In today’s digital age, businesses need to constantly adapt their customer service strategies to remain competitive. Chatbots have been around since 1966, yet they have gained in popularity in the digital realm during the past 6-7 years. This is due to the fact that they are capable of providing a superior customer experience compared to other types of communication tools. Evidence of the popularity of chatbots with conversational AI is seen in figures showing that in 2021 the market was valued at $6.8 billion and is expected to grow to $18.4 billion by 2026. Furthermore, the AI market size – which includes AI chatbots – is projected to grow from $86.9 billion in 2022 to $407.0 billion by 2027, with a Compound Annual Growth Rate of 36.2%. Furthermore, surveys conducted in 2022 indicated that 90% of respondents agreed that conversational solutions are beneficial for creating a better experience for both customers and businesses. Businesses have come to understand the significance of AI chatbots and will integrate them into their offerings regardless of their industry and other options. In fact, chatbots may even substitute certain current technologies or communication methods due to the many advantages they provide to businesses, customers, partners, and employees. Though there can be some obstacles, they can be overcome, and the advantages far outweigh the drawbacks.
That’s why one of the best customer service strategies is to use an AI chatbot versus its alternatives but use it in combination with some of them that cannot be replaced for the best results. If you’re looking to choose the best strategy for your brand, there are several options available. Here are some of the most popular types of channels for communication with your customers, partners, and employees that businesses can use to provide excellent 2-way communication and their pros and cons.
When comparing chatbots to other alternatives, it is important to consider the advantages and disadvantages of each solution. In-person alternatives such as live chat widgets, email, phone, messaging apps, social media communication, contact centers (in-house or outsourced), reception desks, and others involve actively engaging employees in the communication process. Automated/digital alternatives include IVR, mobile apps, website FAQ sections, and other automated solutions providing self-service options to customers. Each of these solutions has its own set of benefits and drawbacks, so a business must weigh these when deciding which is the best for its needs.
A key factor to consider when comparing these solutions is how they can help maximize customer service and experience, save costs and time, optimize business operations and employees’ performance, and meet the need for an online presence. By understanding the pros and cons of each option, a business can then choose the most suitable one or a combination of a few of them.
Knowing the benefits of utilizing a chatbot powered by conversational AI can be helpful in choosing the best solution for a business. These solutions (the chatbot alternatives) may have limitations that a chatbot can improve upon, such as:
- slow customer response time,
- poor user experience,
- high costs due to manpower, staff turnover, and training,
- difficulty in usage due to learning curves, downloading, or installation,
- psychological or emotional challenges that may deter customers from face-to-face communication,
- limited usage within hours of operation or with certain access,
- a lack of first and zero-party data collection, structuring, and analysis without additional investments.
AI chatbot and Website
Having an AI chatbot on your website has many benefits. It allows for two-way communication not with a human via live chat, but with conversational AI. The chatbot can have unlimited content personalized to the questions of the users for instant support. This helps to keep people on your website and more likely to find what they are looking for. According to a report from April 2022, up to 65% of users leave a business website after viewing only one page and 54% scroll down only to half of a webpage and then leave it. Having an AI chatbot, it can help to decrease the percentage of people leaving the website without finding what they were looking for. Additionally, 80.95% of people answered that they prefer to communicate with brands on their websites, and the numbers are growing after the pandemic because people search for self-service options on the brands’ websites and if a chatbot is waiting there to assist them instantly, that could keep them longer on the site, no opportunities will be missed, increasing the average page duration and overall staying on the site. Almost all generations are likely to use a chatbot if the right user experience is offered. This includes 92.31% of Generation Z (18-24), 83.78% of Millennials (25-39), and 94.44% of Generation X (40-59). To ensure a great user experience, an AI chatbot is the perfect solution for offering 24/7/365/forever assistance on your site. A chatbot offers a valuable way to collect customer behavior data in the upcoming digital world without third-party cookies. Around a third of customers now have conversations with businesses outside of regular hours (35% to 45% to be exact). Do you know if your customers are getting what they need? What does Google Analytics tell you about your website bounce rate? An AI chatbot on your site could help with sales, providing engaging content, 24/7 customer assistance, and gathering first and zero-party data. It’s beneficial for businesses of all sizes and industries and can be set up quickly and cost-effectively.
