A chatbot is a computer program that simulates a conversation with a user in order to convey information or carry out a certain task.
Chatbots are frequently utilized in customer service and support functions because they can easily manage repetitive inquiries at scale and guide users to quick, efficient answers.
To understand and respond to user input, some chatbots use artificial intelligence in the form of machine learning and natural language processing. When a user types or speaks a query or request, the chatbot analyzes the input using these algorithms and chooses the best response. The user is then given this response, commonly in the form of text or speech.
Some chatbots can handle more complicated interactions by combining pre-programmed responses and machine learning to deliver more accurate and personalized responses.
Websites, messaging applications, and virtual assistants are among the variety of platforms that can incorporate chatbots, making them readily accessible to users. They are frequently utilized in sectors including banking, insurance, travel and retail, where they can offer users quick and effective support and enhance the entire user experience.
Typical chatbot use cases include:
- Providing customer service and support
- Answering FAQs
- Guiding users through transactions or processes
- Collecting data from users to better understand their needs
- Providing personalized recommendations
As modern companies continue to seek to automate customer service and support, chatbot technology is becoming increasingly commonplace, taking on a variety of forms but most commonly appearing as a chat window that pops up when you visit a website.
In recent years, chatbots have grown in popularity as a simple and affordable means for businesses to communicate with customers and deliver assistance and information. By asking questions and responding to users' input, chatbots can simulate a real-life conversation, making them an increasingly popular choice for businesses looking to automate customer service.
Let’s take a look at what chatbots are, how they work and the benefits they provide for businesses, employees and consumers.
What kinds of chatbots are there?
The are many different kinds of chatbots - some designed to help with customer service and sales inquiries, while others specifically assist employees within an organization.
These various types of chatbots can be split into four main archetypes that each have their own unique features and capabilities.
Here’s an overview of how chatbots work in practice and the four most common types:
Rule-based chatbots:
These types of chatbots are often used in basic applications, such as answering frequently asked questions. They use a set of pre-defined rules to respond to user queries.
Example: A rule-based chatbot for a travel agent might be programmed to provide recommendations to certain holiday destinations or package deals.
Self-learning chatbots:
Using Machine Learning algorithms, these chatbots are designed to improve their responses over time. They can analyze user input and adjust their replies based on gathered data.
Example: Self-learning chatbots can be found in the banking sector as they can adapt to customer history to provide more personalized and accurate responses.
Conversational chatbots:
Designed to simulate natural conversations, these chatbots use generative AI to make their interactions more human-like. They have recently gained popularity with the introduction of ChatGPT.
Example: Conversational chatbots are particularly suited for creative content generation. They can combine varied inputs to create realistic results - e.g. creating a limerick in the style of Lady Gaga.
Task-oriented chatbots:
These chatbots are typically embedded into specific applications or platforms such as flight booking or order tracking. They excel at completing a specific task efficiently and quickly.
Example: A task-oriented chatbot could be used to track a parcel or order home delivery for a postal service.
What kinds of chatbot technologies?
In addition to the four chatbot archetypes above, the use cases for chatbot technology can also vary.
Here are some of the most common use cases for chatbots:
Customer service:
You can get assistance from these chatbots with your customer service inquiries. They can process orders, resolve issues, and respond to inquiries regarding products.
Informational:
These bots are programmed to give you information. They can provide you with the most recent news, forecasts, sports results, and more.
Sales:
Sales chatbots are designed to enhance the purchasing experience. They can display items that are relevant to a customer’s interests, offer deals and promotions, and even accept payments.
Personal assistant:
The purpose of these chatbots is to serve as a personal assistant. They can organize your schedule, monitor a to-do list, and even send notifications about upcoming activities.
Interactive:
These chatbots are made to interact with users for entertainment. They can tell jokes and play games.
A Brief History of Chatbots
The history of chatbots can be traced back to the mid-1960s, when ELIZA, one of the first chatbots ever created, was invented by Joseph Weizenbaum at MIT. ELIZA was designed to imitate a therapist's responses in order to provide therapeutic support to patients.
In 1972, PARRY became one of the first chatbots designed to beat a human opponent in a Turing test. PARRY was based on the paranoid schizophrenic hallucinations of its creator, Wellington Lee.
Since then, chatbots have come a long way, evolving from simple pattern-matching programs to mainstream adoption in the early 2000s on services like AOL and MSN Messenger.
In 2016, the widespread adoption of chatbots exploded when Facebook announced that it would begin allowing bots onto its popular messaging platform. By 2018, there were more than 300,000 active chatbots on Facebook Messenger.
In recent years, chatbot technology has advanced rapidly due to advances in artificial intelligence and natural language processing. Today's chatbots are more sophisticated than ever and are being used in a variety of applications ranging from customer service to marketing to healthcare.
With the rapid advancement of artificial intelligence, the potential applications of chatbots are varied and exciting.
The Difference Between Bots and Chatbots
While similarly named, the difference between the two is simple: bots are computer programs that are designed to automate simple tasks, while chatbots are a type of bot that interacts with humans in a chat interface.
The term “chatbot” is derived from the word “chatterbot,” which was first used in 1966.
