Customer Service Chatbots: Everything You Need to Know

Chris Thomas
September 24, 2021
Read time:
11
Minutes
Live Chat and Chatbots
Chris Thomas

It’s getting tougher to meet customer expectations.

They want the best online service possible, as fast as possible.

But how are you supposed to provide fast customer service and support to the highest quality?

How is your contact centre team supposed to keep up with the demand?

The answer lies in deploying customer service chatbots!

In this blog, we'll be taking a deep dive into that very subject. You'll learn: 

  • What a chatbot is and the benefits of using them alongside human agents 
  • How AI-powered chatbots are built and maintained 
  • How to improve your organisation's customer service with chatbots
  • How to choose the best chatbot 
  • How to strike a balance between human conversation and automated messages

Let's get started! 

What is a customer service chatbot?

Customer service chatbots are automated support tools.

Depending on how they're coded, they're sometimes called AI virtual agents.

They can be installed within an organisation's website, mobile app, or social media pages, providing instant responses to customer queries.

They usually appear as a chat widget in the right-hand corner of the screen.

Image source: The Celtic Manor

A chatbot's primary use is to answer questions and provide relevant information to customers without involving a human agent.

With more advanced automation, chatbots can also:

  • Take orders and make sales
  • Process personal information and user data for lead generation
  • Access knowledge bases to show customers relevant content

Chatbot benefits

There are many benefits to deploying customer service chatbots - both for your customers and for your business support team.

Let's take a look at the benefits for each.

Benefits customer service chatbots for the customer experience

These days, chatbots are one of the most efficient digital channels for offering consistent customer service in a proactive way.

When deployed effectively, customers love chatbots because:

  • They provide immediate responses
  • They provide customers with consistent support, 24/7, 365 days a year
  • As a self-service tool, they save time by limiting the need for users to get in touch with a live chat agent
  • They can assist with many functions, streamlining the online journey

Benefits of customer service chatbots for your support team

Chatbots can never solely replace your customer support agents, but it's hard to discount how efficient chatbots are as a customer service messaging platform.

For instance, some of Talkative's customers use chatbots as their main point of contact, with over 3,000 customer interactions handled every month.

Whether you're trying to improve your sales or support departments, self-service chatbots are so popular because:

  • They lessen the need for real-time interactions and reduce tension through updates
  • They can save on customer service costs by up to 30%
  • They help alleviate high support volume, saving on customer service agents' workloads
  • They save your support teams from constantly answering repetitive questions
  • They can escalate to a live agent when a customer asks
  • Depending on your chatbot building platform, they provide chatbot analytics and an on-brand experience
  • They can offer feedback surveys and save your customer conversation history for training and development purposes

What's more, AI-powered chatbots can "learn" how to answer your frequently asked questions as time goes on. 

It means more improvements to your customer experience strategy without any additional coding.

How does a customer service chatbot work?

There are many different kinds of chatbot available for your business.

From a user perspective, they might all appear incredibly similar.

That said, a lot of different processes might be going on in the background.

Some customer service chatbots are installed and maintained by in-house staff. 

As you might imagine, not everyone has the coding skills required for this kind of implementation.

Other support chatbots use an API or third party system like Talkative. 

This allows you to deploy chatbots without any coding at all.

Easy setup systems like this are understandably much more popular than the 'create your own' approach.

Still, whether you're looking to design your first chatbot or adopt a customer service solution, there are two main types of chatbot that you could deploy as customer service tools.

Scripted chatbots

Scripted chatbots are a type of bot that limits interactions to a set of predetermined options.

Here's an example of a scripted conversation between a customer and a chatbot.

As you might imagine, they help keep customer conversations short and to the point, but these chatbots can only understand your customers if they type exact keyword matches.

AI Virtual Agents

AI Virtual Agents act more like live chat agents.

They work much better in a two-way conversation, offering more human-like answers.

Instead of solely relying on scripted responses, Virtual Agent uses machine learning and natural language processing (NLP) to interpret the customers' queries.

In turn, these bots can deal with more queries, more efficiently.

How do you create a chatbot?

As we've touched on above, chatbots can either be built with:

  • 1. A list of prepared scripted answers that draw from existing information, or,
  • 2. An artificial intelligence technology.

As you might imagine, both of these chatbot types require different building methods to provide support.

Creating scripted bots

Pre-scripted chatbots need to be provided with decision tree routing to communicate with customers effectively.

That way, when a customer asks a question, they can refer to their knowledge base and relay the appropriate answers.

Creating AI Virtual Agents

In contrast, Virtual Agents need to be 'trained' over time, depending on the AI they use.

While they also refer to knowledge bases, they learn from your customers over time by recalling past interactions and analysing messages to determine sentiment and intent.

How to choose a customer support chatbot

When deciding on a chatbot for your business, you first need to determine its primary purpose.

For example, will it offer simple FAQ support or more human-like interactions?

