8 Ways to Know if You Need a Chatbot For Your Business

The chatbot train is chugging along at full speed and if you’re not on it, you’re missing out!

At least that’s what it feels like when you read articles about why your company needs a chatbot. But chatbots are a big investment and aren’t necessary for every business. If you jump on without doing your research, then the chatbot train will start to feel less like the Polar Express and more like the Trans-Siberian.

It’s true that chatbots can help make customer service faster, cost-efficient and modern, yet they require a surprising amount of upkeep.

But they’re popular, they look snazzy on a website and they’re a viable option for boosting your customer communication.

Chatbot FAQs

  1. What is a chatbot? Short for chat robot, a chatbot is a computer program that simulates human conversations. It interacts with users through instant messaging, artificially replicating the pattern of human communication.
  2. Can chatbots simulate people? A chatbot can range in intelligence depending on its type ( rule-based versus contextual, for example) and will have limitations. Therefore, a chatbot can’t replace agents. But they do make great assistants and have had a positive impact on businesses.
  3. Why do I need a chatbot? It depends on your industry and the problems you face. Perhaps you need AI for complicated services, a simple chatbot for collecting contact information, or no chatbot at all. It’s important to narrow down your use cases to determine which provider to choose.
Pyramid graph of chatbot user experience versus technology difficulty

Keep reading to assess if a chatbot is right for your business.

  1. Will a chatbot add value?
  2. Do you have the budget and time to make a chatbot?
  3. Are chatbots too limited for your needs?
  4. Will a chatbot cheapen your business?
  5. Is a chatbot right for your target group?
  6. Is your team ready to be a safety net?
  7. Are you prepared to adhere to privacy laws?
  8. Do you have the time and patience?

Will a chatbot add value?

Before you start shopping around for chatbot providers, thoroughly examine your processes. For example, chatbots can:

  • Reduce cart abandonment by offering to help with the checkout process or give a discount code.
  • Boost sales leads by asking visitors qualifying questions and collect contact information.
  • Automate common tasks like scheduling demos, collecting feedback and sharing promotions.

Using live chat as your primary service channel may be a better option. It’s a direct line of communication that can help with long waiting times, slow responses, missed leads and other pain points of phone and email customer service.

This was the solution Frankfurt School of Finance & Management chose. The school first considered adding a chatbot to improve its online presence but found that live chat suited their needs better.

Building a chatbot infrastructure is a costly matter. Before investing in it, we wanted to assess how students respond to chat as a contact channel.

Florian Fürst, Frankfurt School

Take a look at our post “10 research-backed live chat benefits for businesses” to get a better idea if live chat is right for you.

Do you have the budget and time to make a chatbot?

How much time and money you’ll spend on your chatbot depends on the type you choose. Most businesses want an intelligent bot that understands thousands of commands and speaks at a human-level.

This is an ambitious request only if you lack the data, use cases, budget and time an intelligent bot needs.

Take Capital One’s chatbot “Eno” as an example. The banking assistant was built from scratch in three months using real customer conversations from chat logs.

Conversation with Eno chatbot

Eno understands over 2,200 terms and emoji and speaks conversationally, not via commands. Its engineers used a three-step process to train Eno:

  1. Teaching Eno the meaning and similarities of words.
  2. Feeding Eno the tens of thousands of utterances customers made in chat logs (like “activate” and “make my card work”).
  3. Training Eno to understand new terms customers haven’t used before based on those utterances.

Texting with Eno is simple, but, of course, the easiest-to-use technologies are the hardest to build.

Margaret Mayer, VP of Software Engineering, Capital One

Capital One is the 10th largest bank in the United States, so it’s unsurprising that it could afford to create such a refined bot in a short amount of time.

The lesson is not to be discouraged from building your own chatbot from scratch, but to take a closer look at the reality. That’s why chatbots are like children. Making a baby often isn’t pricey (sometimes even a bottle of Rosé might do) but raising a child until they’re 18 can cost parents up to $234,000.

An intelligent bot like Eno can have starting costs ranging from $20,000 to $50,000. But don’t let this price stop you from considering a bot — customer service software companies like Userlike are making AI accessible to companies of all sizes.

A price-effective way to offer automation is by consolidating it with your customer messaging software. Our AI Automation Hub is built into our live chat software, so you can edit and monitor your bot from the same dashboard.

Userlike Message Center AI button to access AI Automation Hub

Our AI chatbot — including a suite of AI features — is available from our Corporate plan on. The price is just a fraction of what you can expect to pay by using an AI giant like IBM, but with all the no-code editing capabilities you need to deploy an intelligent chatbot quickly.

Are chatbots too limited for your needs?

Even the best bots have their limits. Eno may be programmed to understand thousands of responses, but it will always lack empathy.

Chatbots can’t bend the rules or handle individual use cases. They also have difficulty detecting when a customer is becoming increasingly angry or irate. Its social abilities are entirely in your hands.

Check what types of questions your customers or users ask. Are they repetitive and something a chatbot could answer easily, or are they usually specific and personal?

Will a chatbot cheapen your business?

Chatbots excel in service-heavy industries. That’s why you’re bound to meet a bot when browsing for flights or clothes.

They can make product suggestions, reserve tickets, forward users to certain webpages, suggest dates and times — tasks that are easy to predict when writing a script.

