What are chatbots? Why are they important?

Chatbots are software applications which enables you to interact with them in Natural Language via Speech or Text, there by simplifying the interaction between humans and computers. Unlike regular applications which respond to specific set of commands, interaction with chatbots will be in layman language and it will be as natural as human-human conversation.

Chatbots have become very popular in recent years largely due to advancement in Natural Language Processing (NLP/NLU) and messaging apps opening their platform for chatbot deployment. Today’s chatbots will be smarter, responsive and useful. Chatbots are going to be next revolutionary thing after mobile apps. Predictions show that by 2020, over 80% of businesses are expected to have implemented some sort of chatbot solutions.

Big players like Apple, Amazon, Microsoft and Google have already developed chatbots and are being widely used in the form of Siri, Alexa, Cortana, Assistant.
These are uberbots which can understand wide range of user requests. On other hand, chatbots that are built for personal and enterprise use cases will have specialized functionalities which are customized according to user/business requirements. For obvious reasons, chatbot built for a business need not give weather updates and at the same time Apple’s Siri will not be able to give status of customer’s order.

Bot Data flow:

Above figure depicts how data flows between user and bot. User starts the conversation requesting bot to book a hotel in New York for 3 nights on Nov 30th. Based on the user input, bot understands user’s intent which in this case is Book a Hotel. Understanding user’s request/intent is the first and crucial step of a chatbot. NLU which is the core of chatbot makes this happen.

Once bot understands user’s request, it engages user in a conversation to get additional information related to request. For the sake of simplicity, in above scenario User input contains all travel details in one statement. This will not be true in real world scenario and bot has to get all required travel details from user by engaging user in a conversation.

Once bot gets all required details related to request, it calls backend with required parameters, which in this case is date of travel, duration, destination. Backend processes the request and send its response to bot which in turn presents it user in human readable format.

Bot Integration Channels:

Apart from integrating chatbot with website or mobile app, it can be integrated with messaging platforms too. Research shows that an average user spends 80% of mobile time on messaging platforms. By integrating chatbot with messaging platforms reaching out to customers will be easy which helps in attracting new customers and retaining existing customers. Various messaging apps have opened up their platforms for chatbot deployment, which is one of the reasons for recent popularity of chatbots. Skype, Slack, Microsoft Teams, Facebook Messenger, Twilio are to name a few which enables chatbot deployment.

Benefits:

Cost Effective:

Implementing a chatbot is cheaper and faster than implementing a software solution or hiring employees for each task. IBM estimates that chatbots will save businesses $8 billion each year by 2020. Besides saving costs on employees, human errors can also be avoided be employing chatbots. Deploying chatbots for repetitive tasks allows us to focus human power on complicated and essential tasks.

Quick Response:

Responding to customers queries as quickly as possible is one of the key factors to improve customer satisfaction. Chatbots respond to users with in seconds which is highly impossible if a human is answering to customer queries. On an average people spend 7 minutes for an agent to be assigned to them, when they call customer care. By deploying chatbots, customers will be served immediately. Companies like TacoBell and Dominos are already using chatbots to take customers orders.

Faster On boarding:

Chatbot can be implemented and deployed faster than on boarding human employee. It’s not exaggeration to say a chatbot with basic functionality can be developed in days’ time - thanks to various bot development platforms and messaging channels support for bot deployment. On other hand hiring and on boarding employees takes long time.

Availability:

As businesses are expanding globally, 24x7 availability is very crucial in improving customer satisfaction. Since chatbots are virtual assistants they continue to operate round the clock without requiring to take a break.

Capacity Handling:

Chatbots can handle large number of customers efficiently, which will not be possible with humans. Unlike humans which can communicate with only one user at a time, chatbot can communicate with multiple users at a time. As business keeps growing, having humans to serve customers will be a difficult task, whereas chatbot can server each and every customer immediately. Chatbots also gives us flexibility to scale up servers to meet traffic during peak hours/days.

Data Collection:

Chatbots enables us to monitor user interaction with chatbot and collect data, trends, metrics etc. This gives us ability to adjust our processes and responses to enhance user experience.