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Customer Service Chatbots Are Redefining Customer Service

Written by

 Jeremy Gallemard

Customer service chatbots have become an essential tool for changing the entire customer service experience, especially as it relates to customer self-service. In this blog, you’ll find out what customer service chatbots are, how advanced AI makes them more effective than ever, and how they can be used to amplify your customer service team’s efforts in a big way. And finally, we’ll take a quick look at a few other customer service tools that you can implement now to both empower your customers at every step along their journey with your brand.

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What is a customer service chatbot?

A chatbot is an automated, interactive tool that can mimic human conversation. Powered by a combination of artificial intelligence (AI) and machine learning, an ai chatbot can intelligently respond to written and verbal queries to help users find the information they’re looking for. Think of a customer service bot as your very own virtual assistant. 

As such, chatbots can serve many purposes along the customer journey. However, they’ve recently found a sweet spot in the realm of customer self-service. For example, an expertly programmed customer service chatbot can answer up to 70% of simple, FAQ-oriented customer questions or direct customers to find additional information or resources on your website. 

This comes with the added benefit of reducing the number of contact centre queries received, which means customer service agents can spend more time handling complex customer issues instead of regurgitating information that could be easily automated or found in an FAQ. 

Even better, since chatbots run purely on the power of AI, they don’t require human intervention and, thus, can operate around-the-clock to ensure that customers can get the help they need, even in the middle of the night after your customer service agents have gone home. They pick up on natural language cues and have the knowledge base to be self-sufficient. And even if they can’t resolve a customer need on-the-spot, they can put your request into the queue for a customer service agent to tackle first-thing the following day.

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What kind of customer service chatbots are there?

Even though a customer service chatbot refers to any kind of automated chatbot that allows customers to be more autonomous in their hunt for information across the customer journey, it’s important to note that not every chatbot is created the same. 

Some businesses only need a basic tool that can spout off FAQ-based information found within a knowledge base while others require a more advanced solution that can be “trained” to deal with more complex customer service queries or help customers with straightforward transactions, like making dinner reservations or booking airline tickets. 

We’ve already written a lot about the ins and outs of chatbots and how they are becoming a dominant force in shaping the digital customer experience. But if you’re pressed for time, here’s a quick overview of the two main types of customer support chatbots floating around today:

  • Declarative Chatbots: These task-focused chatbots are the most common. Using rule-based programming, they’re able to answer simple questions accurately. Because they can only understand language—and respond—in a literal sense, their capabilities are somewhat limited. Still, they’re useful for filtering out the simplest customer questions, so that customer service teams aren’t inundated with queries that could be easily answered via FAQ or other website content.
  • Conversational Chatbots: Lots of people already have conversational ai chatbots in their home, like Google Home or Amazon Alexa, or with them wherever they go, like Apple’s Siri. These intelligent chatbots are able to understand and interpret language in context and hold a more natural, sophisticated conversation with customers. Sometimes referred to as artificial intelligence-powered virtual agents, they use machine learning to essentially “learn on the job.” Over time, they can become better equipped at not only answering more complex questions but also at anticipating what customers may need based on the type and tone of the question asked.

77% of customers say that chatbots are going to alter what they expect from companies over the next five years.

-Source: Salesforce

The role of customer service chatbots today

Brands should think of chatbots as sidekicks for their customer service team. They shouldn’t be implemented with the goal of replacing living and breathing human customer support agents. After all, even the smartest customer service chatbots still have their limitations. But when they don’t know how to help resolve a customer query, they should be smart enough to know when to pass the request along to a customer support agent. And therein lies their role as a sidekick. 

However, as mentioned above, these smart customer service chatbots are typically able to answer up to 70% of frequently asked questions, which makes it even easier for customers to find information easily on their own. In fact, recent research has found that 56% of people prefer to interact with customer service via text-based messaging versus picking up the phone. 

Therefore, chatbots make it possible for customers to get instant support 24/7. This can either plug potential gaps in the existing customer service experience—especially when agents are off-the-clock—or help customer support agents manage their workload more effectively. Research out of Salesforce discovered that 64% of customer service agents who work alongside AI chatbots are able to spend most of their time tackling difficult issues versus wasting time repeating the same, FAQ-oriented answers to the same customer questions all day long. 