Secondly, you need to decide what other digital channels you'll use to compliment your bot. Take web chat, for example.

Either way, to find out what kind of chatbot you need, ask yourself the following questions.

Key chatbot considerations

  • What types of customers will be using your chatbot?
  • What issues most commonly arise during customer interactions?
  • Do you want to use your chatbot to simply direct customers to the correct department, or do you want them to handle entire conversations with artificial intelligence?
  • What kind of analytics dashboard would your team members require?
  • On which devices or digital channels will you offer your chatbot?
  • What is your overall goal when installing a chatbot? For example, will you be limiting web chat queues and increasing efficiency?

Pricing is also an essential point to consider. The cost of a chatbot can vary greatly, depending on the features and functions you require.

The other primary consideration is which provider is going to code your chatbot.

Even if you go for a simple scripted bot, what if you need to update its answers with newer, more relevant information?

Is the solution you're reviewing easy enough to update, or does it require more of an in-depth focus?

Keeping these kinds of questions at the forefront of your mind will help you find a customer service chatbot that'll truly complement a seamless customer experience.

How to improve customer service with chatbots

These days, chatbots are an essential part of any customer service solution.

In fact, 40% of millennial customers say they interact with chatbots every day!

Still, that doesn't mean every business uses them to their best ability.

When businesses fail to use chatbots correctly, it can cause user tension and ruin the customer experience.

That said, this doesn't mean customer support chatbots are the wrong choice for your business!

Far from it, in fact. It's more that some organisations don't design their chatbots in line with their customers' needs.

To make sure you can offer the best customer support and achieve your customer service goals, you'll need to take into account two main areas.

Purpose

As we've already seen, deciding on your chatbot's purpose is hugely important.

Overestimating your chatbot's abilities is a sure-fire way to annoy its users.

This isn't exactly a great move!

Customers won't be satisfied if they encounter a chatbot that appears to be more advanced than it is.

It's the same case if you present your chatbot as a real human.

When your customers discover that they're dealing with a bot, they're going to realise you've broken their trust.

Again, this is not a good look.

So, make sure your chatbot’s purpose is clearly defined, both for yourself, and your customers. 

Personality

Unlike humans, chatbots don't come with a personality of their own.

It's another aspect you're going to have to think about before you deploy.

An excellent tip for deciding on your chatbot's personality is to consider how you want to broadcast your chatbot’s chosen purpose.

For example, say you want to offer a scripted bot to deflect customers from your live chat agents.

If this bot only answers the simplest of questions, the bot doesn't need a huge personality. 

In this scenario, it's best to give it a generic, 'bot-like’ personality instead.

Your customers might get irritated if you code a simple bot with too much of a presence when it only answers scripted questions. 

Again, your customers might think your bot is more powerful than it really is.

That said, chatbots don't always need to be boring.

Suppose your brand has a fun image and tone, and your bot uses artificial intelligence to converse. 

In that case, a more fun personality could be a great move for an improved customer experience.

Just remember to create a personality that best speaks to your target audience. 

With 48% of customers stating that fast resolution times are more important than quirky personalities, it’s proof that a succinct chatbot interaction isn't off-putting.

Chatbots vs live chat agents: Which is best?

Research shows that by 2022, 75-90% of customer queries will be handled entirely by chatbots.

Even so, the best approach to deploying customer service chatbots is to use them alongside a dedicated support team.

Not only can human agents solve far more complicated queries, they can also assist your customers on multiple channels like web chat and video chat.

After all, how do you think your customers will feel if they get into a knot during a chatbot interaction?

Even if the chatbot does supply quick answers, users will only get annoyed if the responses they receive don't make any sense!

This scenario will hardly improve engagement.

So, if your chatbot will serve as your primary point of contact, it might be best to adopt a Virtual Agent that can understand when a user is getting annoyed or confused.

That way, they can escalate the interaction to another channel where a human agent can efficiently take over.

Industry examples of customer service chatbot

Here are a few industry use case examples, demonstrating what's possible with your customer service chatbot.

Financial services: HSBC

High street banks don't often have the best reputation for customer service.

They can be infamous for long phone queues and complicated online processes.

To rise above their competitors, HSBC recently launched a chatbot to improve their online response times and functionality.

Image source: HSBC

Using AI-based technology, HSBC’s chatbot can now offer online policy information in a fast and customer-friendly manner.

Fast food: Dominos

Domino's launched their chatbot 'Dom' back in 2017.

First offered through Facebook Messenger, this customer service chatbot is now available through various contact channels, helping customers order their deliveries and keep track of their orders in a fun and engaging way.

Image source: Domino’s

For more on Dom and the customer engagement success it's brought Domino's, check out our article on the best ecommerce chatbots!

Retail: Nike

Nike's 'Stylebot' is another customer service chatbot that got its start on Facebook Messenger.

