What is a Chatbot? Definition, Examples, & How It Works

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What is a chatbot? 

If you’ve been on a website that seems to have 24-hour chat-based support, you’ve probably encountered a chatbot already. 

Chatbots are simple tools that recognize keywords in messages and send pre-loaded responses to help direct the user to key information, customer support, or anything else the chatbot is designed to do.

In this article, we’ll cover the ins and outs of chatbots, including:

  • What a chatbot is
  • How chatbots work and how they differ from conversational AI
  • The different types of chatbots.
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Key Takeaways

Before we get started, here are a few key takeaways to understanding chatbots’ basics:

  • Chatbots are pre-scripted, so they don’t generate original answers based on your message.
  • Conversational AI creates messages on the fly based on a database it has to draw on related to your keyword questions.
  • Chatbots have no people behind them, but they are often linked to a customer support person to review when they are at work to manage any further requests.

What is a Chatbot?

chatbot definition

Chatbots are simple computer programs or add-ons to websites that consist of the user’s end of only a chat window.

In this window, the user can type messages or ask questions. 

The chatbot then delivers responses, pre-loaded by its owner, to direct you to the information you are looking for.

For example, you might find a chatbot on a website providing basic customer support functions, such as directing you to important resources or answering basic questions about the process. 

The chatbots often store a log of your conversion so that if there is a customer support person working business hours, they will see your conversation with the bot, assess whether or not you are satisfied with its responses, and follow up if there is any further assistance they can offer.

Chatbots are also used on shopping websites. You’ll often find a chatbot available to remind you of products in your basket or answer any questions you have about purchasing processes. 

Chatbots may have funny or cute names as if they are characters or named after the business.

In other cases, they may be presented under a person’s name as if they are a real person.

How do chatbots work?

Chatbots work based on a pre-determined and pre-loaded script designed by the company using the chatbot.

This script includes all of the information that the chatbot has access to.

It isn’t presented as a mass of information, but rather as a series of pre-written answers that are often directions to key information a user might need. 

The way the chatbot decides which answers to give to a user is by simple keyword cross-referencing. 

When you ask about a particular topic, the chatbot recognizes keywords and matches the most appropriate answer to those keywords – hopefully giving you a relevant answer.

Chatbots aren’t infallible though, so designers and technicians are always refining their bots to make them more responsive and give better answers to user questions.

Chatbot Examples

As we’ve mentioned above, there are several situations or websites where you might find chatbots.

For instance, a utility company might have a chatbot to explain different packages or rates for their products, payment processes, or information on how you are billed.

Equally, a chatbot might exist on a salon’s website to guide you through booking an appointment, or on a retailer’s website to help you through the process of arranging returns or checking product details.

Anywhere a chatbot could be useful in presenting information or anywhere where direct communication would be beneficial, you will often find a chatbot.

Chatbots vs. Conversational AI

Conversational AI uses language models to generate text on the fly, so it is a different process to a chatbot that draws from a predetermined list of messages.

Indeed, there are quite a few differences between the two tools.

ChatbotConversational AI
Works from a predetermined scriptGenerates responses
Exists only as a chat windowCan be integrated into many formats
Primarily for navigationalCan support dialogue

One of the key things to remember is that neither AI or a chatbot understands anything you say, they merely work based on keywords and their training inputs.

Additional reading: Chatbots vs. Conversational AI

Types of Chatbots

There is quite a range of different chatbots you may encounter:

  • Help center chatbots: are used to manage customer complaints, feedback, or process questions. 
  • Decision tree chatbots: help to narrow a user’s options by guiding them towards the outcome that suits them best with a selection of questions.
  • Task-specific bots: Because there are so many possible uses for chatbots, many are designed to perform very specific tasks. 
  • AI-powered chatbots: leverage AI to make them more responsive and more effective at their specific job. 
  • Voice chatbots: work through the use of artificial voices for output, and listening to the user’s voice for input. 
  • Rule-based chatbots: have predefined questions as well as predefined answers to simplify the flow of information.

Further reading: 8 different types of chatbots

Benefits of Chatbots

Chatbots bring with them a great many benefits for customers and businesses alike:

24/7 support

While human support would be nice all the time, it’s simply not feasible to have support staff on the clock 24/7.

Because many customer support issues will be relatively easy to solve, a chatbot allows those issues to be resolved rapidly. 

Reduce customer wait time

Because chatbots can instantly answer questions and direct users to the right information, they reduce customer wait time significantly. 

Scalability

Chatbots are simple to scale to suit your business needs in a way that full-time support staff can’t. 

