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Here’s why chatbots are essential for your business

When you’re purchasing from a business, invariably, a customer will have questions about the product or service to help them make a purchasing decision. A well-designed FAQ section of your website is essential for this reason, but for most small business owners, it is simply not possible for them to be available 24/7 to answer questions from customers. This is where chatbots can benefit your customers and be essential for your business.

What are chatbots?

A chatbot is computer software that mimics human interaction through chat or text messaging. It is used on websites, mobile phone apps, and telephones. Chatbots were designed to automate and streamline the interactions between people and services, enhancing the customer service experience. 

You may have already come across chatbots in your everyday life. For example, when you call a bank, you’ll be directed to their automatic responder that tells you to press a particular number for a specific query. Or when you contact a business on Facebook Messenger, some automated questions pop up that you click on, which brings up an automated response. These are the chatbots.

Are chatbots effective?

Chatbots aim to enhance the customer service experience, and most importantly for businesses, they increase operational efficiency and reduce the cost involved in providing quality customer service. In other words, if you’re a small business owner, a small investment in a chatbot will allow you to serve your customers better by having a chat function that they can interact with to answer all their typical questions, freeing you up to focus on other aspects of your business.

But is the investment worth it? To answer this question, let’s look at statistics. 15% of people have used a chatbot to communicate with a business, and when it comes to millennials, a massive 40% of them engage with chatbots daily. Engagement ranges from 35% to 90% based on context, and engagement is highest when a user needs a question answered urgently. 

Only 43% of consumers say they prefer to deal with an actual human over a chatbot, which leaves a significant amount of consumers who do not mind engaging with a chatbot to meet their needs.

So we can conclude from these findings that chatbots are a significant part of online interactions and are predicted to increase as more and more businesses digitise because of the ongoing pandemic.

What are the benefits of chatbots?

The main benefit of chatbots is that they help provide efficient customer service support for businesses. While they are most beneficial to companies whose customers require immediate answers, particularly after hours, I would argue that with the digitisation and globalisation of companies, a chatbot is indispensable to help you provide customer service support to customers outside of your timezone.

Chatbots allow for better customer service. The common questions customers want to be answered before making a purchase are available to them without the stress of trying to contact the business outside of business hours.

The second benefit of chatbots is that they help cut the cost of customer service support. A survey has found that chatbots can help businesses cut the cost of customer service by as much as 30%, which is not insignificant.

Do chatbots increase sales?

The third benefit of chatbots is that they help increase conversions. Because customers hate having to wait for their queries to be answered, the chatbots’ 24/7 availability means that you won’t potentially lose a sale through a customer losing patience and clicking away.  Statistics show that 47% of consumers would be open to making a purchase from a chatbot. Another survey showed that chatbots had increased sales on average by 67%. 

What’s more, chatbots can increase customer interaction, thereby increasing the chance that a customer will purchase from you, and they also help you reach new customers. The increased availability that chatbots give you means that your reach is not limited to customers within your timezone. 

What are the disadvantages of chatbots?

Of course, there is still nothing that can replace real human interactions. The main disadvantage of chatbots is that they cannot mimic natural human interaction with absolute precision. And like all technology, glitches and breakdowns can occur, and maintenance can be an issue. 

But having said all that, if you are considering implementing chatbots for your website, think about the benefits it could bring your business versus the hassle of having to maintain it should there be glitches or software issues.

The good news is that as technology and artificial intelligence (AI) software advances, chatbots will only increase in efficiency and accuracy over time. AI is also capable of machine learning, which means that the algorithms can adapt and adjust based on frequent interactions. This means that the chatbot will learn the common queries and information customers look for over time and can adjust to the changing patterns. The upshot to this is that having a chatbot will also enable you to glean important data from your customers to help you tailor your service better. 

The key takeaway

Chatbots can be a great tool to have in helping you grow your business. They enable you to operate efficiently and serve your customer’s needs better. It’s not a bad idea to explore the idea of including a chatbot as part of your business strategy. 

Alternatively, if chatbots are not an option for you, the traditional FAQs are still great to have in their place. Contact me if you would like help in writing your FAQs.