Top 20 Benefits of chatbots (and how to fix the issues)

So, chatbots are just bots that chat, right? What more can there be to them? Well, that might have been true of the all-too-robotic chatbots of the past. However, the top live chat AI chatbots today are customer engagement powerhouses that can completely overhaul how you deliver customer service.

Using technologies like conversational AI, some might sound so human that you don’t even realize you’re not talking to a real person.

Scary, huh? Not if you’re a customer service manager looking to understand and satisfy customer needs better and better, elegantly scale with your customer growth, and optimize your resources. 

In that case, chatbots are a dream come true. Don’t believe us? Then read on to find out why we are all-in on the chatbot hype train:

What is a chatbot?

First things first: a chatbot is software designed to simulate human-like conversations, typically relying on pre-defined rules to generate responses. It’s like an interactive FAQ page that’s useful for handling simple, repetitive queries, and offering instant, 24/7 support.

AI chatbots, however, use technologies like Natural Language Processing (NLP) and Machine Learning (ML) to understand more complex inputs and adapt responses. Conversational AI with generative AI goes a step further, integrating advanced AI to grasp context, sentiment, and intent. It enables natural, dynamic dialogues that evolve based on user interactions. 

Unlike traditional chatbots, conversational AI can interpret and generate nuanced responses and respond to never-before-seen requests, delivering higher-quality customer support with a higher degree of personalization.

20 Benefits of chatbots for your customers

1. Available 24/7

Unlike us, mere mortals, chatbots don’t need to sleep, eat, go home at the end of a shift, or gossip around the water dispenser.

They work around the clock at the same pace without getting tired or burnt out. Besides some very occasional technical issues, they also don’t break down or require frequent maintenance like other equipment.

This allows you to consistently respond to customers’ queries quickly, regardless of office hours or time zones. With 90% of customers viewing immediate responses as extremely important, you can’t afford to make them wait for you to open up shop.

2. Reduced customer waiting times

“Waiting on hold” and “slow response times” together account for over 50% of the top reasons why users are frustrated with the customer support they get.

With chatbots, no customer will ever have to wait a frustratingly long time to initiate a support interaction. As soon as a user lands on your page and clicks the chat widget, the chatbot can immediately start guiding them to a resolution.

It’s not really that important whether it’s the chatbot or a human that will ultimately resolve their issue, what’s important is that you don’t keep them waiting.

3. Cost-saving

For many of the reasons we’ll still cover, chatbots help you optimize resources and reduce costs across your sales, marketing, and customer service operations.

Simply put, chatbots help you reduce overhead and run a lean, mean customer service machine in a number of ways:

• 24/7 availability with no overtime or additional shift costs.
• Handle more inquiries with fewer hires
• Reduces repetitive tasks by automating FAQs
• Less human error = fewer costly mistakes

It’s no surprise that Gartner forecasts conversational AI will help service centers save $80 billion in labor costs.

4. Improved customer satisfaction

Despite some of the negative perceptions we harbor against chatbots, 80% of consumers have had positive experiences with them (Uberall). 

Whether it’s their 24/7 availability, speed, convenience, or a lack of social anxiety, many still prefer chatbots as their first contact point for customer service interactions. And roughly two-thirds report high satisfaction rates with their chatbot interactions (Tidio).

Conversational AI and intelligent routing are already solving the most persistent issues people have with chatbots (e.g., the inability to provide answers or long handovers).

This points to the fact that customer service chatbots are an essential weapon in any support team’s arsenal.

5. Elegantly scales support operations

The #1 or #2 target for most businesses is growth. However, this typically means more customers = more tickets = more staff = more costs.

And, if you don’t act fast enough to meet these growth demands, your customer and agent experiences will suffer.

Chatbots act as a buffer to help you get over both short-term and long-term speed bumps. Because a single chatbot program can handle a potentially limitless number of requests, it smooths over ticket volumes during peak-time surges or times of high growth.

It’s no surprise that most businesses either have or plan to add chatbots to their customer service as part of their long-term strategy.

6. Multi-language support

Most individuals feel far more comfortable engaging with online content in their native language. In online retail, this number is as high as 72.4% (OneSky).

Modern chatbots leverage technologies like generative AI, Natural Language Processing (NLP), Natural Language Understanding (NLU), Large Language Models (LLMs), and Machine Learning (ML) to understand and generate content in multiple languages. 

Some today even go as far as claiming that they support virtually every language across the world. The best part? They can switch between these languages instantly — no routing between agents or support centers.

