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What Is a Chatbot?

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Last editedMar 20222 min read

If you’ve ever shopped online, you’ve probably come across an automated chat service or “chatbot” before. They’ve become somewhat ubiquitous – but what is a chatbot used for, and how can it benefit your business? Here’s a closer look at how chatbots work.

What is a chatbot?

A chatbot is a type of software application that uses language programming and artificial intelligence to communicate with humans. It serves as a virtual assistant or digital liaison between customer and business. At its most basic level, a chatbot might appear as a pop-up screen on a website asking if you need help during the checkout process. It might also be a more comprehensive digital assistant that learns user preferences over time to create a highly targeted response.

Chatbots use existing data to understand the questions that people are asking, analyzing them to determine context and then providing a logical answer. They can range from simple FAQ bots that provide single-line answers to more sophisticated customer service providers. 

What is a chatbot used for?

Chatbots can be used by many different types of businesses, both in internal and customer-facing positions. For example, chatbots can help streamline back-office procedures by onboarding new employees, answering common questions during training, and automatically ordering supplies. They might even take over basic admin tasks including event planning and marketing outreach with automation. In an IT services environment, an intelligent chatbot can do everything from send outage alerts to facilitating password updates and software upgrades.

Intelligent chatbots are also frequently used in ecommerce and customer contact centers. They can provide a helpful FAQ service to first-time website visitors looking for quick answers to their questions, saving the business time spent on handling these queries via phone and email. Consumers can use chatbots to compare similar products, order concert tickets, automatically book and check into hotels. 

How does chatbot technology work?

Chatbots function like most other software or apps. There are two main types of chatbot technology, including the simple rules-based chatbots for basic tasks and AI chatbots for complex functions. 

1. Rules-based chatbots

If your business needs a simple program that performs a single function, task-oriented or rules-based chatbots will be sufficient. These use a set of pre-programmed rules to analyze a user’s question, providing a structured response in return.

2. AI chatbots

The second option is a more complex chatbot program using artificial intelligence, data, and machine learning. AI chatbots learn with every user interaction, becoming increasingly sophisticated and interactive based on each task they perform. These bots use programmed natural language understanding to provide a conversational response, placing tasks in the correct context. Technologies used include analytics and predictive intelligence, with the result being an intelligent virtual assistant that can learn from your user preferences over time.

What are the benefits of using a chatbot?

Whether you opt for a basic live chat box or complex digital assistant, there are plentiful advantages to using chatbot technology. Here are just a few reasons that businesses implement chatbots into their sales and marketing strategies:

  • Improvement in conversion rates – Chatbots provide an immediate response to customers who might be on the fence about trying your product or service.

  • Boost to efficiency – Both internal and external chatbots streamline mundane tasks for greater efficiency at lower cost.

  • Targeted lead generation – Chatbots can analyze user behavior and data to determine whether a lead is qualified.

  • Better customer service – It’s difficult for businesses to provide an engaging, conversational experience to hundreds of website visitors on demand. Chatbots fill this gap.

How to create a chatbot

Chatbot technology has improved significantly since the original phone tree. Many websites now offer built-in pop-up live chat functions as part of their standard design. You’ll also find built-in bot apps for Google Chat and Facebook Messenger. No matter your business, you’ll need a basic messaging platform to deliver the chat service, along with an idea of the FAQs and rules you’ll want your program to follow. From there, the steps are similar to creating any mobile app.

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