What Is a Chatbot and What Are Chatbots Used For?

Have you ever received a phone call and—in the middle of your chat—realized that you are not talking with a human?

Chances are it was a voice chatbot with a pre-recorded conversation script.

Personally, I hate those things!

Many shady companies use “phone call bots” and “automatic robot dialers” for mass-marketing frauds.

Still, not all chatbots are bad! From voice assistants like Siri to virtual support agents, they are becoming a key technology of the 21st century.

But what is a chatbot anyway?

In this article:

• What are chatting bots, and what is their purpose?
• Different types explained (with examples)
• Frequently asked questions about chatbots

Explore Tidio’s chatbot features and benefits, visit our page dedicated to chatbots.

Once you become familiar with chatbot technology, it’s also worth reading:

• Design Your Own Chatbot: Best Practices of Chatbot Design
• 7 Best Free Chatbot Platforms [Ranking & Comparison]
• Chatbot Statistics and Trends You Need to Know

You can jump straight into the action, too.

Now—

Let’s start with the basics and define chatbots.

What is chatbot technology?

Do you remember the last time when you were trying to reach your bank or mobile network operator?

You probably heard something along the lines of:

You have reached [Company Name]. Thank you for calling.

If you want to reach our customer support, press 1. If you want to turn selected services on and off, press 2. If you want to…

You get the idea, right?

This type of automatic attendant service could be considered a very primitive form of a voice chatbot.

Here is an example of a modern customer service chatbot used by a restaurant:

You can interact with this advanced chatbot and book a table, browse the menu, or order food. It is designed in a way that is easier to navigate than a traditional website. This is especially true if you are using a mobile device!

Looking for more chatbot use cases?

• Best Chatbot Examples That You Can Talk To
• Top eCommerce Chatbots For Your Business [+Examples]
• Artificial Intelligence Chatbots Are Changing HR Processes
• How Restaurants Can Effectively Use Chatbots?

What are the benefits of chatbots?

OK—

Chatbots seem like a cool thing to play around with.

But what is the purpose of chatbots? Why do companies use bot assistants instead of offering a more personal (human-based) customer service?

Here are some obvious benefits of using chatbots:

• Faster replies. Even the fastest customer service agents need some time to type in an appropriate response. Bots send automated responses in milliseconds.
• 24/7 support. Virtual assistants don’t need to sleep, and they never get bored. Chatbots work for free and without any limits.
• Better user experiences. About 40% of customers prefer digital AI assistants to other forms of customer service. While some still prefer to wait for a real person, it is important to provide a solution that delivers the best customer experiences.
• More customer interactions. Chatbot apps increase customer engagement levels. Their reply rates are significantly higher than engaging customers via email or contact forms. 
• Many integrations with messaging apps. Chatbots offer multi-channel customer service and can operate on several messaging platforms simultaneously.
• Conversation templates. Many digital assistants and chatbot applications include a library of chatbot templates for real estate, ecommerce, and many other industries.
• Great return on investment for businesses. The costs of deploying a chatbot on your website or social media are negligible. Chatbot pricing plans have a great ROI—a single bot can do the work of a whole call center.

Their primary goal, in general, is to facilitate human-computer interaction.

On top of that, this new technology is becoming extremely popular. Over 1.4 billion customers have already used a chatbot!

If you need more, read: Business Case for Chatbots: 10 Reasons Why You Need Them

This looks impressive. Are there any downsides to chatting bots, though?

Well, if users genuinely want to solve their problems, chatbots work fine. But if someone just wants to find out how to break a chatbot and is not cooperating with AI, it is easy to confuse a bot. Your virtual assistant may fall victim to mischievous users who find provoking it funny.

Virtual assistants cannot improvise, defend themselves, or react in a way a human live chat would. But, on the other hand, nobody’s feelings are hurt. Sometimes using bots is the best way to deal with angry customers.

At the end of the day, the advantages of support bots far outweigh the potential risks and downsides. But how do chatbots work? Are all chatbots equipped with artificial intelligence? Does using them mean that I can’t have human agents?

Let’s find out more.

How does a chatbot work?

Some chatbots use natural language processing (NLP) to recognize the meaning of the messages they receive. Developers use advanced machine learning algorithms and huge amounts of user conversation data to train AI chatbots.

Chatbots explained

Real-time natural language understanding (NLU) is a powerful tool. And you don’t need to be a developer to use it. Let’s take a look under the hood. This is what the bot looks like in the chatbot builder.

You don’t even have to write a single line of code to make a project like this. You can design new conversations by connecting triggers and actions. To recognize the meaning of messages automatically, all you have to do is define the language and topic of the conversation.

Other chatbots use simple decision buttons that are based on common questions. For example, here is a Facebook Messenger chatbot that offers a ticket discount.

