Chatbots: Types, Benefits, and Drawbacks

What is a chatbot?

This is a software app for simulating a real conversation with users via voice commands and text chats. To use human-like communication patterns, chatbots implement machine learning. Through constant interaction with people, they learn to imitate real conversations and respond to oral or written requests.

Thanks to artificial intelligence (AI), chatbots recognize speech not just specific commands. Thus, they`re becoming smarter as they communicate with people. In addition to AI chatbots, they can also be based on programmed multiple-choice scenarios.

Why use a chatbot for startups?

Chatbots help businesses minimize the costs associated with daily and one-type interaction with a large number of users. However, chatbots are not mere robots that understand just a couple of commands. Modern algorithms are able to interact in more complex cases. They can answer similar questions but formulated in different ways, adjusting to variable and nonlinear contexts. This way, chatbots enable startups to optimize staff-associated costs, save time, and create a great user experience.

Chatbot types

Before setting up a chatbot, you should be aware of its types so that your startup can make the most of it. Chatbots can be classified by different criteria.

Algorithms

• Simple. This type interacts with users according to a pre-prepared script, which consists of the most common questions. Using special services, you can set up a scripted chatbot for free. This will help you give it a go and see whether you need chatbots for your startup.
• Smart. It is based on an artificial neural network that can successfully conduct a conversation for multiple purposes. Smart chatbots are more human-like, they can even joke and send funny pictures. Such an assistant is developed personally and requires more resources.

Basic types

• Menu/Button-based chatbots. They look like a set of multiple options and possible auctions. To activate the chatbot, users have to press the buttons they need so the bot reacts to them as commands. Such a bot is suitable for collecting data, determining the subject of appeals, and answering standard questions.
• Linguistic chatbots. They communicate with users through a dialog interface. These bots use conversational AI to help people get answers to questions or solve their problems.
• Voice chatbots. These are virtual interlocutors that can recognize person's speech and respond to users in a voice manner. Such bots often call us from organizations as voice assistants in the phone and smart speakers.

Benefits

Instant response

There`s no longer need to wait for an operator to answer your question. Chatbots instantly react to users`requests and help solve their problems. This helps companies considerably accelerate the client communication process and create a great user experience.

Data gathering

Chatbots ask customers questions and generate leads so the company receives more information about customers. This empowers brands with advanced communication by informing them in advance what their target users are interested in, and what needs and wants they have.

Reduce operation costs

Companies bear considerable staff-associated costs. Chatbots are a great alternative to reduce expenses and save time on looking for employees. On top of that, they can do this job much better as they work at any time and allow businesses to concentrate on more complicated and creative tasks.

Delight and impress users

By implementing advanced technologies into your startup, you make it more innovative and user-friendly. An intelligent chatbot is a brilliant tool for creating an up-to-date image and attract users. You can demonstrate diverse functionality of your bot for increasing customer retention and loyalty.

Challenges

However, don`t rush into developing a chatbot for your company. First, get familiar with the problems you`re likely to face.

Lack of human touch

Live support staff increase the customer satisfaction rating. Users prefer to solve problems with people since the bot cannot always give a clear answer. Chatbots can`t fully replace human or achieve such smooth and diverse interaction. Sometimes people prefer to deal with a real person because it is easier to build relationships and get a more precise response.

Replicability

Chatbots are easily copied, therefore, it`s hard to reach a brand-unique experience. Frequently, they sound the same and perform similar functions. To make it more outstanding on the market, you should develop an interesting script and integrate advanced options. Think of some chatbot functions that could distinguish it among competitors.

Too complex jobs

Chatbots are designed for simple and repetitive tasks. They can`t do highly complex and creative jobs without human control. Besides, chatbots get stuch in unscripted scenarios and end up useless. To make your bot more powerful, you need more time, money, and qualified specialists.

Missing the tone of voice and body language

These are essential elements of successful communication chatbots can`t use. This makes a conversation unnatural and off-putting for customers. In addition, the lack of voice tone and body language may cause misunderstanding.

Enterprise use cases

New AI technologies in chatbots are designed to help various business areas, from product delivery to finance planning, ensuring high performance and security.

Retail

Since retailers have to quickly process loads of incoming requests, they need to adopt new technologies. Frequently, providing an app is not enough as managers still have to manually consult the customers, respond to their requests, and guide them through the whole purchasing process.

Chatbots can perfectly deal with manager responsibilities. By uploading the most common questions to your bot, it can automatically answer them around the clock.

On top of that, chatbot can consult users, accept orders, arrange delivery services, and provide companies with valuable data about customers. In other terms, you can delegate the entire cycle of client communication to the bot.

Medicine

In the medical industry, chatbots can easily handle the processing of numerous incoming requests. Moreover, they`re able to consult patients and even provide a list of possible diagnoses offering appointments with necessary specialists.

Chatbot can also be integrated into CRM system for displaying a list of specialists for scheduling appointments with doctors. They`re able to work 24/7 and automatically respond to patients`requests.

According to experts, the demand for medical chatbots is surging as clinics strive to optimize costs. In addition, the market growth is stimulated by new smart devices, growing Internet penetration, and increased patient waiting times.

Restaurant industry

With the help of chatbots, you can order food and look over the menu. This helps both traditional restaurants and ghost kitchens accelerate and streamline the process. Instead of installing an app or waiting for a waiter to take an order, customers can simply log into their chatbot in the messenger. KFC has already implemented this technology. Additionally, you can put the QR code on the table so that visitors can instantly make an order.

Financial industry

Fintech companies need to process and store complex databases of their customers. Human factor causes risks associated with the data confidentiality and security. Instead of looking for qualified specialists, you can assign this job to an AI-powered chatbot.

Regardless of the time of day, chatbots help customers understand financial processes, such as card blocking/unblocking, account replenishment, PIN code recovery, and more.

Not only can intelligent chatbots answer users' questions but also analyze their behavior and transaction history. This enables brands to predict future customers` actions and offer the services and products they need in advance. .