The Impact of AI-Powered Chatbots on Customer Service and Marketing Communication

By Ainsley Lawrence, Freelance Writer

For digital businesses, offering thorough assistance to customers can be a bit of an obstacle. These businesses are always looking for new strategies to enhance the customer experience and provide the same level of service that brick-and-mortar shops offer through in-person representatives.

AI-powered chatbots are just one of the strategies businesses big and small are using to connect customers with the products, services, and answers they’re searching for. We’ll explore the effects of AI chatbots on customer service and marketing as a whole, along with a few challenges businesses can face when implementing this technology into their marketing strategy.

The Growth of AI Chatbots

The need for a personalized online shopping or browsing experience has led brands to take advantage of the development of AI chatbots, which are software programs that analyze requests or queries and present answers in a conversational manner.

AI chatbot use has grown over the years, with 88% of customers in a study reporting the use of AI chatbots in 2022. Chatbots are utilized to enhance the user experience in a number of ways, from answering questions about return policies for businesses to allowing easy bill payment for phone or internet companies.

This popularity is all due to the positive response chatbots have received from website users. The need for convenience and concise communication is crucial for nearly all customers. Chatbots allow customers to receive near-instant answers to their queries 24/7, yielding a more positive, trusting relationship with businesses.

Ultimately, customers are looking for support in whatever manner they can find it – according to Adweek, 65% of chatbot users have even said they prefer to receive this support without having to deal with human interaction.

How AI Chatbots Are Supporting Businesses

Over half of consumers will shop online at least once weekly, with 30-40% of shoppers spending around 10-30 minutes performing research before they decide to make a purchase. This means that businesses must find a way for customers to use this time to obtain as much information from the website as possible to lead to the most profitable conversions, whether that be through singular or multiple purchases. AI chatbots are helping businesses thrive, aiding them in customer retention and boosting their overall sales in the process.

Customers enjoy it when a brand actively engages with them. In fact, this engagement can increase customer spending by almost 40%. Designing chatbots that interact with a customer in a way that appeals to their interest can work revenue wonders. For example, having an AI chatbot available that will help a user choose an outfit based on their needs and style preferences will more likely lead to a sale than simply presenting featured items on a home page.

Additionally, site users are often just looking for simple answers to common inquiries. According to IBM, chatbots are able to answer about 79% of normal questions, which means basic queries can be answered without a using having to agitatedly peruse a search engine or FAQ page in hopes of finding a direct solution. Even when compared to solutions offered by live customer service agents, chatbots have proven to be faster. This is great for those who are looking for solutions in a pinch, such as tech owners seeking service quotes for same-day computer repair services.

This effectiveness allows businesses to reduce customer service spending by 30%. Seeing as profits can increase with AI chatbot implementation and labor costs can decrease, it is certainly no wonder why many e-commerce businesses and brands with a digital presence choose to add this software to their sites.

The Challenges of Using AI Chatbots for Marketing and Customer Service

Though AI chatbot usage comes with plenty of upsides, there are a few challenges businesses can face when rolling out this software.

Data-transmission Speed and Bandwidth

First, high-speed data transmission is an incredibly important part of offering AI chat software to customers. Slow speeds can equate to poor trust in your site. As a business, using dark fiber WAN (wide area network) can offer online shoppers a sense of reliability. Dark fiber can increase your bandwidth, add a layer of network privacy and security, and heighten data transmission speeds.

Dark fiber technology will allow your AI chatbot to handle a large number of queries at a time while providing lightning-fast answers for all of your customers. Since page speeds and security have a huge influence on the shopping experience and, thus, customer spending, dark fiber implementation can be a worthy expense.

Financial Setbacks

AI chatbot software can definitely save you money on customer service labor costs, but monthly software costs can be a burden on small businesses that either seasonally or regularly are not experiencing adequate cash flow. Examine the size and scale of your business and see if these costs, and the costs of future software-related tools, will upset your profits. Before integrating any new AI applications, understand what you currently have at your disposal and decide if your existing tools may suit your marketing needs better until your business grows.

Many experts and business owners see AI as the future, and chatbots are just one of the technological resources many people are using to expand their digital reach, increase accessibility, and boost profits. AI has years of development ahead, and it will be interesting to see how chatbots grow to support the new wave of digital requirements users will have for them.

Tags: AI