How Companies Are Using Chatbots in Customer Service in 2022

What are chatbots?
Chatbots are innovative computer programs designed to enhance customer service. Engaging humans via a live chat interface, messaging apps, or voice, chatbots leverage Artificial Intelligence (AI) and machine learning to deliver accurate answers to customer queries.

When chatbots first arrived, many thought that they were overhyped apps. In fact, the potential of this innovation was initially panned by businesses at large. Business leaders could not fathom how useful chatbots were to their customer service strategies. As a result, many were skeptical about using them together with customer service software programs.

Fast forward to today: the cloud of doubt has faded away, and a massive paradigm shift has already occurred. It has dawned on businesses that chatbots have a massive potential to resolve customer requests quickly, cheaply, and consistently. Because of this, many brands are deeply embracing chatbots to streamline customer service.

In this article, we’ll show you how companies are using chatbots to redefine customer service. The goal is to help you understand what chatbots are and how you can effectively use them to shape your customer service.

Chatbots in Customer Service

Shortcomings of Conventional Human Support Services

Customer service is imperative to your business. By providing stellar customer service, you essentially cultivate a loyal consumer base and spur business growth. Not just that, sound customer service sells your brand to the public, improves sales, and ultimately, impacts your bottom line. Statistics show that by providing stellar customer support,  52% of entrepreneurs in the US  made additional sales

Today, however, providing sound customer service is not easy because of two main reasons. Firstly, the needs and preferences of modern customers are constantly evolving. Secondly, today’s customers crave immediacy and want instant answers delivered at multiple touchpoints along their journey. Also, customers expect you to be adept at issues resolution and above all be available 24/7.

The increased demand by modern customers has put the capability of human agents to a rigorous test. It has exposed serious shortcomings that are not solvable even with the best customer service software solutions. For example, even with robust customer support platforms and the right number of agents, some limits cannot be reached. This is because your human agents need sleep and rest. As such, they can only operate within a window of time—specifically, during business hours.

Additionally, there are plenty of other factors to consider. For example: if you are targeting the international market, the linguistic factor comes into play. Besides, you have to take into account the constraints of public holidays, weekends, and time zones. Even more, you need to learn how to manage your customer service team during the seasonal rush.

All these challenges make it practically impossible to build self-sufficient, 24/7/365 customer support service without the help of Chatbots. Chatbots excel where human customer service fails. They complete the jigsaw puzzle and enable companies to save up to 30% in customer support services.

Potential Savings from Use of Chatbots, USA

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Source: BI Intelligence (The Chatbot Explainer, 2016)

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What are Chatbots?

A chatbot is a powerful software program that engages humans via live chat windows, messaging apps, or voice. In the customer service context, chatbots use artificial intelligence (AI) and machine learning to answer the most common customer questions. Basically, chatbots simulate a conversation with the user in a fun, back-and-forth method.

Simple chatbots are deployed to deliver predefined answers to FAQs. On the other hand, sophisticated chatbots combine the power of AI and machine learning to create conversations and responses based on customer questions.

Generally, customer service chatbots blend of three parts, namely: User Interface (UI), Artificial Intelligence (AI), and Integration. The UI creates the link between the bot and the user. On the other hand, the chatbot leverages AI to understand and respond to customer queries. Interestingly, thanks to AI, chatbots learn from each customer interaction.

Lastly, the integration is what makes it easy to add chatbots across chat platforms. In recent years, companies have implemented chatbots on Facebook Messenger, Slack, WhatsApp, Skype, and even Amazon Alexa. The growing interest in chatbots is largely attributed to two monumental developments. One is the advances in AI technology and two, the growth of messaging services.

What you should know is that there are two main chatbot types. The first is vendor-built chatbots. What happens here is that you craft and submit a chatbot idea to a company. Then, the company or chatbot builder develops a chatbot for you. An example of a vendor-built chatbot is Next IT

Second, there are user-built chatbots. As the name suggests, these are chatbots built by a user. In this case, a company provides you with a platform or kit to build your own bot. An example of a user-built chatbot is Answer Bot on Zendesk.

You can easily sign up for Zendesk free trial here and get to know how it uses machine learning to answer customer questions.

Using Chatbots in Customer Service

Answering FAQs

The most unfortunate thing is that today’s customers don’t have time to read your FAQ pages. As such, customers are likely to ask questions at some point throughout their journey. Besides, customers nowadays like to shop anywhere, anytime. As a result, some questions will most probably arise outside of business hours. This makes it harder to provide instant answers to vital customer queries. And, this is where chatbots come in handy.

A chatbot enables you to respond to customer questions—especially the FAQs—when your customer service staff are unavailable. They automate FAQ responses, allowing you to quickly respond to questions that customers ask over and over again. This way, customers always get instant answers to their questions regardless of the time they need help.

For example: the BabyCentre UK, which is part of the Johnson & Johnson family, has deployed a chatbot on Facebook Messenger. The purpose of this chatbot is to respond to the most frequently asked questions by parents. The chatbot specializes in providing advice to issues faced by most parents. For example, the chatbots can easily respond to question like, how will you know your baby is ready to start solid foods?

Since introducing chatbots on Facebook Messenger, BabyCenter UK has reaped significant benefits. The company has seen a click rate—from the bot to its website—of 53%. Besides, the chatbot has yielded a read rate of 84%.

Making product recommendations

chatbots in product suggestions

Chatbots can suggest products actively.

Additionally, current chatbots uses now extend to your web store or app to streamline the customer shopping journey. Particularly, you can deploy the best chatbots to help customers find the product they are looking for on your website. Chatbots leverages Artificial Intelligence to deliver product recommendations that perfectly match the customer’s preferences.

