What Are Chatbots? (Benefits, Types, and How They Work)

By Indeed Editorial Team

Published January 3, 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Chatbots are customer support tools that allow customers to communicate with a computer program and receive support and information. Businesses use them to provide faster customer responses and reduce customer service expenses. Understanding what a chatbot is and how it works can help you determine how to apply it to improve customers' experience. In this article, we answer the question "what are chatbots," outline how they work, review the main types of chatbots, examine the benefits of using them, and detail how to create a chatbot script.

What are chatbots?

If you're wondering, "what are chatbots," they are utility software that companies employ to engage and satisfy customers. They're constantly available conversational mediums that engage in interactions, clarify customer questions, and execute some of the primary responsibilities of customer care agents. Chatbots may be excellent substitutes for customer support because they provide fast and streamlined customer responses. They're available for real-time conversations through text or voice interaction. Some businesses also employ chatbots as automated sales representatives. They're capable of starting basic sales conversations and easily increase sales and revenue by acquiring new customers.

Related: 7 Virtual Team Building Activities to Help Stay Connected

How does a chatbot work?

Businesses can personalize and streamline chatbots to provide services aligned with their products and customers' needs. To achieve these functions, here's how a chatbot works:

Identify user intent

When a customer sends a message, a chatbot attempts to understand it. It uses natural language understanding or machine learning to determine how to help the customer. A chatbot analyzes the message users send and detects keywords or phrases similar to the scripted information. It can then identify how to communicate effectively to satisfy the user.

Locate the necessary information

Chatbots try to find the most suitable solutions by running the keywords or phrases they detect through an algorithm and comparing them with data or information embedded in their system or the internet. Next, they identify the most suitable response to the user's request. For example, if a customer uses a word like "defective," it can trigger the chatbot to check its database for solutions to defective products.

Ask clarifying questions

When providing customer care services to users, chatbots ask questions to help ensure satisfaction and combine all the information they gather to provide answers or solutions. The questions may come interactively, similar to conversing with real-time customer support agents. In contrast, they may also be yes-or-no questions. For example, the chatbot can ask what type of defect the user is experiencing to understand their needs further.

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Provide a response

When the chatbot determines it has the correct answers to the user's questions, it responds. Often, chatbots are best suited for automated and direct questions, like the cost of a product, how to use a product, or where to purchase a product. Some advanced chatbots can offer a more interactive experience to users.

Main types of chatbots

There are various chatbots to satisfy different business requirements. Here's a list of the two main types of chatbots available:

Task-oriented chatbots

Task-oriented chatbots, also known as declarative chatbots, are a model that uses natural learning language, rules, and some machine language to communicate with users. Programmers have designed them to perform a specific function which is answering commonly asked but straightforward questions. These chatbot responses are conversational but automated, and they satisfy users by providing them with answers and options that facilitate satisfactory interactions. The answers or solutions task-oriented chatbots provide are typically specific, similar to FAQs. They achieve this through chatbot scripts.

There may also be options for customers to request a direct connection to a customer service agent with these chatbot types. Companies limit task-oriented chatbots to interactions about situations with the least variables. For instance, you can employ them to provide answers to questions like:

  • When are your business hours?

  • What are your exchange or return policies?

  • Are there ongoing discounts?

  • What are the costs of some services?

Predictive chatbots

Predictive chatbots, also called conversational chatbots, are more advanced than task-oriented ones. They use artificial intelligence and a significant amount of data to engage customers. A predictive chatbot can engage in conversations independently by using its information about the user provided by the company or garnered from the internet.

Benefits of chatbots for customers

Chatbots are beneficial for customers in the following ways:

  • 24-hour customer service: Chatbots are always available. Customers can interact with them anytime, even when company hours have ended.

  • Convenience: Interacting with a chatbot is easy when customers want information about a business. It's convenient because they can visit the company website to interact with the chatbot anytime and at their pace, without worrying about being disconnected from the agent.

  • Response consistency: Chatbots are a utility software that produces an immediate and automatic response to customer needs. This ensures consistent responses to questions that can help satisfy customers.

  • Faster transactions and response time: An interaction with a chatbot is similar to interacting with a computer, as chatbots produce immediate responses. Unlike when interacting with a customer support agent, there isn't a waiting period when communicating with a chatbot.

Benefits of chatbots for businesses

Using a chatbot is beneficial for businesses in the following ways:

  • Increased automation of repetitive tasks: Answering general questions can be repetitive, which is why chatbots may be able to handle them better. Businesses can program chatbots to answer direct questions, reducing repetitive tasks for employees.

  • Decreased customer service cost: There's a significant decrease in customer service cost when using chatbots because artificial intelligence can execute primary customer service responsibilities. When necessary, chatbots connect customers to live representatives, reducing the workload of customer support agents and companies' associated expenditure.

  • Increased sales and leads: Chatbots are better at generating leads and increasing sales. Customers are more receptive to them because they're direct and provide only necessary information about sales.

  • Increased access to consumer data: Chatbots can record large amounts of information, such as customers' preferences regarding products and mode of communications, and companies capitalize on this to satisfy their customers. Predictive chatbots also constantly learn, which allows them to process more consumer data and use it for future purposes.

  • Increased ability to serve many customers at once: Chatbots can attend to many customers. One chatbot can answer different questions from different users simultaneously, increasing user satisfaction and customer retention.

How to create a chatbot script

Creating a script is a vital process for businesses intending to implement chatbots. Here are the steps you can take to create a chatbot script:

1. Create an introduction for your chatbot

Creating an introduction for your chatbot is a great way to establish a personal connection between them and the customer. You can give the chatbot a name and write an introductory script. For instance, "Hi! I'm Robot, available to satisfy your immediate beauty needs. How may I serve you today?" may be an excellent introduction for a cosmetic company's chatbot.

Related: How to Write an Introduction Letter (With Examples and Tips)

2. Provide guidelines to initiate conversations

You can provide guidelines on how to start conversations with the chatbots. Usually, chatbots require keywords or phrases from customers to activate their service. You may also create an option for the customer to request a connection to a live representative.

3. Include options for users

Consider including options for easy referral. For instance, after an introduction, the chatbot for a cosmetic company may say, "Do you want some help with our skin, hair, or nail products?" It's best when these options are commonly requested, as there are higher chances of satisfying customers.

4. Use simple sentences

Remember to keep your sentences engaging and conversational and use simple sentences that customers can easily understand. Try to avoid idioms to help ensure effective communication, especially when you're communicating with a diverse client base. You can also ensure the keywords and phrases, emojis, or any other communicative aspect are simple and applicable to the customer base.

Related: How to Write a Topic Sentence (With Examples and Tips)

5. Simulate personalized messages

You can personalize messages to better connect with users. Programming your chatbot to recognize returning customers and remember their names is excellent for establishing connections. Predicting some of the questions users may ask is also helpful when creating personalized messages.

6. Include emotions

You can also create emotional messages to connect with users. These messages make it easier for users to forget that they're interacting with chatbots instead of real-life representatives. For instance, a chatbot may use phrases like "great choice!" or "you have excellent taste!" to help build a connection.

7. Choose a neutral tone

Try to create a balance between a friendly and detached tone. It's also best to ensure the tone is suitable for the nature of the conversation. For instance, the conversational tone for a cosmetic company may differ from party planning business.

8. Proofread your work

Be sure to proofread every sentence included in the scripts for your chatbot. Check for grammatical, punctuation, and other errors as you review your work. Doing this can help demonstrate to customers that the business has care and attention to detail, which is likely to impress them and make their experience more pleasurable.

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