What Is A Chatbot? How Brands Use AI Chatbot Technology To Increase Online Conversions

What Is A Chatbot? How Brands Use AI Chatbot Technology To Increase Online Conversions
Article by Sumana GangulySumana Ganguly
Last Updated: January 17, 2022

Chatbots have become a staple in design -- from websites to apps and beyond. That's because they are extremely efficient, give users a positive experience and lead to actions on the part of the consumer that benefits your brand.

In fact, chatbots aren't the robotic responders of years passed. Thanks to AI tech, some of the most advanced bots can answer questions and lead users on a journey that might even be more helpful than if they were talking to a real-life person.

Modern businesses can -- and should -- integrate chatbots into their business strategy. What's more, the best digital agencies understand chatbots' hidden ability to drive sales, increase conversions and establish a strong, stable brand identity.

So let's learn more about chatbots and all that they're capable of.

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What Is A Chatbot?

A chatbot is a service powered by a form of artificial intelligence (AI) that you can interact with through a chat interface (Facebook Messenger is a great example of what this may look like).

The purpose of the service varies from website-to-website and product-to-product. It can serve a value-added function, or be just for fun. Chatbots for websites are the most common form, but they can be integrated across all sorts of digital platforms.

Many chatbot designs also incorporate another layer of artificial intelligence called machine learning. This is a complex system where a computer, through analyzing various situations and collecting data, makes fact and behavior-based decisions. It is machine learning that powers a lot of human-like interactions or computer-centric personalization surrounding customers. 

Machine learning uses algorithms that help the software absorb more information and make decisions accordingly. But it should always be guided -- or corrected -- by a human.

According to Poll Maker, 81 percent of people will use a chatbot, 7 percent don’t know they’re using a chatbot and 12 percent aren’t sure if the person they interact with is “real” or not.

This might make some consumers wary, but with the prevalence of this technology, the benefits outweigh the costs -- as long as you know what you're doing.

What Can Chatbots Do?

Chatbots recognize trigger points, questions, phrases and user intent. The first thing you need to understand is that while they are good at this recognition, they aren’t perfect.

Chatbots have an entire mapping process that will help them understand user intent depending on phrasing and beyond. From this, they craft a response from a catalog of pre-installed responses.

If the chatbot is confident enough in its response, it will send out an automated message. If that confidence falls under a certain percentage, the chatbot will invite a customer service agent to join in and continue.

If we want to get more technical with this explanation, we would say that bots use several techniques to map the questions and responses. For example, they use entity recognition — where they look for certain categories, like product name, address or anything similar.

They also analyze speech parts – nouns, verbs, subjects and objects in a sentence. Furthermore, good chatbots will analyze a customer’s happiness and whether the experience they are receiving is classified as a good one, or if it’s deteriorating and it would best benefit from human intervention.

A chatbot design is equally complicated and simple. They rely heavily on machine learning and artificial intelligence to engage with users and, essentially, figure things out as they go along. But they are a great tool for brands and businesses, and can actually change consumer perceptions for the better going forward.

Chatbots are more popular than ever before, and they can have a major impact on your business.

How Chatbots Actually Work

Well, in short, the real opportunity around chatbots stems from the fact that people are using messaging platforms more than they are using social networks, and they have been for some time now.

This shift towards message-based apps over social media platforms means that your company’s target audience is more present on Facebook Messenger, What’s App, Viber and other chat services than Facebook, LinkedIn and Twitter. (Social media marketing firms employ this more and more in their brand strategies.)

With this in mind, the underlying benefit of chatbots relates to the potential for designers to get creative and develop new ways that users can interact with chatbots, and for what purposes.

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The Best Chatbots

You might think you’re unfamiliar with chatbots, but chances are, you’ve interacted with a chatbot several times.

There are many platforms and products powered by AI chatbots. Some chatbot examples include:

  • Smartphone voice assistants
  • Home assistants like Amazon Echo and Google Home
  • Chatbots for website customer service live chats
  • Facebook Messenger bots
  • And more!

Fun Fact: Did you know that chatbots as an idea originated in the 1950s?

Chatbots have become an essential part of our digital experience. They exist in many places and in many forms.

And while they might rub you the wrong way, the best chatbots are actually an important feature in web development because they work to alleviate more stress than they incur. Plus, they can make your consumers feel at ease.

This makes it even easier for your audience to trust you and follow through with a purchase -- which is ultimately your goal.

Some of the best chatbot example platforms that you can use to build you’re a custom chatbot include:

  • Ada
  • Aivo
  • Bold360
  • Botsify
  • Chatfuel
  • Inbenta
  • LivePerson
  • Watson Assistant
  • And more!

How To Create A Chatbot For Your Website

Before you decide to build a chatbot, there are some things you need to consider:

  • Which interactive element can and should your brand use?
  • What will happen if they misunderstand a step, and what are the consequences of this? For example, can they “go back,” or skip steps?
  • When should words be replaced with GIFs, emoji, or images — and when should the words only be used?

But remember this: chatbots should empower your customer service, not frustrate your audience.

Throughout the process, remember why you’re doing this in the first place. Why are you wanting to build a chatbot? Is it for customer service? Is it for brand identity? Is it for the user experience?

Your goal will drastically affect the way you approach how to create a chatbot and integrate it into your platform.

Here are some quick tips and tricks for using a chatbot for websites, mobile apps and beyond:

You don’t need to be an expert in artificial intelligence.

One concern that many businesses have when they build a chatbot is if they need to have a bundle of knowledge about artificial intelligence in order to integrate an effective chatbot.

But that’s not necessarily true. In fact, the most important and trickiest part of building a chatbot is the actual user experience itself. Hence, this is where UX designers, in particular, will come into their own.

