Everything you need to know about chatbot technology

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How do you design your customer service smarter, without compromising on quality? Many organizations are struggling with increasing pressure on their customer service. More incoming queries, through different channels, at a higher rate. At the same time, you not only want to control costs, but also ensure a better customer experience.

Chatbots offer a solution. But what makes a chatbot more than an automated question-and-answer machine? How do you ensure that a bot really adds value for your customers and your organization?

In this article, we dive into the world of chatbots. We explain how the technology works, what benefits it offers, and how to choose the right solution for your organization. Whether you're taking your first steps into automation or looking for practical AI solutions, we'll take you through the possibilities.

What is a chatbot?

Chatbot technology is software that conducts conversations with customers via text or voice. The technology automates interactions, such as answering questions, helping with orders or referring customers to the right employee. In addition, chatbots can collect and analyze data to better understand customer needs.

Basically, we distinguish two types of chatbot variants:

• Rule-based (declerative) chatbots: These bots work based on preset rules. They recognize specific keywords or questions and provide fixed answers to them. Ideal for simple tasks such as sharing opening hours or frequently asked questions.
• AI-powered (conversational) chatbots: These bots use artificial intelligence (AI) and natural language processing (NLP) to understand language and engage in more complex conversations. They learn from previous interactions, making them ever smarter and more responsive to customer needs. It should come as no surprise that AI-powered chatbots are booming.

As such, in this blog, we will focus mainly on AI-driven chatbots.

It is important to mention that as far as we are concerned, chatbots never replace human employees, but rather complement your team. They take repetitive tasks off your hands, allowing agents to focus more on complex questions.

How does a chatbot work?

AI-driven chatbots go a step further than rule-based chatbots. In fact, rule-based chatbots follow preset rules and scripts. Suppose a customer types, “What are your business hours?” The bot then searches for the keyword “opening hours” and returns a default answer.

This type of bot is simple and suitable for basic questions, but it quickly bogs down when customers ask questions that don't fit within the rules. 

AI-powered chatbots try to understand the words, intent and context behind a question. This allows them to have much more complex conversations.

Here's how it works:

• The bot receives a message and uses NLP to understand what the customer means. Suppose a customer says, “I want to cancel my package, but I don't know if it's still possible.” The bot recognizes that this is about a cancellation (intent) and a specific order (context).
• Then the chatbot determines an action. The chatbot combines the question with data from linked systems, such as a CRM or order management system. For example, the bot checks the status of the order and provides an appropriate response.
• Through machine learning, the chatbot learns from previous conversations and customer feedback. Thus, it gets better and better at recognizing nuances and offers more relevant answers.

AI chatbots also have the advantage of being able to communicate with multiple systems simultaneously, such as a knowledge base, billing software or live chat. This allows a customer to get an immediate solution without being transferred. Unless, of course, the chatbot realizes that it is necessary to transfer the call to an employee.

The benefits of chatbots

Some of the benefits are obvious and you probably already recognize them yourself. For instance, think of their continuous availability. Whereas with live agents you are dependent on working hours, chatbots can respond to your customers' questions 24/7. But what other advantages do chatbots offer?

Fast and efficient customer service

Does a customer open a chat on your website or in the app? Then a chatbot can respond immediately, without your customer having to queue up. The fact that a customer is helped immediately also increases efficiency. Questions that the chatbot can handle no longer need to be handled by a live agent. This ensures that your agents can focus on questions that are more difficult to handle by a chatbot.

Scalability

During times of increased customer interaction, such as during busy sales periods like Black Friday or the holidays, chatbots can scale customer service. Chatbots handle thousands of calls simultaneously. This makes them ideal for growing businesses that want to respond quickly to increasing demand. Note that it should always be possible for customers to talk to a “real” employee. Thus, more customer interactions in many cases also means you need more live agents who can handle any handovers from the chatbot.

Improved customer satisfaction

Because chatbots provide instant answers and quickly direct customers to the right information or solution, customer satisfaction improves. Customers get the help they need without long waiting times or referrals to other departments. Moreover, with the help of AI, chatbots are getting smarter, enabling them to provide personalized answers.

Consistent and (virtually) error-free service

Chatbots always provide consistent answers and do not make human errors, such as forgetting details or misunderstanding a question. This ensures a reliable experience for customers. However, always keep monitoring whether the answers given by chatbots are correct by regularly collecting feedback. Of course, you don't want your chatbot to accidentally promise a car for $1.

Approachable contact

Did you know that call anxiety is a rapidly emerging fear, especially among young people? For customers who find it difficult to contact you by phone, chatbots offer a low-threshold way to ask questions. Especially for people who are uncomfortable with phone calls, this offers a solution. 

The challenges of chatbot technology

While chatbots offer many benefits, there are certainly challenges to consider. Any bumps are best avoided so that you can create a successful chatbot experience. In our opinion, what are the main challenges?

Understanding complex requests

Although AI-powered chatbots are getting better at understanding customer conversations, they can still struggle with more complex or ambiguous requests. The technology is only as good as the data they are trained with. If a customer asks a question outside the expected pattern, the bot may struggle to provide the right solution. You probably are familiar with the term garbage in is garbage out.

Integration with existing systems

A chatbot often needs to be integrated with other systems you already use, such as CRM systems, live chat software, or order management systems. These integrations can be technically complex, especially if your existing software is outdated or does not offer open APIs. It takes time to properly integrate a chatbot into your infrastructure, but this is essential for it to work properly. 

