What is a Chatbot and how it can elevate your CX: The complete guide

If there’s one thing that decides brand success, it's customer perception.

Customers today are looking to make more informed purchase decisions while being open to exploring alternatives, breaking inherent dissonance, and adopting new ideas.

But finding this information isn’t as straightforward as it seems.

This is where 'chatbots' come into the picture.

From understanding the core workings of chatbots to exploring their evolution, this blog is your guide to all things about AI chatbots.

We'll shed light on their unique engagement styles. We will also dive into real-life examples and understand how chatbots transform various industries.

What is a chatbot?

A chatbot is a computer program that mimics human interactions, automates responses based on specific query types, and redirects conversations to achieve successful query escalation or resolution.

For instance, when you use Siri or Google Assistant or interact with a customer support chat on a website, you're engaging with a chatbot.

How do chatbots work?

Behind every chatbot is an architecture that does three very specific tasks:

Step 1- Recognizing intent

Operating at the core of chatbot functionality, the AI chatbot utilizes machine learning algorithms to interpret user queries. Natural Language Processing (NLP) analyzes inputs, identifying conceptual entities and numerical expressions. This comprehensive understanding enables the chatbot to discern the user's intent and the nature of the task.

Step 2- Mapping intent to action

With the user's intent identified, the chatbot's next step is to determine the appropriate action. The more data fed into the system, the more precise its interpretation and mapping become, allowing for accurate responses and actions.

Step 3- Response delivery

The final stride involves executing the response. This could range from a straightforward textual reply to initiating a logic tree conversation, extracting data from a knowledge base, or providing responses based on backend interactions.

The interplay of AI, machine learning, and NLP ensures that chatbots evolve, adapting to diverse conversational contexts for a seamless and interactive customer experience.

Types of chatbots

Whether it's to help IT streamline processes, help customers find a particular piece of information, or execute routing tasks, chatbots are commonly built in three forms:

Prompt-based chatbots

These chatbots function within the confines of a particular script, logic tree, or set of rules. The user’s input often dictates the direction of the conversation which is highly predictable. This also means that the chatbot can only respond in a set number of ways. Prompt-based chatbots are not meant to handle extreme complexity.

For example, Domino's pizza ordering bot guides customers through pizza customization and order placement within a predefined structure, ensuring a smooth and predictable ordering process.

Data-driven chatbots

Data-driven chatbots are advanced programs that are context-aware and can execute a sophisticated variety of functions. Unlike prompt-based chatbots, data-driven chatbots have a higher understanding of data functionality and can use predictive analytics, machine learning, and user preferences to provide more intuitive conversation.

For instance, Spotify recommends personalized playlists based on customer preferences, utilizing data-driven insights for a tailored music experience.

AI-based chatbots

AI-based chatbots have an added layer of sophistication. They can process natural language, derive context, and make smart suggestions based on user intent. Additionally, they allow users to guide the conversation in any way they want.

What makes them unique is their ability to gather conversational data over time and create smarter responses.

Google Assistant is an example of AI-based chatbots. It understands natural language queries, provides personalized responses, and adapts to customer preferences, showcasing AI-based conversational capabilities.

In AI sophistication, ‘automatic customer reply' snap-in by DevRev comes into the picture. Operating seamlessly, it empowers PLuG widget users to automate responses and engage visitors effectively. Similar to AI-based chatbots, this snap-in processes natural language, offering customizable auto-replies that adapt to working hours.

With actionable features like custom buttons and email collection, it goes beyond conventional responses, creating an interactive and user-centric communication experience.

Just as AI-based chatbots evolve through data, this snap-in gathers insights over time, crafting smarter and more contextually relevant responses for enhanced user engagement.

Chatbots vs. conversational AI vs virtual assistants

While chatbots, conversational AIs, and virtual assistants all fall within the bracket of chatbots and are loosely based on the same concepts, it’s important to know that they are not exactly the same thing.

The table below gives you an overview of the differences that make them unique:

Benefits of chatbots

Chatbots have emerged as invaluable assets, revolutionizing the way businesses interact with users. Leveraging the power of artificial intelligence and deep learning capabilities, chatbots not only simulate human conversation but also elevate the quality of interactions. From enhancing customer satisfaction to streamlining processes, the benefits of chatbots are manifold.

Let's explore the advantages that make these virtual assistants highly important in this environment:

Simulating human conversation

Chatbots simulate human conversation, engaging users in natural and interactive dialogues. This fosters a more user-friendly and relatable interaction, enhancing the overall customer experience.

24/7 availability

64% of consumers state that the most beneficial aspect of chatbots is their round-the-clock availability. Unlike human agents, chatbots are available 24/7, ensuring constant accessibility for users. This round-the-clock availability contributes to improved customer service and responsiveness, catering to diverse time zones and customer preferences.