Sephora is one of the popular brands that use chatbots to elevate the retail experience. The chatbot engages buyers on the Sephora Facebook page with questions that make it easy to understand customer preferences. Consequently, the bot provides makeup tips and product reviews to aid customer purchase decisions. Besides, Sephora chatbot provides beauty advice to help customers pick products that match their skin types, as well as other personality aspects.

On the other hand, Nike uses chatbots on Facebook and Skype to deliver a personalized experience for customers buying sports shoes. The chatbot engages the buyers to understand their personality and preferences before proposing to them the right product.

Recently, Nike launched an advanced chatbot “Stylebot” aimed at female buyers. The Stylebot allows different buyer segments like the sporty girl and working girl to find shoes that match their styles.

Automating sales

chatbots in sales

Chatbots actively guiding customers to sales

Whether you are aware of it or not, your business has a predefined sales process. Your sales strategy probably involves capturing the buyer’s attention, qualifying the lead, sending the offer, addressing customer concerns about the product, and closing the deal. A reliable sales software platform can help you align these processes.

However, not every customer who visits your website is a buyer. Therefore, you need an intelligent system that engages these website visitors to separate the wheat from the chaff. Chatbots can help you engage customers on the different levels of the sales funnel. You can train and program the chatbot to adapt to different conversational styles.

For example, the chatbot can be designed to be friendly to capture buyers’ attention. It also can be helpful, technical, or precise when answering customer questions about the product. Furthermore, the chatbot can be configured to be humorous and snarky to engage the buyers after the sales. The best thing about chatbots is that they can be built to pop up on any product page. What’s more; the chatbot can be designed to provide additional information, discount code, or video content.

An example of a chatbot automating sales is Hello Chatbot by Hipmunk. The chatbot engages travelers at a closer level, helping them to find and reserve their travel choice with ease. It provides discounts and aggregates deals on travel packages. As a result, customers don’t have to wade through numerous websites analyzing deals to find an ideal offer.

Interestingly, Hello Chatbot can easily identify the user’s location. Also, the chatbot is friendly and helpful, often trying to simulate a travel agent. Thanks to the high level of engagement of Hello Chatbot, Hipmunk has managed to convert many travelers to book flights.

Enhancing social media experience

Finally, today’s chatbots do not only live within the website pages. With the progress made in technology, its easy to build chatbots that enhance social media experience.

Generally, social media chatbots are deployed to engage customers in a back-and-forth conversation. The goal is to interact with customers on social platforms and help them gain an in-depth understanding of a particular topic.

For example, Quartz; a popular media company uses chatbots to provide news, projects, messages, and obsessions. The chatbot provides a snippet from popular stories via Facebook Messenger. Then, it engages customers who respond, taking them deeper into the topic.

This strategy works perfectly, especially if you know the best tips for customer service and have an active social community.

Creating unique characters

chatbot mimicking unique characters

Examples of chatbots mimicking unique characters

Chatbots are designed to simulate human intelligence. Simply put, chatbots are built to mimic the way human agents work. However, thanks to technological advancement, it’s now easy to create chatbots with unique character or personality.

In most cases, these chatbots facilitate activities outside the conventional customer support service. For example, you can deploy a chatbot to build brand loyalty. Alternatively, you can use the chatbot to enhance customer engagement with your brand.

Disney created a chatbot on Facebook that had a distinctive personality. Actually, the chatbot simulates the main character, Judy from the movie Zootopia. The chatbot included speech that Judy said in the movie. The ides was to allow kids to interact with Judy and feel as if they were part of the action. This way, the kids would develop an interest to watch the movie, hence asking parents to buy movie tickets.

Are chatbots replacing human agents?

Are chatbots replacing human agents? Absolutely no! While chatbots can handle the most FAQs, they are not fully capable of processing complex customer issues. Chatbots complement human agent effort and are not in any way meant to replace humans.

That said, its good to note that chatbot uses vary depending on what you want to achieve. Some of the benefits of chatbots include:

  • They offer seamless live chat
  • Chatbots deliver 24/7/365 customer service
  • When combined with CMS and CRM software tools for small business, chatbots allows brands to leverage customer information with ease.
  • Chatbots streamlines the sales process.
  • Chatbots save customer service costs.

Also, depending on how effective the chatbot is, it can make or break your customer service. When a chatbot is good at what it does, it increases customer convenience, reduces response time, and improves the first-time resolution. However, when a chatbot fails, customers walk away with regrettable experiences.

The companies we’ve mentioned have used chatbots to great effect. Whether its answering FAQs, automating sales, streamline social media operation, or offering product recommendation, these brands are reaping significant rewards. The companies are also using chatbots to understand how digital customer service is changing.

There many chatbots that you can explore including Custom Bots by Intercom, FaqBot, and Answer Boy by Zendesk. You can easily sign up for Zendesk free trial here and get to know how it leverages AI and machine learning to answer customer questions.

Finally, chatbots come with their own set of risks. To be on the safe side, run a pilot before fully deploying the chatbot, and avoid using chatbots where customers are likely to be irritated or sensitive. Ideally, you should first adopt a hybrid system where human agents supervise and train the chatbot until it’s able to intervene in conversations on its own. You can read our guide to learn more about AI-powered customer service and how you can execute it to great effect.  

Jenny Chang

By Jenny Chang

Jenny Chang is a senior writer specializing in SaaS and B2B software solutions. Her decision to focus on these two industries was spurred by their explosive growth in the last decade, much of it she attributes to the emergence of disruptive technologies and the quick adoption by businesses that were quick to recognize their values to their organizations. She has covered all the major developments in SaaS and B2B software solutions, from the introduction of massive ERPs to small business platforms to help startups on their way to success.

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