AI chatbot vs and with Live Chat
Live chat is a great way to provide quick customer service without the long wait times associated with the email or phone support. Live chat allows customers to communicate directly with a real person who can answer their questions and resolve their issues quickly and effectively. Although companies are often asking themselves which is better – human assistance or chatbot with conversational AI? Both have their advantages and disadvantages, but when used together, they can provide customers with the greatest experience. AI chatbots have some clear benefits compared to human interaction: instant response, no holidays, lower costs, 24/7 support, consistency in learning, consistency in company standards, and the ability to talk in many languages when trained, multitasking –communication with more than one customer at once is a feature only of chatbots, automatic first and zero-party customer data collection. These features combined with a live chat option provide customers with comprehensive customer service and support.
Live chat agents are often seen as more compassionate than business AI chatbots, displaying a more personal attitude with a more emotional and empathetic approach. They are also more sensitive to culture and other human nature differences, as well as being more cognitive in handling customer emotions, but not always. In addition, agents can perform more complex tasks than chatbots, which are usually best suited for more routine tasks.
Customers expect their queries to be answered swiftly, no matter the time of day. To meet this demand, AI chatbots and live chat agents should work together, with the chatbots providing quick answers to routine queries and the agents taking on more complex issues. This way, the agents can focus on developing their skills and aiding the company’s growth, while the AI chatbot handles the more regular tasks. AI chatbot assistance is available 24/7 and instantly to provide customers with information regarding company products, services, prices, benefits, and frequently asked questions. For more complicated queries, live agent assistance is available to investigate and resolve issues, such as packages not being received. With AI chatbot support, customers can get answers to their inquiries without having to wait, even when agents are resting.
AI chatbots and live chat solutions each have their advantages and drawbacks. However, when it comes to assisting customers and meeting their needs, both AI chatbots and human agents can work together in the business’s favor. Conversational AI for businesses is becoming increasingly popular and is the future of online communication, while live agents provide a more personal approach. The business team can further train the chatbot to imitate their mannerisms and speech, making it difficult for users to tell the difference between talking to a machine or a human. 40% of consumers don’t mind engaging with a chatbot or a human for help, as long as they get the support they need. This number is expected to grow as chatbots continue to develop, expand use cases, and integrate with payment systems and etc.
Chatbots offer fast and accurate responses to customers’ inquiries, with 40% of customers expecting a response within 5 seconds or less. In comparison, live chat typically provides a response in 5 minutes or less. It’s clear that chatbots offer a faster, more efficient customer service experience, allowing customers to get the answers they need quickly and conveniently. Meanwhile, live chat provides a more personal, human touch, offering a deeper level of support and allowing customers to receive tailored answers to their specific questions. When both are used in tandem, customers are sure to receive a high level of support that is both efficient and more human.
AI chatbot vs Messaging App
Messaging apps like Facebook Messenger, WhatsApp, Viber, and Telegram allow customers to communicate with customer service reps in a more convenient way than traditional email or phone support. With a wide array of messaging applications available, it can be difficult to decide which one is best for communicating with family, friends, and customers. When it comes to business, companies need to select an option that meets their core goals and requirements.
- Website AI Chatbot vs Facebook Messenger
Facebook Messenger is a popular communications tool that enables users to exchange messages, audio, and video with friends, family, and businesses. It provides live chat functionality which allows companies to connect directly with their customers in real time, helping them provide better customer service, support, and engagement.
More than one billion people and businesses use Facebook Messenger. According to the latest information from Facebook, 40 million businesses communicate with their customers on Messenger, sending over 20 billion messages each month.
As with other messaging tools, Facebook Messenger is easy to use. However, it requires employers to regularly check for messages and respond, making it costly to maintain. As a result, providing customer service and support instantly and 24/7 is almost impossible. Customers must often wait for a response to their inquiries.
To meet this need, automated chatbots were introduced on Facebook Messenger. This allows customers to get the answers they need quickly and efficiently. Facebook reported having 300,000 active chatbots in Messenger in 2019. During the past few years, numerous platforms have made available a tool for businesses to create a Facebook Messenger bot. This was an attractive solution as most customers have a Facebook profile and it made communication easier. However, recently Facebook Messenger has introduced many new policies and technical requirements which have made it difficult for businesses and marketing specialists to quickly adapt their strategies and chatbots. For instance, when chatbots initially appeared in Messenger, businesses could send an unlimited number of messages to their subscribers at any time with no limitations. Businesses now have the option of sending a free message to a customer through a chatbot on Facebook Messenger within 24 hours of the last communication. Initially, these chatbots were mainly used for marketing and their popularity began to wane.