Phare Circus uses the same solution for live chat, bots, and multi-channel automation.

The majority of customer support automations use simple decision tree diagrams or conversation flowcharts.

It may be difficult to perfectly simulate human interactions with a computer program. But, unless you want to pass Turing’s AI test, it should be more than enough for the majority of typical online situations.

Read more: What Is the Difference Between Conversational AI and Chatbots?

What are chatbots used for?

Today, chatbots can carry on entire conversations. Some people even fell in love with virtual companions such as Replika.

But, most of the time, chatbots help businesses with their day-to-day operations. For example, I happen to receive automatic bot messages from Slackbot that remind me about the deadlines for my articles! Would you believe it?

Chatbots help to streamline customer service, marketing, and other business processes.

Here are the basic types of chatbots:

• Voice chatbots. Millions of people use Amazon’s Alexa or Siri without thinking about them as chatbots. But that’s exactly what these virtual assistants are.
• Customer service bots. They can answer questions about products or services and help you track your order or shipping.
• Lead generation chatbots. They collect phone numbers, emails, and other contact details (usually by offering incentives such as discounts or free resources).
• Social media bots. These bots can send messages via social channels and include Facebook, Instagram, or WhatsApp chatbots.
• Companion bots. Many people have chatbots that they interact with for fun and companionship. They are like virtual boyfriends or girlfriends.
• FAQ chatbots. These chatbots are an alternative to knowledge bases and answer recurring questions from customers.

If you want to get your own chatbot now and learn how to use chatbots, you can choose between:

• WordPress chatbot plugins
• Facebook chatbots
• Shopify chatbots

How can chatbots improve customer service?

Conversational bots are extremely popular, especially among the younger generation of online shoppers. About 40% of Millennials interact with bots on a regular basis. They provide seamless, conversational shopping experiences.

Here is an example of a customer service bot in action:

It can handle the most typical customer service scenarios on its own. Or it can notify live chat operators if an unusual problem occurs.

Virtual assistants that use artificial intelligence and NLP increase customer satisfaction by:

• Offering conversational interfaces that are easy to use
• Being available both through browsers and mobile apps
• Providing fast responses and around-the-clock service

It is like having a super-hero customer support agent on your team. And there are many providers and chatbot alternatives to choose from.

Read more: Customer Experience Trends

How do chatbots qualify leads?

Chatbot subscription messages are far more effective than traditional lead generation popups. Old-school popup ads are extremely intrusive, and 73% of online consumers hate them. With a chatting bot, it feels more like a conversation. And it is easier to encourage someone to speak to you, tell something about themselves, or answer a question.

You should try out several designs for different stages of lead qualification.

Are chatbots effective? You can read an inspiring business story of Whisker Bag. The owners created fully automated customer service and advanced lead qualification flows.

Read more: Best Lead Magnet Ideas 

Why chatbots are the future of market research

Chatbots are not just a technology for streamlining sales and customer service. They are a great alternative to customer feedback surveys, too.

Imagine a situation where a customer of your online store has a full shopping cart. They browse the store and visit different subpages. They spend a lot of time on your website. Despite that, they do not finish their purchase.

What went wrong? 

You won’t know until you ask. And chatbots happen to be made for this job.

You can trigger chatbot conversations with any event on your website. Collecting customer feedback at the right moment is essential for learning more about your customer base. And for finding problems that they may have with your services or products!

You can start it when:

• Customers visit a specific page on your website
• Their mouse cursor moves away from the page
• A given amount of time has passed
• They abandoned their shopping carts
• They have been inactive or didn’t answer your message

You can also create custom chat triggers with Tidio chatbot APIs.

Read more: Learn about the new Tidio AI features and how they can help your business.

Key takeaway

Keeping customers happy is more important than ever. But human customer service agents can be costly—compared to automated support and self-service tools.

What can chatbots do?

• Generate leads
• Answer FAQs
• Give discounts
• Recommend products
• Track orders
• Send images and videos
• Save abandoned shopping cars
• Send notifications
• Engage users
• Get user feedback
• Collect CSAT scores
• Inform about best deals
• Get orders and track sales
• Send user data across different platforms
• Qualify leads and tag users
• Assist support agents
• Collect contact information

Natural language processing solutions are becoming more commonplace and intuitive to use. Consequently, companies are discovering what automation can do for their business. They learn that:

• Building a support team that can help customers requires a huge amount of resources
• Installing a virtual bot assistant on their website takes just a few minutes

It’s not hard to put two and two together. If customers can find the information they are looking for faster, they are more satisfied. Even more so when they can get help without getting human agents involved.

Chatbots: Frequently Asked Questions

If you want to learn more about chatbots, here are some of the most common questions.