Explanatory 2021: What changes happen due to COVID-19 on Chatbot Market

With the sudden outbreak of the Covid-19 pandemic and the implementation of lockdown in various parts of the world, remote working has been adopted by various businesses. Due to less availability of employees, companies are not being able to effectively address the rising customer queries. Chatbots can aid companies or businesses to connect with their customers without the need for human representatives.

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What is a Chatbot?

In simple terms, a chatbot is an Artificial Intelligence (A.I.)-based software that simulates human conversations, interprets and processes the user’s request, and gives relevant answers instantly. This functionality allows people to interact with digital devices in the same way in which they communicate with a real person. Chatbots interpret and process requests from users and provide prompt, relevant answers in response to those requests.

You probably might have interacted with a chatbot before, whether you know it or not. Here are some of the scenarios in which you could have encountered a chatbot –

• While searching for a product on your system, you might have noticed a small window pop-up on your screen asking if it can assist you.

• While you step out to visit a bookstore and use your Smartphone to book a ride via chat.

• You might have used audio commands to order a pizza from a nearby restaurant and received a reply from a chatbot telling you when your order will be ready and how much it will cost.

Examples of chatbots -
Chatbots process the user’s data and deliver quick responses to all types of users’ requests with a set of pre-defined rules. Here are some of the examples of chatbots –

• Weather chatbot – It will give you accurate answers for your weather-related queries and you can plan your day accordingly.

• Grocery chatbot – It will help you pick and order groceries for the week.

• News chatbot – It will send you a notification whenever something interesting happens.

• Personal finance chatbot – It will help you in managing your money effectively.

• A friendly chatbot – In China, there is a chatbot called Xiaoice, which is built by Microsoft. Nearly 20 million people talk to it.

What are the Different Types of Chatbots?
Chatbots are effective in businesses as well as consumer markets. There are two main types of chatbots. They are as follows –

1. Rule-based chatbots-
While having a conversation with the user, these chatbots follow a predefined path. At every step during the conversation, the user is requested to select an option from some definite options to determine the next step in the conversation.

Key attributes-
• Rule-based chatbots are ideal for customer support functions, as here the interactions between the user and the chatbot are highly structured.
• These bots can be used for getting an answer for common queries such as inquiries about the distance between your location and the destination or the delivery status of your order, etc.

2. Conversation-based chatbots -
Conversation-based chatbots are also known as digital assistants. These virtual chatbots converse with the users in the same way humans communicate with each other in their day-to-day situations.

Key attributes -
• Conversational chatbots gain an understanding of user behavior using predictive intelligence and provide more personalized conversations with the help of sentiment analysis.

Why were Chatbots Created?
Chatbots enable companies or businesses to connect with their customers without the need for human representatives. For example, many of the issues faced by the customers are easily answered with the help of FAQs and troubleshooting guides. Moreover, if some issue faced by the customer becomes too complex for the chatbot to resolve, it can forward that issue to a human customer representative. Chatbots have become popular among businesses as they save their time and money.

How have Chatbots Evolved?
The original chatbot was known as the phone tree. Although it was helpful, it led the customers through a frustrating path in which they had to select one option from another to make their way through an automated customer service model.
With advancements in technology and the use of Artificial Intelligence, Machine Learning, and Natural Language Processing, the chatbots have evolved into a model in which, through pop-ups the user can have live and onscreen chats.

The rising adoption of advanced chatbots by many businesses may flourish the global market for chatbot in the upcoming years. A report by Research Dive states that the global chatbot market is estimated to increase at a CAGR of 28.7% and garner a revenue of $19,570 million by 2027. Moreover, the outbreak of COVID-19 pandemic has made a positive impact of the chatbot industry, mainly because of the growing adoption of this technology in various sectors such as healthcare, banking & insurance, and retail for responding queries of customers and other information amidst the crisis period.

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Why are Chatbots Important for your Business?

Along with offering convenience and additional services for customers, chatbots help businesses by being cost-effective. They boost the operational efficiency and allow businesses to easily resolve the issues and queries of the customers, without the need for human interaction.

According to Forbes, 80% of businesses intend to start using a chatbot by 2020. Nowadays, companies are focusing on improving the user experience. Using a chatbot, you can gain new customers as well as retain the existing ones.

Here are some points which highlight achatbot’s importance for your business.

• They reduce the customer’s waiting time -
As per the Chatbot Report, 21% of customers find chatbots as the easiest way for contacting any business. With the help of chatbots, businesses can make sure that the customers get an immediate response which they are looking for without making them wait for long.

• 24 x 7 availability -
According to Entrepreneur, 68% of the customers tend to switch to your competitor if they think that you don’t care about them. The prime advantage of using a chatbot is that you can offer 24 x 7 services to your customers. Bots are readily available for the customers and provide immediate answers to the common questions asked by them.

• Better customer engagement -
The conversational bots engage the customers round the clock by initiating proactive conversations and offering customized recommendations that enhance the customer experience.

• Bots offer easy scalability -
Chatbots can manage ‘n’ number of customer conversations without any additional customer service cost. They are easily scalable in the peak business hours.

• Chatbots save the customer service costs -
It is estimated that chatbots will help businesses in saving more than $8 billion per year by 2022. Chatbots help the businesses in saving customer service costs, as support agents need additional costs for salary, training, infrastructure, etc.

• Chatbots automate lead qualification and sales -
Businesses can automate their sales funnel with the help of chatbots. By doing this, they can prequalify leads and then direct those to the appropriate team where they can further nurture them. Engaging customers ensures an increase in the number of leads and conversion rates.

• Chatbots reduce the customer bounce rate -
Engaging your customers can significantly reduce the bounce rate and subsequently increase conversions. Chatbots can boost your engagement strategy by keeping your visitors hooked.
In the next few years, every person will have a fully functional personal assistance in the form of chatbot, in their pocket to make our world even more efficient place to live and work.

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This release was published on openPR.