The Ultimate Starter Guide To Chatbot: All You Need to Know

What are chatbots? Why they are so much on news these days? How do chatbots function? Can I build one for my business?

I know there are hundreds of other questions like these that are occupying your mind right now. And, perhaps this is the reason you are here. Am I right?

Well, let’s do this!

In this Chatbot guide, you’ll get answers to every single question that you have been looking for and will understand why they have become so important.

The term “chatbot” surfaced in the year 2016 when Facebook, the leading social networking platform, introduced Messenger for bots to help brands improve customer service.

Since then, this technology has taken a giant leap and is transforming the way customers interact with businesses. It is, undoubtedly, the “next big thing” in the field of Artificial Intelligence field. And chatbot development company like us is leveraging the knowledge of this game-changing technology to help businesses across the world. Continue reading further to learn more.

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What is a Chatbot?

Chatbot is a computer program that is trained to converse like humans via text messages. AI-powered Chatbot applications use Natural Language Processing (NLP) to understand human queries and respond instantly. Chatbots possess human-like intelligence and help users with smart decision-making based on their conversations.

Overview of Chatbots

Chatbot is a service that businesses integrate into their website or mobile application to communicate better with their customers (both current and potential) and enhance their experience.

Chatbots mimic human-like interactions with users and provide them with the information they need in seconds. Because of this, they are used on a global scale by brands to automate customer service. Chatbot integration in CRM has also become a predominant need for them to deliver a desirable customer journey.

A chatbot acts as a primary point of contact for a user and provides immediate responses to the questions raised by customers. Speedy interactions improve response time and empower a business to focus on core business challenges.

In this chapter, we will be discussing the types of chatbots and their functionalities. Each type of chatbot has its set of pros and cons, depending on its features and use cases.

AI bot is an indispensable tool for various companies. The chatbot classification will help you better understand which type is suitable for your business.

Menu-based Chatbot

The most popular and rudimentary chatbot type that most businesses use is the menu-driven bot. Also known as button-based chatbots, this standard type follows a tree hierarchy where users are provided with buttons or menus to choose from.

The users need to select a suitable topic from the predefined menus/buttons to get a desired action from the chatbot. (something like dial pad menus in telephones where we have to select numbers as per automated instruction to proceed further). This type of bot offers no room for text input or sentence queries for the customers.

It may happen that a query raised by a user may be not listed in the menu, thus not being able to answer adequately. It is a kind of scripted chatbot designed for answering limited questions. Their knowledge base is finite and so, you need to reach out to human agents for complex queries.

Use Case of Menu-driven Bot:

Most business websites and applications have menu-based chatbots for their customer service and support. It is effective in assisting potential customers and current customers with simple queries and FAQs, such as product information and prices, etc. Given below is an example of a menu-based bot used by a reputed Finance company in India.

 

Keyword recognition-based Chatbot:

This one is a more advanced and better version of the first chatbot type. It has unique capabilities to pick relevant keywords from customer queries and provide appropriate responses.

Let me explain this in a very simple way. A potential customer or lead put a query – Tell me the Price of the XYZ Bluetooth speaker. The chatbot immediately recognizes the related keywords “Price” and “XYZ Bluetooth Speaker” and thus, brings to the lead an appropriate detailed pricing of that particular product.

Use case of Keyword recognition-based Chatbot:

It is also used by brands to respond quickly (within seconds) to the popular and common queries of visitors. It impacts customer experience positively by helping them with their questions instantly and assures customer satisfaction.

In the below example, a customer has raised a query regarding how to make a return request. The bot, Bert, recognizes “Return Request” and has come up with a detailed reply.

Rules-Based Chatbot:

Also known as a linguistic chatbot, this type of bot is useful if you have an idea about the kind of questions a customer can ask. There is conversational automation to some extent and you can also integrate a personalized human touch in the replies.

This can be done by defining conditions in the chatbot language, such as synonyms, word order, and more. If an input query aligns with the predefined language conditions, it will certainly give an appropriate response to the customer in no time.

