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Jun 13, 2022
5 minutes read

What Is an AI Chatbot?

Chatbots have grown in popularity as more industries discover the benefits of automation in customer service. But what is an AI chatbot? This blog will go over how AI chatbots work and why you would choose an AI chatbot over other types of chatbots.

Josh Intagliata
Josh Intagliata,
Product Marketing Manager

AI chatbots use artificial intelligence to go beyond the basic pre-programmed responses of a regular chatbot. Most chatbots have pre-written responses based on common customer inquiries, like questions about returns and exchanges or requests for product recommendations. 

Although these types of chatbots are simple and fast to deploy, their uses are typically limited to providing answers from a knowledge base or redirecting customers to a live customer service representative.

In comparison, AI chatbots can understand the humans they interact with and respond accordingly. Furthermore, thanks to machine learning, AI chatbots get smarter over time, analyzing every conversation to provide a conversational AI experience that feels just like talking to a human.

How Do AI Chatbots Work?

Using natural language processing (NLP), natural language understanding (NLU), and machine learning (ML), AI chatbots can independently have conversations with human users. With advanced algorithms that combine language rules with context, an AI chatbot can understand a conversation and deliver responses that sound like natural human language.

With every conversation, an AI chatbot’s understanding of human language grows. Its algorithms recognize the contexts and cues in each interaction, improving its conversational skills over time. When applying these algorithms to a conversation, the AI chatbot can identify the user’s intent, even if the message doesn’t match a pre-written script or contains typos or other errors.

What Makes AI Chatbots Different From Other Chatbots?

Although chatbots have been around for a long time, AI chatbots are the next generation of this software. Some of the more popular types of chatbots include:

  • Menu- or Button-based chatbots
  • Rule-based chatbots
  • Keyword recognition-based chatbots
  • Voice-based chatbots

Menu- or Button-Based Chatbots 

These chatbots provide pre-programmed user response options and respond according to a decision tree hierarchy. These chatbots are commonly used to answer frequently asked questions, pulling their responses from an approved knowledge base or directing more complicated inquiries to live agents.

Rule-Based Chatbots 

Rule-based chatbots use pre-written scripts based on common questions and follow an if/then logic. Once you define the language conditions of your chatbot, it can respond to incoming queries based on the words in the message, their order, synonyms, related terms, and more. 

Although rule-based chatbots have a much faster response time than their menu-based chatbots, they require specific programming that takes a long time to develop.

Keyword Recognition-Based Chatbots 

Like AI chatbots, keyword recognition-based chatbots use natural language processing and predefined keywords to determine the most appropriate response to a user’s inquiry. 

Many organizations use a combination of menu-based and keyword recognition-based chatbots so that users can pick options from a menu if the keyword recognition provides unsatisfactory results.

Voice-Based Chatbots

Also called voice bots, voice-based chatbots have become a popular alternative to the more standard text-based chatbots. Voice bots work similarly to other basic chatbots, operating based on pre-written scripts, but customers can simply speak instead of type during their conversation. 

A voice-based chatbot makes it easier for customers to ask questions and get responses, further streamlining the customer experience.

Benefits of Using AI Chatbots

An AI chatbot is a powerful tool that can help your business understand your customers better, driving sales and improving the customer experience. Here are six benefits of using an AI chatbot.

1. 24/7 Customer Support

The explosion of e-commerce means that customers can shop at any time of day. But if a customer messages your business in the middle of the night and receives no response, they will likely move on to a competing brand.

AI technology enables 24/7 customer support so your customers receive the answers they need, even outside of regular business hours. Faster response times result in higher customer satisfaction, and excellent customer service is the key to developing a loyal customer base.

2. Reduced Costs

Responding to customer inquiries is a crucial but time-consuming process, but AI chatbots can save both time and money for your business.

You can assign these inquiries to an AI chatbot rather than having human customer service representatives respond to repetitive, frequently asked questions. If the chatbot isn’t able to resolve an issue, it can redirect the user to a human agent.

3. Elevated Customer Engagement

By adding an AI chatbot to your customer service team, you can take customer engagement to the next level. Because AI chatbots are constantly learning from user data, they can improve their answers to be more relevant and interactive with every conversation.

4. Nurtured Leads

You can use AI chatbots to generate leads by guiding site visitors to browse specific products or services or fill out a sales inquiry. An AI chatbot can also nurture leads to support your sales team, providing personalized recommendations or sharing special discounts to drive your sales conversion rate.

5. Continuous Learning

One of the unique benefits of an AI chatbot is its ability to learn from every conversation. In addition to improving its natural language processing to understand the intent behind users’ messages, machine learning enables AI chatbots to understand more about your customers. 

This type of data is extremely valuable for brands, leveraging that information to anticipate customers’ needs and provide an excellent customer experience.

6. Improved Customer Experience

AI chatbots constantly gather data about your customers so they can provide product recommendations based on their previous behavior. 

Nearly 50% of consumers reported purchasing a product they didn’t initially plan to buy after receiving a personalized product recommendation from an AI chatbot.

Upgrade Your Customer Service With CM.com’s Chatbots

AI chatbots offer so much more than automated responses to customer inquiries. By leveraging recent advances in machine learning and natural language processing, AI chatbots can provide powerful insights into your target audiences so you can make data-driven decisions about marketing, product development, and much more.

At CM.com, our chatbot solutions empower your business to provide a unique automated experience that increases revenue and improves customer satisfaction. With the option to choose between a Scripted Chatbot and our powerful Conversational AI Cloud, you’re sure to find an automation solution that meets your team’s customer service needs.

Contact us today to learn more about how chatbots can help you provide the ultimate conversational commerce experience.

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Josh Intagliata
Josh Intagliata,
Product Marketing Manager
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A marketing technology expert, passionate about driving business growth through strategic product marketing. With expertise in digital product marketing, and go-to-market strategy, he boasts a track record of success in driving product adoption and revenue growth.

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