Using chatbots to improve customer service (with examples)
Learn how retailers are using chatbots to improve customer service, chatbot use cases, and best practices for integrating chatbots effectively.
In recent years, we’ve seen the rise of artificial intelligence (AI) and natural language processing (NLP), especially in customer service. With generative AI stepping into the spotlight, the face of customer service is changing.
Customer service chatbots are just one way that AI and NLP come together to enhance the customer experience (CX). Retailers have caught on to this technology, and many are now using chatbots to provide customer service at any hour of the day and increase ROI.
Data from MarketsandMarkets reports that the global chatbot market is projected to reach $15.5 billion by 2028. With this immense growth, you may wonder, “How can I improve my business’s customer service with chatbots?” Luckily, this article will share chatbot use cases, their benefits, and best practices for integrating this technology into your business.
What is a customer service chatbot?
A customer service chatbot is an application that uses AI and NLP to provide immediate customer support via a chat or instant messaging platform. Chatbots interact with customers just as humans would, answering questions to the best of their ability and providing assistance. Overall, these chatbots serve as digital customer service representatives.
We’ll explore the many different customer service chatbots use cases later.
Types of customer service chatbots
Different types of customer service chatbots have their own strengths:
- Scripted chatbots. Scripted chatbots are company-built applications that answer customer questions and interact using pre-defined, scripted answers and behaviors. These chatbots have a set number of scripted responses and are the least dynamic.
- Rule-based chatbots. Rule-based chatbots utilize a decision tree to guide users through a series of prompts to respond. These chatbots anticipate the flow of a conversation using pre-set rules designed to guide the reader to the answer they’re looking for.
- AI-powered chatbots. AI-powered chatbots are the most powerful of the types of chatbots. It uses AI to simulate human conversation, understand a user’s queries, and generate appropriate responses. These chatbots adapt their responses to a user’s preferences automatically.
Chatbot use cases
The most common uses for chatbots are customer service, retail, and e-commerce. Let’s dive into these use cases and how companies are using chatbots:
Customer service
Chatbots are highly utilized for online customer service to answer common questions, assist in finding information, and support dissatisfied customers. Chatbot technology has advanced significantly over the past several years, along with the rise of generative AI.
Chatbots are commonly used to provide customer service to online customers in the following ways:
- Automated FAQs. Customers often ask the same questions over and over again. Chatbots can easily handle this and save the time of human employees. For simple and frequently asked questions, chatbots can typically provide satisfactory answers to customers.
- Customer onboarding. Organizations can streamline customer onboarding with chatbots. For instance, a new insurance customer can upload proof documents via chat, which can be verified on the backend. This way, customers can ask questions about their policy and get answers from the bot immediately.
- Customer feedback. Chatbots can quickly gather customer feedback on their experience with your business. They can ask customers questions such as “On a scale of 1-5, how would you rate your experience?” and “How easily did you find what you needed?” Using a chatbot makes the process of collecting feedback from customers much faster and improves customer loyalty.
Conversely, chatbots can sometimes provide negative customer experiences and cause frustration. According to a recent study, most customers (64%) would prefer companies not to use AI for customer service. These customers who reject AI customer service also shared that they would consider going to a competitor if a company relied on AI for customer service. Additionally, SurveyMonkey research found respondents preferring a real-life assistant (43%) as the biggest barrier to using chatbots.
Retail & ecommerce
Chatbots and AI are also popular in retail, and for good reason. Retailers can use chatbots to improve the e-commerce experience in retail with:
- Personalized product recommendations. The most common way chatbots are used in retail and e-commerce is to provide product recommendations based on their history on the site. This helps upsell to customers already interested in purchasing something from your business.
- Shopping assistance. Users may have questions about purchasing products, such as sizing guides, pricing, discounts, etc. A chatbot can assist customers through the buying process.
- Streamlined navigation. Chatbots on retail sites can be used when a customer first lands on the home page to ask what they need help with. The chatbot can provide options such as “How do I track my order?” and “My order is wrong” for customers to select and receive guidance on the next steps.
The disadvantages of using chatbots for retail and e-commerce stem from customers not wanting to see chatbots pop up on their screens during their shopping experience. Some customers see chatbots as more of a headache than a help when shopping online.
Benefits of chatbots for customer service
Chatbots can be extremely helpful in providing strong customer service to your customers. Here are some ways chatbots can improve customer service and increase retention.
Boost customer satisfaction
Improve customer satisfaction by using chatbots to provide customer service 24/7. Chatbots, unlike humans, work around the clock to support your customers, which can boost customer satisfaction. Additionally, you can reduce response time and provide immediate responses to customers by utilizing chatbots.
Chatbots also allow you to provide multilingual support without hiring more employees who speak various languages. You can program chatbots to work in multiple languages, empowering them to help every customer.
You can even have your chatbot end each conversation with a customer satisfaction survey or Net Promoter Score® (NPS) survey to gauge customer loyalty.
Improve the sales process
Chatbots can improve the sales process by automating customer service through live chat, ensuring customers get the support they need during the sales process, and encouraging them to purchase. When customers feel supported, they are more likely to stay on your website and complete the buying process.
Cost-efficient customer service
Another benefit of chatbots is that they are a cost-effective customer service method. Instead of having a roster of customer service representatives, you can cut costs by using a chatbot for online customer service. Chatbots are affordable compared to having an entire staff of customer service representatives with salaries and benefits.
You may still have call center customer service representatives for users who prefer speaking with a human for support.
Data collection & analysis
Chatbots can track and analyze every customer interaction, giving your business the upper hand in understanding what your customers need and what recurring issues are. Chatbots allow businesses to gather extensive customer data for analysis to personalize experiences and enhance support processes.
Best practices for customer service chatbots
If you’re considering integrating chatbots into your business’s customer service offerings, follow these best practices for the best results.
Collect customer feedback
When using chatbots for customer service, you should take the time to gather customer feedback about their experiences. You can collect this information by sending post-chat satisfaction surveys via a web link. The survey would gauge a customer’s satisfaction level following a chatbot experience.
Use user-friendly designs
Choose a user-friendly design for your chatbot to ensure it provides a seamless experience to your customers. Simple designs with branded color palettes work well as a general rule of thumb. Keep the user experience top of mind when selecting a chatbot design.
Ensure seamless integration with digital tools
When you start using a chatbot to improve your customer service, you must ensure that it integrates seamlessly with your existing digital tools, such as ticketing and monitoring tools. Work with your IT team to find the best-fit chatbot for your business.
Plan for continuous learning and improvement
Chatbots aren’t perfect, but neither are humans. Keeping this in mind, you should plan for continuous learning and improvement on both sides. Companies should continuously update and train chatbots to provide better customer service. On the other hand, your team will learn more ways to utilize chatbots for customer service over time and how to improve the process.
Boost your customer service with SurveyMonkey
Using chatbots for customer service is the way of the future. With SurveyMonkey, you can create high-quality surveys and forms to send out to customers to improve the chatbot experience.
Learn how SurveyMonkey can help you boost your customer satisfaction.
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