Chatbots are commonly used to simulate human conversation by responding to questions with pre-written or pre-programmed answers. They can be used for a variety of purposes, such as customer service, marketing, and even entertainment and are typically powered by artificial intelligence (AI) and natural language processing (NLP) technologies.
While chatbots and bots both involve the automation of tasks, chatbots are specifically designed to interact with humans. Bots are traditionally more related to technologies like Robotic Process Automation (RPA) which takes care of repetitive back-office tasks without the need to interact with humans directly.
Where Can I Find Chatbots
Chatbots are commonly used in industries such as healthcare, finance, retail, travel and telecommunications. Aside from their use in a customer service setting, chatbots are also deployed behind-the-scenes to help employees with everything from IT and HR support to knowledge base querying and other second-line functions.
Here are some of the key industries in which you will typically find a chatbot being used:
Healthcare
Chatbots are becoming increasingly popular in the healthcare industry. They are being used to provide information, to gather data on patient preferences and behavior, and to improve patient care. In addition, healthcare chatbots are being used to provide health education and to connect patients with doctors.
Finance
Banks and insurance companies are key adopters of chatbot technology, enabling customers to interact through messaging platforms, mobile apps or websites. These insurance and banking chatbots assist with tasks such as checking account balances, making payments and providing information on products and services, enabling customers to complete a variety of tasks without needing to visit a physical location.
Ecommerce
Chatbots are becoming more prevalent throughout online shopping websites and portals. As well as typical customer service use cases such as product FAQs or technical support, ecommerce chatbots can also be used to track orders and make product recommendations based on customer preferences.
Travel
A travel chatbot can provide useful information, such as hotel reviews, flight prices, and transportation options. They can help save time and money by offering access to travel advice and often are equipped with features such as currency conversion and automated booking helping to further streamline the travel experience.
Telecommunications
In the telecommunications sector, chatbots are commonly used to help customers make better purchasing decisions about mobile phone or broadband services. Using artificial intelligence, chatbots in telecom industry can make recommendations on appropriate data plans based on customer information and assist with account and billing inquiries.
Public sector
Federal and local governments use chatbots to help citizens access information and public sector services. Government chatbots can be used to help dispense crucial information during crisis situations or simply to let users know what day of the week their trash is being collected.
Why do Chatbots Get Such a Bad Rap?
Most people think of chatbots as a cheap, easy way to get customer service. And while chatbots can be helpful for simple tasks, in the past they have often fallen short when it comes to more complex inquiries. As a result, chatbots have developed a reputation for being unreliable and ineffective.
So, why do so many people dislike chatbots? The answer is simple: because they haven't tried the right one yet.
This reputation, however, has begun to change due to advances in artificial intelligence.
Thanks to AI, chatbots are becoming more sophisticated and can learn from interactions with users. Today’s AI-powered chatbots can handle more complex inquiries and integrate with other business systems to offer true customer self-service via a friendly, conversational interface..
How is AI Making Chatbots Better?
As chatbots become more sophisticated, they are beginning to rely less on rule-based programming and more on artificial intelligence. This shift towards AI-powered chatbots is making them smarter and more capable of handling complex inquiries.
AI is making chatbots smarter by allowing them to understand and process natural language more effectively. In the past, chatbots were limited to responding to pre-programmed commands and keywords, but modern AI chatbots are able to understand the meaning behind the words and phrases that are used in conversation. This allows them to provide more relevant and appropriate responses, resulting in more natural and human-like conversations.
AI chatbots are also able to learn from their interactions with users. As they engage with more people, they can understand their preferences and interests. By understanding the behavior patterns of users, modern chatbots can dynamically tailor their responses to provide more personalized interactions.
It is also possible to integrate AI chatbots with other systems and platforms, not just with social media networks and messaging apps, but also with powerful backend systems for large businesses.
As a result of these advantages, AI is quickly becoming the default method for powering chatbots, enabling them to provide a wider range of services and be far more useful overall for users and businesses.
The Benefits of Chatbots
Chatbots are a great way for businesses to connect with their customers. They provide an always-accessible way for customers to get help with simple tasks, and they can also be used to provide marketing and sales information. In addition, chatbots are an effective way to build brand loyalty.
Some major chatbot benefits include:
- Chatbots are a great way for businesses to connect with their customers.
- They provide a fast, easy, and convenient way for customers to get help with simple tasks.
- They can also be used to provide marketing and sales information.
- Chatbots are an effective and interactive way to gather customer feedback.
- They can be used to collect data on customer preferences and behavior, which can then be used to improve marketing strategies and products.
Chatbots offer several advantages over traditional customer service methods. They are faster, cheaper, and more convenient than phone or email support. Chatbots are also more efficient than traditional customer service methods, as they can handle a large number of tasks at once, without needing to involve any human assistance. Additionally, chatbots can learn from their interactions with customers over time, making them smarter and better able to handle complex inquiries.
As people become more familiar with chatbots, their reputation is changing for the better. In this content hub, you will learn about the different types of chatbots and how they work. You will also read about the benefits of chatbots and where you can find them. By the time you finish exploring this content hub, you'll have a better understanding, thanks to chatbot examples and best practices, why they are becoming an increasingly popular customer service tool.