Chatbots: All you need to know

By 2020, over 85% of customer interactions will be handled without a human according to Gartner, a global research and advisory firm. While the percentage may seem inflated at first look, with virtual assistants, voice integrations and chatbots racing towards perfection, we might reach that mark sooner than anticipated too.

Alexa and Siri may not need much introduction, but have you encountered a chatbot online? You might have visited some sites that had chat windows pop up with a friendly ‘welcome to XYZ, how can I help you today’. Yes, those were chatbots. The live chats that we have on websites are in fact robots. Today’s chatbots are smart, responsive, natural and undeniably useful and we’re likely to see them more often in the coming years.

The global chatbot market valued at around $350 million is estimated to reach $2.1 billion by 2024, set to multiply by six times. The chatbot technology is here to stay, so let’s take a look at what exactly is a chatbot and how they work before addressing the common questions about chatbots.

What are chatbots?

As the definition goes, ‘a chatbot is a computer program designed to simulate conversation with human users, especially over the internet’. Chatter robot or simply chatbot is a form of human-computer interaction that is picking up pace. It is an application to simulate a conversation with a user through message applications, websites, mobile apps or voice calls.

It is an automated system of communication that is designed to replicate the patterns of human interactions. The conversations with a bot can be text or voice-based.

The arrival of chatbots has opened up new doors in the form of conversational commerce and marketing and is redefining customer engagement.

Types of chatbots

There are several types of chatbots on the basis of application, intent and working among other factors. You can read about the types of chatbots depending on their application here. The nomenclature of chatbots may vary from source to source, but the concept at the core remains the same. In this article, we have classified them into two main types that will help you understand it’s working.

Script chatbots:

These are the question-answer type of bots that take inputs from the users and respond via a pre-programmed set of instructions (the script). It is a decision tree with each question opening a predetermined set of possibilities.

Smart chatbots:

These rely on artificial intelligence to communicate and instead of a predefined set of instructions, it relies on machine learning to respond to questions with adequate suggestions and capture the queries to process later and ‘learn’ from.

Both types of chatbots can be made ‘chatty’ through natural language processing to make the interactions more human-like and conversational. Most bots are hybrid, a combination of scripted and smart bots that integrate algorithms and artificial intelligence.

Deconstructing chatbots:

Chatbot applications have a few distinct aspects essential to make it work.

  • Database: The database stores product information, user data and transactions.
  • Application layer: This is the brain of the bot that contains the instructions to make it functional.
  • APIs: These integrate the chatbots to the existing platforms to say process payments, generate quotes, etc.
  • User interface: The chatbot interacts with the user through this window.

Different types of businesses have different requirements of the above layers depending on their goals and audience.

Do chatbots work?

Chatbots have become extraordinarily popular in recent years largely due to dramatic advancements in machine learning, artificial intelligence and natural language processing. But as a business owner, you may be skeptic about integrating chatbots into your website. Let’s address some of the common questions you have.

Are chatbots useful?

Undeniably so. Chatbots can talk to your customers for you. These applications streamline interactions between people and services, enhancing customer experience without having to spend manhours to do it. Not only does it reduce the costs, but efficiency is also higher. This also enables exploring new leads through customer engagement.

How receptive are the audience?

If you’ve come across a few clunky chatbots that failed to be helpful or took up the screen space, we can understand your doubts. Chatbots done right (which we definitely guarantee) are a great addition to the user experience as they are engaging, informative and efficient. Not convinced, read about why users like chatbots.

How accurate are chatbots?

Chatbots are growing smarter and reliable. The accuracy of the chatbot depends on its algorithm and data available. With the advancements in natural language processing, the scope of understanding of the chatbots has increased. When chatbots are posed questions beyond the scope of its framework, they can be deflected or forwarded to a human operator to be taken care of.