Top 22 benefits of chatbots for businesses and customers

According to the Zendesk Customer Experience Trends Report 2023, 72 percent of business leaders said expanding AI and chatbots across the customer experience is their priority over the next 12 months. Bots and chatbots have been around for decades—but with the recent advancements in AI, the benefits of AI chatbots have become more apparent to businesses and customers alike.

Now, let’s examine the various chatbot benefits for businesses, employees, and consumers.

Table of contents

• Benefits of chatbots for customers
• Chatbot benefits for businesses
• Disadvantages of AI chatbots

Benefits of chatbots for customers

Chatbots are often the first support interaction customers have with a business, greeting and engaging with them in a friendly, convenient way. Until recently, there were two main types of bots:

• Rule-based, or decision-tree chatbots, are easy to set up and provide a high level of customer service, responding to questions with predetermined answers.

• AI chatbots use natural language processing (NLP) or machine learning to understand customer requests and improve with each interaction.

Businesses still use rule-based chatbots—for now. AI has become more accessible than ever, making AI chatbots the industry standard. Both types of chatbots, however, can help businesses provide great support interactions. Here are the benefits of chatbots for customers.

1. Provide fast, 24/7 customer service

Customers want fast and easy service, even during peak hours. When bots step in to handle the first interaction, they eliminate wait times with instant support. Because chatbots never sleep, they can provide global, 24/7 support at the most convenient time for the customer, even when agents are offline.

Photobucket, a media hosting service, uses chatbots to provide 24/7 support to international customers who might need help outside of regular business hours. With bots, customers can find information on their own or get answers to FAQs in minutes. Since implementing a chatbot, Photobucket has seen a three percent increase in CSAT and improved first resolution time by 17 percent.

2. Offer more personalized experiences

Customers understand that bots collect personal data but want them to use it to create a better customer experience. According to our CX Trends Report, 59 percent of consumers who interact with chatbots expect their data will be used to personalize future interactions with a brand.

When AI-powered chatbots are integrated with your other business systems, like your customer service tool, marketing automation software, or CRM, they can use relevant information to deliver personalized experiences. Here are a few examples:

• Adapting messaging so it corresponds with the phase of their customer journey

• Recommending relevant products or services based on their preferences, behaviors, or demographics

• Presenting information about new products or services

• Asking if customers have questions about items in their shopping cart

• Providing the status of an order without asking for order information

3. Deliver multilingual support

With online shopping, customers are no longer limited to shopping at local brick-and-mortar businesses. Customers can buy products from anywhere around the globe, so breaking down communication barriers is crucial for delivering a great customer experience. Chatbots can offer multilingual support to customers who speak different languages.

At the start of a conversation, chatbots can ask for the customer’s preferred language or use AI to determine the language based on customer inputs. Multilingual bots can communicate in multiple languages through voice, text, or chat. You can also use AI with multilingual chatbots to answer general questions and perform simple tasks in a customer’s preferred language.

4. Ensure more consistent support

Customers who frequently interact with you rarely talk to the same support agent twice. Because the level of expertise and training varies from agent to agent, customers may experience inconsistencies when connecting with support teams. Although most businesses continuously work to improve their customer service training, chatbots function on predetermined frameworks and pull answers from a single source of truth every time—resulting in consistent customer service experiences.

Chatbots are also programmed to provide level-headed guidance, no matter how long the conversation lasts and how the customer acts. If a customer is rude or dismissive, chatbots can deliver an empathetic CX by recognizing language indicative of frustration or anger and responding appropriately.

5. Offer convenient self-service options

In our CX Trends Report, 37 percent of agents surveyed said that customers become visibly frustrated or stressed when they can’t complete simple tasks on their own. Chatbots can help mitigate that by providing self-service options so customers can take care of basic issues independently or quickly find information when it’s most convenient.

Zendesk bots, for example, can direct customers to community forums, FAQ pages, or help center articles. They can also pull information from your existing knowledge base to answer common customer questions. Because chatbots learn from every interaction they provide better self-service options over time.

6. Provide proactive customer service

Businesses can use a chatbot to help them provide proactive support and suggestions to customers. By monitoring user activity on their websites, businesses can use chatbots to proactively engage with customers to answer common questions and help with potential issues on that page.

For example, an e-commerce company might use a chatbot to greet a returning website visitor and notify them about a low stock on merchandise in their cart. Or, a financial services company could use a bot to get ahead of common questions on applying for a loan with tailored information to help them complete their applications.

Chatbots can also understand when a handoff is appropriate and proactively ask customers if they’d like to connect with a support agent or sales rep to help answer any questions holding up a purchase.

7. Deliver omnichannel support

Customers turn to an array of channels—phone, email, social media, and messaging apps like WhatsApp Business and Messenger—to connect with brands. They expect conversations to move seamlessly across platforms so they can continue discussions right where they left off, regardless of the channel or device they’re using.