Use case of Linguistic Based or Rule-Based Chatbots:

It is mostly used by e-commerce websites to provide information regarding product prices, descriptions, etc. It also helps in brand promotions through personalized offers and discounts. Want to know how Chatbot and AI can impact your e-commerce business? Read our blog post:  11 Incredible Ways AI is Redefining The eCommerce Industry

Machine Learning or AI Chatbot:

The AI chatbot is far more advanced than the other three types and uses machine learning and Artificial Intelligence technology at its core. It depicts a user’s input quickly which can be either text or voice input.

AI-based chatbots use a lot of user data to understand customer behavior and mood. This helps businesses to provide personalized customer service. Contextual bots potentially comprehend and respond in multiple languages.

Also, they learn and evolve during the course of conversations with the customers by storing the data and attaining valuable insights. To conclude, AI chatbots enhance the customer experience to a higher level.

Use case of language model-based Chatbot:

Since the conversation seems natural, customers feel like they are talking to a human. Websites using an AI chatbot can make the conversation engaging and immersive. Further, they can be used in other various applications such as marketing, entertainment, etc,

Voice-enabled Bots

Voice bots use voice recognition technology that gives users a hands-free way to interact with the bot through speech queries. Voice bots improve customer service accessibility for users with physical disabilities.

It provides users with intuitive interaction and can be easily integrated into smart devices like speakers, and give the users a seamless experience.

Use case of Voice Bots:

Voice assistants like Alexa and Siri are great real-life examples of voice bots. These are conversational AI with incredible capabilities of bringing frictionless conversation experience to a customer. All you need to do is just Ask the bot. The voice bots, by using voice recognition API, will reply to your query.

Hybrid Chatbots

The intelligent blending of a live chat and chatbot makes a hybrid chatbot that brings the best result by replicating human-like conversations. The live chat features attempt to automate chat responses and resolve queries in no time. And a customer service representative is available to answer those questions that are too complex for automation.

The AI component in a hybrid chatbot initiates an automated conversation and tries to resolve it as a human agent would. If it fails, a real agent in the live chat would intervene to solve the problem.

Use Cases of Hybrid Chatbots:

Hybrid chatbots are mostly used in the hospitality business because it is a sector that cannot rely only on automated responses to answer all the questions of the customers. This is why the hybrid chat model works best because for complex requests a live chat would become the best point of contact and an AI-based chatbot would ensure 24/7 availability to answer immediate queries related to booking, reports, etc.

Social Messaging Chatbots:

With the continuous rise in the use of social media apps by users, organizations have started feeling the importance of integrating live bots across major messaging platforms. To enhance the customers’ online experience and increase engagement, businesses no longer need to load up their contact centers.

They can do so easily by deploying AI chatbots in the social media messenger apps like WhatsApp, Facebook, Instagram, Twitter, etc.

Use case of Social Messaging chatbots:

Most retail businesses like fashion brands, electronics stores, etc. as well as food & lodging businesses like hotels, restaurants, etc. use messenger chatbots to give 24/7 access to the customers for solving their queries and improving conversions. An example of a travel agency’s social messaging chatbot is shown below.

Most retail businesses like fashion brands, electronics stores, etc. as well as food & lodging businesses like hotels, restaurants, etc. use messenger chatbots to give 24/7 access to the customers for solving their queries and improving conversions. An example of a travel agency’s social messaging chatbot is shown below.

Reach out to the best Artificial Intelligence development company to develop an AI-powered chatbot with incredible features and stunning UX.

Chatbots have turned out to be an incredible tool for businesses to build meaningful customer relationships. You, as an entrepreneur, need to leverage this revolutionary AI bot to strengthen connections and improve engagement.

Chatbot integration can help companies achieve their marketing goals faster by positively impacting customer interactions and driving growth. Below are some prominent ways a Chatbot is adding value to your business and can help you become a brand differentiator.

Boost Engagement

The right moment to initiate a conversation with a potential customer is the time when he or she visits the site and starts exploring. What if you help them find what they are looking for? They will be happy for sure!

Hence, it would be not wrong to say that bot assistants have the exceptional ability to trigger conversations based on the intent of the customer or visitor. And this tactic is especially effective when a visitor is at a final decision-making stage and just needs an affirmation that his or her decision is right. This way chatbots boost conversions and fuel business revenue.

More qualified leads

As a business owner, it is not possible for you to personally check every lead and understand whether they actually have the potential to convert. Even it is difficult for the sales team to keep track of every visitor and check whether they are a good fit.

