Chatbots are probably one of the most common applications of artificial intelligence in people’s day-to-day lives and there’s a good reason why: this specific application of AI technology has awarded companies and businesses the power to automate repetitive tasks and provide better customer service, which contributes to overall better business practices.
We’re sure you’re familiar with chatbots and, speaking honestly, how could you not be? It seems that every time you head to a website, message customer service, or call a company, you’re first met with some sort of a chatbot. But what does this mean? What exactly powers these chatbots? And what can we expect as AI continues to evolve and improve?
That’s what we’re here to discuss.
What is a Chatbot?
First things first: what exactly is a chatbot? Well, not all chatbots use AI technology to mimic human-like conversation, but today, more and more are being created with NLP and machine learning technology to make their interactions as realistic as possible. Through its training, these chatbots can understand and respond to human queries, comments, or complaints and provide automated responses.
Wondering exactly what makes the use of chatbots so beneficial? Let’s dive in:
Chatbots can help increase customer loyalty: with quick and easy answers to their queries, customers will learn that they can rely on the company for help when issues arise and therefore become more loyal to the brand.
Chatbots don’t need to take breaks or work limited hours: without a need for time off, recharging time, or even scheduling shifts, companies that choose to use chatbots can provide assistance to users at every moment–and chatbots can talk to multiple (read: thousands!) of users at once.
Chatbots are more cost efficient: investing in chatbot technology helps companies save money by not needing to hire more employees, in addition to significantly lowering the risk of error.
Chatbots help collect valuable data: this is a benefit that may come as a surprise to you–chatbots not only interact with customers, but also collect data about what customers are asking about or having issues with, giving you incredibly helpful data about where you could make improvements.
Chatbots provide communication alternatives to users: for many, the idea of cold-calling a person for assistance is daunting and chatbots, which are immediate, quick ways to chat with a company, provide an accessible and stress-free way to interact with the brand.
Chatbots don’t have geographic or language barriers: don’t think a second more about reaching clients who speak other languages or are in a new time zone; chatbots are available 24/7 and can interact with users in the vast majority of languages, bringing your business even closer to each and every possible user.
Types of chatbots
Now that you know exactly what chatbots bring to the table, let’s dive into the six different types of chatbots that currently exist so you can pick the best possible one for your business needs:
Rule-based chatbots: most companies start out with a rule-based chatbots, which is the simplest version and one that has a set of predefined responses prepared for specific customer queries, ensuring quick and thorough responses.
Keyword recognition-based chatbots: AI tools are skilled when it comes to recognizing patterns and trends and keyword recognition-based chatbots pick up on keywords used in the customer’s input to create a customized and helpful response for the user.
Menu-based chatbots: one of the most common formats of chatbots, menu-based chatbots provide users with clickable menus to guide them through specific flows, which is very useful for companies facing similar queries.
Contextual chatbots: this more advanced version of the chatbot is able to remember previous conversations and draw on them for added context, giving customers unparalleled personalized customer service.
Hybrid chatbots: why not have a little bit of everything? Hybrid chatbots combine aspects of each of the aforementioned types of chatbots to create a chatbot that perfectly meets business needs.
Voice-enabled chatbots: this versión of chatbots can speak and understand spoken words, instead of just text, taking into account dialects, accents, colloquial speech, and much more.
Applications of AI Chatbots
As artificial intelligence technology continues to improve, we can expect to see even more chatbot development. But until then, we can explore some of the most common applications of AI chatbots in today’s world.
Customer service
This one is a given! From answering simple questions to more advanced actions such as resetting passwords or submitting tickets, chatbots were a life-changing advancement for many companies. They are now able to provide accurate, immediate, and customized customer service for clients across the world at any moment–does it get any better than this?!
Recommendations
Because of the AI technology behind chatbots, they’re able to store data for users and figure out exactly what the best, data-backed suggestion for this user would be. For example, after a user purchases an item, a chatbot could suggest another item frequently purchased with the item the user just bought to increase sales and customer loyalty.
Appointment scheduling
Through menu-based chatbots for appointment scheduling, phone lines can be freed up so that receptionists can focus on their other tasks instead of scheduling appointments. In addition to simply being a fantastic example of how automation can give humans more time for more engaging tasks, it provides an easy and straightforward way for clients to make appointments.
Considerations When Using AI-Powered Chatbots
Although the benefits seem truly incredible–and they are–it’s important to remember that there are some limitations associated with their use and as you begin your chatbot journey or select the right chatbot for you, keep the following in mind.
Chatbots cannot solve all customer queries: chatbots can definitely help you downsize your customer service team or free up agent time for other tasks, but chabots are not (yet) a definitive solution to all customer service problems. Therefore, you cannot rely too heavily on chatbot technology alone and instead must find the balance between humans and chatbots that works best for your users.
Chatbots are not 100% accurate: as you’ve probably seen with examples of ChatGPT answers in the past few months, chatbot answers cannot be trusted 100% of the time; if you’re choosing to use a context chatbot that’s able to come up with its own answers, it must be carefully trained and supervised to avoid any issues.
NLP technology is still evolving: there are lots of variations in human text and speech input, meaning chatbots must take all slight variations into account and understand the query behind the input. And although we’ve made quite a few strides forward in NLP technology, there’s still a lot to be done to truly understand all variations of human communication.
Chatbot technology needs to become more secure: some chatbots take personal information and this means that they need to be properly secured to avoid any sort of data breach and protect customer information.
The future of chatbot technology, thanks to artificial intelligence, is truly unmatched. And that’s precisely why it’s a great place to focus your efforts. Want to be on the forefront of technological advancements? Well, your future is right here.
Learn the basics of AI needed to dive deeper into ML and NLP with Ironhack and join the AI revolution today.
