What Problem Does A Chatbot Solve?
Published by
James Rice Mcaulay

Satisfying shopping experiences are the key to building a loyal following of paying customers. If people don’t have immediate answers to their most pressing questions, you could lose a sale and a potential lifetime customer with real value.

But what happens if your customer support team is overwhelmed by the volume of incoming questions? What if you don’t have enough people power to respond to those enquiries in real time?

In situations where your inbound traffic is higher than can reasonably be managed by human support staff, an AI chatbot is one of your best resources to handle the higher volume. Chatbots can be programmed to respond to FAQs in real time and, thanks to their machine learning capabilities, they can identify the intent behind those questions to strike up more meaningful, informative, and satisfying conversations with shoppers. This helps automate the customer support process and ensure shoppers receive the support necessary to satisfy their needs.

How does a chatbot work?

First of all, what types of chatbot or live chat engagement options are available to address the needs of your customers? There are three templates of chat-based solutions that enable real time engagement with buyers with the potential to relieve overburdened support teams. However, not all are made equal.

Live chat software

Live chat is a manual way to have direct engagement with shoppers as they browse through your website, basically the equivalent of Facebook Messenger. According to SuperOffice, 79% of customers prefer using live chat over hopping on a phone call with a support agent as it provides immediate responses to pressing questions.

With live chat, you gain specific insight into your buyers’ needs and provide direct responses to those enquiries. Using those responses, you can guide shoppers to the most valuable point of conversion that will give them the items they desire while increasing revenue for your business.

Rule-based chatbots

Rule-based chatbots are examples of the types of bots that people have interacted with for years across many websites. They use a predefined set of rules, primarily built upon if/then statements that inform the bots of how to automatically respond to FAQs in place of a human.

The benefit of rule-based chatbots is that they’re fairly easy to build and train to interact with shoppers. The drawback is that because they’re programmed using specific rule-based responses, they’re limited in how they can engage in helpful conversation with shoppers.

AI chatbots

As opposed to rule-based chatbots, AI chatbots can make proactive recommendations to shoppers, triggered by browsing behaviours. The chatbots use natural language processing (NLP) and machine learning technology to react to the buyer intent of shopping behaviours.

Companies use AI chatbots to not only automate customer support, but they also help optimise conversion rates, improve customer experiences, and contribute to direct revenue. In fact, AI chatbots have helped generate a 60% increase in revenue for e-commerce businesses.

What is the purpose of chatbots?

Most companies that use chatbots do so for one of three main reasons:

  1. To sell more products
  2. Reduce overall costs
  3. Improve customer care

Thanks to the COVID-19 pandemic, more and more businesses have relied on their websites to increase sales and provide customer support. This has increased what was already a growing demand for chatbots to power those online experiences. In fact, the global chatbot market will increase from what was $40.9 million in 2018 up to a staggering $454.8 million industry by 2027.

With chatbots, companies can recommend products that align with the needs of their buyers. They can reduce total support costs by relying on the chatbots to automate FAQ responses without requiring additional human support. Chatbots are also the first point of contact between the brand and the shopper, enabling companies to provide real-time customer support to improve quality care and generate repeat business.

What problems do chatbots solve and what are they used for?

We’ve highlighted some of the core fundamental benefits of AI chatbots. Now, what exactly are the types of problems that this technology can help your business solve?

1. Eliminates the added costs to meet global customer demands

Think of this scenario. You’re an e-commerce business with customers visiting from all corners of the world. Many people don’t even speak your native language and their time zones are approximately half a day ahead or behind from where your headquarters is based. Do you have the human support staff to manage all of those inbound enquiries?

By using a chatbot, you eliminate the need to hire additional staff to engage with these shoppers. Chatbots never sleep and they can be programmed to interact with customers in as many languages as you program them to do. They can provide that front-line support without forcing you to overextend your budget with new or temporary hires.

