companies are looking for various ways and means to make use of chatbots to improve their customer experiences whether it is for shopping, booking tickets or simply for customer service. So the next time you hear about a chatbot, say during a business or travel, please remember to look beyond that fancy term and retrospect about how it really adds value to your travel program.

Misconceptions regarding Chatbots

The  biggest misunderstanding about chatbots is that they’ll automate everything and eventually replace human staff thereby creating unemployment. This isn’t likely to happen; at least not completely and definitely not in the near future. At the moment, chatbots deal with queries clearly within their preset limit. Outside of this, a chatbot will pass on the query to be dealt with by human beings. A chatbot is helpful only when customers ask simple, common questions, because the information required to respond is already available. 

How can Chatbots transform your business?

Most customers often complain about the use of interactive voice response (IVR) systems during phone calls to customer support. Too many questions asked by the system to the customer and the endless wait for each response is often very frustrating. A chatbot however, does the same task with less time, better efficiency and does not frustrate the customer who asks questions. The customer feels like their grievance is actually being heard and empathized with, and the chatbot can effectively lead them towards either a  premeditated answer based on previous situations or to a human representative.

Chatbots offers a useful platform for broadcasting and reaching out to a potential target audience. Unlike erratic customer reactions to cold calls, chatbots strive to maintain a cordial and friendly customer contact. Customers engage with a chatbot almost the same way that they would converse with a live customer support employees. Many chatbots use natural language processing methods, hence they can analyze the customer’s question and deliver an appropriate response that meets the customer requirements. 

Business is all about reaching a target audience. But conventional routes nowadays cannot effectively analyze and predict customer interests and preferences. Chatbots have the means to change all this. Chatbots build good customer relationships and they can persuade consumers to purchase a product or service by suggesting some offers based on customer preferences. Chatbots can effectively monitor consumer behavior and track their interests, hence they will send a notification having only the relevant information based on the customer interests.

It can be quite difficult for customers to choose what to buy. That’s why they seek advice. Consumers based in the US are often interested in receiving chatbot recommendations and chatbots are good at this. Chatbots don’t merely offer lists of irrelevant product recommendations. Instead they analyze data associated with each customer and provide relevant choices based on this data. Customers are always searching, and chatbots can recommend similar products to customer based on his search pattern. As per online surveys, almost 40% of all consumers  are open to receiving recommendations or advice from chatbots.

Future of Chatbot

A chatbot is always connected to the database for most applications. When a customer poses a question, this database is utilized to fetch the right answer and equip the chatbot to provide the right response to every customer. NLP has the ability to translate human language into data information with a blend of text and patterns.

There are NLP applications, programming interfaces, and services that are utilized to develop chatbots and make it possible to utilize them for all sorts of businesses – small, medium or large-scale industries. The primary point here is that chatbots can help increase the customer base by enhancing the customer support services, thereby helping to increase sales.

Chatbots helps in saving money for businesses and they also increase their sales and conversion rates. So with more research and advancement studies in the 3 separate areas of NLP, AI and machine learning, chatbots are going to become more and more intelligent. Hence the future prospects of chatbots looks very bright as of now.