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AI & Rule-Based Chatbots: What's Your Business Choice?

What Is a Chatbot? How Do Chatbots Work?

By AltcraftPublished 2 years ago 5 min read

The digital age has led to high customer expectations. From eCommerce, healthcare, marketing, or finance, instant communication is essential in every business. Today, chatbots provide businesses in different industries with the capability to keep customers engaged and satisfied.

What Is a Chatbot?

You've likely encountered this already. Have you gone to a website, and a little chat window pops up with a generic profile picture and name to go along with it? That's a chatbot, usually. Sometimes it's a real person, but that's extremely rare owing to logistics. Generally, you're encountering a chatbot.

A chatbot is a software application that uses Artificial Intelligence (AI) and Natural Language Processing (NLP) to process and understand human intentions and provide guidance to desired outcomes. It works as a virtual assistant to enhance your customer experience.

Basically, chatbots for marketing often leverage existing data to understand submitted queries. They also analyze appropriate answers based on their training period. And with machine learning technology, they learn context and improve their efficiency.

How Do Chatbots Work?

Chatbots use advanced machine learning and NLP algorithms to learn from existing data. Typically, NLP is the ability for computers to process and understand human speech and respond in human language. It's designed to make the interactions mimic communication between two people.

Types of Chatbots

  • Rule-based Chatbots
  • Rule-based chatbots require human input to choose predefined options. And since the selections are limited, these chatbots tend to be the slowest in terms of customer service.

    Data Science Dojo managed to explain in an accessible way how AI chatbots work:

    • AI-based Chatbots

    Intellectually independent chatbots rely on machine learning to understand users' inputs and queries. These bots are highly trainable, and you can train them to process certain phrases and keywords that require responses. Independently, the bots will also learn complex queries and generate appropriate responses.

    In this picture, LeewayHertz did a great job to show how AI chatbots work:

    Let's take a closer look at the difference between rule-based chatbots and AI chatbots.

    Utilizing rules-based chatbots and AI chatbots can facilitate a variety of outcomes that provide clear paths to sales avenues for customers. When considering what chatbots are used for, look into infrastructural needs. Artificial intelligence chatbots may be a little bit too ambitious for your operation. Sometimes you just need something that generates preset alternatives for clientele. At other times, you need AI capable of having a conversation. It all depends on the needs of your business overall.

    Benefits of Chatbots for Businesses

    1. They Give Your Business a Friendly Face

    Chatbots can help your business create a friendly and relatable face for better customer interactions. For your audience, the chatbot becomes the first touchpoint and can be more personal than communication through the phone or mail.

    Chatbot personality can have a significant influence on user experience, and it plays an important role in customer perceptions. To develop the appropriate chatbot personality for your company, you have to consider factors like brand identity and audience preferences.

    To get started, consider the phrases and words that you use when marketing to your audience. The chatbot persona should mirror this language. And while you can't appeal to everyone, making a persona that's consistent with your brand voice can address audience preferences.

    2. Constant Availability

    Unlike traditional customer service, chatbots for websites are always available 24/7. It provides support to your customers on weekends and at late hours. Interestingly, AI chatbots are not overwhelmed by a multitude of requests. By design, it can process multiple requests at the same time and maintain accuracy.

    Whenever there's a query that a chatbot can't handle, a customer can always forward the question to a human respondent.

    Outside the normal business hours, customers can leave a message for customer service to attend to the next business day. But within business hours, the complicated queries can be handled by human employees.

    3. Instant Response to a Customer

    By providing real-time interaction, you can ensure instant service to your customers. The studies confirm that businesses can react three times faster than when using human customer service. That's one of the reasons why chatbots help businesses increase customer satisfaction by 24%.

    4. Gathering Customer Data And Provide Accurate Marketing Insights

    Customer service chatbots can qualify relevant business leads by collecting relevant data that can be used by your sales teams for sales conversions. Ideally, chatbots can direct customers towards desired products based on their queries.

    And since we're in the customer age, your customers expect personalized responses to their queries. Chatbots are designed to tap into customer history and generate the most appropriate responses to questions. Most importantly, the data helps your marketing team to send personalized messages and offers.

    5. Chatbots Can Increase Your Sales

    If your business can offer the appropriate information and offers to potential customers, your conversion rates can increase significantly. Chatbots for business can provide answers to website visitors throughout the customer journey. Most importantly, it will advise and guide customers when selecting products. According to a recent survey, businesses that use chatbots increased their sales by 67%.

    Social Media Chatbots

    Generally, a website chatbot is a great tool for improving customer service and increasing sales. But you need not only rely on website options. In recent years, chatbots in messengers and social networks have been increasingly implemented by companies from a wide variety of industries. The relevance of the solution is confirmed by the fact that a very large and active audience is concentrated on social media. And that audience is your potential consumers.

    Let's consider social media like Telegram, as an example. Text and image files can be sent through this platform, and "bots", as they've come to be known, are popping up all over the place. You might send bulk messages to Telegram subscribers using chatbots. Varying buttons can be put in images, text can be added, you can have images in your messages, and basically design them just as you like. When the time comes, you can schedule it to be sent as fits your needs; this can be narrowed down to the specific time on the specific day when you need that message sent. After sending, stats can be explored to determine effectiveness. It's a great way to determine how effective your outreach is.

    Final Words

    Artificial intelligence has ushered in limitless capabilities for businesses. And chatbots have proved to be an incredible invention for any business. Chatbots offer continuous customer support and recommendations to help you faster. While chatbot technology is useful for automation, it's prudent to balance chatbot automation with the human touch.

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