However, with Chatbots, this is attainable! Chatbots are trained with AI technology to filter the quality leads at scale and accelerate the sales process. With chatbots, you will never miss the chance to engage with a high-potential target. The bot assistant will personally greet the visitor and fast-track the sales.

Increases the Efficiency of the Support Team

Every support team of businesses would agree with the fact that over one-third of the total queries coming from visitors are about the things that are already existing on the web pages. Answers to these questions are pre-defined and hence, do not require an individual attendant to address the queries.

In such scenarios, chatbots can come to the rescue of the support teams and free them from the excessive pressure of handling bulk queries. In addition, chatbots ensure that any query that requires a human agent to solve is directed to the support team right away. Thus, the productivity of the customer service team improves when they have chatbot assistants to help them.

Reduces Costs associated with Customer Service

Although chatbot integration involves an initial investment, in the long run, it reduces the company’s expenses. Chatbots save the cost of hiring additional resources in the support team.

The costs can be divided into three layers – Salaries of the resources hired, training costs, and setting up infrastructure. Chatbots reduce the company’s expenditure to a great extent by automating customer services and streamlining chat support during peak hours.

You no longer need to maintain a large support team to handle massive volumes of customer queries. Few experienced and knowledgeable resources are enough to address the complex customer requests that require comprehensive responses.

Gain In-depth Customer Insights

Chatbots fetch granular insights and data about visitors and customers that help businesses make smarter decisions. You no longer need to scan through multiple applications or dashboards to access customer details.

All the information is readily accessible to them and they can even generate reports. Bots record and store conversations of customers during their purchasing journey and provide business owners with real-time significant insights.

Further, AI-powered chatbots use the neurolinguistics programming technique to understand customer emotions from their words. This way, businesses can identify customer pain points and gain an emotional perspective without requiring them to fill up lengthy survey forms and questionnaires.

Streamlining Customers’ Onboarding Journey

Who doesn’t love being guided and pampered? I guess, everyone!

Most of the time, customers are either annoyed or reluctant to find solutions on their own through tutorials and how-to guides. People love brands that show them the next steps after they land on your page to make a purchase.

Chatbot assistant that provides a seamless onboarding experience by guiding and educating them. But how does it do this? By communicating with the customer well, asking relevant questions, and collecting answers.

It intelligently pushes a customer down the conversion or sales funnel. This enhances the user experience and makes the purchasing journey smooth.

This is not an exhaustive list as chatbots offer a multitude of other benefits that can help a brand scale up its customer support service. The next section highlights the ultimate advantages of using an AI bot to enhance customer service.

 

Are you that buyer who needs a seller to personally attend to you in a store, talk to you, understand what you are looking for, and then bring to you the right product?

Well, if the answer is Yes, then you already know why you need a Chatbot. To Personalize experiences.

Since you can’t interact with every customer individually, you cannot know what they are liking and what not. Chatbot implementation in your company website or eCommerce store can help you exceed your customer’s expectations. Let’s see how.

Personalized conversations

The chatbots leverage the power of Visitor Intelligence to identify the specific needs of the visitors and deliver a customer experience that would meet their expectations.

They interact with them by analyzing the intent of their query through their message tone and the types of questions raised. This helps the website owners provide the users with tailored experiences and make them feel connected to the brand. High-value leads are given a red-carpet experience with help of bots.

24/7 Availability

A support team run by human agents might be unavailable round the clock to assist with customer queries. Either, you need some of your employees working the night shift or you need to make your customer wait for the next morning or available shift.

With chatbots, customers no longer need to wait to get answers to their queries. They are available 24/7 and provide immediate responses, thus making the customer’s service experience smooth.

Let’s face it! We are always busy and occupied with lots of work. Neither do we have the patience to write a detailed email explaining our query nor do we have the interest to call the support team and wait in line to get connected.

Therefore, a well-trained bot can help in eliminating communication barriers and offer customer support even after business hours.

Quicker Responses

Intelligent chatbots or virtual assistants improve customer response time by replying to them in seconds. The chat interface is, by far, considered the fastest mode of interaction with customers.

