How Chatbots Help Small Business Owners To Increase Conversion Rate

Customers are the lifeblood of every business. That is why it is important to put a modern strategy in place to keep them happy. In this modern-day and age, many businesses consider automating their processes and one of the aspects that they are focusing on is customer communication. Attending the needs of customers in real-time might be a challenge, but with chatbots, everything becomes smooth.

What is a chatbot?

A chatbot refers to artificial intelligence (AI) software. It is designed to simulate chats using natural language through websites, mobile apps, messaging applications and even through the phone. When it comes to interacting with humans, chatbots make the process a lot easier because it communicates like a real person

Chatbots use a Question-Answering system to leverage Natural Language Processing. It has the ability to formulate responses to questions using natural language

How do chatbots work?

At the chatbot’s core, there are two different tasks to expect:

  1. Analyzing user request
  2. Returning the response

With user request analysis, the chatbot analyses the request by identifying the user intent. It works by extracting keywords or relevant information. If a request is not fully understood, the chatbot won’t be able to provide the right responses.

This is where returning the response, the second task, comes in. Once the chatbot identifies the user’s intent, it will provide the closest and most relevant response. These responses can be any of the following:

  • Generic or predefined answer
  • Responses obtained from a knowledge base with different answers
  • Piece of information that has been contextualized based on what the user has provided.
  • Data retrieved from enterprise systems
  • Results taken from actions that chatbots performed with one or more backend apps
  • Clear and specific questions that enable a chatbot to understand request

Benefits of Chatbots to small businesses

1.    Improves Lead Generation and Nurturing

Most businesses use an omnichannel model to operate. They are using various channels or platforms such as their website and social media page to market their products and services. The process becomes effortless with the help of chatbots. Through messaging platforms like Facebook Messenger, businesses deploy chatbots to engage with customers using personalized messaging.

The more customers chatbots respond to, the more leads are generated. These qualified leads will be nurtured easily through personalized offers, recommendations, and discounts

2.    Provides 24/7 Customer Support

One of the reasons customers decide to do business elsewhere is long hold times. Relying on traditional forms of communication can compromise the quality of your service. With AI chatbots, you can easily serve your customers by responding to their needs 24 hours a day, 7 days a week. Chatbots can also direct leads to answers that will help them. There is even an option to train your bots for customer chats. All you need to do is to add general FAQs and answers.

3.    Reduces Service Cost

According to reports, each year, businesses receive 265 billion customer requests, spending $1.3 trillion to ensure these requests are responded to. Chatbots are a cost-effective option because they can reduce service costs by 30%. A chatbot is considered an investment. It can optimize customer support without compromising on the quality of the service. With chatbots, you reduce the costs associated with hiring more support agents, training, salaries and infrastructure.

4.    Increases Customer Engagement

Research conducted by Bain & Company revealed that businesses that consistently engage with their customers increase customer spend by 20% to 40%. Chatbots kick customer engagement up a notch by personalizing customer interaction, providing a real-time response, improving user experience and enhancing customer satisfaction.

5.    Saves Time

Time is money for all businesses, especially startups. Chatbots make the most of your precious time by giving customers first-level support. Each customer request is filtered before it are routed to the team. With chatbot’s efficiency, it has been forecasted that by 2022, businesses can save over $8 billion per year. Chatbots save time because they can provide quick solutions and answers based on customer’s simple queries.

The Bottom Line

The versatility of chatbots maximizes business growth. When deploying chatbots, businesses need to understand how each area works so they fully benefit from the software. While it has its own disadvantages as no software is perfect, the pros still outweigh the cons.