An AI chatbot is a computer program that simulates human conversation. Chatbots are designed to help users with a variety of tasks, including customer service and support, marketing, and sales, and even entertainment or other purposes.
Chatbots have been around for years, but they have become more popular during and after the pandemic with the increasing need of self-service and support. They were even listed in the 25 technologies that will help businesses get out of the pandemic crisis faster.
There are two main types of chatbots based on the technology: rule-based and AI-based. Rule-based chatbots follow a set of pre-defined rules to respond to user input. They are only basic chatbots that include cards, forms and quick-replies, and others, but without the potential of conversational AI. AI-based chatbots use conversational artificial intelligence to understand user input and provide a response. AI chatbot technology is more developed than ever now. It mostly depends on the company that will use it to properly plan, develop and train it for better customer experience and support.
Rule-based chatbots are easier to create but have limits in the usage cases and functionalities. AI-based chatbots take longer to create to work properly but can provide more accurate results. Businesses should decide which type of chatbot is right for them based on their specific needs to meet their goals.
There are many benefits of using chatbots for businesses. Chatbots can save businesses time and money by automating tasks that would otherwise need to be completed by humans. For example, customer service chatbots can answer common questions from customers, freeing up customer service agents to handle more complex issues.
Chatbots can also help businesses increase sales and engagement by providing personalized recommendations based on customers’ searches and questions. For example, the forms in a chatbot can be used for specific user groups – personalized and accessible when a precise answer by the conversational AI module is triggered so only these users that ask a specific question will access the concrete form to fill it out. Then, they could receive something in return (discount or else) and the business would collect this customer data for further analysis to target those groups with more personalized suggestions. This customer data also can be used to improve customer service, target marketing campaigns, and personalize the user experience on the company’s website.
How can a chatbot help your business?
There are numerous ways a chatbot can help your business. Here are some of the main benefits:
1. They can help save you time and money by automating customer service tasks – One reason to have a chatbot is that it can help improve your customer service and support. Chatbots can be used to answer common customer questions, providing them with the information they need quickly and easily. This can free up your customer service team to focus on more complex issues, leading to improved satisfaction levels overall.
2. They can increase sales – Chatbots can help with increasing the revenue for your business. By directing customers through the marketing and sales funnels, you can encourage them to make purchases they may not have otherwise considered.
3. They can boost customer satisfaction by providing rapid responses to customer queries – One of the main reasons businesses should consider having a chatbot is that it can help to increase customer engagement. By being able to communicate with customers directly and instantly, you can provide them with a better experience and build a stronger relationship with them to stay loyal to your brand.
4. They can improve customer retention – chatbots can help businesses to achieve higher customer retention rates. By staying in touch with customers after they have made a purchase, you can keep them engaged with your brand and encourage them to come back again in the future. By being always online, the AI chatbot can always assist customers regardless of the time of the day which helps with their retention for longer.
5. They can help with attracting leads by collecting customer data (mostly emails) in exchange for something to download – an e-book, a whitepaper, how-to materials, or sign-up for a newsletter, and many other ways. The emails then can be used for sending special offers, new releases, and more targeted campaigns.
How to create a chatbot?
Creating a chatbot is not as complicated as it may sound at first. In general, all you need to do is to determine the key parameters of your bot and then define its rules of behavior. Of course, there are many other things you can do to make your chatbot more engaging and interactive, but these are the basics.
The first step is to choose where your chatbot will be implemented – on your site or somewhere else and when it will be implemented. There are many different service providers available, so take some time to consider which one would be best for your needs. То chose a service provider, you will need to plan your chatbot project – choose what its main purpose will be – for customer service and support, for marketing, for sales or other, who is going to use the chatbot – customers, partners, employees, therefore what functionalities your chatbot would be required to have. The provider you choose shall support the technological needs of your chatbot.
The next step is to determine the key parameters of your chatbot. This includes things like its design, name, avatar, and others. You will need to determine these to start its creation in favor of your business from Day 1 – brand logo, colors, tone of voice (witty, funny, formal, etc.). This is about how chatbot users will perceive it and think of it when communicating with the brand.