But many businesses aren’t offering this type of experience. To stand out from the competition, you can use bots to answer common questions that come in through email, your website, Slack, and your various messaging apps. Integrate your AI chatbots with the rest of your tech stack to connect conversations and deliver a smooth, consistent experience. Your customers will get the responses they seek, in a shorter time, on their preferred channel.

Chatbot benefits for businesses

How do chatbots help businesses? Interactions between chatbots and consumers are becoming a standard business practice that helps create a better customer experience. But it’s not simply a tool to benefit the customer—it also boosts the agent experience. Here are a few ways businesses benefit from implementing chatbots.

8. Improve service with every interaction

Here’s an overview of how chatbots use AI to provide better support over time:

• Tracking: AI customer service bots track how people respond to every answer they provide.

• Collecting: As chatbots gather customer data, they’ll continuously analyze it to provide more accurate and personalized responses.

• Learning: With the knowledge your chatbot gains, it will learn which response is best in each type of situation.

• Refining: The chatbot will improve at determining which questions it can answer and which are best to pass to an agent.

Chatbots are getting better at gauging the sentiment behind the words people use. They can pick up on nuances in language to detect and understand customer emotions and provide appropriate customer care based on those insights.

9. Collect customer feedback

You can program chatbots to ask for customer feedback at the end of an interaction. The bot can send a single survey question in the chat to ask how the support interaction went. The customer can select a rating from one to five, with an option to include a written response for additional comments.

To encourage feedback, chatbots can be programmed to offer incentives—like discount codes or special offers—in exchange for survey participation. Companies can also search and analyze chatbot conversation logs to identify problems, frequently asked questions, and popular products and features.

10. Reduce customer requests

Chatbots intercept and deflect potential tickets, easing agents’ workloads. They handle repetitive tasks, respond to general questions, and offer self-service options, helping customers find the answers they need. This allows agents to focus their expertise on complex issues or requests that require a human touch.

These requests can vary based on a business’s product, service, or industry, but commonly include:

• Providing order status and tracking information

• Offering product details

• Assisting with returns or refunds

• Balancing accounts and identifying payment issues

• Collecting feedback

• Offering self-service

11. Detect customer intent for added context

Advanced bots powered with AI can understand intent and customer sentiment based on phrasing and language. In reference to AI, these terms mean:

Customer intent: AI can detect the customer’s needs, like what their question is about.
Customer sentiment: AI can detect if the message is positive, negative, or neutral.

AI can pass these details to the agent, giving them additional context that helps them determine how to handle an interaction after handoff. The agent can also use these customer insights to personalize messaging and avoid future escalations.

12. Boost customer engagement

According to our CX Trends Report, 71 percent of customers believe AI and chatbots help them get faster replies. But getting quick service is just the tip of the iceberg. Chatbots can be an important tool to increase customer engagement and interactions in the following ways:

• Sending proactive messages about order statuses, tracking numbers, or payment issues

• Collecting customer feedback after an interaction or resolved issue

• Engaging in real time or holding asynchronous conversations across channels, meeting the customer where they are

• Sending reminders and appointment confirmations

• Customizing messaging to match your brand’s voice and tone

Chatbots can provide a deep level of personalization, prompting customers to engage with products or services that may interest them based on their behaviors and preferences. They also use rich messaging types—like carousels, forms, emojis and gifs, images, and embedded apps—to enhance customer interactions and make customer self-service more helpful.

13. Streamline service with routing and triage

Chatbots can deflect simple tasks and customer queries, but sometimes a human agent should be involved. With AI, bots can collect important information at the beginning of an interaction—using routing and intelligence to get the conversation to the best agent based on skill, availability, capacity, and issue priority. These seamless handoffs from chatbots to agents can help streamline service, save time, and enhance the customer experience.

14. Boost sales

Use chatbots to do manual, time-consuming sales tasks. They can collect information and qualify leads, schedule product demos, and engage website visitors.

Chatbots can also nurture prospects and potential customers through your sales funnel by proactively communicating with them, answering questions, and educating them about your product or service. As a result, they can help:

• Decrease bounce rate

• Boost conversion

• Reduce abandoned shopping carts

• Automate cross-sell and upsell activities

Given all the real-time guidance they offer, chatbots can be the deciding factor in a customer’s purchase.

15. Increase lead generation

Natural conversation can help businesses generate leads. AI-powered chatbots can use customer data, machine learning (ML), and natural language processing (NLP) to recognize voice and text inputs to create a conversational flow, otherwise known as conversational AI.

Rather than directing a customer to a form, AI bots can mimic human interactions and engage in a natural conversation to answer questions while capturing customer data. The information that chatbots can collect includes:

• Pages a customer visited

• Abandoned shopping carts

• Languages

• Geolocation

• Preferences

Chatbots can then send the data collected during these interactions to marketing teams. These teams can gather consumer insights and identify customer trends and behaviors to use in targeted marketing campaigns.