An alternate way to drive more traffic and engagement to a website is to transfer the communication flow from Facebook Messenger and other messengers to the website and create a website chatbot. This gives businesses control over their own website, allowing them to benefit from the technology as well as their customers.
Businesses can use chatbot platforms to create, train and maintain their own AI chatbot on their website, forgoing the need for customers to check different accounts for contact information. This was successfully done by the hotel complex “Izgreva” and used to ensure customer inquiries are not overlooked. This will bring an increase in website traffic and session durations, as customers will be able to access all necessary information in one place. The AI chatbot is always available to assist, and businesses can also use a basic Facebook Messenger chatbot to direct customers to answers in the AI chatbot on the website, for more automated communication.
- Website AI chatbot vs WhatsApp chatbot
Using WhatsApp for customer service is a popular choice due to its wide accessibility. However, it is not always the most efficient way to communicate with customers, as it can be costly, and difficult to provide 24/7 assistance and cause customers to have to wait for a response. To address these issues, WhatsApp chatbots have been adopted by many businesses. However, website AI chatbots are preferred due to their more advanced features and capabilities. Website chatbots can provide a more engaging experience for customers, with features such as cards with buttons, carousels, and request forms. Additionally, WhatsApp chatbots require extra investment for licenses for integrations, and templated messages if messages are sent after 24 hours. When selecting a messaging provider, businesses should weigh the pros and cons. WhatsApp may require extra fees, while website AI chatbot requires no additional cost per message, offering only monthly or yearly subscriptions. Furthermore, it is easy to use (with no technical expertise), cost-effective (making the CFO smile), and has no integration (leaving your team satisfied).
- Website AI chatbot vs Telegram
The Telegram messaging platform is renowned for its end-to-end encryption, making it one of the most secure messaging services available. However, it is not as widely used as other messaging services like Facebook Messenger and WhatsApp. Businesses have begun to use Telegram for customer communications, mainly through a Telegram chatbot.
Similar to WhatsApp and its chatbots, using Telegram bots can be challenging since they are dependent on the app’s requirements and require commands to be used to make changes. Website AI chatbots, on the other hand, are much easier to create and use with friendly interfaces and more design options such as colors, names and logos, and others.
- Website AI chatbot vs Viber chatbot
Statistics from Viber on customer behavior in Bulgaria have revealed that in 2021, messages sent for order confirmations, delivery tracking, reminders for meetings, and other tasks have increased by 52%, marketing messages for offers, discounts, and other purposes have increased by 91%, and calls for customer support have risen a remarkable 237%.
An AI chatbot with conversational capabilities can be a great option for businesses to handle all these tasks, as it can be located on the company website instead of splitting customer communication channels. The website is the core of a company’s digital ecosystem, where its products and services are located, and offering an AI chatbot there can be much more engaging than directing customers to other messaging apps. Additionally, Viber is not a widely-used platform globally, and if businesses are dealing with customers from many countries, they would need to convince them to download the app to communicate with them. A chatbot powered by AI can be found on the business website, meaning customers won’t need to download or install anything to chat. While Viber bots have their benefits, businesses should be thoughtful when deciding where they want customers to interact. Ultimately, they should use all available communication channels to direct traffic and conversations to their website, and the AI chatbot, informing customers on why their site is the best place to be given proper assistance.
AI chatbot vs Mobile App
Mobile applications require substantial storage on our phones, so when it comes to downloading and installing a new one, users tend to hesitate or do it only for a specific purpose and then uninstall it. People usually organize their phones from Day 1, so they think twice before downloading an app – they already have what they need and use. Businesses offering mobile apps must take into account this hurdle and the fact that each app comes with its own learning curve – another obstacle for users to overcome (why would they bother?). On the other hand, chatbots are primarily hosted on websites or messaging platforms, so there’s no need for users to download and install anything new. All chatbots work in the same way: click, scroll, ask, and get the answer. Once someone has used a chatbot once, they have no difficulty conversing with another one.
Benefits of Business Mobile Apps:
- The business has its own tools that are not reliant on third-party companies (such as the website chatbot).
- They are designed to meet the business’s specific objectives (same as the website chatbot).
- The business or an outsourced company maintains them (as with the website chatbot).
Drawbacks of Business Mobile Apps:
- They can be difficult to navigate, resulting in a poor user experience.
