Unveiling the Power of Chatbot: Definition, Types, Pros, Cons, and Examples

A chatbot is a piece of software that mimics human dialogue through text chats, voice commands, or both. Chatbot, also referred to as a chatterbot, can integrate and be used with any major messaging platform.The terms “talkbot,” “bot,” “IM bot,” “interactive agent,” and “artificial conversation entity” are all synonyms for “chatbot.” 

Customers can greatly benefit from a chatbot as it utilises automated algorithms to communicate with users in a human-like manner, all at minimal or no expense. Important examples include chatbots used by companies like Facebook Messenger or virtual assistants like Alexa from Amazon. It tends to operate in one of two ways— either via machine learning or with set guidelines.

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Additionally, technology continues to evolve, more companies are switching from using traditional platforms to doing business online. Businesses are bringing convenience through technology by integrating AI techniques on their digital platforms. Chatbots are one AI method whose use and application are expanding. Virtual assistants like Amazon’s Alexa and Google Assistant, as well as messaging services like WeChat and Facebook Messenger, are some examples. 

Types of Chatbots

Chatbot functions through two main methods: Set Guidelines and using Machine Learning (ML).

Set Guidelines Chatbot 

A chatbot’s conversational options are limited by the rules it must adhere to. It is only as intelligent as its computer code and can only react to a limited amount of questions and words. A limited bot is one that only does certain tasks, such as an automated banking bot that queries the caller to determine their goals. The bot  would issue a command along the lines of “Please tell me what I can do for you by saying account balances, account transfer, or bill payment.” Moreover, the bot would repeat the command or transfer the caller to a human assistant if the consumer replied with “credit card balance,” as the bot would not grasp the request. With new AI developments over time, chatbots have developed and are now much more receptive to human interaction than chatbots that follow predefined rules. 

Machine Learning Chatbot 

The developers model an artificial neural network in a chatbot, which uses machine learning, after the neural cells in the human brain. They design the bot to learn for itself when it encounters new conversations and vocabulary. As a matter of fact, chatbot can respond to more questions and respond to them more accurately as it receives fresh voice or textual dialogues. 

A machine learning chatbot from Meta, the parent company of Facebook, provides a platform for businesses to communicate with their customers via the Messenger app. Users may order a trip from Uber, purchase shoes from Spring, and converse with The New York Times about current events using the Messenger bot.  

However, Chatbots are used in various industries, each with different goals in mind. They are widely employed across different sectors. Retail bots that pick and order groceries are available. Weather bots that provide day- or week-ahead weather forecasts are also available. Finally, there are kind bots who just converse with folks in need of a buddy.

The fintech industry utilizes chatbots to simplify customer requests and applications for financial services. In 2016, Thinking Capital, a Montreal-based small business loan, used a virtual assistant to offer customers round-the-clock support via Facebook Messenger. In addition, simply responding to the bot’s main qualification questions will determine whether a small business is qualified to obtain up to $300,000 in finance from the corporation. 

Pros and Cons of Chatbot

Chatbots make it simple to offer client support and service around the clock, every day of the week. In addition to freeing up phone lines, they are also significantly less expensive in the long run than hiring staff to provide support. Chatbots are getting better at comprehending client needs and delivering the assistance they require thanks to artificial intelligence and natural language processing. Chatbots are popular with businesses because they enable data collection on consumer enquiries, response times, satisfaction, and other factors. 

However, chatbots still have some limitations. They might not fully understand a customer’s input, even with natural language processing, and might give illogical answers. Furthermore, chatbots often have limitations in the types of questions they can answer, which can be frustrating as they provide generic responses without empathy or emotion. Additionally, building and maintaining chatbots can be expensive, especially when frequent modifications and updates are required. This can lead to customer dissatisfaction as they prefer speaking to a live person.

Pros 

• They are cost-effective 
• Available round the clock 
• They can boost salary and marketing efforts. 

Cons 

• They may struggle to understand user queries. 
• Lack of personalisation and emotion. 
• Can be costly to set up and maintain. 

Examples of Chatbots

On business websites, e-commerce sites and also other customer-facing websites online (through web or app), chatbots are now commonplace. Also, These can assist with customer assistance by providing information on how to return or exchange an item, how to get a refund, and other related topics.

Moreover, chatbots have been employed to aid in public policy and educate citizens in response to specific inquiries. For example, governments and healthcare organizations developed health chatbots during the COVID-19 pandemic.

Furthermore, These tools can ask and respond to queries, generate reports, fill out forms, build health records, and track usage histories. However, using health chatbots is fraught with difficulties, both in terms of the technical (i.e., design and usability) and social (i.e., consumer acceptability) systems. 

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Conclusion 

In conclusion, chatbots have emerged as powerful tools in various industries, revolutionising customer service, enhancing user experiences, and streamlining business operations. Moreover, with their ability to automate tasks, provide instant responses, and offer personalised interactions, a chatbot has proven to be an invaluable asset. However, it’s important to consider the limitations and challenges they may present, such as potential privacy concerns and the need for continuous improvement.

Despite these drawbacks, the potential of a chatbot is undeniable, and its future holds even more exciting possibilities. Also, by embracing this technology, businesses can unlock new opportunities and create more efficient and engaging experiences for their customers. 

Recommended Reads

• Artificial Intelligence 101: All You Need To Know As A Beginner.
• Deep Learning Vs Machine Learning.
• Top 25 AI Companies of 2023.

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