Lower costs

Chatbots are exceptionally cheap. This means that, combined with upkeep and development costs, you are spending less to keep customers satisfied.

Personalized conversations

With the huge range of chatbots available, there are those with specific skills, such as personalized interactions with customers.

Conversion opportunities

A good chatbot can turn someone on the fence into a paying customer by answering their questions and giving them the information they need to make good decisions. 

Identify business leads

The questions customers ask can help to show you what sort of customer a business is attracting and what uses they have for your products. In turn, this can open up new leads you may not have previously known about. 

Used as sales & marketing tool

A chatbot can also help guide customers to special offers or new products, and therefore aid in your marketing through promotion and information.

Best Practices

If you’re running a chatbot, there are a few things you should know to get the most out of it.

  1. Let chatbots handle simple issues – While it can be tempting to get hands-on with everything, let your chatbot handle any simple issue. It saves you time and money, and it gets use out of your chatbot.
  2. Use data to improve your bot – Every time your chatbot interacts with a customer it is collecting information on how you can improve it. Don’t forget to act on that information and use it to revise your chatbot settings and responses.
  3. Let users know they are interacting with a bot – Don’t trick people into thinking they are speaking with a real person when they aren’t. Be upfront about using a bot. 
  4. Use to collect customer context – Keep an eye on what sort of customer is interacting with your chatbot and how they are using it. It will tell you a lot about your customer base and their needs!
  5. Make it easier to reach a human agent – Sometimes, a customer will want to speak to a human support person. Make this possible, and make it easy. Don’t rely solely on your chatbot at the cost of customer experience.
  6. Create a self-service strategy – Part of using a chatbot is fostering a community that finds resources to solve problems themselves. The chatbot is one of these resources, but make other information readily available so that customers can navigate your site freely. 

Use Cases

Chatbots have a great many use cases and can improve your experience or your business in a range of significant ways. 

  • Automating website support – By automating website support, you reduce bottlenecks and make help available any time it’s needed. 
  • Provide personalized recommendations – Chatbots can interact with account information, so if a user with an account is browsing your site, the chatbot has an idea of their interest or needs and can recommend accordingly.
  • Boosting website sales – Because chatbots smooth the navigation and browsing experience of your users and can recommend quality products to them, chatbots can potentially boost website sales.
  • Help customer website journey – All of the content on your website is meant to be seen by users; otherwise, it wouldn’t be there. While a good layout is crucial, a chatbot can make navigation that little bit smoother. 
  • Tracking orders and inventory – Chatbots are a great way to keep track of inventory, orders, and shipping by plugging them directly into your fulfillment system. This saves a person looking up tracking numbers or inventory lists.

Best Chatbot Providers

Many developers provide chatbot services for businesses and websites.

However, not all chatbots are created equal, so we’ve compiled a little list of three of our favorite chatbots:

Zendesk

Zendesk homepage

Zendesk offers an all-in-one CRM service that supports responsive and active chatbots. 

Along with the many integrated features of the CRM, a Zendesk chatbot is able to draw on detailed information to provide comprehensive answers.

Start your free trial of Zendesk today!

Hubspot Chatbot Builder

Hubspot chatbot builder

Hubspot’s Chat Builder allows you to create a chatbot of your own devising to suit your needs specifically.

It’s not a one-size-fits-all approach, so you get the right chatbot for you.

Build your own free HubSpot chatbot today!

HelpCrunch

HelpCrunch homepage

Helpcrunch is specifically designed for customer support, so their chatbot systems are perfect for answering queries or directing users to specific areas of the website.

Book your demo to see how HelpCrunch works!

Should you use a chatbot for your business?

If you’re running a website that sells products or holds a lot of information waiting to be navigated, then a chatbot may be a great choice for you to reduce the customer support workload. 

However, not all businesses or websites need a chatbot – so keep an open mind to solutions that might work best for you.

FAQs

Are chatbots bad?

Chatbots are simply tools, neither good nor bad. As long as you’re not tricking your customers into thinking they are speaking with a real person, there’s no issue.

Is ChatGPT better than Google Bard?

ChatGPT is best used for summarizing text, whereas Google Bard is better for answering questions. They are two unique tools.

Is a chatbot worth it for customer service?

If a chatbot answers your customer’s questions and gets them on the right track, I’d say that’s well worth it.

Related reading:

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Zendesk is award-winning customer service software trusted by 200K+ customers. Make customers happy via text, mobile, phone, email, live chat, social media.

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Donny is the founder of SMB Guide. He is a seasoned small business owner and entrepreneur, with over 17+ years of experience growing and building companies. He is a well traveled and multi-faceted individual with several successful six figure business exits.