Written by Taran Soodan

November 13, 2020

What does Alexa, Siri, and Google Assistant all have in common? They’re chatbots.

With the rise of eCommerce and a change in consumer expectations surrounding access to instant communication, businesses need new ways to communicate with customers. Luckily, chatbots have enabled businesses to connect with customers like never before.

Chatbots can dramatically enhance the customer experience your business provides by streamlining the interaction between consumers and your services; plus, the right chatbot solutions can help your organization cut back on customer service costs by reducing the number of people required to manage customers.

Although, some customer support staff is still needed as human intervention is still an integral part of the training and configuration process for chatbot technology.

In this guide, we’ll go over how chatbots work, how to set them up, and why your business needs chatbots.

What is a chatbot?

Chatbots are artificial intelligence (AI) software used to simulate digital conversations and interactions with users. Chatbots communicate in a natural language (written, spoken, or both) through different mediums including websites, mobile and messaging apps, or even on calls.

Artificial intelligence

With recent advancements in AI technology,  chatbots have become extremely sophisticated making them suitable to do more than just respond to specific queries with pre-determined templates. 

Thanks to AI and machine learning, chatbots can gather and process information regarding users, such as their preferences, interests, and inclinations, all of which help chatbots “learn” and understand how to better respond to user requests.

For example, artificial intelligence can help an eCommerce brand drive sales by streamlining product promotions and recommendations to target customers that have specifically expressed interest in similar products. This prevents businesses from irritating their customers with constant promotional emails and also helps cut back on advertising costs.

Natural language processing 

Natural language processing (NLP) is at the root of chatbot technology and forms the foundation for voice recognition systems for leading virtual assistants such as Cortana and Siri. But how exactly do chatbots work with NLP?

A chatbot works by first receiving a user request, analyzing it, and then returning an appropriate response. After processing all relevant information it’s crucial that the bot provides a useful response. If the chatbot fails to understand the user’s request or the intent behind it, then a human agent is alerted and can intervene.

After the chatbot has determined the user intent correctly, there are a few ways in which the software can respond to the query. The response may come from a standard, predefined template, from information stored in enterprise systems, or a question prompting the user to clear up some ambiguity for the chatbot. If the digital assistant fails to provide users with an appropriate response or lacks the ability to resolve the issue at hand, then a human agent can take over.

How are chatbots built?

Major players like Amazon aren’t the only businesses that can benefit from chatbots; banks, restaurants, eCommerce businesses, and more can also use them. 

There are two ways to make a chatbot: Create one from scratch or use a bot-building platform.

To design a chatbot from scratch, it’s important to:

  • Identify specific goals that your chatbot should fulfill, and determine exactly what you want your chatbot to do.
  • Design your chatbot’s interaction. This helps ensure that your chatbot offers an engaging user experience.

After ironing out these details, you will need to actually develop the chatbot, which requires programming experience. Of course, hiring a developer is an option, but, in general, using a chatbot-building platform is much easier.

There are several good platforms out there that provide templates for building your own, intelligent chatbot. Many existing platforms, such as ManyChat, don’t even require users to code. Thanks to a sophisticated drag-and-drop interface, business owners can conveniently build their own chatbot in minutes.

Which channels can chatbots be used on?

Chatbots can be integrated and used on many different platforms including social media websites like:

Messenger from Facebook

Messenger from Facebook makes it easy for business owners to create and integrate chatbots with Messenger, specifying default responses, welcome messages, AI capabilities, and more, to handle customer queries.

Messenger also provides advanced options, like galleries, that help enhance customer experience and engagement. (A chatbot can curate a gallery that  provides customers with different links and images to match their needs.)

SMS

Did you know that SMS open rates can be as high as 98%? This makes SMS (short message service, aka text messaging) the best option for communicating time-sensitive information. For this reason, SMS chatbots have become increasingly popular amongst various organizations.

