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You’re sure to have heard the word “chatbot.” You may also understand what a chatbot is – perhaps you know it has something to do with AI or machine learning. Or you may know it’s a way for businesses to engage directly with millions of customers without their physical presence.
So, what exactly is a chatbot? What do they do? How can they benefit your business? When should you use a chatbot, and when shouldn’t you?
We’ll answer all these questions and more in this comprehensive guide to chatbots. By the end of this guide, we aim to provide you with an understanding of what chatbots are, what they do, how they can benefit your business, and why and how to measure their performance.
What Are Chatbots and What Do They Do?
A bot is software that performs automatic tasks. It’s a computer program that communicates with people through the internet.
A chatbot is a developed program that can have a “conversation” or a “discussion” with humans. For instance, any user can ask the chatbot a question, and the chatbot will respond or perform the appropriate activity.
Chatbots are programmed to answer certain questions in specific ways. However, they aren’t limited to this functionality, because chatbots can access and use all of a company’s resources to answer dynamic questions. Also, chatbots can use many systems and files simultaneously to find answers.
Chatbots interact in a format similar to chat platforms such as SMS text, website chat window and social media platforms like Instagram, Twitter, and Facebook to receive and respond to messages.
The simplest way to think of chatbots is as a virtual assistant on messaging channels like Facebook Messenger. By leveraging the power of AI, chatbots help businesses to engage with customers, build loyalty, automate routine tasks, and provide excellent customer service.
The work of a chatbot is to interact with website visitors like a human would and answer any questions they may have.
Thus, chatbots are typically used to automate customer service interactions for brands with a high volume of online inquiries. Also, you can use them to make it easier for prospective customers to get timely answers to their queries.
To scale your business, you need to leverage chatbots to streamline customer communications, marketing, and sales.
How Chatbots Benefit Businesses
Running a successful business requires you to be as productive as possible so expenses are lower and profits are higher. This is an obvious, basic fact of doing business.
However, many business owners don’t use the tools needed to make this happen. One new tool that’s gaining popularity but is not adequately used by all businesses, is the chatbot.
Chatbots’ simulation of human language and behavior offers many benefits to brands, including:
Save Time
One of the primary benefits of using chatbots in your company is that they save time.
When you use chatbots on your website, they can deliver fast, automated answers to most queries. Using chatbots reduces the waiting time so that customers don’t have to wait a day to get responses.
This way, you can serve many customers while boosting productivity and reducing operating costs.
Save Money
Chatbots are cheaper than hiring many customer support agents to offer fast customer communication, because hiring more support agents means additional costs and time. The costs are in terms of:
Salaries
Training
Infrastructure
By investing in chatbots, you can lower these costs.
According to reports, every year there are 265 billion customer requests and companies spend over $1.3 trillion to serve these requests. However, leveraging chatbots can help you save up to 30%. This is because chatbots speed up response times and can answer up to 80% of routine questions.
Offer 24/7 Automated Customer Support
No one likes waiting and neither do your customers. In fact, 91% of customers who are unhappy with a brand leave without complaining. Chatbots can help engage customers 24/7 with immediate answers to all the frequently asked questions. Offering excellent customer service round the clock will naturally have a positive impact on your customer satisfaction and retention.
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