Chatbots 101

What are chatbots?

Chatbots enable customers to access information and complete tasks via a conversation. For example, a customer can have a back and forth dialog with a computer using their voice or text.

Benefits for customer experience

Customers can already access information and perform tasks via websites and apps. The key advantages of chatbots include

  • Enabling customers to make requests with natural language in the same way that they would speak with a person. Some chatbots have a name and personality. These bots are designed to simulate how a human might respond in a conversation (e.g. Apple’s Siri )

  • Reducing the effort to access information

    • Chatbots are easily accessible. For example you can use your voice to speak with Amazon Alexa instead of pulling out your phone or opening your laptop

    • Chatbots are available on the platforms that customers already use (e.g. messaging apps like Facebook Messenger)

How do chatbots work?

Many chatbots use a “rule based” approach

  • When the bot receives a message from a customer

  • The bot scans the message for keywords or phrases

  • Then the bot replies with a matching response. For example, when a customer sends a message “nearby restaurants,” a bot could be programmed to send a list of restaurants

Some chatbots also have more complex functionality

  • Natural Language Understanding - The bot understands the intent of a message. For example, when a customer sends a message “I’m hungry” or “Do you know any good places to eat,” the bot would also respond with a list of restaurants

  • Personality - The bot can engage in small talk or chit-chat, tell jokes and carry on a conversation

  • Memory, context and personalization - The bot remembers your preferences and improves over time

Why are chatbots important now?

  • Rise of messaging - Customers have become heavy users of messaging apps (e.g. SMS, WhatsApp, Facebook Messenger, WeChat). As a result of this many brands have begun to engage with customers over messaging. Chatbots provide efficient and innovative ways for brands to engage with customers on messaging platforms

  • Rise of voice interfaces - Smartphones and home speakers enable customers to use their voice to access information and perform tasks. Smartphones are ubiquitous and voice activated home speakers are growing fast. For example, over 10M Amazon Echo devices have been sold.

  • Advances in Machine Learning and Artificial Intelligence - In recent years, computer scientists have made big leaps in the fields of Natural Language Processing. For example, speech recognition technology has now reached human parity. Every major technology company (Google, Apple, Amazon, Microsoft, Facebook, IBM) has launched bots and / or launched new frameworks and platforms for building bots

Impact of chatbots for companies

Many brands have launched experiments with chatbots. For example, Over 100,000 bots have been launched so far on Facebook Messenger and over 15,000 Amazon Alexa Skills have been created.

There are many different use cases from increasing revenue by driving more bookings to making customer service more efficient.  You can find an overview of the top use cases and best practices across industries here