Chatbots with more sophisticated language understanding can even interpret humor, satire and colloquialisms so that nothing gets lost in translation.

7. Get to know your customers better

Chatbots and conversational AI passively collect and analyze data from customer interactions. Using AI can create handy summaries of customer histories, behaviors, preferences, and pain points.

In turn, this can be used to make more informative decisions about how to cater to individual customers or take advantage of large-scale trends. Not to mention effectively segment customers to make your campaigns even more targeted.

All-in-all, this allows you to take a more proactive and data-driven approach to customer service

8. Supports customer service agents

Chatbots don’t just handle repetitive tasks and peak volumes; they also use AI to significantly ease the workload of real-life customer service agents. 

For example, they can provide quick recaps of past interactions and customer profiles, so agents don’t have to research each contact from scratch. Plus, many tools today use generative and conversational AI to provide live chat writing assistants, helping agents respond faster with higher accuracy.

Chatbots also offer real-time insights, flagging urgent tickets and suggesting next steps based on context. So, they greatly help boost resolution times and productivity without compromising service quality.

9. Drives more conversions

By offering personalized and instantaneous interventions during key moments in the sales journey, chatbots can help boost conversation rates, too.

Experiments show that chatbots are up to 3x better at sale conversions than simple web forms (Dashly). While generative AI is up to 2.5x more effective than FAQs or similar content.

For example, many brands already use chatbots to guide customers to products instead of only using conventional search and filter tools. Being interactive, shoppers find chatbots more engaging, similar to having your own personal shopping assistant.

You can also set up chatbots to optimize checkouts, intervening when customers are about to abandon carts with timely reminders, discounts, or assistance. Not to mention qualifying leads in the first place, so more valuable prospects make it into your sales funnels.

10. Offer more personalized experiences

Although 80% of consumers are more likely to do business with brands that personalize their experience, it’s unrealistic to expect a human agent to be able to do this for every client.

Once again, this is where AI-powered chatbots can save the day. By analyzing key customer data points, like purchase or browsing history, support requests, account information, and demographics, they can craft hyper-personalized experiences that feel authentic on the fly.

This enables chatbots to provide personalized product recommendations, self-service suggestions, and offers, making customers feel understood. With context-aware interactions, chatbots can provide continuity across previous, present, and future conversations.

11. Consistent brand voice and service quality

Consistency is an important part of building rapport, trust, and a safe customer experience. In fact, over two-thirds of brands report that it significantly contributes to their revenue. (Marq)

By configuring rule-based and standardized chatbot workflows, you can ensure a consistent experience across all your support interactions. This allows frequent or longstanding customers to become experts at using your chatbots to get the most out of them.

At the same time, chatbots today can use built-in machine learning and data training to analyze and consistently replicate your brand style. Having conversational AI tools baked into your live chat dashboards even guides your agents to stick to your brand voice.

12. Promote customer self-service

37% of agents report customer dissatisfaction at not being able to complete simple tasks themselves.

While we already know that chatbots can automate a lot of basic interactions, they’re also a great tool to funnel customers to your other self-service options. With a bit of intelligence, chatbots can automatically identify what type of content (FAQs, knowledge base articles, troubleshooting guides, etc.) has the best chance of helping a particular customer.

So, even when the chatbot itself can’t provide the answer, it still encourages users to resolve issues independently.

13. Offer proactive customer support

What if you could detect customer issues and reach out to them before they even contact support?

No, we’re not talking about psychic powers, unfortunately.

However, website or app-integrated chatbots are the next best thing. They can monitor user behaviors, like time on the page, failed searches, or repeated actions that could indicate they are struggling with something.

The chatbot can jump into action by asking them if they need help or offering proactive suggestions. Hopefully, you can offer solutions before the customer’s frustrations boil over and they simply abandon whatever they’re doing. If they need more help or clarification, they can simply continue the chat with the live bot.

14. Seamless omnichannel support

Today’s digital-literate consumers want brands to reach them in ways that they prefer. In fact, they want to interact with brands across 13 different channels, with many of them preferring live chat on each one.

However, this causes a situation where agents spend a significant amount of their time trying to reconcile disconnected communication systems.

Luckily, AI-powered chatbots unify these channels, providing a seamless experience. They maintain context as customers switch between platforms—whether web chat, social media, or messaging apps—ensuring continuity without forcing customers to repeat themselves, making them sit through lengthy handovers.

