Why and How to Use Chatbots in Business

By Owen Manningham, Updated: 2023-03-20 (published on 2021-03-24)



Let’s begin at the beginning: should you use chatbots? There’s no shortage of miracle technologies that are supposed to transform your business. If it isn’t VR, it’s blockchain, and if it isn’t blockchain, it’s some AI miracle. Chatbots may seem like just another item on the list.

Now, let’s talk numbers. A staggering 56% of people prefer to message a business via chat rather than pick up the phone and call them. The market is starting to be dominated by generations that see messaging as the default, and phone calls as intrusive and tedious. Meanwhile, eight billion AI-powered voice assistants solve people’s problems based on nothing more than natural language queries. Over 75% of devices have some sort of AI built-in.

It’s evident: people want to communicate over chat, and finally, this task is something machines can take over. Machines can get the job done cheaply, quickly, and at scale. How? Read on.

Identify Your Goals

There’s no point in deploying a chatbot unless you have a concrete problem to solve. The first thing to do when deciding whether you even want a chatbot is to see what problems one can solve for you. A chatbot can potentially resolve any problem that requires a conversation with some third party. Certain conversations are easier for the AI at the heart of modern chatbots to grasp than others. The two main fields of application are marketing and customer support.

Marketing may seem like an odd fit for chatbots, but they can be a revolutionary tool. Chat marketing is on the rise: just using chat blasts is a massive benefit on its own, boasting an open rate of 70-80% over e-mail’s 5% in the same timeframe. Where chatbots change the game is in the ability to adapt to user behavior. A marketing message is a fixed thing and the same for each customer – but not with chatbots.

A chatbot can identify potential customers. And increase odds of conversion by making specific offers to the customers the same way a flesh-and-blood sales rep might. In the case of a restaurant, a chatbot can even be a virtual maître d,’ making suggestions and streamlining the ordering process. Leveraging the fact that computer systems have infinite attention spans, we can also arrange for automated follow-up.

Retail Examples

A common phenomenon in online retail is the abandoned shopping cart. The user may fill their shopping cart with multiple items. And then, before checkout, leave the site. There is no simple way to discover whether the user simply changed their mind. They may have found the shipping options underwhelming. Or decided the items were too expensive after all. They might have just found a better deal elsewhere.

This is not just a lost opportunity for conversion. Knowing the reason why the cart was abandoned may yield precious data. This data would allow for fewer abandoned carts and more successful conversions. A chatbot can follow up on every single case of an abandoned cart. And maybe even entice the customer back with special offers, perks, or gifts.

Customer support can be a make-it or break-it proposition for businesses. Especially in the tough period where a promising startup needs to scale up. At some point, support can’t just be an additional task done by whoever’s in the office. It needs to be the job of a dedicated person. And, soon enough, an entire department. This introduces sudden increases in cost and may endanger the success of a company just as its future starts looking bright.


Chatbots may provide a welcome solution to this quandary since their operating costs are negligible compared to human staff. But are they good enough?

Well, studies show that about 90% of all customer support tasks can be automated using properly configured chatbots. Customers ask similar questions, after all. And what becomes a tedious routine to a human operator is welcome regularity to an algorithm.

Programming several of the most common support pathways into the chatbot’s database allows for a massive reduction of pressure on your support staff. This, along with 24/7 support at startup levels of expenditure. This is just the sort of edge that can really help a growing business thrive with minimized risk.

Manage Your Ambitions

It’s easy to get lost in the tech. And it’s easy to assume, based on the buzz, that you have to use the most advanced chatbot technology. And it’s true that it’s possible to use spectacular AI technology to produce remarkable results. Deep learning networks can learn any pattern they are provided, including those inherent in language.

Neural networks are staggering people by learning how to write poetry and movie scripts and articles arguing that AI is not a threat – one of which was published in the Guardian. It may be the case that we are at the beginning of a new ecosystem of language-AI-powered applications. It may be the case, but fortunately, this is not something you need to worry about.

