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What is a chatbot and how to use it to Boast your business

What is a chatbot

A Chatbot can be defined as an AI-based computer program that simulates human conversations. They are also known as digital assistants that understand human capabilities. Bots interpret and process the user requests and give prompt relevant answers. Bots can through voice as well as text and can be deployed across websites, applications, and messaging channels such as Facebook Messenger, Twitter, or Whatsapp. 

How Do Chatbots Work

Chatbots work by analyzing and identifying the intent of the user’s request to extract relevant entities, which is the most important task of a chatbot. Once the analysis is done appropriate response is delivered to the user

Chatbots Classification Methods

  1. Pattern matching
  2. Natural language processing

Pattern matching

Bots utilize pattern matches to group the text and it produces an appropriate response from the clients. Artificial Intelligence Markup Language (AIML) is a standard structured model of these patterns. A bot is able to get the right answer in the related pattern. The bots react to anything relating it to the correlate patterns. 

Natural language understanding (NLU)

NLU is the ability of the chatbot to understand a human. It is the process of converting text into structured data for a machine to understand. NLU follows three specific concepts. They are entities, contexts, and expectations.

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Natural Language Processing (NLP) comprises of the below steps:

· Tokenization – The NLP filters a set of words in the form of tokens.

· Sentiment Analysis – The bot interprets the user responses to align with their emotions. 

· Normalization – It checks the typo errors that can alter the meaning of the user query.

· Entity Recognition – The bot looks for different categories of information required.

· Dependency Parsing – The chatbot searches for common phrases that users want to convey.

Types of Chatbots

  1. Rule-based chatbots
  2. Conversational chatbots

Rule based chatbots

Rule-based chatbots follow the predefined paths during conversations. At each step during the conversation, the user will need to pick from explicit options that determine the next step in the conversation. 

Conversational chatbots

Conversational chatbots are also referred to as virtual assistants or digital assistants. They are much more interactive and personalized than rule-based chatbots. The conversational chatbots converse with the users as in a way humans converse and communicate in real-life situations. 

Conversational communication skills of the chatbot technology empower them to deliver what customers are looking for.

Why are chatbots important for your business? 

Chatbots boost operational efficiency and bring cost savings to businesses while offering convenience and added services for customers. They allow companies to easily resolve many types of customer queries and issues while reducing the need for human interaction. 

According to Forbes, 80% of marketers plan to start using a chatbot in some way or another by 2020. This is a significant reason why brands are investing in improving the customer experience. 

Let’s find out the importance of adopting the chatbot strategy in your business and how chatbot benefits to win more customers or retain the existing ones.

· Reduce customer waiting time – According to Chatbot Report, 21% of consumers see chatbots as the easiest way to contact a business. Chatbots are a smarter way to ensure that customers receive the immediate response that they are looking for without making them wait in a queue. 

· 24×7 availability –  68% of customers switch to a competitor if they don’t think you care about them. Bots are always available to engage customers with immediate answers to the common questions asked by them. The top potential benefit of using chatbots is 24-hour customer service.

· Better customer engagement – Conversational bots can engage customers round the clock by starting proactive conservation and offering personalized recommendations that boost customer experience.

· Easy scalability with bots – Bots can be easily scalable during the peak business hours or and manage ‘n’ number of customer conversations without additional customer service costs. 

· Save customer service costs –  Juniper Research estimates that chatbots will help businesses save more than $8 billion per year by 2022. Chatbots help businesses to save customer service costs of hiring more support agents that require additional costs such as salary, training and infrastructure costs.

· Automate lead qualification & sales – You can automate your sales funnel with chatbots to prequalify leads and direct them to the right team for further nurturing. Being able to engage customers instantly increases the number of leads and conversion rates.

· Reduce customer churn rate– Engaging your visitors is arguably the single most sure-fire way of reducing bounce rates and subsequently increasing conversions. With chatbots, you can boost your engagement strategy even further and actually keep visitors hooked. 

Customer service

Business Insider reports say 67% of consumers worldwide used a chatbot for customer support. Customer service is one of the key business functions where chatbots have a great impact. With AI chatbots, businesses can save customer support costs and improve the key productivity metrics that enhance the customer service experience. 

Some key customer service use cases are as follows:

· Website support – Today’s customers expect real time response. Businesses are adopting chatbot technology in order to deliver prompt customer engagement. 

· IT helpdesk – Chatbots can help your IT helpdesk to boost your team productivity and drive efficiency.

· In-app support – Having a bot to handle FAQs within applications enhances user engagement. It enables businesses to send notifications to keep customers updated. 


Lead generation is the most important function of every business. With chatbots, you can pre-qualify your leads and automate your sales funnel. You can do so by sending the leads right into your CRM or transfer to the sales reps to assist them further. 

The key use cases of sales bots are: 

· Segment your audience –  Bots enables you to identify the product interests of visitors and customers. Based on that you can segment your target audience.

· Pre Qualifying leads – Bots, programmed with a predefined sales questionnaire converts your website visitors into prospects. Then they are directed to the next level of the sales funnel. 

· Bookings – Bots help for scheduling appointments for hospitality or health care, and also make bookings for personal services.


Bots can learn from user interaction and share relevant information regarding your brand, products, and services. Essentially, it’s able to up-sell and cross-sell in a personalized, conversational, and engaging way. 57% of businesses agree chatbots deliver a large return on investment (RoI) with minimal effort.

The bot marketing use cases for better customer engagement are:

· Product recommendations – With bots, you can recommend products or combo offers based on the customer journey.

· Start a proactive conversation – Bot can initiate proactive conversation while the customer is stuck within the product and guide towards the right direction.

· Personalized notifications – You can learn your customer behavior and improve your conversations by personalizing it.

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