As brands attempt to up the ante on providing a better customer service experience, it should never be a question of a support chatbot or a human agent. Brands need both to succeed. 

This is partially because the AI that powers chatbots has not yet reached the stage where it can operate with the full emotional intelligence of a human being. In fact, artificial general intelligence (AGI) capable of doing this is still a long way off, with some experts predicting that nothing will ever truly be able to replicate the nuances of human communication. 

Until then, it looks like humans and customer service chatbots will need to work side-by-side to both boost customer support efficiency and improve the end-to-end customer experience.

How are customer service chatbots redefining customer service?

The rise in popularity of customer service chatbots—and other digital customer self-service solutions for that matter—has a lot to do with the latest tech trends and the behaviors that they create. For instance, rather than having your ears assaulted for hours by horrible contact centre hold music, many customers today—especially those of the younger, digital-first generation— are increasingly happy to embrace self-service solutions as a first line of defense. 

In fact, just 38% of consumers actually want to talk to a fellow human when they need information or help, making an automated voice bot or chatbot a preferable option. Of course, if customers aren’t able to resolve their issues through various customer self-service channels on their own, or even through live chat or email with customer support agents, they’re more than happy to pick up the phone to get dedicated support.

"Chatbots are vital because [customers] won’t feel stupid for asking important questions."

in Why People Use Chatbots by Professor Petter Bae Brandtzaeg, Media Professor at University of Oslo and Chief Scientist at SINTEF Digital

Biggest advantages of customer service chatbots

AI-powered customer service chatbots offer a whole host of advantages, including:

  • Convenient and conversational: Chatbots that can converse in a friendly, human way will boost the connection customers have with your brand, adding yet another positive and oftentimes more personalized touch to the overall customer experience.
  • Available 24/7: It doesn’t always make good business (or financial) sense to have your customer support team working around the clock. This is especially the case for smaller businesses or for brands that sell products and services that don’t ever require immediate assistance (even if customers think otherwise). Adding a virtual agent into the customer service dynamic can give your business a simple and cost-effective way to ensure customers can get access to some sort of help at any time of the day.
  • Constantly learns and improves: By their very nature, chatbots aren’t static tools. If you’ve opted for a customer support chatbot that’s fueled by advanced AI and machine learning, it will continually learn based on the data it processes from every interaction it has with customers. Similarly, you can also feed it more useful data to boost its knowledge, ensuring that the information offered is accurate and up-to-date at all times.
  • Highly efficient: In addition to the big benefit of making the customer journey more autonomous, chatbots can also become a major life line for brands, too. For starters, they can optimize your customer service team’s workload, freeing up agents to focus more of their time and attention on complex customer matters that require human intervention. They can also go one step beyond by carrying out more personalized tasks, like finding a customer’s tracking number and providing shipping details, or escalating a query to a human customer service agent after exhausting all other automated options.
  • Increased sales: Some advanced customer service chatbots can handle more sophisticated transactional tasks—such as helping customers make a purchase, pay a bill, or book a reservation—that can boost conversion in a big way. After all, by helping customers along the purchase journey, intelligent chatbots can eliminate the barriers to purchase simply by providing the last bit of information that customers need in order to make a sound purchase decision.
  • Improved customer satisfaction: Customer expectations are greater today than ever before. This has a lot to do with the immediacy of today’s digital technologies—and it’s caused many customers to fall into the trap of wanting instant gratification whenever they need help. The benefit of customer service chatbots is, therefore, simple: They are designed specifically to provide customers with the help or information they need, whenever and wherever they need it. And as you can imagine, when they’re able to get their questions answered quickly, they’re a lot happier and, ultimately, feel more satisfied by the customer service interaction. 
  • Actionable customer insights: Chatbots provide opportunities to learn more about your customers and, in doing so, be able to provide a more personalized experience every time they reach out across all customer service channels—whether it be through automated customer self-service solutions or interactions with human customer service agents. Even more, the insights gleaned through these data-driven customer service interactions can shed valuable insights into customer behaviors, habits, trends, and potential stumbling blocks, helping you to refine the customer journey and build a customer experience based on the needs, wants, and expectations of your customers. 