Remember that when you build a chatbot, you’re essentially a conversation. So, spend time considering how you’re going to integrate the ‘right’ words alongside the additional elements like chat bubbles and emojis to create the best UI and user experience possible.

Quartz App
The Quartz app shows seamless AI in action.

Create a personality for your chatbots.

Giving your chatbot a personality is important, and it’s worth considering the implications of the type of personality you opt for.

A great chatbot example of forming a personality around your content is Quartz's news app. It's an ongoing conversation about the news and global economy, but they’ve opted for a light-hearted touch to break up what can naturally be quite heavy or deep reading.

The Quartz app is just one example of how chatbots can be leveraged to provide a far more engaging conversation than the typical blog and comment section usually can provide.

Create a navigation system that lets users lead the conversation — and go back if necessary.

There’s often a misconception with chatbots that navigation structure and flow goes out the window purely because it’s a chat box or message app. You should really be thinking about possible scenarios at every stage of the conversation.

  • Which interactive element can, and should, the user use?
  • What will happen if they misunderstand any step, and what are the consequences of this? For example, can they ‘go back’, or skip steps?
  • When should words be replaced with GIFs, emojis, or images - and when should words always be used?

Users must have an option to pose different questions and go back, at all times.

Designing the best chatbot for your brand can uncover faults in these navigations – and the last thing you want is a customer stuck in a “20-questions” scenario without the possibility of backing out, thanks to a misinterpretation in the beginning.

Use pointers from an existing customer service team.

These are the people who work tirelessly to service a lot of customers, and chances are, they already have well-formulated responses for the questions they habitually receive.

Your customer service team should be your guide through the chatbot mapping process, pointing out trigger points, obvious answers and possible conversation topics.

Create a chatbot with a clear purpose.

Don’t try to incorporate everything into one chatbot. Be clear about your goals and create chatbots for your brand accordingly.

You can have a bot that will upsell, offer sales pitches, deals and promotions, just like you can have a chatbot that offers customer service help, answers simple questions and more.

Have a human back-up to your chatbot in place as a failsafe.

We can’t stress this enough. You can’t rely on chatbots to handle ALL your customer service needs. You can’t expect them to perform better than humans – yet.

When you create chatbots, it’s important to consider the points where a user may need or be better off with a human to discuss something with. For example, when booking.com released their ‘Booking Assistant’ they opted to include a human back-up as part of their customer service team to ensure that should any user get stuck or need additional help there would always be someone readily available.

In their case, a smaller team of customer service employees were able to categorize and address any queries which couldn’t be resolved automatically via the chatbots.

When people are outraged by something, they want to talk about it. And it’s likely that they will want to talk to a real person about their issues.

A good, experienced customer service rep can diffuse the situation, offer some perks, and even strengthen the brand loyalty in that customer in ways a bot can’t.

Let people know — or don’t.

Determine whether you want people to know immediately if they’re chatting with a bot, or keep it a secret. It’s entirely up to you and both have their pros and cons.

If people know they’re talking to a chatbot, they won’t be surprised by some answers and mistakes in the conversational process. They’ll be aware and ready for them.

If people don’t know they’re talking to a chatbot, and they expect a human, realizing the contrary might give them some doubts about your intentions. They might be outraged both by the fact that you tried to hide it and by the fact that their complaint hasn’t been heard by a human being.

Examples Of Chatbots

Let’s see some chatbot examples from brands who use them successfully. This can help you better understand if AI chatbot technology is right for you, or if you should walk away.

1. Lyft

Lyft lets you request a ride right from their Facebook messenger app, or you can even use your Amazon Echo to order a ride. They will even let you know of current ETA times, driver’s plate numbers and car model. This AI technology is exceptionally and creates a seamless user experience.

2. Starbucks

Order your caffeinated beverage or a snack in advance through text messages or voice commands. You can use the Starbucks chatbot in the Starbucks app — which also increases app engagement and helps them stay relevant.

App abandonment is a real issue, and this chatbot provides Starbucks with continuous use of their app. Not only that, but it also helps customers order in advance, get info about their bill and lets them know when they can pick up the goods.

3. Spotify

Spotify uses a Facebook Messenger bot to let people listen to music, search for songs and even share them. If you input some answers, you can get playlist personalization services and recommendations that are based on the genre you’re interested in, your current mood or whether you need something to take your mind off of things to aid you in specific situations like studying.

4. Pizza Hut

A simple chatbot in the Facebook Messenger can help you order a pizza in advance, both for delivery and carryout. Also, this chatbot lets you know about current deals and promotions, thus upselling and increasing the total bill and encouraging higher sales.

5. Wall Street Journal

The Wall Street Journal cleverly uses Facebook Messenger to deliver stock quotes at customized alert times. You can compare companies, get live stock quotes, research company information and more. This builds the brand up and gives it an authority that is unmatched in the industry.

Chatbots aren't going away anytime soon -- but you can learn how to leverage them throughout your website, apps and mobile sites for meaningful business success.

The Future Of Chatbot Design

As mentioned, when you create chatbots, you build emphasize a conversational flow that not only makes sense, but that is engaging, compelling, and actually results in a user learning something new, buying an item and having their concerns or queries addressed effectively.

It's an increasingly popular tool that brands should be leveraging to boost customer service, drive conversions and keep their audience happy.

Chatbots are the features of the future -- with more businesses working to create chatbots for websites, apps, messaging platforms and more.

They work to alleviate consumers stresses, transform consumer opinions and lead users on their journey. With the number of consumers already willing and happy to accept a chatbot design, your business needs to jump on the bandwagon or get left behind. Top software development companies can help you with development of these chatbots.

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