Human agents need at least a couple of minutes or more to scan through customer information, the order number, and other details, before coming back with an answer. But with AI bots, this can be done in a fraction of a second.

The moment you raise your complaint or seek an answer to a question, it is resolved immediately. There is no wait time and customers love being heard the moment they need and want it. Chatbots not only make them feel heard and valued but also give them concrete solutions.

Consistency in Responses

Chatbot maintains great consistency while providing automated replies to customers. It analyzes the earlier conversations, understands the requirements, and serves the customers with tailored responses that save time.

Furthermore, it helps customers get personally connected with your brand by making the conversation human-like. It is redefining customer service in a way no one could’ve imagined before.

Omni-channel Communication

AI-based bots are easy to integrate into multiple channels such as mobile apps, and social media platforms like Facebook, Instagram, etc. Thus, it becomes easier for your customers to reach out to you easily.

Mobile users spend a lot of time scrolling through social networking platforms. So, what can be better than allowing them connects with your brand from there?

Another significant advantage of using an omnichannel chatbot is that it can help in generating quality leads by engaging with active social media users. It enhances the digital experiences of the customers by proactively engaging with them across multiple channels.

 

Just like chatbots are used to improve customer engagement, integrating them into your marketing strategy can bring you a lot of benefits too. How? Let’s check them out.

Brand awareness – Sending tailored messages to your potential audience about your products and services at regular intervals would raise brand awareness. This would make the audience curious about checking your brand and trying your products and services.

Engagement to a larger extent  – Chatbots can keep your audiences’ interest growing and hold on to your brand. Sending promotional messages, personalized discounts, and festive offers boosts engagement for a longer period.

Helps in targeting a wider audience – Chatbots remove the boundaries or limitations to target customers. With the help of programming and ML algorithms, it can easily tap into new regions, and new demographics, and help your brand build an extended customer base.

Data analysis and collection – AI bots serve as the right opportunity to collect customers’ feedback and understand their behavior and likelihood towards your brand. It helps you gain insightful information about your potential customers and remodel your marketing approach.

Useful for sending relevant notifications – Customers get irritated when bombarded with unstoppable and uncountable emails, SMSs, and push notifications. In such a scenario, Chatbots can help. They analyze data and help brands send only relatable and tailored notifications to a particular customer.

Makes interesting conversations – Product promotions and marketing campaigns using traditional methods are boring and tend to make customers uninterested. Through AI-powered, you can initiate interesting and meaningful conversations with the customers and keep them engaged.

Makes your customer feel special – Giving attention to your customers individually is a smart marketing tactic to boost conversions. AI chatbots assist you in making your customer feel welcomed and special.  It will automatically send welcome notifications like “Hi, Welcome to [XYZ], How can I help you? “ when a visitor comes to your website or opens your app.

Pushes down the leads through the sales funnel –  Chatbots play an integral role in nurturing leads and converting them into paying customers. Providing businesses with purposeful insights regarding potential customers helps them prepare customer-oriented and lead-nurturing marketing campaigns such as sending personalized messages, special offers, etc.

Reduces Human Errors – Mistakes by humans are inevitable and sometimes committing major blunders can hamper your brand marketing efforts. Chatbots fully eliminate the possibility of committing errors and streamlines your marketing process.

 

eCommerce chatbots have been existing in the space for a decade now. And the reasons are many! AI bots are incredibly useful for both store owners and online shoppers.

In this fast-paced world, no one has the patience to raise a query and wait for hours or days to get it solved. More than 75% of e-shoppers have admitted that they like immediate responses (almost within 3-5 minutes).

Most importantly, surveys of online shoppers revealed that more than half of them make purchases either while on the move or in-between other tasks. So, it is quite evident that they won’t stick around longer to receive an email. Therefore, automated chatbots are the solution.

Here are the best practices and use cases that an eCommerce business can put a chatbot into.

Searching Products

Customers are always in a hurry! They would like to get the right product the moment they land on the page. To make their search experience effortless and quick, you can integrate a chatbot to help them find a product through easy filtering.

You just need to send a message specifying what you need exactly. The eCommerce chatbot will bring a list of all the products that match your search criteria. Thus, the chatbot eliminates the need for browsing products by putting a query in the search, applying filters, and then waiting for the perfect product match.

