The ultimate guide to customer service chatbots

Learn how chatbots are bolstering customer service by empowering agents and consumers to resolve issues quickly.

By Hannah Wren, Content Marketing Associate

Published October 22, 2020
Last updated April 29, 2021

Customers today use chatbots to do everything from check if they have COVID-19 symptoms to find the perfect lipstick color.

Business use of conversational Artificial Intelligence (AI) is only going in one direction. Gartner predicts that 70 percent of customer interactions will involve 'emerging technologies'" by 2022. That includes machine learning, mobile messaging apps, and chatbots.

Chatbots aren’t the future anymore; they’re the present. And using them the right way is vital for your customer service strategy.

To offer standout bot-based support, you have to first understand how chatbots and agents can work together. Then, you have to choose the right bot for your customers’ and support team’s needs.

What is a chatbot?

Chatbots are a type of computer program designed to have a conversation with a human. They run on apps, on websites as messenger pop-ups, and on social media messaging channels.

If you’ve ever needed help on a website and clicked the “24/7 chat” feature, you probably talked to a chatbot. You’ll often get a prompt, like, “please describe your problem.” Unlike live agents on chats, chatbots typically respond immediately.

This software is designed to run on template scripts or to be self-learning. The most advanced bots also use natural language processing (NLP) to sound like real people.

With a chatbot platform, brands can offer support to customers at all times—year-round, 24/7.

The evolution of chatbots

We call chatbots an “emerging technology,” but their history is longer than you might think. Chatbots are almost as old as the ’net itself.

The first chatbot, ELIZA, was created at MIT in 1966. It was programmed to have vague, open-ended answers to most human input, so users felt like it understood what they were saying.

The PARRY chatbot was created next, in 1972, at the Stanford Artificial Intelligence Laboratory. Parry was similar to its predecessor with one big difference: it had a bit of an attitude. Parry was the first chatbot to occasionally fool people into thinking it was a real person responding.

There were a handful of other chatbots in the 20th century, but the game really changed in the 21st century with the rise of the internet. You may remember SmarterChild in 2001, the AIM chatbot you could have (often hilarious) full-length conversations with.

The first iPhone in 2007 gave rise to the smartphone era, and Apple’s own chatbot, Siri, was integrated on iPhones in 2011. Then, Google, Microsoft, and Amazon got into chatbot technology. Google Now was released in 2012, and Microsoft Cortana and the legendary Amazon Alexa arrived onto the scene in 2014.

Today, the functionality of chatbots is clear all over the internet, from bots in social media messaging to pop-up chats on company sites. What started out as an experiment has turned into a necessity for serving customers 24/7 and staying connected.

How does a chatbot work?

Chatbots are programmed to have answers to common questions through predefined rules. Advanced bots use natural language processing, machine learning, and deep learning to interpret customer (or employee) requests and provide responses.

Chatbot algorithms work best in situations where a customer’s needs are specific and clear.

  • A bot can work alongside a knowledge base. Bots are able to answer FAQs by recommending the right help center articles. For example, an airline service could assist customers who are wondering, “How do I change my ticket?” by using a bot to provide step-by-step instructions.
  • With access to business and customer data, chatbots can deliver personalized responses. A bot can tell you the flights available on your new travel date and that you’re eligible for a discount if you upgrade to first class.
  • An AI chatbot can also help customers complete tasks. You could reserve a window seat and buy your upgraded ticket right inside the chat.

Are chatbots going to steal customer service jobs?

Chatbots are great, but don’t worry: humans will always be the secret sauce to a great customer experience. Chatbots work best alongside humans in agent-machine partnerships.

Customers want to talk to real people, but they want those interactions to be meaningful. Low-stakes questions like “How do I change my password?” can easily be handled on-demand via self-service. When bots take lackluster cases off a support team’s plate, agents can prioritize trickier questions that need the human touch.

Chatbots can also start conversations for an agent. They can gather context like a customer’s order number or city upfront before an agent takes over.

How Fintiba’s chatbot empowers agents

Fintiba offers online solutions for people who want to work or study in Germany. Human agents are critical for resolving high-empathy issues, like when a customer’s visa gets declined.

Chatbots help streamline this process. Every conversation goes through Fintiba's virtual agent first before going to a human agent. That takes the pressure off the support team, so they have the time they need to solve problems chatbots can't handle.

For example, when customers want to change their phone number, they complete a form and send a selfie inside the chat. An agent can then jump in with the process already started.

Fintiba’s chatbot solution, Solvemate, integrates with its customer service software. The bot is able to route chats with context and conversation history to live agents.

With Zendesk’s bot APIs, businesses using our omnichannel customer support solution and our CRM platform can integrate with a variety of chatbot solutions. Some of our chatbot partners include:

When chatbots enhance the agent experience—instead of replacing it—it’s a better experience for everyone.

To learn more about how agents and chatbots can work together, read our guide.

Benefits of chatbots that go beyond efficiency and cost savings

The benefits of chat go beyond “increasing efficiency” and “cutting costs”—those are table stakes. Bots are at their most powerful when humans can work in tandem with them to solve key business challenges.

Chatbots provide convenient one-on-one service 24/7

Being constantly connected has increased customers’ desire for instant support. Customers today expect help as soon as they need it on channels convenient for them. Over 40 percent of customers think 24/7 real-time support is a top factor of good service, according to Zendesk's 2021 Customer Experience Trends Report.

In deploying a chatbot across customers’ preferred channels, businesses ensure customers get seamless, always-on support. If Sally’s sushi delivery is late, she can text a chatbot and get an update on her California roll in real-time. If Rachel lost her credit card, a virtual assistant can help her freeze it, so she doesn’t have to worry about mysterious charges.