A key lesson when thinking about chatbots for your business is to manage your ambitions. Well-configured Facebook bots are very often all you need for success. It’s true that some needs may require risky, complex use of cutting-edge technology. And it’s just as true that this amazing technology will filter down to the general user in five years’ time. However, available templates and likely interaction scenarios are all you need.

By focusing on what’s easily achievable with affordable technology, you can reduce your workload significantly, lower costs, increase availability, and improve quality. You won’t be able to automate everything or achieve everything possible. You will be able to do enough, however. And you won’t have to risk committing to an untested technology.

Don’t Disappoint Your Users

People don’t like untruths. Your chatbot can be remarkably lifelike, and its very quality may risk inadvertently fooling the user into thinking they’re talking to a real person. You should avoid this at all costs. Sooner or later, the user will try to interact with the chatbot in a uniquely human way. The resultant failure will, at best, frustrate them. At worst, the user will feel deceived.

Make it a policy for all your automated systems to be upfront about their AI-driven nature. Offer users a clear method to opt-out or contact a real human being. Feel free to be informal and faithful to your brand voice, but never leave the user guessing about who they are talking to. Moreover, keep in mind that your users might be from other countries and it would be nice to contact them in their own language. This can be possible by partnering with translation services who will be the cultural bridge between you and your clients.

An opt-out mechanic is also crucial. Users are much more likely to have a positive experience if they feel they aren’t confined to only the automated option. Furthermore, you’ll want to take into account that the automation system could fail. No AI is perfect, and no algorithm covers every possibility. Instead of this trapping the user in an endless labyrinth of options, none of which are what they wanted, the system should fail gracefully.

The Human Touch

The ability to opt-out of an automated interaction should be a last resort. That means that your system has failed and has failed so thoroughly that it has not noticed that it has failed. As you hone your chatbot and improve its resilience, you will be more and more capable of detecting when your programmed templates and scenarios have reached a dead end.

At that point, instead of lunging into a communication breakdown, it is possible to simply transfer the case to a human operator. There’s always something AI can’t handle – something that requires the nuance of a real human being. It’s easy to develop a two-tiered approach to support and marketing, where technology is used to handle the everyday tasks automatically while closing a particularly important sale or answering a thorny problem is handed off to a human operator.

Measure Everything

A crucial yet underappreciated benefit of using chatbots in your business is the ability to monitor every user interaction.

It’s trivial for a chatbot to record every conversation, every pause, and every user response. This data can later be used to extract valuable information. When’s the best time to contact a customer about an abandoned cart? What sort of special offer or discount is most appealing  to customers? Is there a demographic that’s particularly easy to market using chatbot technology?

It’s possible to record all this data with conventional marketing and support, of course. But collecting the data, transcribing recorded calls, and running controlled experiments would require yet more staff and expenditure. With chatbot technology, the cost is largely part of the cost of the chatbot itself.

Final Thoughts on Chatbots

The potential of chatbots might be limitless. But it’s far more important for a business that they are also capable of handling problems in the here and now. Provided you know which problem you are solving, how much of it you wish to solve, and at what cost, a chatbot can do much to help. You can lower costs, improve how well your business scales, improve flexibility, and do things with online marketing that would otherwise be impossible.

With modern chatbot solutions, it is configured by template and programmable by people with no coding experience. There is remarkably little upfront cost and very little risk. If you manage your ambitions and your goals, introducing a chatbot is a great move for any business.

This article does not constitute legal advice.

The opinions expressed in the column above represent the author’s own.

Start managing your legal needs with Zegal today


FURTHER READING: Is AI taking over Payroll?

READ MORE: 6 Apps Helping You Work Remotely

Tags: AI | business

Like what you just read?

Subscribe to our newsletter and be the first to hear of the latest Zegal happenings, tips and insights!