Lack of human nuance

While chatbots are good at recognizing textual input, they often lack the nuance of a real conversation. For example, they don't understand emotion or complex context the way a human would. When a customer types their story in frustration, the bot doesn't always pick up on it properly. This can lead to interactions that hurt customer satisfaction, especially if the customer is seeking help for an emotionally charged problem. Therefore, always make sure that if empathetic responses are important, emotional intelligence is well integrated into your chatbot. That way, you ensure that customers always feel they are understood. Even if they are talking to a chatbot.

Customer acceptance and trust

Although more and more customers are getting used to using chatbots, there is always a chance that customers will prefer to talk to a human employee. Especially if the situation calls for it. If a customer does not trust the chatbot or experiences the conversation as impersonal, this can lead to frustration. This means it is important to design the chatbot in such a way that it can smoothly switch to a human employee when needed.

Privacy and security

Chatbots often collect sensitive customer information, such as personal data or payment information. This makes them vulnerable to data breaches or misuse. So proper security that complies with all privacy laws, such as the AVG, is hugely important. Customer data management must also be transparent and well communicated to maintain customer trust.

Use cases: how companies are going the extra mile with their chatbots

Companies achieving real success with chatbots are not just using the technology to automate frequently asked questions. They go a step further by integrating the bots into their entire customer strategy. By creating links to other systems, multilingual support and seamless collaboration with live agents, they take the customer experience to the next level. The following examples show how companies take this extra step by using Seamly and what it brings them.

Faster and better handling of requests

Healthcare billing specialist Infomedics receives many requests and questions via the chatbot. These are simple requests, such as changing a password. But these are also questions about making payment arrangements. And that requires just a little more context. Every request is unique. To make a payment arrangement via the chatbot, an integration with the billing system is therefore necessary.

With Seamly, Infomedics can make this integration, and in doing so, Infomedics shortened waiting times considerably. Customers no longer have to wait for a live agent, and can instead arrange everything themselves in the chat. Things still don't work out in the chatbot? Then a transfer to a live agent is always possible.

Would you like to read more about the case? Download it now. 

DHL is also setting up their customer service more efficiently by using Seamly. It's possible for DHL customers to request package statuses via both chat and phone. In addition, Seamly allows for summarization of conversations between customer and chatbot, allowing a live agent to immediately see concisely what the customer's question or request is. As a result, customers are helped faster because agents do not have to read through the entire conversation. As a result, more customer requests can be handled.

Would you like to read more about the case? Download it now. 

International accessibility

Chatbots in many cases offer only one language. If you would like to offer multiple languages, for example because you have a lot of foreign customers, you normally have to integrate, monitor and improve these languages separately. 

The Efteling receives guests from all over the world. And these guests all want to be helped in their own language in the chatbot. 

With Seamly, the Efteling has developed a solution that offers support in seven languages, including English, German, French and even Chinese. This allows international guests to ask questions about, for example, their reservation or park opening hours. 

Seamly ensures that translations are automatic and accurate, providing the Efteling with a consistent customer experience regardless of the user's language. As a result, the Efteling does not have to keep each language up to date separately. In doing so, the Efteling also immediately strengthens the park's international appeal.

Choosing the right chatbot technology: how to do it?

Choosing the right chatbot technology starts with clearly defining your goals. Do you want to automate simple processes or improve complex customer interactions? Each type of chatbot has its strengths and weaknesses, and the technology must fit the specific needs of your business. In any case, go for a solution that is future-proof and robust.

Integration with existing systems

A good chatbot doesn't work on its own, but connects to your current infrastructure. Check that the technology easily integrates with your CRM, knowledge bases or live chat. Think beyond technical compatibility: how well does the chatbot support your existing workflows?

If a chatbot is not compatible with other enterprise software by default, that doesn't have to mean the end of the world. Seamly makes these pairings easier by acting as a connecting layer between different systems. Already have a chatbot vendor and don't want to switch? We'll make sure you don't have to uproot your existing infrastructure.

Flexibility and scalability

Your business is growing and changing, and your chatbot needs to keep up with that pace. Therefore, choose a platform that can easily add new features, such as voicebots, multilingual support or integration with new channels. Also consider using AI to allow the chatbot to constantly learn and improve. Even if these features are not provided by default by your chatbot vendor, Seamly can provide a solution.

Usability for your team

Implementing a chatbot is one thing, but managing it effectively is another. Choose a solution that puts your team in control, without the need for constant technical support. We see an intuitive interface, and the ability to monitor data and make improvements as an important part of a chatbot.

The future of chatbots

The role of chatbots in customer service is getting bigger AND more strategic. It may sound cliché, but technological change has never been as rapid as it is now. In addition, the arrival of AI is an important factor, also in customer interaction. Where will we be in five years? Whoever has an answer to that has a crystal ball. In any case, there are some developments we are already seeing.

Chatbots will no longer be limited to text or speech. The future lies in multimodal bots that simultaneously use text, voice and visual elements. Think of a voicebot giving instructions while an on-screen video shows how a product works.

With the rise of generative AI, chatbots can not only respond to queries but also proactively provide solutions. This development will become increasingly sophisticated. Customers may soon be proactively contacted about an expiring payment deadline. Or chatbots will order the required products in advance or solve a malfunction. This transforms the role of a chatbot from reactive to advisory. In doing so, a chatbot creates more and more value.

In short, even though it is difficult to predict exactly what is about to happen, developments we’re already seeing could drastically change customer service in the future. Chatbots will not only become smarter, they will also become more integrated into the daily operations of businesses. Chatbots will soon no longer be just a tool, but an important part of the entire customer strategy. 

What exactly does the future hold? One thing is certain: those who invest in this technology now are laying the foundation for customer service that exceeds not only today's expectations, but tomorrow's as well.

At Seamly, we see it as a challenge to shape tomorrow's customer service. Wondering what we can do for you? Get in touch with us!