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What are the Advantages and Disadvantages of Chatbots in Business?

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Do you open your Apple iPhone and ask Siri questions like “How’s the weather”? Or maybe you ask Alexa to play your favorite songs on speaker? Do you even ask questions on eBay bot relating to the best-priced items? All these are chatbots that are created using artificial intelligence to communicate with you like you were communicating with an actual human. Although they don’t sound like humans yet! They don’t exactly use grammar correctly or even answer questions that are different from what you asked! But chatbots are constantly improving because of advancements in artificial intelligence with modern bots smarter and more communicative than ever before. So this means that love them or hate them, chatbots are here to stay! What-are-the-Advantages-and-Disadvantages-of-Chatbots-in-Business But the most basic question in many minds is “What are Chatbots?” and how are they even useful for companies when they already have customer service agents? So let’s answer these questions in this article and also see some of the disadvantages of chatbots which may disappear in the future because of advancements in technology.

What are Chatbots?

Chatbots are a form of artificial intelligence that are programmed to interact with humans in such a way that they sound like humans themselves. Depending on the complexity of the chatbots, they can either just respond to specific keywords or they can even hold full conversations that make it tough to distinguish them from humans. Chatbots are created using Natural Language Processing and Machine Learning, which means that they understand the complexities of the English language and find the actual meaning of the sentence and they also learn from their conversations with humans and become better with time. Chatbots work in two simple steps. First, they identify the meaning of the question asked and collect all the data from the user that may be required to answer the question. Then they answer the question appropriately. The answer obtained also depends on the complexity of a particular chatbot. If it is relatively dumb, it may just provide a generic and previously recorded answer and if it is more intelligent, it may create a custom answer based on what the user asked and the data that is already stored in the bot’s knowledge base. A smart chatbot may even ask clarifying questions if it has doubts!

Where are Chatbots Used?

Chatbots are mainly used to answer customers’ questions. However, there are still different types of chatbots that may be used in different situations. Check them out below: 1. Virtual assistant chatbots: Almost everybody these days has heard about Siri, Cortana, Alexa, etc. and even asked questions from them ranging from the important like “Open my calendar” to the silly like “What is the color of the sky”! These chatbots are virtual assistant chatbots that are available in mobile phones, laptops, smart home devices, etc. and they can be used to retrieve information from the internet, call people, schedule appointments, etc. Almost like a personal assistant that is just not physical! 2. Customer service chatbots: Almost all companies use chatbots to help their customers with the basic issues they face. These customer service chatbots can help the customers to easily navigate the company websites, answer basic questions and forward the customers to the relevant human customer service agents if their queries are more complex. For example, suppose your Samsung earphones are not working, then you can contact the Samsung customer service chatbot on their site to resolve your problems. 3. E-commerce chatbots: E-commerce companies also use chatbots to help their customer easily complete their transactions and also help them if any problems arise. These chatbots are specially designed to lead the customers from the starting which involves browsing the items on the E-commerce website and ending with purchasing to complete the transaction. If you are buying something on Amazon, the Amazon chatbot can guide you through the whole process of online shopping!

What are the advantages of Chatbots?

Now let’s check out the advantages of Chatbots! 1. Chatbots have 24/7 Availability: Chatbots can be available to solve customer problems 24/7 whether it is day or night! They don’t need to sleep after all! This is much more difficult to achieve using human customer service as it would require rotating teams that would be more complicated to manage as well. This means that chatbots can answer customer queries whenever customers have queries which help in increasing customer loyalty. If companies don’t address customer problems as soon as possible, then the customers may switch to another company that provides better customer service. 2. Chatbots can gather Customer Insights: Companies thrive on customer data! The more data they have, the better they can cater to their customers and be much more successful. That’s where chatbots can be a big help. Whenever you interact with any chatbots on a company page, you provide basic data such as user preferences, buying habits, sentiments, etc. which can then be analyzed to understand market trends, operational risks, etc. And using this information, the company can solver customer issues much easier and create targeted products. This will help in increasing their customer loyalty! 3. Chatbots provide Longterm Financial Savings: Companies that have human customer support teams have to pay a large amount of money as salaries to their employees. And if the company is large then their expenditure will be equally large as well! Here, a chatbot can reduce this expenditure so that the company has longterm financial savings. While it is true that initially, a company has to invest a lot of time and money in creating a chatbot, after some time the chatbot will be able to answer all the basic customer queries that would have taken a lot of time for humans. In addition to that, the chatbot can give instantaneous replies which saves time. And time is money in business!!! 4. Chatbots cause an Increase in Sales: Customers can get instant support and solutions for their problems using chatbots while using agents takes a longer time. When customers get such good service, chances are high that they will be more loyal to the company which will drive up sales. Companies can also use chatbots to market their latest products directly to their customers. When customers get recommendations for a product while chatting to a chatbot, it is much more personal than a mail or a random ad and they are more likely to buy the product. So chatbots can increase sales in this manner as well!

What are the disadvantages of Chatbots?

Now let’s check out the disadvantages of Chatbots! 1. Chatbots sound too Mechanical: Chatbots are not human and so obviously they cannot interact as a human with customers. They sound too mechanical and can only give answers to problems that they have been programmed with. They cannot answer a customer according to the context and they cannot show any emotions if needed. Chatbots also cannot maintain a natural-sounding conversation in-depth with customers and that is why they are only useful in solving basic queries. But this can create a disconnect with customers who prefer the human approach when solving their problems. 2. Chatbots can only handle basic Questions: Chatbots are still a basic Artificial Intelligence technology and so they can only answer the basic questions of customers and provide general information that is already available to them. They cannot solve complicated queries or answer out of script questions and companies need to have human customer service employees that can manage these for them. However, this is changing with time and currently, more and more advanced chatbots are entering the market. 3. Chatbots are Difficult to Create: Chatbots are created using Natural Language Processing which is extremely popular for customer support applications. Natural Language Processing is a part of Machine Learning which can be used to interact with the users in textual form and solve their queries. However, this requires complex programming and is not easy for companies. This becomes especially difficult if companies have to create chatbots from scratch and that is why many online platforms help companies to build and manage chatbots easily. 4. Chatbots require Constant Maintenance: Companies cannot just create a chatbot and then leave it hoping that it will correctly answer customer inquiries forever! The company products change with time and more advanced Natural Language Processing capabilities are also developed with time. All of these changes need to be programmed into the chatbot so that it has the most up to date information. In addition to that, chatbots also need to be periodically analyzed so that the most common questions that customers have can be identified and then their answers updated for future customers.

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Last Updated : 22 Mar, 2023
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