By equipping your chatbot with multiple default responses, customers can have a two-way text conversation effortlessly. Additionally, many Fortune 500 companies and growing businesses include an additional live chat support option, so customers can swap over to human support at any time.

Instagram

Facebook rolled out some updates to the Messenger application programming interface (API) that support messaging on Instagram. Now, business owners can integrate chatbots with Instagram messaging, improving customer communications even further. The Messenger API allows for omnichannel messaging platform management, whereby businesses can manage messages coming in from their stories, shops, and direct profile messages too, with different workflow tools.

For now, the new Messenger API is still in the beta stage and only a limited number of developer partners (including ManyChat) have access to its features. Businesses can sign up on the waitlist if they are interested in utilizing the features following the post-beta launch.

Voice

Chatbots can be used on voice channels to provide users with an optimal experience, which is precisely what software like Google Assistant, Apple’s Siri, Microsoft’s Cortana, and Amazon’s Alexa does. These sophisticated software use NLP technology to understand user queries and simulate an engaging conversational interface.

What are chatbots used for?

Chatbots can be used to implement a rigorous marketing campaign, drive your eCommerce sales, engage customers, and more.

eCommerce

Chatbots are a great way for eCommerce businesses to increase sales or provide real-time customer service. With a chatbot, you can automatically recommend products, answer customer questions, recover abandoned carts, and more. Think of chatbots as an online concierge for your store. Instead of having humans guide customers and answer questions, a chatbot can do it 24/7.

Marketing

When it comes to marketing, chatbots not only offer businesses a way to invite new customers to check out your service or product but keeps them engaged as well. While something like a well-developed video improves customer engagement, this only lasts as long as the video plays. Chatbots, on the other hand, are continuously gathering data and analytics and learning about how to better interact with customers.

By learning your customers’ names and gathering information about their preferences, bots can provide customers with a more personalized user experience. Rather than sending out multiple emails for every product and promotion, chatbots can send targeted notifications to specific customers about products they like.

Customer support

Chatbots have revolutionized customer support options, and allow businesses to communicate with customers over phone calls, messages, and mobile apps. Some banks, for example, provide a significant amount of customer support through call-based chatbots, wherein users can authenticate themselves and learn about account details such as their current balance and transaction history.

Live chat

Chatbots can be integrated into your brand’s live chat support to quickly and efficiently resolve customer problems. While more sophisticated bots are designed to analyze user intent and respond accordingly, some brands use simpler chatbot technology with the help of fixed message templates, which are also quite effective.

This way, users can contact the chatbot and select the nature of their problem from a predetermined list. The chatbot will continue to provide the user more and more response options until the details of the issue, request, or question are nailed down. Now, thanks to automation, the software provides a specific response to the user’s query. If the chatbot is unable to resolve the problem, then human support is alerted and an agent takes over the live chat operations.

Lead generation

Another area where chatbots shine is in nurturing leads for your business, which is an otherwise time-consuming and resource-taxing process. Bots can gather large amounts of data effortlessly which can be used to generate personalized messages and notifications for guiding your customers through the buyer’s journey.

In the initial stages, split testing (or A/B testing) the messages on your brand’s website can be useful for determining what works and what doesn’t so your organization can determine the best way to personalize your customer’s experience, which makes for a better lead-nurturing campaign.

Four chatbot examples

The right chatbot can bring your business great success. But don’t just take our word for it. Here are examples of chatbots from leading businesses!

hideAWAY

facebook messenger broadcast

hideAWAY is an Australia-based eCommerce brand that specializes in producing beautiful, handcrafted artisan soaps and other body products. As hideAWAY grew internationally, the brand looked for a means of streamlining customer support in order to increase customer engagement and enhance customer experience.

hideAWAY came up with a marketing campaign plan to drive sales by implementing a rewards-based system for their active customers. The brand used ManyChat’s Growth Tools and Coupon Campaigns for Shopify to develop and implement a plan that helped customers earn rewards through weekly giveaways in exchange for providing feedback and taking a quiz.