- They can be costly to create and maintain (requiring fixed costs for manpower, developers, potential bugs, and ongoing maintenance).
- They may be hard to use for customers (requiring learning, downloading, and installation, and taking up storage space).
- Creation and testing can take a long time.
On the other hand, the use of AI chatbots offers a range of advantages over traditional mobile apps:
- They require no download or installation, making them less expensive to create, maintain, test, and train.
- Furthermore, they are simple to use for both businesses and customers, allowing businesses to tailor them according to their choices and goals.
- Additionally, chatbots are always accessible on a website, helping customers while simultaneously driving traffic.
- Finally, businesses can direct customers to a specific webpage or element within the chatbot from anywhere online and offline by simply clicking a link, button, image, or text, or scanning a QR code, making them perfect for sales, marketing, and customer service and support.
AI Chatbot vs Email
A Juniper Research whitepaper reports that chatbots have a higher CTR (Click-through Rate) than emails, meaning users are more likely to interact with content presented in an interactive and engaging way by chatbots, particularly with conversational AI, as opposed to traditional e-mail marketing.
AI chatbots enable marketers to establish an immediate connection with customers while they’re looking for information or shopping. This is beneficial to businesses as customers provide their data willingly, enabling the business to tailor future offers according to their needs. With active user engagement, the business can gain insight into what customers are interested in, and customers feel more comprehended by the business. AI chatbots are more advantageous than email marketing as it enables instant engagement as opposed to delayed communication, not to mention the potential for emails to be filtered into Spam or Promotions.
On the other hand, email marketing and AI chatbots can work in tandem to provide a higher level of customer experience. According to the 2022 State of Conversations report by Drift, email is the most popular communication channel, with 26% of respondents reporting they have used it more than 10 times in the past six months. Chatbot solutions have not been used as often as email, but a majority of respondents said they have used them between 3-5 times in the 6-month period. This suggests that, while traditional methods like email and phone calls are relied upon for consistent communication, chatbot solutions can offer the customer a starting point for the conversation, and assistance when an immediate response or a routine task is needed.
Businesses can use emails to provide potential customers with links to a chatbot that can take specific actions – such as a sign-up form, more information about a product or service, direct order, answer to a question, promotion, or other. In addition, the link can include the specific page on which the chatbot will open. This allows customers to access their desired destination with just one click or scan of a QR code. Furthermore, the chatbot will capture data about customer behavior and collate all clicks and questions for businesses to analyze. By analyzing this data, businesses can create automated email sequences with more personalized offers tailored to customers’ exact needs. To maximize opportunities, businesses should combine chatbots and email marketing to further grow their business.
AI Chatbot vs Phone Calls
Meta reveals that 64% of people prefer messaging a business over calling it. This trend is projected to increase in the coming years due to customer preference for online communication and digital self-service. Whereas phone calls are becoming outdated, the younger generations have adopted chat as the preferred method of communication, with the older generations following suit. When a customer calls, they may not receive an immediate response or may have to wait in a queue or for a callback for hours or even days, particularly on weekends and holidays. In contrast, an AI chatbot is always available and customer queries can be answered anytime, day or night.
According to IBM, businesses spend an estimated $1.3 trillion per year on customer service calls and chats. However, a significant portion of these, around 80%, are frequently asked questions and routine inquiries taking up to 12 minutes of employee time per customer. AI chatbots can automate this process, reducing the time and resources spent on such calls and providing a better customer experience. With AI chatbots, businesses and customers can benefit from efficient, distraction-free communication which allows employees to focus on more complex tasks.
AI Chatbot vs SMS
SMS notifications are more intrusive when it comes to informing customers about business products and services. While they have benefits such as high open and click rates, customers may quickly forget about the information they receive since they are not actively searching for it. Additionally, SMS notifications are not interactive or memorable. In contrast, chatbots are found on the business’ website or on messaging apps where customers are willingly looking for something they are interested in. Through chatbots, businesses are able to understand customers’ behavior, needs, and problems. Moreover, companies can gain insight into whether customers opened the message and clicked on the link. The trend of customers diverting from SMS and seeking out online chat with businesses is not a new concept. According to a 2016 Mobile Messaging Report by Ubisend, the initial research and statistics showed an impressive 80.7% of users preferring website online chat to SMS communication with the business, with only 19.3% preferring the latter – assuming both services were free and accessible.
