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Role of Chatbots in Customer Retention


Ashok Sharma

Advancement in Technology in the 21st century has surpassed our expectations. It hasn’t been long that chatbots were introduced and now the Technology behind them is advancing rapidly. Every business these days is looking forward to integrating customer care chatbots with their services. It is due to the functionality and response time offered by chatbots for low level as well as advanced issues.

Customer care chatbots play an important role in enhancing the customer experience. Customer experience is crucial in today’s economy because customers have multiple options in the market for the same service. If they face even the slightest of inconveniences, they change the service providers at the drop of a hat. They will only use services that cater to their needs instantly and provide them with a personalized experience.

Businesses have experienced revolution and drastic changes in sales all due to customer care services via chatbots. Apart from new user acquisition or just generating leads, customer retention is such a huge part of any business’s success. Keeping a customer on board is a lot harder than acquiring a new customer. However, chatbots can help retain customers because they have been made while keeping customers’ convenience in mind.

Millennials expect instant response and prefer texting over a call or face to face interaction, due to which chatbots are in such a huge demand. We have accumulated a list of reasons and factors which will help you understand the role that customer support chatbots play in customer retention.

24×7 instant customer service is not a choice but a requirement for brands these days. But humans need rest, they take a break, take leaves for a vacation, and they even get sick sometimes. So you might need to hire multiple helping hands for a single monotonous task. That’s why bots are the obvious choice these days. Because a bot never sleeps or takes a break. They are faster, more efficient, and persistent when it comes to customer interactions. As soon as you get a query or any grievance on any platform, chatbots can solve it for your customers instantly. Any repetitive query or task can be pre-programmed, or the bots can take care of it using FAQs and use that to help users when in need.

For brands and businesses that operate globally in different time zones, chatbots are a boon. If customers face any issue while making a transaction but get an instant response/ timely solutions, then they are more likely to shop again.

A really huge advantage of chatbots is that chatbots can collect data. In e-retail and e-commerce, businesses are connected to the back end, where all the information of customers is stored. From the moment a customer lands on a page on your website till the time he stays. It’s all taken into account. E.g., When customers get in touch on a social media platform, then all the chatbot-customer interaction is stored at the backend.

This information is then used to provide better assistance to customers in the future as the bot will have different scenarios to refer from. It will ultimately personalize the customer service experience for all customers e.g.; You can ask the chatbot development company you’ve hired to personalize the bot according to your company. If you are a ride-hailing company, then if the customer wants to book a cab, it can be done via bot. The bot can share the estimated cost and time. After that, if a query is a bit complicated and the chatbot can’t handle it, then human agents can easily step in and take the matter into their hands.

While agents are interacting with customers, there’s always a chance of human error. They might forget to mention a point that’s written in the T&Cs of a campaign; Grammatical errors are pretty common. However, a chatbot can be pre-programmed with the necessary and accurate information catalogue. So while interacting with customers, there is no chance of error. First-time customers mainly ask a similar or repeated question; bots can handle that instead of human agents as the answer will be the same. When customers get the correct information/ solution for their queries, it leaves a lasting impression on their mind. They will trust the brand more, will keep coming back as recurring customers and in some cases will become loyal customers.

Customers are attracted to businesses that use the latest technologies and AI consulting solutions like chatbots. It is a testament that your company is up to date with the latest trends that can serve customers. Customers expect modern and responsive chatbots as it will build a sense of trust for your brand, which in turn will help in customer retention and increasing loyalty.

After building the trust, how the chatbot interacts with customers is very important. On the platforms, such as social media, chatbots can help to increase engagement. Interaction AKA listening to and fulfilling customer needs are key to retaining customers. You can make small changes in chatbot answers if you want to change your brand image from a mediocre to an uber-chic brand. Some examples are- Using quirky one-liner responses for questions, or just sarcastic response instead of straightaway replying with a boring template answer. Bots can also be programmed to wish birthdays or random check-ins with customers. Whether it’s for new customers or old, bots can do a lot more than just replying to standard simple questions.

All the traffic that you get on your website can be converted into potential customers or hot leads if nurtured properly. Lead generation, data segregation, and targeting are features that can make or break your game. Chatbots respond immediately whenever a customer inquires anything; it helps them to accumulate valuable contact information and new user acquisition data.

If the correct algorithms and programs are used, sales chatbots can help increase your lead database and thereby increasing your sales. It doesn’t matter if your product is online or offline, by analyzing the data and demographics of users, you can help them convert. You can segment users according to their preferences and interests. This will help you narrow down and decide the communication mode, platform along with the frequency of communication. Once all the criteria are met, you can transfer these hot leads to the sales department and connect with potential users in real-time.


As mentioned above, chatbots can easily deal with repetitive and monotonous tasks or queries. Low-level inquiries, such as basic product information exchange can be dealt with effectively by chatbots. However, it is still necessary to have a human agent to take care of more serious issues. At this stage, the chatbots can not really replace humans, but they easily assist us and make our work as easy as possible. They can work on improving the response time, collecting data, new lead generation, and ultimately customer retention. Along with the improvement in technology, chatbots will only grow going forward. But for now, humans and bots go hand in hand.

Originally published at on September 19, 2019.

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