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How AI Chatbots Are Redefining Customer Engagement and Service


Himanshu Rauthan

Offering amazing customer service is a top priority for any kind of business. Happy customers are the lifeline of every successful business and organization around us. A good customer retention rate and an increased customer lifetime value is what every business craves for. Both the above metrics depend on how a customer is treated when they connect with a business for help.

With the help of technological advancements over the years, brands are becoming apter in delivering quality customer service. One such advancement is Artificial Intelligence(AI) which has changed the perspective businesses have about serving customers.

Though AI and chatbots are two separate concepts but they are often used synonymously. Throughout this article, we will understand the significance of AI chatbots for businesses and how exactly are they becoming a necessity for delivering a captivating customer experience.

With an increasing volume of customer queries and service requests for businesses of almost all sizes, the efficiency of customer support representatives is being tested like never before. The investments that brands make in customer support are substantial. On top of this, the time human resources are investing in assisting customers is precious and can be utilized in higher-value work.


Chatbots have found their biggest use case in customer service. Today, customers expect every online business to facilitate a chatbot on their website with a good response time. Many of these customers prefer a bot over human intervention for basic support and information.

Support costs are another pain point for business owners which impact the overall profits and return on investment(ROI). Chatbots solve the issue of support costs for good as implementing chatbots is quite economical as compared to maintaining a team of customer service representatives.

According to Juniper Research, customer service chatbots are predicted to save approximately $11 bn in support costs by 2025.

The statistic may be mind-boggling but lays enough emphasis on the importance of chatbots in customer service.

Artificial Intelligence(AI) and chatbots are two distinct technologies that are changing the course of eCommerce and retail. With the increasing use and acceptance of chatbots around the globe, different types of chatbots rose to the scene.

A separate concept of AI chatbots emerged and gradually they took over the whole bot scenario. Let’s check these chatbot types one by one.

These are the most basic chatbot type built to solve a single purpose or serve a single task.

They are uncomplicated in their workflow and architecture, being linear in their methodology. They catch specific keywords in the customer’s query and are programmed to give out simple responses. They don’t learn over time and are limited in the way they interact with humans.

Here is an example conversation with a normal chatbot:

AI Chatbots use Natural Language Processing(NLP) and machine learning to simulate human-like conversations and learn from these conversations over a period of time. Their response to a similar query will differ across different customers. They take more time, effort, and money to be built and implemented.

Here is an example conversation with an AI chatbot:

Chatbots have great potential to drive user engagement and assist customers better. With more and more businesses opting for chatbot support, it’s imperative to have a look at ways in which bots improve your customer service game:

Brands go above and beyond to serve customers better and provide a memorable support experience to their customers. One of the biggest barriers in delivering this kind of service is not being available to customers for 24 hours a day, seven days of the week.

With bots at your disposal, this issue is taken good care of. People nowadays are less patient and have short attention spans. A 24*7 support availability assures your users that they are in good company and builds trust.

Moreover, a lot of people are heavily busy on weekdays and only find time to avail support on weekends. The majority of your customer support representatives are also unavailable on weekends. Chatbots are the perfect solution to this.


Along with offering customer support round the clock, chatbots elevate the standard of customer experience as a whole. A user no longer has to wait to get connected to a support representative, can get instant access to resources, and doesn’t have to repeat their query over and over again.

Consider this.

You contact the support department regarding a bug in the digital product you bought recently. First of all, you juggle your way through all the IVR loops and finally, you get connected to a human agent. After a detailed discussion, the representative offers you a date and time to come back and get your issue resolved. When you return, you have to go through the process again and explain your issue to a new person all over again.

This doesn’t seem to be a great customer experience by any means. A couple of such interactions and you will have lost a customer for sure.

Conversely, chatbots ensure that such bad experiences are completely eradicated out of your system and every customer returns satisfied. Chatbots provide great experiences which, in turn, impacts customer loyalty for your business. A free-flowing conversation keeps users engaged and empathizes with them.

Using AI chatbots means customized recommendations and interactions with users as bots learn from previous conversations. Chatbot conversations can replace contact forms, sign-up forms, etc. to make things easier.

We all have faced a situation when we had trouble navigating to our favourite product on an online website or marketplace. This is usually the case with stores with a large inventory where it sometimes gets difficult to make your way through a plethora of options and categories.

With chatbots at your service, your customers just need to type in the product’s name and the bot will guide them to the destination.

Here is an example of an AI chatbot based on Facebook Messenger from the eCommerce giant, eBay:

The bot helps users to reach their desired product and simplifies their search. Consequently, you have more number of pleased and satisfied customers.

A clear understanding must be established that chatbots can simulate human-like conversations but can never replace human support completely. This brings us to probably the most vital feature of chatbots — human takeover.

As the name suggests, this feature allows you or your support team to intervene and take over any ongoing bot conversation.

Queries involving real-time payments, closing deals, and other complex problems that can’t be resolved by a bot are the biggest use cases of this highly useful feature.

Additionally, the use of AI chatbots ensures that the bot itself can recognize such instances where a human touch is necessary and prompts a representative to join in.

What do we simply do while having a conversation?

We exchange information.

Be it a human or a bot, if there is a conversation with the customer, there will be information shared between the two parties. This information is invaluable considering the fact that the same user may interact with you in the future. This time, you would be ready with all his data, preferences, and previous queries and solutions.

This data can also be used to recommend products and services to users.

Tracking customer satisfaction is another pain point for online businesses and bots act as a solution here as well.

According to Oracle and SG, 86% of customer experience executives expected to use AI to customize every product or service offered by their organization within the next 5 years.

With the help of chatbots, you present your customers the opportunity to rate the service via surveys. This serves the purpose nicely and isn’t too pushy at the same time. As the survey is generally sent out via messaging applications like Messenger, Slack, etc., the response rates are high too.

Customer satisfaction scores act as parameters to judge and measure your whole workflow. Using these, you can make amends to your process and aim for higher levels of customer satisfaction. At the end of the day, chatbots store invaluable consumer data which is used for the greater good and also track customer satisfaction efficiently.

Being an online business owner, you can’t deny the fact that bots have a plethora of applications and come in handy in various important tasks. Given the low cost of chatbot implementation as compared to maintaining a team of customer support representatives, every business should opt for bots and cut down support costs.

But is your business ready to embrace the bot technology?

Here are a few things to keep in mind while deciding on the above question-

We all understand that bots serve information that we feed or provide them with. It’s imperative to make sure that you have a good amount of informative articles that can be furnished to the users.

Your conversational marketing strategy ought to have a purpose and when that purpose is fulfilled, you should be aware of it. Ranging from customer satisfaction to the impact of bots on your marketing strategy, performance metrics must be carved out, understood and analyzed carefully.

Before automating your customer service, the whole process of customer flow and how the bot will handle it should be present with you. Your chatbot script should be preplanned, with clear-cut escalation points and verification processes.

The tone and voice of your chatbot are critical in building customer relationships and representing your brand. Your bot must compliment your brand’s values and beliefs in the way it deals with customers.

Customer service in our times is all about studying and anticipating the customer’s issues and giving out the best resolution possible. A high influx of customer support requests requires a dedicated team of support representatives to help the cause. Maintaining such a team will destroy your budget and demand a cent percent human efficiency.

Chatbots are the present and future of communication between businesses and customers. It’s high time that online businesses adopt bots as an important cog in their customer service strategy.

Do you use chatbots for customer service? If yes, what’s working for you and what’s not?

If not, do you plan to incorporate them into your marketing strategy any time soon?

Please have your say. I am listening.

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