What You Don’t Know About Chatbots

By TechDogs Editorial Team

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Overview

Imagine you want to buy a pair of shoes from your local retail store. You first go to their website to find what’s on sale or which products are discounted, right? More often than not, the website would have a bot. You only need to send a message to describe your needs and queries about size, color and other preferences. Cue instant answers! However, you can’t expect the same quickfire service or answers.

This is thanks to chatbots, an Artificial Intelligence (AI) software that can mimic natural human communication (or chat) via messaging apps, websites, smartphone texts. With AI sweeping into every industry, customer engagement has evolved by leaps and bounds. Gone are the days when businesses used contact centers for lead generation or human assistants for query resolution. Though some businesses still use them, those techniques are quite costly and difficult to scale up or down. Chatbots offer a solution to such issues. They’re cost-effective and available round-the-clock (no more waiting on hold!).

Backed by Natural Language Processing (NLP) and Machine Learning (ML) algorithms, Chatbots ensure that your customers get their questions answered regardless of the time or day. Plus, they’re available in different languages and are pre-programmed with huge volumes of data (and that takes care of the accent and limited agent knowledge issues). So why not learn all about these smart conversationalists to improve your business’ customer experience?

When was the last time you visited a website and weren’t pinged by an instant little pop-up with the words “Hello! How can I help you?” (or some such) at the side of the screen? That, dear friends, is what’s called a Chatbot. It’s one of the coolest gifts Artificial Intelligence (AI) has bestowed upon us earthly beings.

Chatbots are practically everywhere. Every mobile app and website are making use of them to offer quick information and query resolution to users. In fact, to get practically any information on any topic today, all you need to do is engage with a Chatbot (that means you can have your ground-level questions answered without dialing any numbers or dropping emails and that too, at any time of any day!).

Now while you may think Chatbots aren’t really needed, as human assistants can also offer undivided and “personalized” attention, Chatbots are immensely useful for businesses. In fact, industry trends show that the Chatbot market is continuously growing at the rate of 21.9% every year (wow!).

When the technology is garnering so much attention and hype, being curious about it is only natural. So, without pushing it any further, allow us to introduce you to a 360° look at Chatbots - from their inception to future and working to benefits. We have answered it all – just like a Chatbot!

What The Heck Are Chatbots?

Well, Chatbots are software programs that you, as a user, “chat” or interact with through instant messaging interfaces. They’re programmed according to pre-defined rules and are sometimes powered by AI to make human interactions easier. Essentially, they have the ability to understand and respond to human inputs (read queries) through written language.

Chatbots can often hold basic “conversations” as well as extremely complex ones depending on the algorithms that power them. They can be very professional (for example, bots on banking websites) or extremely fun to engage with (for example, Facebook or Slack bots) depending on the website or platform they’re active on.

Though Chatbots are primarily used for customer service, other applications for them include helpdesks, lead generation, transactional help and information search. The next section is a slight detour explaining how these fascinating “human mimics” evolved!

Evolution Of Chatbots

If you thought Chatbots are a gift of the 21^st century, well, you gotta think again, friends!
This is a brief of how and when the first software bots that could ‘chat’ with humans came into existence.

ELIZA

In 1966, Joseph Weizenbaum created the world’s first Chatbot at MIT and named it Eliza. It was programmed to recognize keywords and phrases in user input and respond from a set of pre-programmed responses.

Jabberwacky

Thereafter, Rollo Carpenter, a British programmer, created Jabberwacky in 1988 (and no, we’re not talking about the giant dragon from Alice in Wonderland!). The developer aimed to simulate human conversation and make it interesting, entertaining and humorous.

ALICE

Then in 1995, Richard Wallace developed a Chatbot named ALICE (Artificial Linguistic Internet Computer Entity). Unlike Eliza, Alice used NLP that enabled it to have more sophisticated conversations. The project was open-source and developers could use AI Markup Language (AIML) to create more Chatbots using Alice.

Mitsuku

Steve Worswick created Mitsuku using ALICE’s AIML files in 2005. Mitsuku portrayed an 18-year-old girl from Leeds. Besides the AIML files, the developer also added user-generated conversations to the bot to make its responses seem even more ‘natural’ and spontaneous. The project is still in progress.

Bet you didn’t know Chatbots have been around that long! Now, let’s look at an interesting aspect of them… how Chatbots work!

How Do Chatbots Even Work?