Once you have determined the key parameters of your chatbot, you will need to define its functionalities and whether will it has conversational AI or not. This includes things like how it will respond to certain questions and what answers it will give (it depends on the business itself). Will it provide inquiry forms, on what languages it will be, the marketing and sales funnels creation, direct links and logics, and any other elements that will help your business grow. If the chatbot will be with conversational AI, it must be decided on what topics it will answer, it must be trained to it and tested for any mistakes to be sure it works properly.
There are some mistakes to avoid in creating a fully working AI chatbot. Some of them are no checking for grammar mistakes, mistakes in factology and illustrations, there is no team, or a person assigned to the project to supervise and maintain the chatbot, no checking for proper direct links and connections, not following good practices by experts, no chatbot promotion, no customer data analysis. These are the very first main mistakes to avoid for reaching your business goals so keep them in mind.
Once you have created your chatbot, you can begin testing it out with your employees, specific groups, or others. This is an important step, as it will help you fine-tune your chatbot before making it available to the world. You can test your chatbot with friends or family members first or use online services that allow you to connect with real people for testing purposes.
After you have tested your chatbot and made sure it is working properly, you can then make it available to the public. There are different ways you can promote a chatbot on your website through social media platforms such as Facebook, Instagram, LinkedIn, Youtube, offline, etc.
What your chatbot should be?
When you’re planning to build a chatbot, it’s important to consider what will make your chatbot most useful to your audience. Here are 5 key factors to consider:
1. Easy to use: The chatbot should be easy to use and understand, with a natural flow to the conversation. Users should be able to accomplish their goals without getting frustrated or lost in much information in the chatbot.
2. Engaging: Your chatbot should be engaging, keeping the user’s attention throughout the interaction. This could include telling funny jokes, delivering useful or inspiring content, or providing an exciting experience with the help of conversational AI.
3. Scalability: As your chatbot grows in popularity, it should be able to handle an increasing number of users without sacrificing quality or performance.
4. Security: Your chatbot should be secure, protecting the user’s information and ensuring that all interactions are safe and private.
5. Trained not only on business topics but also on small talk: Your chatbot shall greet customers so they feel it more like they are talking to a human instead of only business information. It should answer questions on small talk like how are you, what are you doing, what are you and etc. because when users first chat with a chatbot they want to know if it can answer simple questions, not only business ones. This is part of the interaction experience for them and can have a Wow-effect.
How to promote and market your chatbot?
Assuming your chatbot is already built and ready to go, you will need to start promoting and marketing your chatbot to reach your target audience. Here are a few ideas to get you started:
1. Use social media platforms: Social media platforms are a great way to reach out to potential users and promote your chatbot. Make sure to post engaging content that will encourage users to try out your chatbot and to post relevant links to precise chatbot content so users will be able to get there with 1 click or scan of a QR code.
2. Create a landing page: A landing page is a great way to test and promote your chatbot and collect user data. Include a call-to-action (CTA) that will encourage users to chat with your chatbot.
3. Run ads: Ads are a great way to reach potential users who might not be familiar with your chatbot. Make sure to target your ads appropriately to reach the right audience.
4. Collaborate with other businesses: Collaborating with other businesses can help you reach a larger audience and promote your chatbot more effectively. For example, you could collaborate with a business that has a similar target market or offers a discount for users who sign up through your partner’s link.
5. Hold competitions, games, and giveaways: Contests, games, and giveaways are always popular among users. You could hold a contest or giveaway on social media or on your website/landing page and offer prizes for the winners – with all activities happening in the chatbot. This is a great way to generate interest in your chatbot and encourage more people to check it and try it out.
6. Promote it also offline on promotional materials or other offline objects such as packaging of products, labels on products, price tags, flyers, billboards, t-shirts, mugs, keychains, business cards, or other materials to popularize it more.
There are many other good practices for chatbot promotion, but we will share them in a separate blog post with more details.
How to measure the success of your chatbot?
There are some key metrics you should track to measure the success of your chatbot:
1. User Retention captures how often users come back to your chatbot. You can calculate this by dividing the number of returning users in a given time period by the total number of users and multiplying by 100 to see the percentage of these users.