Sending Personalized Offers

It is a proven fact that promotional emails have a very less open rate. But this also means not letting your faithful customers know about your latest offers and sales. Chances are high that your mail gets hidden among the bulk of other promotional emails.

Deploying chatbots, especially on social media platforms, is a great idea to make your customers aware of your offers. With more and more people resorting to messaging platforms for communication, the open rate is very high. Thus, it proves to be a great way to promote your eCommerce products.

Recover Cart Abandonment

The percentage of users abandoning their cart is nearly 70% all over the world. This means trillions of dollars worth of loss. Chatbots reduce the cart abandonment rate by sending reminders to the users and enticing them to complete the purchase.

The eCommerce bots send messages to a user telling him or her that the cart is left idle and tempting to drive him or her back to the store through exciting deals such as limited-time offers, etc.

Enhance customer service

Chatbots are an absolute winner when it comes to customer service. And why it shouldn’t be? It is the function for which the chatbot was first introduced and applied.

Nowadays, online shoppers can directly seek the service of an AI bot or digital assistant to get their queries solved within minutes. They no longer have to wait to connect with live human agents to get the support they need.

Real-time order tracking

Customers, with the help of AI chatbots, can get real-time updates on their orders such as when their product has been shipped and when it is in transit.

You just need to ask the bot that “Where is my order?” and the bot will display the live status of your package. This will help you estimate the time of delivery so that you are available to receive it.

Chatbot is considered one of the most happening trends in eCommerce web development trends in 2023. Make sure you hire the best eCommerce web development company that knows about these trends and incorporate them in your online store.

Also, have a look at the latest WordPress development trends in 2023 in our latest blog post.

Believe it or not, Chatbot is a huge opportunity. Are you thinking of building a chatbot for your business? Here is a step-by-step guide exclusively for you!

But before we jump into the process of Chatbot development, let us check what are tools and techniques employed by developers of a Chatbot development company.

 

Before we go deeper into the step-by-step process of ChatGPT-like Chatbot development in the eighth chapter of this article, let’s check the key components and tools that comprise chatbots.

Natural Language Processing (NLP) – Chatbots use the power of NLP to understand user input like text or speech to provide automated responses.

Natural  Language Understanding (NLU) – As the name suggests, NLU is a subset of NLP that focuses on interpreting human language or speech by identifying patterns from the speech input.

Data Storage – Chatbot developers may decide to store conversations in SQL either on-premise or on the cloud. The data stored is used for both training and testing purposes by the bot.

Knowledge Base – It is the information library that forms which a bot fetches data and interprets it to reply to users.

Intent Recognition – This feature is essential to understand the intent of the user, such as whether it is a request or it’s a question.

Dialog Manager – This component in the chatbot is responsible for maintaining consistency in the flow of conversations by storing records of earlier interactions.

Natural Language Generation (NLG) – This is the most important component in chatbots because it aids in the easy transformation of machine-generated data or language into human-readable text.

User Interfaces – The front end of a chatbot represents a conversation user interface which can be a voice-based or a text-based bot assistant. The user interfaces are built in a way that facilitates easy integration into various platforms like WhatsApp, Facebook messenger, etc.

 

Chatbot development is a complicated process and involved multiple steps. Here we have broken down the process into 6 clear series of steps for your better understanding.

Step 1: Deciding the type of chatbot your business needs

Since we have already discussed the types of chatbots in chapter 3, hope you know which type suits your business best. More precisely, you need to consider the following questions before deciding – What is your purpose? Is it for lead conversion? Or to serve your customers better?

Step 2: Select your chatbot KPI

Key Performance Indicators (KPIs) help in assessing the effectiveness of your AI bot and help you understand whether the bot is useful in attaining your goal. The KPIs that are mostly used for measuring the performance of chatbots are the number of clicks, purchases completed, forms completed, etc.

Step 3: Understanding user needs

When you think of creating a chatbot from scratch, you need to understand your audience’s needs first. This will not only help you in the next step i.e. selecting your chatbot persona but also enhances user satisfaction.

Step 4: Selecting your chatbot personality

The moment you understand your user’s persona, it becomes easier for you to design your chatbot personality. By chatbot personality we mean, the voice tone and the terminology that the chatbot is going to use to interact with the users. The elements or traits that you need to consider are –

• Chatbot Avatar
• Emojis
• Creative Name
• Casual language
• Support Image sending along with the text.