Source

No, we don’t sit around teaching them human language. We make Artificial Intelligence and its underlying elements such as Natural Language Processing (NLP) and Machine Learning (ML) do the heavy lifting. NLP is what helps these bots read, interpret and analyze what a user types into a chat window. Simply put, AI-based technologies help these little guys understand what you’re saying and how to respond to your request (good machine… stay!).

Now, let’s take a look at what happens internally when you pose a query to a Chatbot (through a chat window, of course).

First, the bot tries to look for the phrases or keywords entered by you in its database and accordingly retrieves pre-programmed answers. Next, if it can’t locate enough information to understand your intent in the first few milliseconds, it asks you closed-ended questions to get more clarity. This process continues until either the bot can provide you with the answer you’re looking for or connects you with a human agent.

Since Chatbots have self-learning capabilities embedded in their code, the more they communicate, the more they can improve their understanding of how to respond to similar questions in the future. Your positive response to any questions a Chatbot asks helps reinforce its answers so that it can use those answers again when someone else fields a similar question. This is the wonder of reinforcement learning, a Machine Learning technique.

Chatbots are also programmed to simulate human conversations. In fact, experts predict that a few years down the line they’ll evolve to interpret so many complexities in the dynamic nature of the conversation that it’ll become a challenge for users to guess whether we are chatting with a Chatbot or a real human! #ScaryOrNot

Just imagine your surprise when you spend about 15 minutes communicating with a pizza delivery guy over WhatsApp, explaining your order and then the directions to your house, only to later discover that you weren’t chatting to a human but a bot! Won’t that be a jolt?

Let’s move to something less shocking; the types of Chatbots!

What Are The Different Types Of Chatbots?

Chatbots are generally categorized into two major types – Rule-based Chatbots and (Artificial Intelligence) AI Chatbots. Although there are some modern Chatbots that can combine the strengths of both types. These are called Hybrid Chatbots. Let’s look at the two main types in detail:

Source

Rule-based Chatbots

Rule-based Chatbots are the most common ones in the industry today. You might be surprised to know that you might’ve already interacted with such a kind of bot through the ‘Live Chat’ features on social media and e-commerce sites. These bots are programmed to hold basic conversations which involve the use of “if/ then” logic. More often than not, digital marketing professionals determine what the logical response/ next question should be in different kinds of conversations. This helps give Chatbots’ responses a “human touch.”

Social media Chatbots are a popular kind of Rule-based Chatbot.

Social Media Chatbots

There are around 300,000 Facebook Chatbots live today. Businesses such as Wholefoods, Pizza Hut and Sephora were the first to use Facebook Messenger for automating online sales, marketing and customer service. Similarly, you’ll find Chatbots on leading websites like WSJ (Wall Street Journal) that answer simple questions and help you find the right content.
AI Chatbot

AI Chatbots, obviously, are powered by AI algorithms. They’re more complex than their rule-based counterparts since they’re dynamic and don’t depend on pre-recorded responses to plan their conversations with their visitors. Their responses are more natural and spontaneous.

AI chatbots are of two types – Natural Language Chatbots and Machine Learning Chatbots

Natural Language Chatbots

As the name suggests, this kind of Chatbot relies on NLP to understand a user’s question and its intent. A Natural Language Chatbot has abilities that machines generally don’t have or struggle with – that is human language fluency. Come to think of it, machines speak in a logical way (1s and 0s!) but humans often don’t. People often use slang and wrongly spell words while chatting. For machines to have the capability to understand what we’re saying despite all that, they need detail, language structure and context. NLP makes it all possible!
Machine Learning Chatbots

Machine Learning Chatbots are programmed to learn about the user, retain information about them and predict the next steps in the conversation. Such bots use artificial networks that mimic the human brain which feeds on random yet massive volumes of information – we call these sci-fi-sounding algorithms Neural Networks. The datasets these bots use for prediction are typically the answers to the questions that have been asked in the past. This helps Chatbots learn about the user intent better. Therefore, Machine Learning Chatbots are also referred to as “smart Chatbots.” They create a personalized experience for the visitor and the whole experience is incredibly close to human-like interactions.

If you look at popular statistics, you’ll find that Chatbots are being heavily used by businesses in all verticals. Why is this so? What benefits of this technology have led to its increased adoption in different industries? Let’s have a look.

Why Have Chatbots Become Such A Rage For Businesses?