Customer expectations are constantly changing—with 77% of customers today saying that chatbots are likely going to alter what they expect from companies over the next five years. So if your company hasn’t yet embraced chatbots and other AI-based customer self-service solutions, you might soon struggle to keep up with what customers expect from you.


How to create an effective customer service experience

1. Lean into your customer service agents

It’s estimated that chatbots will save businesses up to $11 billion in customer service expenses by 2025, as they partially take the place of costly support staff—especially during off-hours when chatbots should be able to do most of the heavy lifting. Even so, we believe that customer service agents will always have an irreplaceable role to play in your customer service strategy. 

The truth is, technology—even the smartest technologies—can’t handle every aspect of the customer service experience. For example, they don’t have the knowledge or emotional intelligence to know when they can “break the rules” and offer customers a rare exception as part of the issue escalation and resolution process. Only human agents can do this, and oftentimes this is the result of the empathy that comes with human interactions. 

So, there’s still very much a place for customer service agents in the mix. The bigger question for companies needs to be around how to balance the tech versus human aspect of the customer service experience. At the end of the day, the companies that use technology to not only enable customers to be more autonomous in their search for information but also to empower customer service agents to be more effective and efficient at helping customers who really need their help are the companies that stand to win. Again, it’s not one or the other; it’s both.

2. Make it simple to escalate unresolved queries

No matter how advanced and effective your chatbot is, it won’t be able to resolve every query or handle highly complex or atypical scenarios. That’s why you need to train your chatbots to know when it’s the right moment to throw in the towel and pass the customer query off to a living and breathing customer service agent for a more thorough chat. Not only will this minimize the amount of time it takes for customers to get their issues resolved, but it’ll also alleviate a lot of frustration, too. 

Surprisingly, 34% of chatbot users primarily interact with them as a means of getting through to a real human, rather than calling directly. So if your customers want to actually speak to someone, don’t make it unnecessarily difficult to do so—or assume that just because they’ve started their customer service journey via a customer self-service solution means that their issue can actually be resolved without human intervention.

3. Invest in other customer self-service solutions

Chatbots aren’t the only customer self-service options available to businesses today. Dynamic FAQs are also becoming increasingly popular, as they can typically address up to 80% of common customer queries. Dynamic FAQs use AI and machine learning to personalize the customer experience and surface the most relevant answers in real-time.

Sophisticated CRM software can also help cut down on the time it takes to address customer service issues, as it helps customer service agents and customer self-service solutions track asynchronous conversations across different platforms and channels. 

Let’s say your customer first asks a question via a customer self-service chatbot or sends you a direct message on social media before moving the conversation to email or phone. A great CRM tool can give agents a consolidated and holistic view of the entire interaction across all channels, allowing them to pick up where another channel left off seamlessly. And knowing that 33% of customers report feeling frustrated if they’ve had to repeat themselves during the customer service interaction, it’s important to ensure that this kind of intelligence is available throughout the customer service experience in order to boost customer satisfaction. 

Now, if you’re sure which option is right for your business, check out our breakdown of the best customer self service channels based on different business needs.

58% of customers believe new technology, like chatbots and virtual voice assistance, have changed what they expect from companies—with another 54% saying that, as a result, they now expect companies to engage with them differently.

-Source: Salesforce

Ready to launch a customer service chatbot of your own?

Customer service chatbots are an excellent way to help your customers be more autonomous, satisfied, increase customer engagement and generally happy throughout the entire customer journey. They also have the power to minimize contact centre query volume, slash query resolution time, improve on-site conversion rate, boost sales, and, of course, enhance the customer experience. 

When used alongside a skilled and empathetic human customer service team—that can tackle more complex or sensitive customer matters—customer service chatbots can essentially make the entire customer service dynamic more effective, efficient, and useful than ever before.

Want to see what a customer service chatbot looks like in action? Check out our DPD case study to learn more about how Smart Tribune’s AI-powered customer self-service solutions can take your customer service experience to the next level.


Jeremy Gallemard

Hello! I'm Jérémy, President & Co-founder of Smart Tribune. With my background in the digital & customer experience space I'm happy to share my insight & practical advice on customer experience today & what it might look like tomorrow. Happy reading!

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