Do you know the best way to retain customers in today’s competitive environment? Provide them with exemplary customer service, online and offline.
However, that is easier said than done. Having an “always-on” customer service team is practically and economically unfeasible for most businesses.
The search for a cheaper, more practical and effective customer-service channel has led businesses to try chatbots.
Chatbots give quick personalized service to multiple customers simultaneously. They can save a business up to 30% in operational costs and reduce the call-handling time of agents by almost four minutes per query. But they do come with some downsides as well.
We’ll elaborate on the pros and cons of using chatbots in a while. First, let’s take a look at some chatbot basics.
What are Chatbots?
Chatbots are software that can have human-like conversations with other humans via voice or text.
Well-designed chatbots mimic humans so well that 27% of users are unable to differentiate between the two. Hence, many companies are using bots for customer service. You can see bots in websites, apps, and online and phone messaging services.
Types of Chatbots
There are two basic types of chatbots:
Fixed chatbots: They have limited information that is sufficient to solve common customer queries.
- AI chatbots: They have access to unlimited information and the ability to keep learning and evolving. They also have advanced features such as human sentiment analysis and voice or face recognition, which renders them “intelligent.”
As of May 2018, there were 300,000 chatbots on Facebook Messenger alone. Cortana, Siri, and Google Assistant are the top-ranking bots by usage numbers.
Pros of Using AI Chatbots
80% of businesses plan to use bots by 2020, clearly indicating that bots are more than just a passing trend.
Here are some of the main advantages:
Quick Service: Chatbots can resolve small, routine issues quicker than a human agent. They have a huge repository of pre-fed answers that they keep updating after each customer interaction. They can access answers online or search in their repository.
No Downtime: These tireless agents provide round-the-clock service. They neither get sick nor demand overtime. Additionally, they require no maintenance, except an update to their algorithm from time to time.
- Cost-Savings: Bot development costs are a one-time expense. It is negligible in comparison to the annual salaries plus benefits you pay to your customer service staff. Even if you outsource your customer service to a call center, you incur huge operational costs. A bot can effectively handle basic query resolutions at a much lower cost.
Cons of Using AI Chatbots
While chatbots do have their benefits, bot technology is far from perfect. Users claim that bots falter in understanding requests (59%), interpreting human emotions (59%), and executing command correctly (30%).
Image via Spiceworks
Bots often fail to identify auditory commands in noisy surroundings. They also face difficulty in comprehending foreign accents. As a result, 34% of consumers use chatbots only to connect to a human assistant.
Check out this infographic first published on my blog shanebarker.com for the complete list of advantages and disadvantages of chatbots.