2. NPS Score measures customer satisfaction and gives you a pulse on how likely people are to recommend your chatbot to a friend. To calculate NPS, you have to take the % of users who rated your chatbot as a 9 or 10 (promoters) on a scale of 1 to 10 and subtract from it the % of users who rated you lower (detractors). Here is a simple formula to calculate it: NPS = % promoters – % detractors. For example, if 70% of users were Promoters and 10% were Detractors, your Net Promoter is a score of 60.
3. Conversion rate measures the percentage of users who complete the desired action, such as making a purchase, signing up for a newsletter, filling out a form, or something else.
To calculate the conversion rate, track the number of people who clicked a link or scanned a QR code (online and offline) that lead to the chatbot and how many of them completed the desired action for a specific period of time (month, year). This way, you will know the effectiveness of your chatbot, keep in mind that these are the basic KPIs and that there are many other ways of calculating the chatbot’s effectiveness and overall ROI but they will be shared in detail in another blog post.
What are the challenges of chatbot development?
Even though chatbots have been around for a while, they are still considered to be a relatively new technology. This means that there are still some challenges associated with chatbot development.
One of the biggest challenges is that the chatbot project must be planned properly and for a long-term period to meet its full potential. This is difficult because there are no 2 chatbots the same even if you compare the chatbots of 2 similar businesses therefore there is no one right way to create and develop a chatbot. Consulting with experts like our team will help you avoid some of the common mistakes and meet your chatbot goals smoothly without any stumbles.
Another challenge is ensuring that the conversational AI is trained well by the business – on many topics with many different training phrases and questions so that it could give the right answers to its users and to work in favor of the business.
Finally, one of the most common challenges is making sure that the chatbot is helpful and not annoying. This means striking the right balance between providing too much information and not enough information. It also means avoiding common pitfalls such as giving answers that are clearly not helpful or with just one or two words, or too promotional. Make sure the chatbot gives information about anything that its users could ask and offers alternatives also when you do not provide a product or service instead of saying you do not provide them. That is a good practice so customers would be happy with your chatbot and what it has to offer.
What are the future trends in chatbot development?
1. Chatbots will become more ubiquitous:
They are already used by many businesses from different industries and their usage is growing rapidly. In 2018, Business Insider predicted that 85% of customer interactions will be managed without humans by 2025. This trend is being fueled by the advancement of artificial intelligence (AI) and natural language processing (NLP) technologies, which are making chatbots more intelligent, engaging, and effective at managing customer queries.
2. Chatbots will get smarter:
As AI and NLP technologies continue to evolve, chatbots will become even more intelligent. They will be able to understand more complexity in human conversation, carry out more sophisticated tasks and provide more accurate information. The conversational AI market also is expected to reach $41.39 billion by 2030, according to a new report. It is expected to expand at a CAGR of 23.6% from 2022 to 2030. These trends are not going away, and the technology would continue to develop for better customer service and support, and overall experience.
3. Chatbots will be more widely used:
Chatbots are not just limited to businesses – they are also being used in a variety of other sectors such as education, healthcare, and even politics or for personal purposes. As their capabilities continue to expand, we can expect to see them being used in even more industries in the future, because no matter the industry, a chatbot can be used for any purpose to meet the goals of its owner and users.
4. The use of voice assistants will increase:
As well as text-based chatbots, there is also a growing trend for voice-based assistants such as Amazon Alexa, Apple Siri, Google Assistant, and business bots with voice-to-text and text-to-voice capabilities. These devices are becoming increasingly popular as they are seen as a convenient way to carry out tasks hands-free. We can expect to see the use of voice assistants continue to rise in the coming years not only in big companies’ projects but also for small and medium-sized ones.
AI chatbots on your site are for sure a great idea for your business if you want to succeed and grow further. They are more affordable than ever now, and every business can have their own digital assistant, create it by their business goals and needs and 100% won’t regret the investment for such a long-term working project. Invest in the future of your business now with a digital assistant by your side!
Sources:
1) CB Insights – 25 Industries & Tech Shaping The Post-Covid World research
2) Research and Markets – Conversational AI Market Size, Share & Trends Analysis Report By Component (Solutions, Managed Services, Professional Services), By Type, By Deployment, By Technology, By End-user, By Region, And Segment Forecasts, 2022 – 2030