Step 5: Design the Chatbot

You need the professional help of a Web development company to help you with chatbot design and development.

The designer, after understanding your requirements and audience demographics, will design an attractive chatbot that will help your users engage better.

Step 6: Develop the Chatbot

Either you go to a developer or you can Do-it-Yourself (DIY) by taking the help of Chat GPT. It can beautifully guide you and develop a bot with any programming language and API you want. An example is shown below.

Here’s a simple guide to building a chatbot with Python and the Telegram API:

1. Set up a Telegram bot account: To create a Telegram bot, you need to create a bot account on Telegram. To do this, search for the BotFather account and start a conversation. Follow the prompts to create a new bot account and obtain the API token.

 

2. Install the necessary Python libraries: Install the python-telegram-bot library using pip, which will help you to communicate with the Telegram API. Open your command prompt and type the given command:

 

 

3. Create the Python script: Create a new Python file and import the necessary libraries:

 

 

4. Define the handlers: Define the handler functions that will handle the commands and messages sent to the bot. Here’s an example of how to define a “start” command handler:

 

 

5. Set up the updater: Set up the Updater object and pass in the API token obtained from the BotFather:

 

 

6. Define the dispatcher: Define the Dispatcher object and register the handlers with the bot:

 

 

7. Start the bot: Start the bot by calling the start_polling() method:

 

 

8. Test the bot: Test the bot by sending a message to the bot account on Telegram. Here’s the complete source code for the chatbot:

 

 

Replace YOUR_TOKEN with the API token obtained from the BotFather. You can also add more handlers and logic to the bot based on your requirements.

 As we talk about chatGPT, here is an exclusive article on how to build a mobile app using ChatGPT.

 

Social media chatbot integration is beneficial for every business because it adds value to your online marketing efforts and builds brand awareness.

Integrating social media Chatbot into a website using the social media API is easy and one can easily do it by taking the help of ChatGPT. An example is presented below for those who have WhatsApp Business accounts and have access to WhatsApp business API.

Step 1: Request access to the WhatsApp Business API by going to the WhatsApp Business API website.

Step 2:  Set up a Twilio account to send and receive messages from WhatsApp.

Step 3: Configure your WhatsApp account by following the instructions provided in the WhatsApp Business API documentation.

Step 4: Set up a Webhook to receive messages from Twilio and send them to the chatbot. Here’s a sample code in Node.js to help you.

Step 5: Set up your chatbot to receive incoming messages from Twilio. Here’s a sample code.

 

 

With these six easy steps, you have your WhatsApp chatbot integrated into your website.

 

The increasing popularity of Chatbot usage in the business world has made it quite evident that Chatbots are here to stay. With their amazing power to deliver personalized customer service in seconds, chatbots have secured their existence in the foreseeable future.

Moreover, the future of chatbots is heavily dependent on their evolving abilities to automate operations that were previously fulfilled by human agents only. The more opportunities a chatbot offer to streamline customer service experience, the higher the chances of this technology adoption by business and startups all over the world.

Some of the noteworthy Chatbots trends that every business and chatbot development company should keep their eyes on are:

• Increase in the popularity of Voice-enabled chatbots
• Predictions of customer behavior using Chatbots
• Shopping and paying via chatbots
• Gaining real-time insights into customers

 

Final Chapter: Key Takeaway

 Chatbots are, undoubtedly, the next evolution of customer communication.  Gradually, the need for human intervention is reducing with chatbots being able to solve complex cases.

Having said that, integrating chatbots into websites is worth investing in because it will bring high ROI in the future. Whether it’s automating customer service or gaining insights, chatbots have a lot of potentials.

eCommerce and other websites are capitalizing on chatbot capabilities to take advantage of this groundbreaking innovation in every way. Nowadays, we have chatbots for crypto trading that automates the buying and selling of crypto and help investors identify the most profitable investment.

That’s all for now! We wish you all the best in your journey to build your own chatbot and immerse yourself in the world of AI. If you need any help, talk to our chatbot developers to get expert advice and plan your bot journey.

 

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