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Why Does Everyone Use Chatbots?

Сhatbots are a popular means of making businesses more profitable. As stated in a recent report on Reuters, a chatbot can help a company increase revenue by as much as 30% in just one year. That’s a substantial leap in terms of income. And to impress us even more, analysts go even further and predict that $19+ billion of chatbot-powered transactions will take place on Facebook Messenger starting this year.

How did chatbots become so renowned and profitable? Chatbots can streamline interactions in both the business-to-business and business-to-consumer spheres. And no matter what kind of business you run – retail, customer service, or financial – there’s a distinct possibility that you can implement a chatbot to improve communication with your clients.

While all we’ve said so far is nothing new, it still begs the question: Why exactly do businesses use chatbots? We’ll start answering this question with an explanation of what a chatbot is.

What are chatbots exactly?

Chatbots are simply robots that can chat with people. A chatbot is a conversational interface with which customers can order food, book a room, or purchase tickets to a football match.

But this description of chatbots explains only the outward appearance. What’s with the innards?

A chatbot is a server-side web application that talks to users through a dialog interface. Instead of tapping buttons and navigating through menus in mobile and web applications, users write messages and commands to a chatbot to get the job done.

Given that chatbots are just like apps in a technical sense, you need a web development team that can code in a backend programming language such as Ruby, Python, JavaScript (Node.js), Go, or PHP. Depending on the bot platform you’re to going to use (e.g. Slack or Messenger), the development team must also understand the platform’s API.

This explanation is enough to roughly define chatbots. Let’s now find out why exactly chatbots are used by businesses.

How Chatbots Best Mobile Apps

We can find many reasons why a chatbot does a better job than a mobile application. In the following sections, we’ll review the main advantages of chatbots for businesses.

Chatbots are easier to develop than apps

Web and mobile applications require much work on both frontend and backend. The frontend part provides the interface to the user, so your development team must design a great UX and UI. The backend part is responsible for business logic.

Chatbots don’t have a frontend part. Since a chatbot looks like any other user on a messenger, you’re only required to implement the business logic. In other words, if you’re going to develop a conversational bot instead of an app, then you’ll save time, money, and efforts on designing the interface. Overall, the price for chatbot development is substantially lower than the price for app development.

Chatbots have the potential to be CRM replacements

To promote products, to drive customers to purchase products, and to retain satisfied customers, a business usually hires dozens of people: marketers, salespeople, and customer support representatives. These employees convince customers to use the company’s services. There’s also an advanced software tool that helps these people organize their work – Customer Relationship Management software.

But not every business can afford enough customer support representatives, marketers, and salespeople and also pay for a CRM. Even if you can afford all this, you can’t easily scale the number of concurrently contacted customers.

With a chatbot, on the other hand, your business can serve customers 24 hours every day of the year with no disruptions (unless a server goes down, which seldom happens). Since a chatbot is just an app, all you need to do is to scale a bot like an app.

In the nearest future, it’s still unlikely that chatbots will replace CRMs and the people using them. But even now, chatbots are definitely capable of reducing the load on customer support, as chatbots can scale to serve hundreds or thousands of clients per day. As reports suggest, bots can save companies around 30% of expenses for customer support.

With a chatbot there are no unserved clients even if your customer support team doesn’t have time for them. As a result, your company saves money and retains customers. As for notable examples of customer support bots, you can take a look at LiveMessage by Salesforce and AgentBot by Zendesk.

Chatbots are simpler to use than apps

Modern mobile applications continually polish their interfaces to please users. Nevertheless, users may not like your app’s interface or even find it convenient. Besides, different applications implement different UX design, so when you publish a new mobile app, you actually tell users: “Here’s a new interface. Learn it, then use it.”

For these reasons, users might leave your app and look for alternatives. But with chatbots, users don’t install a new application. In practice, users write messages to the bot in an interface they’re already familiar with – a messenger platform.

Communication between users and chatbots mostly takes place in messengers – KIK, Facebook Messenger, Slack, and others. When you replace your entire app with a Slack app bot, for example, customers are able to continue using your company’s services through the messenger interface they’re used to.

Chatbots are more personal than apps

As you connect your bot to a messenger platform, you’re also getting access to profile data of users through an API provided by the platform. Facebook, for example, collects various data about users: what they’ve looked at, what products they’ve clicked on, and what they’re interested in. This data is very useful for businesses, and can be used by chatbots.

Bots can ask probing questions that are still not evaluated as advertisements: “What’s your favorite color?” or “What kind of music do you like?” Users do appreciate these kinds of personal questions.

Having access to personal information – both through a messenger’s API and through conversations – allows a bot to foresee what users want and make personalized offers. Your revenue increases in turn.

Chatbots automate typical tasks better than apps

Let’s say you’ve installed a PayPal bot for Slack to simplify managing your PayPal account. You need to send money from your PayPal account to another team member. With a PayPal bot, this task could be completed by running one slash command: “pay $6 to Ashley.” The bot would move money between accounts in the background.

With an app, you’d have to log in, switch to the necessary tab, choose a sum, choose a person you want to pay, and confirm. But the PayPal bot can do all of this without your wasting time on performing dull actions.

Your development team should teach your chatbot to parse user commands and understand what to do next. In such a way, you can automate many tedious, typical tasks. Plus, you don’t force a potential client to install your app, navigate to the necessary part of the app, fill in details, and wait. You’ll provide a much sleeker user experience, which will produce higher income.

Chatbot Problems and Businesses

We wouldn’t be objective if we omitted issues that chatbots have or create. If you’re considering developing a chatbot, you also should have a basic understanding of the problems behind chatbots.

Bot Platform Fragmentation

It would be difficult to build a chatbot that works on Slack, HipChat, and Facebook Messenger at the same time. Different messaging apps provide different APIs, which is a serious hindrance as not every business can rework a chatbot to tailor it for a specific platform.

Low convergence of messaging platforms holds back businesses from getting even more profit from their chatbots. Put differently, you may need to first think of what platform is most used by your customers.

Bots and AI Are Yet to Become Friends

Bots aren’t smart yet. Although the concept of a chatbot is certainly great, implementation is still an issue. Bots are often simple scripts. They can suggest items to clients depending on their answers. In other words, bots work like this: if a, do z, if c, do g. But such bots don’t feel like real people: whenever a user writes something unexpected, the magic disappears and the bot becomes much less advanced in eyes of the user.

A truly advanced bot must be implemented with artificial intelligence. Using AI algorithms for analyzing customer messages and constructing more human-like responses is the only way to go with chatbots. The only issue is that AI algorithms are yet to become sufficiently advanced. So you need to accept that your chatbot won’t be a perfect talker any time soon.

Smart and sleek robots talking to customers on messenger platforms is the future for many businesses. So when you think of how to make your business more profitable, think of developing a chatbot.

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