But luxurious services and industries risk looking cheap by using chatbots. Imagine walking into the fine dining restaurant Eleven Madison Park and using an iPad built into your table to order food. Excessive technology just doesn’t fit the environment.

Chatbot conversations can also quickly go south. Replika, one of my favorite chatbots, sometimes has trouble understanding basic questions despite being a highly-developed conversational bot.

Conversation with Replika gone wrong
Some users say that Replika’s speech improves over time, but others disagree. Chatbots can be unpredictable.

High-profile businesses tend to use curated language when speaking to customers or potential clients to uphold an image. My former director at the university I worked for would edit emergency text messages to the student body with a fine-toothed comb. Chatbots are great university assistants, but sometimes it can be difficult to trust a chatbot to communicate sensitive information with the same level of care as your staff.

Is a chatbot right for your target group?

Your customers may not be the right demographic for chatbots. According to Chatbot Magazine’s “Chatbot Report 2019: Global Trends and Analysis,” a survey found participants aged 18 to 34 were twice as likely to talk to a chatbot when shopping.

Chatbot demographics show millennials use them most often
From Facebook’s “Insights to Go”

Additionally, women speak to chatbots or live chat while shopping online more often than men.

If older men are your target audience, you may want to reconsider your chatbot idea. But there are still a couple factors to consider.

People prefer to communicate through text rather than phone, which is great for the future of chatbots. But if your company is dependent on phone customer service, then the sudden switch to chatbots may feel odd.

Many brands also use emotions to sell products, a chatbot’s greatest downfall. Rational compassion and appealing to a customer’s personal experiences is difficult to program.

For example, the German prosthetics company Otto Bock uses empathetic language on their website to sell their products:

Otto Bock's empathetic website copy

Otto Bock representatives likely speak to customers who are struggling to cope with their situation on a daily basis, which is evident in their copy.

If a new customer were to contact their support team and speak with a bot that starts spewing tech specifications and generic condolences, it would hurt their image.

If you still want to use automation but maintain your brand voice, consider using a self-learning responsive FAQ page.

Smart FAQ attempts to answer customer's question as they type

With Userlike’s Smart FAQ, you control the tone and length of your answers. To save your users time, it attempts to answer their question as they’re typing it by understanding keywords in their request. It’s also self-learning, so its accuracy will improve the more your site visitors interact with it.

Is your team ready to be a safety net?

Sometimes questions or issues are too complex for a chatbot to handle by itself. That’s why participants in our chatbot survey agreed that speaking to a bot directly is okay as long as it’s easy to escalate the situation to a human agent.

That’s why we recommend combining your chatbot with your live chat software. Whether it’s connected through an API or directly built into the software like our AI chatbot, you’ll be able to monitor and take over chats when necessary.

Conversations are intelligently routed to a chatbot or an agent
Userlike lets you intelligently route inquiries depending on the request.

If you plan to use your chatbot as a proactive first point of contact on your website, you may notice an increase in chats. Make sure you have enough agents to help cover these handovers.

Are you prepared to adhere to privacy laws?

A chatbot is only as complex as its infrastructure and the data it can access. But this may require gathering private details about your customers.

Data privacy is an important development factor to consider. If your chatbot can access user accounts and collect customer information, then it needs to follow data protection regulations set by your country.

In the U.S., there is no single overarching data privacy legislation. Instead, the country takes a sectoral approach to data privacy, relying on a mixture of sector-specific laws and state laws.

In the European Union, however, the laws are rather extensive and strict. The General Data Protection Regulation requires controllers of personal data “to put in place appropriate technical and organizational measures to implement the data protection principles.” A service provider may only collect or access personal data on a contractual basis.

What are the laws in your country? Are you already well-versed in data protection because of the nature of your company? Then maybe a chatbot is no big deal. But if not, i-Sight has a brief overview of each country’s legislation.

Want to talk to a human about chatbots?

We'd be happy to answer any questions you have about using chatbots in your business and how to get started.

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Do you have the time and patience?

Chatbots are an ongoing project that requires a dedicated team. Many providers need to be monitored and edited to keep it up to date and running smoothly. Can you afford the commitment and attention?

Implementing a chatbot means asking for your customer’s patience as well. There’s no guarantee that they’ll be forgiving of a bad support experience, especially if they’re used to receiving high quality service.

A chatbot may also not be worth losing customers for, especially if your company is still growing.

If you need a chatbot, try this no-code software

Userlike helps you make your chatbot an integral part of your customer service team. By combining it with live chat, you ensure that you’re using your agents’ time wisely on qualifying leads — your chatbot can take care of the routine stuff.

In addition to our AI chatbot, we offer a Smart FAQ and Contact Form Suggestions, which pull answers from its knowledge base full of your business data.

Intelligent contact form answers customer's question as they type
Answer the customer’s question before they even hit “submit.”

Reduce tickets and redundant inquiries to free up your agents’ time with our self-learning software. You don’t need a developer or coding knowledge to set it up, and it’s ready to chat before you even add your business data.

Sign up for Userlike and test our automation features for free for 14 days, as well as our customer messaging software. You don’t need a credit card and your account will switch to the Free version once the trial ends.

If you enjoy using our product, reach out to us in the chat on our website or email our team at support@userlike.com. Can’t wait to hear from you!