16. Enhance conversational commerce and marketing

Chatbots deployed across channels can use conversational commerce to influence the customer wherever they are—at scale. That means businesses, like ecommerce sites, use conversational technology like AI and bots, to boost the shopping experience.

For example, online retailers can deploy bots to act as virtual assistants, answering product questions on demand or offering proactive support about products in a customer’s shopping cart to nudge them to make a purchase.

17. Streamline the checkout process for higher conversions

Proactive outbound messages from chatbots informing customers of order updates or personalized offers can create upsell opportunities. Chatbots can offer discounts and coupons or send reminders to nudge the customer to complete a purchase, preventing abandoned shopping carts. They can also assist customers who may have additional questions about a product, have issues with shipping costs, or not fully understand the checkout process.

18. Help with A/B testing

With chatbots, businesses can try out different kinds of messaging to see what works best. With some chatbot platforms, you can set up A/B tests that show consumers different variations of the conversational experience. Half of the customers might interact with a chatbot that asks them how their day is going, while the other half might interact with a bot that asks them if they need help. Based on responses, you and your team can determine which variations resonated with customers.

Here are a few metrics worth monitoring when A/B testing AI customer support bot messaging:

• Activation rate: how long it takes for a customer to respond to your chatbot

• Self-service rate: the chatbot’s ability to resolve questions without manual (agent) intervention

• Retention rate: the number of visitors that return to the chatbot within a specific time frame

• Confusion triggers: how frequently chatbots misinterpret customer messages

19. Improve agent training and onboarding

Businesses can also use bots to help new agents onboard and guide them through the training process. Chatbots are always available for questions during onboarding, even when trainers or managers aren’t. To help new agents assist customers in real time, AI can surface relevant help center articles and suggest the best course of action.

Businesses can also deploy chatbots to offer self-service resources for new employees, helping new hires assimilate more easily into your company culture. HR and IT chatbots can help new hires access information about organizational policies and provide answers to common questions.

20. Lower employee churn

Of course, many of the things we’ve already covered contribute to a better employee experience (EX) that can reduce churn, including:

• Simplified workflows

• Automated tasks

• Deflected tickets

• Streamlined onboarding

Bots can also engage with employees by offering feedback opportunities and internal surveys. This allows your business to capture satisfaction ratings and understand employee sentiment. Additionally, it helps you understand where you’re excelling with the employee experience and where you need to make changes.

21. Reduce business costs

In order to thrive, businesses need to keep costs under control while delivering more value. Our CX Trends Report shows that 68 percent of EX professionals believe that artificial intelligence and chatbots will drive cost savings over the coming years.

68 percent of EX professionals believe that artificial intelligence and chatbots will drive cost savings over the coming years.

Though customer service chatbots may require an investment upfront, they can help you save money over time. Chatbots can handle simple tasks, deflect tickets, and intelligently route and triage conversations to the right place quickly. This allows you to serve more customers without having to hire more agents.

Additionally, choosing a no-code, click-to-configure bot builder, like the one offered by Zendesk, lets you start creating chatbot conversations in minutes. Zendesk bots come pre-trained for customer service, saving hours from manual setup. This helps you see a return on your investment faster.

22. Serve more customers at scale

Customer service managers can deploy chatbots to increase productivity and efficiency. Because chatbots can handle simple tasks, they act as additional support agents. They can also address multiple customer questions simultaneously, allowing your service team to help more customers at scale.

At Zendesk, We hear from customers all the time, ‘I don’t want to have to grow proportionally to the number of customer interactions we’re supporting,’ and chatbots are one of the top ways to solve that problem.

If your ticket queue is constantly clogged with simple requests, your operational costs will likely keep rising. Chatbots intercept most of these low-level tasks without involving human agents, leading to better and faster support for more customers.

What are the disadvantages of AI chatbots?

Although AI chatbot advantages heavily outweigh the disadvantages, some consumers still reported certain challenges. According to our CX Trends Report, 54 percent of customers said their biggest frustration with chatbots is the number of questions they have to answer before being transferred to a human agent. That’s why it’s so important to deploy a chatbot that makes bot-to-human handoffs seamless. Still, the trade-off actually nets several benefits, such as:

• Bots still answer FAQs and deflect tickets.

• Bots help triage queries for agents, reducing manual work for your team.

• Bots can collect customer information upfront, making customer service faster and more efficient.

Because AI chatbots continue to learn with every interaction, the service will improve over time. This means a better understanding of customer needs—and fewer questions to get customers where they need to be quickly.

Smart decisions start with AI

AI bots won’t replace customer service agents—they are a tool that enhances the experiences of both businesses and consumers. Customers will always want to know they can talk to another human, especially regarding issues that benefit from a personal touch. But for the simpler questions, chatbots can get customers the answers they need faster than humanly possible.

The benefits of chatbots in customer service are endless. Ready to experience the advantages of chatbots? Start integrating AI chatbot solutions into your customer service solution and see how the technology takes your CX to new heights.