If a customer decides to reply back to an SMS, they may be charged for that. On the other hand, using an AI chatbot won’t cost anything and customers will receive information immediately. Unlike SMS, which is a one-way communication channel, the AI chatbot is a two-way communication channel that allows customers to engage with it to get more information and options for a better customer experience. Leveraging SMS to direct customers to the chatbot on your website is a great strategy to increase website traffic, allowing customers to take specific actions such as making a purchase, reading important information, subscribing to a newsletter, etc. All in all, an AI chatbot helps businesses keep up with new opportunities and trends.
AI Chatbot vs Website FAQ Sections and Forms
FAQ sections and forms on websites offer limited information and capabilities that are not tailored to the customer’s search and needs. An AI chatbot can be utilized instead to provide more than just an answer and drive customers through pre-defined marketing and sales funnels, triggered by a customer question. The AI chatbot can handle hundreds and thousands of customer questions, something a website FAQ section cannot do. Forms on websites can be replaced with ones in the AI chatbot, which can be personalized to certain groups of customers, linked to answers to specific questions, and connected to a button in an information card.
The AI chatbot collects customers’ inquiries (zero-party data) to create highly personalized experiences while providing the company with feedback and first-party data about groups that used concrete forms. Additionally, AI chatbots offer many more sales and marketing opportunities and can instantly answer any questions that the business has trained it to do. With an AI chatbot on the website, businesses can gain insights into customers’ questions and interests when they visit the website and know them better.
AI Chatbot vs Contact Centers
Chatbots with conversational AI are an efficient and cost-effective solution for companies of various sizes and industries. They can help reduce the need for contact centers or call centers (insource or outsource companies), as well as the associated costs of hiring and training employees. The chatbot can provide an immediate response to FAQs and routine inquiries 24/7, eliminating the need for customers to wait on hold in a queue or for an agent to search for the required information. Chatbots also reduce the time it takes to handle customer inquiries since they are always available and don’t take breaks or become distracted.
There is no worry that chatbots will take away jobs from contact centers. In fact, a 2017 study by Aspect showed that customer service agents feel chatbots will actually improve their value to the organization. 59% of employees felt more satisfied and committed to their company when working with a chatbot, while 79% said handling more complex issues improved their skills. Moreover, 72% reported feeling relieved when assisted by a chatbot, as it allowed them to have a bigger impact on their organization. Lastly, 64% of staff said chatbots enabled them to provide more personalized service for their customers. Chatbots, with their inclusion of conversational AI and their ever-advancing technology, are providing customer service agents with even greater support than before.
Which is Best for You?
Different types of companies have different needs and require diverse solutions. To determine the best option for your business, first, you need to recognize the specific objectives you want to achieve and begin planning the use of such technology. However, there isn’t always one solution that can fulfill all business needs, and combining multiple approaches may achieve even greater success. A combination of an AI chatbot and live chat, for example, is the ideal choice to address customer inquiries and provide the best customer experience. In the last few months, 83% of support agents used a self-service chatbot and 89% used a live chat solution. On the other hand, customers were less likely to use web forms, emails, or social media to contact customer service. The AI chatbot can handle more routine tasks, while the live agents can tackle more complex issues that require a more personal touch.
Maximizing the potential of a business website is essential for any successful enterprise. Directing customers to this single source for information and services will not only save time for customers and improve their experience, but it will also help the business optimize employee performance, reduce costs and resources, and increase the return on sales and marketing efforts. Which platform is more effective in responding to customer needs? Does the response time differ among channels? Which platforms generate the most successful resolutions? By finding answers to questions like these, businesses can continue refining their customer service practices and optimize the experience for both customers and employees.
By taking time to evaluate these types of systems individually – including understanding any unique advantages or limitations each individual communication method presents – businesses can create a better overall approach that ensures all customers receive high levels of support regardless of what tech they decide on. This is a winning strategy for growth and customer satisfaction: more satisfied customers – more successful deals!
Using a chatbot or with one of its alternatives as the communication hub for your website is a great way to keep customers informed and engaged. It can also provide valuable first and zero-party customer data and direct customers to where the business wants them to be. Plus, businesses with a chatbot are perceived as tech-savvy (87.62%), customer-oriented (83.81%), and proactive (85.71%), according to GoodFirms Research. Be among these businesses!
Sources:
Juniper Research whitepaper – Why Chatbots Are Essential to Retail (2019)
Drift – 2022 State of Conversations Report
Ubisend – 2016 Mobile Messaging Report