With the advance of artificial intelligence and machine learning that resulted in the emergence of chatbot technology, businesses have gained an opportunity to ensure a positive customer experience and at the same time reduce costs associated with service delivery. So do chatbots contribute to business success and why is the implementation of this technology worthy of being considered by startups?
In this article, we are going to dive into the pros and cons of using chatbots, find out where and how the technology can be used, and answer the question of why chatbots are beneficial for startups.
What Are the Advantages and Disadvantages of Chatbot Technology?
Let's start our discovery of chatbot technology for startups by pointing out its key benefits, and continuing with pitfalls — so that you can create a realistic picture of it.
Benefits of Chatbots
Insights into customer preferences and problems
Because chatbot is an interactive technology, it allows you to gather important information about your audience. You can easily determine the problems of your customers by gathering the most common queries and providing solutions on how to solve them. The same scheme can be applied to define your customers' preferences.
The ability of chatbots to react to customers' queries instantly opens up space for immediate support that, in turn, results in increased sales. Furthermore, chatbots can serve as effective promoters of your products and services, sending notifications correlated to your customer' preferences and informing about new arrivals.
Whether it is a day, night, holiday, etc., having a chatbot for customer support means ensuring the ability to provide 24/7 information support. What is more, a chatbot won't leave your customer waiting for an answer. By responding in a few seconds, chatbots contribute to the increased retention rate.
If you calculate how much money takes monthly wages to your customer support team, especially if you provide 24/7 services, you will see that chatbot technology is more than a quality service — it's a real money-saver. Even though the technology requires some considerable investments for its development, it pays off quickly.
Furthermore, the benefit of the reduced costs offered by chatbots can also be tracked through the efficiency of a chatbot service: the technology provides immediate answers, reducing time spent by a customer from a query to purchase, and in this way increasing the number of sales and paying off investments.
One of the key benefits of AI chatbots is that the technology is not subjected to any mood changes, while human support specialists are — and this could lead to an unsatisfactory customer experience. In this way, chatbots ensure that your audience will always receive positive feedback. Furthermore, you can always enrich your chatbot with tools for sentiment analysis that would allow generating answers in the exact manner your customer wants at the moment.
Lack of emotions
While nearly the same feature was added to the benefits of AI chatbots, the emotionless characteristic of chatbots can also be considered as a weakness. For example, if the conversation takes an unexpected turn, the machine often fails to provide a relevant answer. Nevertheless, there are always ways of improving your chatbots, such as sentiment analysis technology and the creation of a chatbot personality (like the one used in Siri). But these improvements lead to the next pitfall
High development costs
Creating a complex chatbot that would be able to answer complex questions and read the mood of your customers is a challenging, time-consuming, and pretty expensive thing to do. Such projects require the involvement of various high-profile specialists, the use of the latest technologies, and a well-thought-out development plan. Nevertheless, you can always start from the implementation of a simpler solution and then enhance it with needed features and functions on the go.
Unresolved complex questions
When you implement a chatbot trained to answer simple questions, you have to delegate more complex ones to human support specialists. That means you can't rely solely on a chatbot and have to take into account additional investments and possible delays in feedback: for example, when your customer creates a query at night but you lack round-the-clock support specialists.
Need for maintenance
If you want your chatbot to provide relevant information and contribute to customer satisfaction, you will have to maintain and optimize it in terms of a knowledge base. Furthermore, the more your business expands, the greater the requirements for analysis of conversations and the need for enhancements to your solution are.
Where Are Chatbots Used?
While there are some pitfalls, the benefits of chatbots in customer service are undeniable. The technology quickly spreads and is used in a variety of industries, including e-commerce, human resource, travel, media & entertainment, chatbots for retail business, etc. So here are some examples of a chatbot use:
Chatbots in Banking
Modern people use multiple communication channels to access all types of services and expect their banking partner to offer the same level of service. For this reason, the use of chatbots in digital banking is evolving at an incredible pace. In addition to meeting the digital needs of consumers, financial chatbots offer a seamless and personal experience.
One of the best examples of a banking chatbot is Erica by the Bank of America. Enriched with predictive analytics and natural language processing, the chatbot provides balance data, suggests how to save money, provides credit report updates, allows paying bills, and helps customers with simple transactions.