With ManyChat, hideAWAY successfully ran a three-phase chat marketing campaign across Instagram and Facebook, earning the brand an additional $100,000 in just one month.

The Crawfish Hole

facebook messenger ad

Restaurant chatbots are a great way to grow your business. When COVID-19 hit the United States, The Crawfish Hole was one of the many dining venues that closed its doors to the public. Realizing that the company would have to revamp its ordering process to stay afloat, The Crawfish Hole team turned to ManyChat to implement an effective marketing campaign for curbside pickup. 

The eatery advertised buy-one-get-one-free and bulk order rewards through a social media ad campaign. Once a potential customer clicked on the ad a ManyChat chatbot guided them into Messenger where they were shown the menu and the restaurant’s contact information. After placing an order, customers were given location details as well as the buy-one-get-one-free voucher, which was redeemable upon pickup. 

The initiative proved to be exceptionally rewarding with The Crawfish Hole driving more sales than when they were open for regular dining, and making $23,000 in just one month.

The Dream Workshop

facebook messenger broadcast
flow

The Dream Workshop — a brick-and-mortar mattress store based in Costa Rica — used ManyChat to drive Facebook ad traffic to a bot flow and landing page. They used a combination of flows and live chat to guide customers to their eCommerce store where customers were shown products and deals. This tactic helped drive over $43,800 in sales during the shutdown and create a successful eCommerce marketplace for the business. 

Offset Solar

facebook messenger bot

Offset Solar is one of the leaders in home solar installation across the United States. Although they were seeing new sales meetings booked through a contact form on their homepage, they wanted to test how Chat Marketing could help speed up their sales cycle.

Together, the team at Alice Digital Design and Offset Solar decided to use a ManyChat bot to start a conversation with site visitors and help book more meetings. Within six months, the company was able to close over $1.2 million in sales by funneling website leads through ManyChat.

Tracking and improving chatbot performance

Developing is only the first step, as businesses often need to continually track the chatbot’s performance and find new ways to improve it.

Revenue

When it comes to tracking revenue, it’s important to focus on marketing-oriented metrics such as the conversion rate for user-chatbot interactions, cart abandonment rate, and goal completion rate. These metrics offer insight into how well your chatbot is driving sales. Goal completion rate, in particular, is important because it reveals how successful the bot’s calls to action (CTAs) have been.

Customer questions answered

When a customer asks your chatbot a question, the AI software attempts to understand the buyer’s intent so that it can respond to the query with relevant information. The chatbot may answer with pre-programmed responses, or alert a human agent to take over if the task is too complex. Some chatbots, like Google Assistant, are synced with search engines and can pull up search results if they are unsure about how to answer a question.

Add common questions

Adding common questions to your chatbot software, with accompanying predetermined answers, can help your bot perform more efficiently. S when customers have a question that has already been asked, your chatbot can provide an automated response almost instantly.

Chatbot FAQs

People have many questions about chatbots, here are some of the most common ones.

Are chatbots only for Messenger from Facebook?

No! Chatbots can be used for any communication channel. Chatbots can be built for Messenger, Instagram, SMS, and more.

Is Siri a chatbot?

Siri is technically a chatbot designed to provide iPhone users with continual support and improving their user experience. Some people differentiate virtual assistants and chatbots by identifying the former as user-focused and the latter as server/business orientated. Under these definitions, Siri is considered to be a virtual assistant rather than a chatbot.

How much does it cost to build a chatbot?

Chatbots can start at $10 a month and go up to potentially thousands of dollars every month. It all depends on your needs and whether you chose to build it yourself or use a chatbot platform.

Build a chatbot in minutes with ManyChat

In the modern world, having a reliable chatbot is essential for any serious business or service. Not only can the artificial intelligence software improve your customers’ experience with minimal human interaction, but chatbots can also be used to execute effective marketing campaigns, drive sales, collect consumer data, and more.

With ManyChat, you can design custom SMS and Messenger chatbots in minutes.