2. Automates repeat customer support enquiries

Many customer support teams are bogged down with repetitive tasks to answer the same versions of FAQs over and over again. It can lead to burnout and job dissatisfaction that ultimately brings down the level of quality care your brand stands behind.

Since chatbots don’t have human feelings, they don’t respond to repetitive menial tasks with any degree of dissatisfaction. They’re simply programmed to do the job and provide the level of support that buyers need. Most importantly, they can automate many of these tasks, thereby speeding up response times and reducing employee dissatisfaction and/or turnover.

3. Ends sales activity only taking place during working hours

Again, let’s go back to the international example. If you have shoppers visiting your website from another part of the world, they need the same level of service that local shoppers demand. But if your sales team works standard 9-5 hour days, they might not be available for those shoppers visiting from another time zone.

Chatbots provide 24/7 real-time support for all buyers, regardless of language barrier and geographic location. If sales teams are not available to those international visitors, a chatbot can provide that exceptional level of service without question. This way, you avoid missing out on potentially lucrative visits from international buyers.

4. Reduces abandoned carts

In March 2021, nearly 80% of all online orders were abandoned. There are many reasons that people may abandon carts without completing a purchase, but the common denominator is that you lose out on revenue for every abandoned shopping cart.

With AI chatbots, like those powered by Kindly, you have the means to reduce abandoned cart rates and win back some of those shoppers to your website. To take things a step further, by integrating with Kindly’s Nudge conversion rate optimization software, your chatbot carefully recommends the products that are most likely to excite the buyer and motivate them to complete a purchase.

5. Gives customers an accessible channel to find answers to their questions

If people feel their needs are not being met by your brand, they’ll abandon your website and give their business to someone else.

Chatbots are always available to customers, and they can have a coloured design to stand out on the page when not in use. Buyers can easily click on the chatbot pop-up to bring up the conversation and interact with the bot as their needs require. They can do this while shopping through a number of different pages and receive answers to pressing questions without having to go digging for those responses on their own.

Examples of how chatbots are useful for businesses

Finally, what are some examples of how AI chatbots have been put to good use by different types of businesses? Here are a few ways that brands benefit from AI chatbots to help sell more, reduce costs, and improve customer care.

1. Hertz Sweden

Hertz Sweden was forced to adapt their customer engagement strategy in response to COVID-19. As lockdowns were lifted, the company noticed that customers were booking cars for longer trips rather than shorter day trips.

To help customers book the right vehicle for their holiday, Hertz teamed up with Kindly to integrate an AI chatbot integrated with the Nudge CRO solution. This allowed the company to send targeted and personalised messaging to drivers and increase bookings generated from their website. The investment paid off for Hertz Sweden as they reported a 23% increase in revenue thanks to the chatbot.

2. Thon Hotels

Thon Hotels prides itself on a brand reputation powered by knowledgeable employees and a guaranteed quality in customer service. But as their business grew in size, they found that their support team was overwhelmed with enquiries asking variations of the same FAQs again and again. As a result, the team struggled to keep up and employee burnout began to rise.

Realising they needed a solution, Thon partnered with Kindly to build an AI support chatbot that could automate the majority of responses to those FAQs. As expected, the chatbot helped reduce the number of repetitive enquiries handled by human support up to 30% across different channels. This ensured that the Thon brand commitment was upheld, and it also helped improve employee satisfaction by empowering support teams to shift resources towards more pressing business needs.

3. Helthjem

Helthjem is a Norwegian shipping and logistics company that introduced food delivery services to their offerings at the onset of the COVID-19 pandemic. To ensure this would be a successful expansion of their core business, they had to provide the level of customer care that would help buyers trust their orders would arrive on time and intact.

Helthjem teamed up with Kindly to build an AI chatbot that could handle the bulk of order enquiries on their behalf. Tracking follow-up enquiries were among the most common questions submitted to Helthjem. By using the chatbot, as many as 30% of tracking enquiries were managed by the platform, providing customers with the care and assurances needed to trust in the order fulfilment process.

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