But Erica's potential, as well as the future of other banking chatbots, is to bring even more convenience. In the nearest future, the benefits of chatbots in banking will be extended with possibilities for opening a bank account and requesting for credit.
Chatbots in Education
Whether used for assistance to students or as a time-saving alternative to repeated processes for teachers, the benefits of chatbots in education are far-reaching. They increase student engagement, provide smart feedback, become helpful teaching assistants, offer instant help, personalized outreach, and can serve multiple users simultaneously.
One of the very first examples of the educational chatbot is Pounce created for Georgia State University. Powered with AI and ML, the chatbot sends timely reminders and relevant information about enrollment tasks to students, collects key survey data, and instantly answers questions around the clock. Pounce provides information about FAFSA and student aid filing, housing options, dining plans, registers students for classes, signs up with campus organizations, etc. And it has shown great results.
During the first month in use, Pounce has increased the engagement rate with new students by 71% and minimized the need for the university staff to answer students' questions, redirecting just 1% of all queries to humans.
Chatbots in Healthcare
In healthcare, AI-powered chatbots are mainly used as a more reliable and pretty accurate alternative to online searches for patients who are not sure if they have to make an appointment with a doctor or for some reason don't have such an opportunity.
One of the examples of such chatbots in Your MD — a free platform that provides health information delivered from highly accurate sources. It is worthy of saying that Your MD is more than a symptom checker: the chatbot also offers relevant information on medical service providers, pharmacies, test centers, doctors’ offices, and generates recommendations on mental health apps.
Offering accurate and trusted information, medical chatbots contribute to better physical and psychological health of their users. But the use of chatbots in healthcare does not end there. AI chatbots also help medical staff to effectively deal with their daily caseloads by organizing patient pathways, analyzing the patient data and providing instant help, allowing accurate medication management, scheduling appointments, etc.
Reasons to Invest in Chatbots for Startups
Chatbots perfectly serve as a medium of communication to companies operating across different industries, allowing them to automate repetitive tasks, facilitate service delivery, and ensure the accuracy of information provided. But why are chatbots good for startups?
Time and money savings
It's no secret that the key priority for every startup owner is to start generating profits as soon as it is possible, and generally, within a limited budget. When chatbot development is included in the initial business strategy, startups can save money on customer support agents and reduce the time needed for the processing of their queries.
Here are some statistics to prove that:
Efforts to quality golden ratio
Having limited resources means constantly looking for ways to cut costs whenever it is possible. Unfortunately, this often leads to a decrease in the quality of services provided. And here is where chatbots can come into play, allowing you to ensure customer satisfaction, provision of relevant information, and 24/7 support — all included in one solution.
Digitized services are no longer considered some kind of an enhancement of your business, but a must. What is more, modern consumers are hungry for innovations and always looking for providers capable of meeting their tech expectations. AI-powered chatbots that create an impression of talking to a real human being are considered as one of the best ways to provide your tech-hungry audience with an innovative solution, ensure that your business is catching up with the times, and your services are available from anywhere and at any time.
The Bottom Line
Comparatively young yet beneficial chatbot technology currently attracts a lot of attention from companies willing to deliver quality services while saving time and money resources. Serving a golden means for the establishment of timely and trusting interactions with customers, it becomes one of the must-have technological solutions for both enterprises and small businesses. Nevertheless, the latter can reap even more advantages out of its implementation, ensuring their business modernity from the very beginning, attracting tech-savvy audience, and paving the way to the future adoption of innovations.
At Emerline, we respect the power of innovative technologies, offering the development of advanced, custom artificial intelligence and machine learning solutions, including chatbots. So if you are looking for a best chatbot for a small business, we are here to help you with its development.
To create solutions that make a difference, we always pay a lot of attention to the analysis of your business, its goals and future perspectives. We have an innovative department that constantly keeps an eye on the new technological developments and trends, in this way ensuring your ability to receive state-of-the-art solutions. And every project starts from a consultation, which is free. So don’t hesitate to contact us and ask any questions. Let’s take a step toward your company’s tech future together.