Marketing Automation

What is a Chatbot? How Advancements in AI Can Benefit Your Business

What is a Chatbot? How Advancements in AI Can Benefit Your Business

Despite the disturbing implications associated with the rise of artificial intelligence, the use of AI technology is becoming increasingly common.

And if you know anything about AI, chances are you’ve heard of chatbots.

But there’s also a good chance that many of you are sitting there asking yourselves, “What is a chatbot?”

Sadly, our ignorance shows that the chatbots have us right where they want us.

It seems artificial intelligence is slowly rendering humanity obsolete and fulfilling its dream of world domination, complete with human zoos and flower-filled cruise missiles.

Don’t believe me? Check out this video:

But seriously, if you want to learn more about how chatbots work, what they are, and how your business can benefit from them—keep reading.

What is a Chatbot?

Otherwise known as a conversational agent, a chatbot is a computer program or AI that can conduct conversations by interpreting and responding to written or spoken language.

Typically, they’re used to reply to users through chat windows on websites, SMS text, or on social media platforms like Facebook and Twitter.

Chatbots offer a wealth of convenience for consumers and many benefits for businesses, so it’s no wonder that more and more people are using them.

But how do they work?

How do Chatbots Work?

Chatbots use natural language processing (NLP), which is the same technology used by virtual assistants like Siri and Cortana.

Using a series of algorithms, NLP technology allows chatbots to process language, determine what a user has said and respond accordingly.

But given the nuances and complexities of human speech, chatbots can have a hard time interpreting what people are saying and an even harder time figuring out how to respond.

However, the technology behind chatbots is becoming increasingly sophisticated, to the point where it would be tough for people to tell whether they’re talking to a human or a robot.

If you want to know how far this technology has come, check out the video below to see Google’s virtual assistant, known as Duplex, book a hair appointment, and make a dinner reservation.

So, now that you know what chatbots are and how they work, let’s talk about how they can benefit your business.

How Chatbots Can Benefit Your Business

Improve Customer Service

Chatbots can vastly improve your customer service.

You might not be able to hire customer support agents to work around the clock, but using a chatbot, you can afford to offer 24/7 customer service.

A chatbot won’t be able to resolve every customer’s issue, but it can at least make you more responsive and provide automated replies to things like frequently asked questions or common technical issues.

Being more responsive can also increase conversions by convincing customers who are still on the fence to make a purchase from you, rather than the competition.

Chatbots also allow you to obtain information from customers before transferring them to a human being, which can save you time and money on qualifying potential leads.

A collaborative report from several companies, including Drift and SurveyMonkey, asked consumers what they would use a chatbot for, and the top two answers were “getting a quick answer in an emergency” and “resolving a complaint or problem”.

SurveyMonkey graphic


Below are some examples of companies that are already using chatbots to improve customer service:

Spotify has a chatbot on its Facebook page that helps users to find and create playlists and share them with friends:

Spotify chatbot


Evernote has a chatbot on its Twitter account that provides support resources and helps users to troubleshoot:

Evernote chatbot


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Save Time

Chatbots can save a significant amount of time for both customers and employees.

For instance, instead of having to wait for a response to an email or be put on hold while waiting for a customer service rep, customers can have access to support when a human isn’t available, or while they’re waiting for one.

35 percent of respondents to a survey from Usabilla said the number one reason to use a chatbot is to save time.

The survey also found that more than half of respondents would choose a chatbot over a human if it would save them 10 minutes.

Usabilla graphic

At the same time, chatbots can provide answers to simple inquiries and collect information that’s needed to resolve these issues, freeing up employees to spend their time dealing with more complex problems.

A study from Juniper Research found that chatbots can save companies in the healthcare and banking sectors an average of more than four minutes per inquiry.

Save Money

Time isn’t the only thing chatbots can save.

Besides making you more responsive, increasing conversions, and helping to qualify leads, using chatbots for customer service can also save you money.

As with all forms of automation, letting robots take care of tasks that were once done by humans provides the potential to significantly reduce operational costs.

For example, while a human being can only effectively help one customer at a time, a chatbot can simultaneously deal with a nearly unlimited number of interactions.

The Juniper Research study referenced above found that in the customer service industry, chatbots will provide cost savings of more than $8 billion per year by 2022.

And research from Business Insider Intelligence estimates that several U.S. industries can save billions using bots.

Business Insider Intelligence graphic


What are your thoughts with chatbots? Let me know below.

Looking to implement a chatbot to your website or just looking to grow your business in general? Book a Free Strategy Session with my team and we can discuss how to make that happen.

Rob Pacinelli

Roberto Pacinelli is the VP of The Best Media and Senior Digital Marketing Strategist with a career in digital marketing spanning over 19 years. Roberto and The Best Media have helped thousands of small, medium and large businesses succeed online across Canada, USA and the world with many business owners recognizing Roberto and his team as their Key to Success in helping their businesses earn millions of dollars as a result. Call Roberto Pacinelli at 416 253 0934 or email him at