What are chatbots? Learn its Benefits, Types & How it works?

“Alexa! How is the weather today?” “Siri, what is the time now?”

What are they?

Siri, Alexa, and Microsoft’s Cortana.

They are bots.

And they use Artificial Intelligence and voice recognition to interact with us more and improve our human experience. If these kinds of bots are used on your company websites to interact with the leads, they are chatbots.

Soon, artificial intelligence, virtual reality, and augmented reality will take over the world, and they are already in their infant stage. Getting into the game of machine learning and chatbot technology earlier will significantly benefit your business. You can stay ahead of your competitors in engaging the customers and providing them top-notch customer service. A report predicts that 95% of customers’ questions will be answered by a chatbot by 2025.

Also, around 55% of customers prefer a messaging bot before communicating with a human to discuss further. According to a report, companies see an increase in the conversion rate when they use high-end technologies like customer service bots on their websites.

What is a Chatbot?

A chatbot is software that employs artificial intelligence and Natural Language Processing (NLP) to simulate a human conversation with the prospects who visit your website for information about the product or recommendations. This alternate solution came into existence because humans were tired of waiting hours to resolve their problems.

The use cases of chatbots do not end there; there are much more benefits like serving as virtual assistants, virtual nurses, digital guides, etc.

Besides, the chatbots are included in the sales funnel and come in the initial process to seamlessly take the prospects to the next level of interaction.

Gradually, businesses are embracing this technology, and soon, they will be the future of customer support and various other services.

Henceforth, we need not try harder to understand machines; instead, we have come to an age where machines are trying and will try to understand us more and provide the lifestyle we desire.

Four types of chatbots

Here are the four types of chatbots you typically see in the market.

Rule-based Chatbots

These chatbots are also known as decision-tree chatbots or menu/button-based chatbots as they follow a set of predefined rules and provide solutions to the customers who ask questions within the knowledge database. For further assistance, the prospects will be led to the support person. The customers will also be given a few options to select a criterion they would like to know more about.

Around 80% of customer support questions are solved by these rule-based bots, and these bots can be implemented in very little time and with minimal effort. Besides, not all businesses need advanced chatbots that leverage ML to answer questions. Most companies, where ordering and delivery are the vital actions that customers perform on a site, can utilize the help of rule-based chatbots. Choosing a suitable chatbot can help you reduce a lot of training hours and also find quick solutions for the challenges confronted by your business.

Keyword-Based Chatbots or Intelligent Chatbots

Keyword-based chatbots, just like other chatbots, use a chat interface to communicate with the users. These chatbots analyze the words in the text of the user and provide relevant information. For instance, if you visit a SaaS product site and type “the features of the product” in the chat interface, the chatbot will consider ‘features’ as the keyword if it is programmed that way and trigger a reply based on the keyword.

Hybrid Chatbots

Hybrid chatbots use both decision trees and keywords to provide the right solutions to the users. The users can decide whether they need the chatbot to guide them or if they want to ask questions directly to the bots. These chatbots are highly convenient as the users can select another method if one proves to be ineffective for a particular question.

AI-Based Chatbots

Tech experts strongly believe that AI is the present and will be the future. These contextual chatbots are more interactive with the users as they leverage the power of machine learning, Natural Language Processing (NLP), and Artificial Intelligence to formulate a response by understanding the intent of the question. The more training, the better the performance as the AI-powered chatbots store the previous conversations and learn from them to provide a better-personalized experience to the users.

Benefits of Chatbots

1. Works 24*7. It is always available at your customer’s service.
2. Enhances the customers’ experience and engagement.
3. Takes your leads to the next step seamlessly.
4. Answers the questions immediately.
5. Reduces your operational costs
6. Increases your workforce’s productivity and efficiency.
7. You can focus on what’s important.
8. Generates qualified leads and also increases the conversion rate

How do Chatbots Work?

The chatbots classify the input text based on three classification methods. They are,

1. Pattern-matches
2. Algorithms
3. Artificial Neural Networks

Pattern-Matches

The chatbots use patterns to respond to the users’ questions. If the bots cannot find the question in their knowledge database, the user will be connected to a human operator. When a user types a question, the chatbots analyze the question to find keywords and classify the question depending on whether the keyword is available or not. It is strictly a pattern-based approach, and the chatbots cannot learn and improve from the previous data. Pattern-matching chatbots use the standard language, Artificial Intelligence Markup Language (AIML).

Here is an example of how pattern matches work.

This is the basic pattern.

WHO IS BARACK OBAMA

Barack Obama served as the 44th President of the United States of America.

WHO IS APJ ABDUL KALAM

APJ Abdul Kalam served as the 11th President of India.

DO YOU KNOW WHO * IS

WHO IS *

As a result, a response is triggered when a user asks a question that is in the predefined patterns.

User: Who is Barack Obama?

A chatbot (within seconds): Barack Obama served as the 44th President of the United States of America.

Algorithms

This classification method is also known as the reduction approach. A pattern must be specified for every word in the input to trigger a response. Each word in the text will be categorized into a class, and the word will be assigned a score depending on the number of occurrences. The word with the highest score will be considered as the input and matched with a pattern. Then, the response will be made based on the commonality. A classic algorithm for text classification is Multinomial Naïve Bayes. The equation used to reduce the classifier and make it a structured, manageable problem is as follows.

For example,

If the input is, “How are you doing today?”

Term: “How” (Class: Greeting (1))

“you” (No matches)

“doing” (Greeting (1))

“Today” (greeting (1), weather)

Classification: Greeting (score=3)

Thus, the input is taken as a greeting, and the chatbots will respond based on how the word with the highest score matches the pattern.