Chatbots offer business benefits that a human workforce simply cannot. Here we list the major benefits that businesses can see when they deploy Chatbots. They include:

Reduced Response Time

Response time is a crucial factor in customer satisfaction. If a customer is required to wait for long periods to get an answer to simple queries, they might get frustrated and switch to another brand. Chatbots reduce waiting time. Unlike human representatives, Chatbots are faster and smarter when it comes to providing immediate responses to customers. Moreover, they’re available 24x7 which is why they’re ready with answers any time, every time.
Lower Operational Expenses

If your company plans to provide a 24x7 customer helpdesk, it will need several employees to work in shifts to make it possible. This will also scale up the overall operational expenses. In short, chaos! When you use Chatbots, you don’t need a customer service team to work round the clock. Chatbots can be programmed to handle simple queries and customers can simply access your website and get the answers – at any time of the day. For complex queries or service-related issues, the bots can direct your customers to leave a message with an assured callback during regular business hours.
Increased Customer Engagement

Chatbots are excellent options when it comes to conversing with people; they’re built for it! They can engage with customers and help reduce bounce rates due to long wait times. Chatbots can also help in increasing conversions as they can answer most questions related to your products or services. They use personalization algorithms that make the person on the other end feel satisfied with their conversation.

We’re sure you are impressed – yet we believe that the future of Chatbots is even more impressive! Read on for a sneak peek.

Future Of Chatbots

As Chatbots are making headway, many businesses are expected to jump on the Chatbot bandwagon to automate their customer interaction processes.

As per Gartner's predictions, Artificial Intelligence will become mainstream in the next few years, with almost 47% of businesses using AI-based Chatbots. Several leading organizations have already begun automating and augmenting routine processes through Chatbots. In fact, Machine Learning algorithms powering Chatbots are being developed to such a level that their day-to-day use almost doubles the efficiency of certain processes. Very soon, Chatbots are expected to become capable of helping at every step of the end-user’s interaction creating a phenomenal customer experience.

A widely popular opinion is that voice bots will soon replace Chatbots. Voice bots are AI-powered query-resolving programs that accept a user’s voice instead of keywords typed in a chat window. Quite obviously, the method of input is drastically simple in the case of voice-based bots and thus, it won’t be much of a surprise if they completely replace Chatbots. Well, haven’t you seen how Alexa, Siri and Google are already making voice input popular?

Conclusion

Chatbots are software linked to an information database to provide quick responses in several applications. The database is used to keep the chatbot operational and provide effective responses to each user and query. NLP helps convert human language into the relevant data a Chatbot understands. The bot can then identify the relevant responses and streamline conversation.

Chatbots are feasible for all kinds of businesses – small, medium and large – in every domain. The ultimate focus for businesses is to boost customer satisfaction by enhancing customer support and experience, thereby generating higher revenue and brand loyalty. Having said that, we're sure you've encountered Chatbots in your daily life. You know how nifty these little guys are – so when are you deploying one for your customers?

Frequently Asked Questions

What Are Chatbots?

Chatbots are software programs designed to interact with users through instant messaging interfaces. They utilize pre-defined rules and sometimes artificial intelligence to understand and respond to human inputs in written language. These bots can engage in both basic and complex conversations, catering to various purposes such as customer service, helpdesks, lead generation, and information search. Whether they're providing professional assistance on banking websites or offering entertaining interactions on social media platforms like Facebook or Slack, Chatbots have become ubiquitous tools for engaging with users and addressing their needs.

How Do Chatbots Work?

Chatbots leverage artificial intelligence, particularly natural language processing (NLP) and machine learning (ML), to understand user queries and provide relevant responses. NLP enables Chatbots to interpret and analyze human language inputs, while ML algorithms allow them to improve their understanding over time through self-learning. When a user interacts with a Chatbot, it searches for keywords or phrases in its database to retrieve pre-programmed responses. If clarity is needed, the Chatbot may ask closed-ended questions to refine its understanding. With each interaction, Chatbots enhance their ability to respond accurately, creating a more personalized and seamless user experience.

What Are the Different Types of Chatbots?

Chatbots are typically categorized into two main types: rule-based Chatbots and AI Chatbots, with some modern variants combining elements of both, known as hybrid Chatbots. Rule-based Chatbots operate on predetermined logic, often using "if/then" statements to guide conversations. They are commonly found in live chat features on websites and social media platforms, offering scripted responses tailored to specific scenarios. On the other hand, AI Chatbots employ advanced algorithms to simulate human-like interactions, utilizing natural language understanding and machine learning to provide more dynamic and context-aware responses. These AI Chatbots can further be classified into natural language Chatbots, which rely on NLP, and machine learning Chatbots, which use ML techniques to learn and adapt to user behavior, delivering personalized experiences.

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