Chatbots allow businesses to scale quickly based on customer needs

In our trends report, we found that 42 percent of customer service leaders expect customer requests to grow, yet only 36 percent can expand headcount. This gap represents a sweet spot where a chatbot can help. Chatbots can act like extra support reps, triaging simple questions and basic requests.

Consider Spartan Race, which deployed a Zendesk chatbot to help its small team of agents tackle spikes in customer requests during races. Spartan Race has seen a 9.5 percent decrease in chat volume, extending its team’s live chat availability by three hours every day.

France’s national rail carrier, SNCF, needed to provide quick support to on-the-go passengers using its mobile app. But it couldn’t hire another team of agents to deal with the influx of requests. Mindsay's Zendesk integration helped SNCF take the pressure off its overwhelmed agents. They deployed a chatbot to help find travel itineraries, provide departure information, and send alerts. And the integration led to a 50 percent reduction in incoming support tickets.

Chatbots give support teams the ability to scale without having to hire more staff.

Chatbots offer more opportunities for conversions

Customer service bots can boost conversions with smarter self-service.

A chatbot can enable customers to self-serve outside of a help center, like on a checkout page, with knowledge tailored to their context.

Chatbots can also convert customers within the message chat by providing ecommerce opportunities for immediate action. Messaging types like carousels, forms, and picklists let customers book a hotel reservation or purchase a pair of shoes—all within the chat.

Chatbots can also automate cross-sell and upsell activities. With the right context, a bot can check if a consumer is eligible for a discount on a hotel room with a view or ask if he wants a pair of socks to match his new Nikes.

4 questions to consider when evaluating a customer service chatbot

Chatbots are relatively new to customer service, and companies are still figuring out how they fit within their support strategy. That can make it tough to know how to find the right bot for your business. Answering these questions will help you find a solution that best fits your support team’s needs.

  1. What problem are you looking to solve—and what resources do you need to solve it?
  2. What channels do you want to use—and what features will you need on those channels?
  3. What level of context will your chatbot need?
  4. How will you manage conversations between chatbots and agents?

1. What problem are you looking to solve—and what resources do you need to solve it?

For starters, you need to decide what use cases to automate. Decide based on the problem you need to solve and what resources you have to solve it.

Some companies may need a bot to deliver help center articles across a variety of channels and capture basic customer context. Other companies may need bots for personalized requests, like telling a customer how much data her iPhone used this month or recommending a new plan based on usage.

Offering personalized service with a chatbot requires more resources and a bigger budget. You’ll need a chatbot solution that integrates with customer service software and other relevant systems.

2. What channels do you want to use—and what features will you need on those channels?

Customers expect to get support over their preferred touchpoints—whether they’re interacting with a human or a bot. Research tells us customers want to interact with brands on channels they use with friends and family. Messaging channels, like Facebook Messenger, WhatsApp, Twitter Direct Message, LINE, Apple Business Chat (which integrates with iMessage), and SMS lend themselves to more convenient conversational experiences. For instance, Samsung Australia created a Twitter chatbot to give customers personalized TV recommendations.

Beyond customer channel preferences, a business should consider features it will need on those channels.

  • Quick replies allow customers to find answers with a few clicks instead of typing
  • Adding a call-to-action button increases click-through-rate three times
  • Carousels result in 10 times higher engagement
  • In-chat conversion-to-purchase rate is 2.3 times higher compared to a website or mobile app

Zendesk lets a business build once and deploy anywhere. In other words, you can use the best version of a rich bot experience across all your channels, even those with no native bot support.

3. What level of context will your chatbot need?

More context leads to better chatbots—and more personalized conversations.

Using Ada’s Zendesk integration, freelance platform Upwork’s chatbot displays proactive CTAs tailored to what a user is trying to accomplish, like what help center article they’re viewing.

Upwork’s bot also uses contextual metadata, like a user’s name for a personalized greeting. It knows if a user is a client or a freelancer, tailoring quick replies accordingly. It also integrates with our Support Suite, so agents have the context they need to handle every escalated chat.

Beyond passing on relevant information to agents, bots can also pass on context to a CRM or other software. This enables things like:

  • Understanding that Rose has a necklace in her cart and sending a message to a marketing automation tool, so she receives better-targeted email offers
  • Knowing that IT buyer Bob signed up for a demo and qualifying him as a lead in a sales CRM

Bots can read context coming from a conversation, too. With sentiment analysis, a virtual agent can understand when a customer is frustrated and react accordingly.

4. How will you manage conversations between chatbots and agents?

Businesses need tools to both deploy chatbot conversations on the front end and manage them on the back end. This ensures agents can understand the intent behind every conversation and streamline hand-offs between agents and chatbots.

With the help of triggers, automation, and workflows, support teams can centrally define engagement rules and track, manage, and prioritize chatbot interactions at scale. This opens up possibilities, like automatically assigning:

  • A high priority to VIP customers, so a bot can route them to a live salesperson for help—with conversation history
  • A repeat dissatisfied customer to a specialized customer support team by looking at context, sentiment, and intent

To effectively control bot interactions, a business will need to integrate its chatbot solution with its customer service software, for example, through our Bot APIs.

The agent workspace in Zendesk provides agents with a real-time, conversation-focused interface to seamlessly manage conversations between agents and bots.

Rephrase the conversation

AI is key to delivering the fast, convenient, and personalized experiences customers expect.

The question is no longer “Should we use chatbots?” so much as “Where and how should we use chatbots?” to better serve our customers.

When a business balances the power of virtual agents with human agents' power, it can create the kind of customer service chatbot that drives loyalty—and improves the bottom line.

Ready to try a chatbot your website? Let's chat.

Make all your chatbot dreams come true

Whether you’re just getting started with chatbots or looking to scale, Zendesk can help.