Considering investing in a chatbot? You need to read this first

Considering investing in a chatbot? You need to read this first

A chatbot is a computer program that is built to converse with those who visit the website that it is hosted on. It processes human queries and responds to them. Chatbots can be as simple as a program that answers basic queries with one-line responses, or as complex as a digital assistant powered by Artificial Intelligence (AI) that provides personalized answers, and evolves or ‘gets smarter’ as it gathers and processes information.


How do chatbots work?

Step #1 Analyzes user request:  A chatbot assesses the query that the user has selected or typed into the chatbot. Then, it decodes their intent and requirements.

Step #2 Provides a response: Once the user’s request has been correctly identified, the chatbot provides an appropriate response based on its build. Here are a few options:

  • Predefined text
  • Text formulated based on user inputs
  • A response directly from an enterprise system
  • A response based on interactions with one or more backend applications
  • A follow-up question to better understand the user’s requirement
Types of chatbots

Types of chatbots?


  • Rule-based chatbots

Rule-based chatbots are otherwise known as decision-tree bots. As the name suggests, these chatbots function in anticipation of any question that a user might ask. Like a flowchart, the chatbot will then roll out its responses. In case it fails to identify the user’s request in one go, it will continue to ask questions to reach a point of understanding.

Rule-based chatbots can answer simple or complex questions based on their programming, but will fail if a query is outside the defined rules. Notably, they do not attempt to learn through user interactions.

  • AI chatbots

Comparatively, AI-based chatbots use Machine Learning (ML) to understand the context and intent of the question before formulating a response.

They are more intuitive and accurate, and therefore more helpful. They improve in performance as they learn more with each interaction, and yield a better customer experience in due course of time too.

benefits of chatbots

How chatbots can help your business


1. Improve customer satisfaction:

Chatbots can engage with customers round the clock without any human interference, in a language of your customer’s choice, and resolve queries immediately. This results in a smooth journey for existing as well as prospective customers, in addition to greater satisfaction.

Individuals can access information at their fingertips, as per their convenience and don’t even have to make a phone call. When you opt for an AI chatbot, you can better differentiate your business amongst competitors, as well as boost customer engagement and satisfaction manifold!

2. Automate qualification & increase leads:

AI chatbots can aid in lead generation. They can help you qualify leads and warm them by taking care of the initial interactions and problem-solving. For instance, chatbots can ask a series of set questions and then direct the prospect to the right team/individual based on his/her responses. Also, by engaging with potential customers non-stop, chatbots increase the number of leads and hence the number of conversions. Moreover, chatbots reduce the stress on your human resources. Sales teams can focus their energies on closing deals rather than qualifying and nurturing prospects.

3. Reduced customer service costs:

Chatbots can be scaled during peak hours effectively without putting any additional pressure on your human resources. This makes them a cost-effective way to address both new as well as repeat customers. In fact, research suggests that by automating this aspect of your business, you can reduce customer service costs by up to $8 billion per annum in 2022 alone.

4. Store and analyze critical data:

Chatbots not only troubleshoot, but also capture data. This means that they’re a treasure trove of information. You can get numerous insights, whether it’s purchase triggers, common concerns that your audience has, gaps in website content, shopping patterns, customer personas and a lot more. What’s more, you can use chatbots to conduct surveys too. Thereafter, you can use the insights that you have gathered to improve your services/products, as well as your marketing approach to bolster visibility, credibility, reach, ROI and revenue.

5. Reduce bounce rate:

A high bounce rate is always a bad sign for any business, and chatbots can help address this problem. Visitors usually move to another website when they can’t find the information that they’re looking for on your business’ website. Bots reduce the chances of this happening as they pull relevant information/URLs and present it to website visitors. This means that visitors no longer have to look for information themselves.

Additionally, chatbots can pop-up on to the screen automatically once a person has spent a few seconds on a webpage to spur additional activity. For instance, on a webpage that explains product or service features, the chatbot can urge individuals to book an in-person demo, submit information or consume related webpages. These are just a few ways in which AI chatbots can reduce bounce rate.

Chatbot brand loyalty

6. Build brand loyalty:

Chatbots are all about providing accurate, concise, and personalized information quickly. In other words, they serve as a ‘personal assistant’ to each website visitor and steer them to make a purchase. Because of the hand-holding and exceptional service that they provide, they help build a loyal customer base. In due course, they also contribute to a positive brand perception.

All said and done, all businesses don’t need chatbots. So before you join the bandwagon, ask yourself these two questions.

  • Do you employ a sales funnel? If yes, then you can add a chatbot to your website.
  • Is your target audience accustomed to using tech-based solutions to problem-solve? If your answer to the latter is no, avoid getting a chatbot.

If you’re still not sure about how to proceed, contact us. As one of the best digital marketing and lead generation agencies in the country, we will assess your business and your objectives, and help you determine whether a chatbot will add value to your organization. What’s more, we will help you set it up too!

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