Efficiency and productivity

Chatbots automate repetitive tasks, streamlining processes and freeing up human resources for more complex and strategic endeavors. This efficiency leads to increased productivity within various business functions.

Amidst automation, DevRev introduces 'convergence,' a powerful set of default automations that supercharge cross-functional collaboration. This snap-in propels information seamlessly across DevRev entities—conversations, tickets, product enhancements, and development issues.

By fostering a shared system of record, convergence allows machines to intelligently converge data, minimizing manual effort. It transforms cross-functional updates, ensuring customer tickets align with product enhancements effortlessly.

With features like automatic customer updates, convergence between tickets and issues, and streamlined issue management, this snap-in optimizes workflows, exemplifying how automation goes beyond chatbots to redefine efficiency in various business functions.

Did you know?

Chatbots are involved in 39% of all interactions between businesses and consumers in chat-based communications.

Enhanced customer satisfaction

Chatbots contribute to customer satisfaction by providing instant responses to queries, addressing issues promptly, and ensuring round-the-clock availability. This results in improved customer experiences and increased satisfaction levels.

Meaningful conversations

With deep learning capabilities, chatbots evolve over time, learning from interactions and delivering more meaningful conversations. This adaptability ensures that customers receive relevant and contextually appropriate responses.

Examples of chatbots

DevRev’s Turing AI

DevRev's Turing AI is your ultimate AI copilot for customer support.

• With advanced capabilities, it automates first-line support, empowering users with self-serve options through advanced search and auto-generated answers.
• Extracting product insights in minutes, Turing accelerates analysis, transforming days of work into mere minutes while ensuring prioritization for maximum customer impact.
• The inclusion of similar ticket recommendations expedites problem-solving, enhancing efficiency.

The brilliance of Turing AI extends to solving common problems faster through similar ticket recommendations and automating knowledge base creation by generating articles directly from customer conversations.

Thus, DevRev’s Turing stands as an exemplary chatbot, seamlessly integrating AI into customer support for unparalleled efficiency and customer satisfaction.

Apple’s Siri

Siri, integrated into Apple devices, exemplifies advanced AI chatbots. It assists people with tasks, answers questions, and performs actions based on voice commands, showcasing the integration of chatbot technology into daily life.

Facebook messenger bots

Modern chatbots are seamlessly integrated into messaging platforms. Facebook Messenger incorporates AI chatbots for businesses, handling customer queries, providing information, and facilitating transactions directly within the chat interface.

Chatbot use cases

Chatbots have several conventional and unconventional use cases. They can fulfill several roles across departments and functions owing to the dynamic ways they can be molded.

With that in mind, here are a few ways in which chatbots can be leveraged:

Customer support and helpdesk

AI chatbots excel in handling customer queries, providing instant and accurate responses. They assist users in troubleshooting issues, accessing information, and navigating services seamlessly, reducing response times.

E-commerce assistance

In online shopping, chatbots guide users through product selections, offer personalized recommendations, and facilitate smooth transaction processes, contributing to a more interactive and user-friendly shopping experience.

84% of companies anticipate that AI chatbots will gain increased significance in facilitating communication between customers and businesses.

Meeting and appointment scheduling

Businesses leverage chatbots to automate appointment scheduling processes. Users can conveniently book appointments, receive reminders, and make changes, enhancing efficiency for both businesses and customers.

Messaging apps integration

Chatbots seamlessly integrate with messaging apps, meeting users where they already are. This integration allows for interactive conversations, whether it's for providing information, conducting transactions, or delivering personalized content.

Future of chatbots

The future of chatbots is poised for groundbreaking advancements, particularly in AI chatbot technology.

• Conversational AI chatbots are anticipated to become integral customer service tools, offering more than just automated responses.
• Future iterations will possess heightened contextual understanding, enabling them to engage in more natural and nuanced conversations.
• Enhanced machine learning algorithms will contribute to even more personalized interactions, making chatbots indispensable for businesses aiming to elevate customer engagement.
• The integration of advanced technologies like sentiment analysis and emotional intelligence into chatbots is on the horizon.

This promises a future where chatbots not only fulfill functional roles but also become empathetic conversational companions, redefining customer interactions and setting new standards for the synergy between technology and human-like engagement.

Chatbots: Redefining communication and user experience

As we explore AI chatbots, understanding their nuanced functionality becomes important. From recognizing user intent to delivering responses, each step reveals the intricate process behind chatbot technology.

Diverse types, including prompt-based, data-driven, and AI-based chatbots, showcase the evolution towards sophisticated conversational interactions. Delving into the benefits, such as simulating human conversation and enhancing customer satisfaction, underscores the indispensable role of chatbots. Real-life examples, like Siri, Facebook Messenger bots, and Google Assistant, exemplify their versatility.

Looking ahead, the future promises heightened contextual understanding, custom interactions, and the integration of advanced technologies, ushering in a time when chatbots become empathetic companions to communication and customer experience.