Nike's bot is proof that a great imagination can help to improve the online customer experience.

Image source: Nike

With their chatbot, users can browse outfits based on their personality, not just their preferences.

It's proved a creative way to offer fast and automated customer service while increasing convenience, engagement, and satisfaction.

What's the best customer support chatbot?

Now that we've outlined how a customer service chatbot can work for various businesses, you might be wondering which chatbot providers offer the best solution.

To help you decide, we've outlined a few of the key names you should explore.

Talkative

You might've seen it coming, but we'd be remiss not to highlight Talkative's own customer service chatbot in this discussion.

That said, Talkative's AI Virtual Agent is one of the best chatbot options available. 

Here's why:

  • With our conversational agents, we can automate your customer support and maximise your contact centre efficiency.
  • Lightning-fast responses mean you can keep your customers smiling and reduce the pressure on your live chat agents.
  • What's more, you can humanise your chatbot experience by linking your bot with several other customisable communication channels.

Whether you need a standalone deployment or integration with big names like Salesforce, Mitel, and Microsoft, we've got you covered.

Add a no-code building experience into the mix, and you'll be able to deploy your customer service chatbot with ease.

Zendesk

When it comes to customer service chatbots, Zendesk is a big name for a reason.

Adopting their solution will mean your business is amongst some colossal brand names too.

Image source: 1000 Logos

Much like Talkative's solution, you can use Zendesk's customer service chatbot to answer customer queries at any time, night or day.

However, their basic package only allows you to offer 50 AI answers to your customers a month - so make sure you properly check their pricing tiers for your needs!

Freshworks

Freshworks is another excellent option.

Much like Talkative's customer service chatbot, their model enables you to qualify leads on your website and answer visitor questions, all based on user behaviour.

Image source: Seek Vector Logos

It means you can help boost both your sales and support teams, all thanks to intelligent automation.

Freshworks is traditionally known as a helpdesk software provider too, so if a chatbot isn't your primary concern, it's a great choice.

FAQs about customer service chatbots 

To round off our discussion on chatbots and Virtual Agents, here are the answers to your most frequently asked questions. 

When were chatbots invented?

The first 'chatterbot', ELIZA, was invented by professor Joseph Weizenbaum in 1966.

Where do chatbots get their information?

Chatbots retrieve information from a company's knowledge database. They can also pull data from AI technology like NLP and machine learning.

Do customers actually like chatbots?

They do! However, a poorly programmed chatbot can cause huge customer perception issues. It's the same with any other self-service tool - even FAQ pages can sour the customer experience if they aren't written helpfully.

Does chatbot installation take long? 

Customer service chatbots can be installed in minutes!

What kinds of questions can chatbots answer?

For best practice, you should limit your chatbots to answering basic customer requests.

Should you always keep chatbots on?

It's up to you! Some companies only turn on their chatbot during out of office hours. Some keep them on 24/7. It all comes down to your needs.

Can chatbots speak in other languages?

Yes! Talkative's chatbot uses our multilingual translation, meaning it can deal with over +100 languages.

Can you connect chatbots to other channels?

You can! Chatbots work great in conjunction with live chat. It enables bots to escalate interactions when they don't understand a customer's query.

How do chatbots escalate to human agents?

Chatbots can be programmed to escalate queries when they don't understand the user's requests or when they type a keyword of your choosing, e.g. 'speak to human'.

Is it easy to create your own chatbot?

Building a chatbot requires a large amount of coding experience. In contrast, chatbots can be simple to implement with customer service platforms like Talkative.

Can you design how your chatbot looks?

You can! Thanks to Talkative's widget builder, you can create your chatbot in line with your brand and website.

What security concerns are there with bots?

If a customer service chatbot collects data, the biggest concern for businesses is security and customer privacy. It's why our customers choose Talkative - they know all our contact channels are security compliant, valuing privacy and safety above all else.

What name should you give your chatbot?

Depending on your brand, you might want to opt for a serious name or something more fun. Either way, it's best to make it evident that customers are speaking to a bot.

Do I need a chatbot or a Virtual Agent? 

Again, it’s really up to you! While Virtual Agents are far smarter than basic chatbots, it all comes down to your needs. To help you decide which will work best for you, get in touch with Talkative today. 

Customer service chatbots in summary

As an automated customer service tool, chatbots are the prime choice for increasing interactions while reducing pressure on contact agents.

They can offer your customers fast answers, 24/7 and 365 days a year.

What’s more, they'll help you automate the same sterling customer service that you would offer in person.

Want more information on how you can engage more of your site's visitors with automated customer service? Book a demo with Talkative today.

Download the ‘Inner Circle Guide to Video & Next-Generation Customer Contact’

Discover use cases, implementation tips, and ROI for video chat as a contact channel

Oops! Something went wrong while submitting the form.
Never miss a blog post!

Get monthly insights from our experts straight to your inbox.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Live chat interaction