15. Monitor and improve customer service performance

Chatbots can help automatically track real-time data on mission-critical KPIs, like resolution rates, response times, and the ratio of chatbot resolutions vs. agent escalations. 

By analyzing customer satisfaction metrics, teams can identify areas for optimization or run A/B tests for continuous, rapid service improvement. For example, if escalation rates are high, it may show that you need to adjust your chatbot workflows to cater to new use cases or improve accuracy. 

However, AI and ML’s real superpower is their ability to self-train and learn from real interactions. They’ll only get better with time, being able to respond to a wider range of circumstances more accurately.

16. Collect customer feedback

Chatbots offer the perfect opportunity to gather customer feedback through surveys, CSAT scores, and post-interaction reviews. 

Since they’re already busy interacting with the chatbot, they’re more likely to action these than cold emails that come out of nowhere. Plus, customers are much more willing to engage with them than static web forms.

They can prompt users to rate interactions, provide comments, or complete quick surveys—either after a resolved issue or as part of a follow-up. This helps teams understand their users better and identify service gaps.

17. Leverage sentiment and intent analysis

As service people, we know how important it is for customers to feel “heard,” and not just in a practical sense. Advanced AI chatbots can now analyze customer sentiment and intent nearly as well as human agents.

This allows them to determine whether messages are positive, negative, neutral, or express specific emotions and deliver more empathetic responses that resonate with customers. 

Customers will feel more understood and it can help de-escalate situations. For example, if the chatbot detects frustration, it can switch to a more supportive tone or escalate the conversation to a live agent.

18. Efficient ticket routing and triage

Chatbots streamline ticket routing by analyzing incoming requests and directing them to the appropriate department or agent based on urgency, topic, or customer history. 

Besides that, AI can reduce your agents’ admin load by categorizing tickets, assigning priority levels, and ensuring urgent issues receive immediate attention. From a customer perspective, this will further reduce response times and improve overall satisfaction.

For example, if a chatbot detects a billing issue, it routes the ticket directly to the billing department, bypassing unnecessary steps.

19. Generate more leads

AI-powered chatbots can double as lead-generation tools picking up on cues in customer conversations. Chatbots can capture valuable data points, such as:

• Pages visited: Tracks customer interests and behaviors.
• Abandoned shopping carts: Identifies potential buyers and triggers follow-ups.
• Languages: Tailors responses based on preferred language.
• Geolocation: Offers location-specific promotions.
• Preferences: Gathers insights into user interests.

Chatbots then relay this information to marketing and sales teams, providing insights for targeted campaigns that drive higher conversions.

20. Helps train and onboard new agents

Chatbots can help new agents ease into their role by instantly providing them with contextually relevant resources, guides, and FAQs. Acting as a personal assistant, this helps agents learn on the job without sacrificing the customer’s experience.

One of the more innovative ways AI-powered chatbots are being used in onboarding is to provide interactive simulations of real-world scenarios. 

They can also deliver step-by-step onboarding instructions, answer questions about workflows, and provide refresher training on customer service best practices, such as preferred solutions.

Disadvantages of traditional chatbots you want to know

Despite their many, many benefits, chatbots are still not a cure-all or golden bullet to solve all your customer service challenges. Planning around their potential shortcomings or disadvantages when deploying them is just as important as trying to maximize their utility.

• Limited understanding and lack of empathy: Traditional chatbots struggle to grasp complex queries, emotions, and sarcasm, leading to impersonal responses. For example, when users ask nuanced questions like “Why is my order delayed again?” will only interpret it as “Why is my order delayed?”, potentially leading to a tone deaf response.
• Complex initial setup and configuration: Whether setting up a conventional “dumb” chatbot or a modern, AI-powered one, the initial stages can be challenging. The former requires setting up extensive rules to give it any type of real utility, while the latter needs careful data training and weighting to provide accurate responses.
• High maintenance requirements: Traditional bots need frequent manual updates to stay relevant by configuring new rules for new use cases. AI chatbots have the ability to grow and adapt but still need monitoring to ensure there are no biases or deviations in their development.
• Disconnected communication channels: Not all chatbots can maintain context across channels, resulting in fragmented customer experiences. For instance, if a customer starts a conversation on social media and continues it on the website, the bot may not recall previous interactions.
• Limited data access: Some bots have restricted access to company databases, meaning they can’t handle account-specific questions or offer personalized recommendations. For example, if a user asks, “What’s my current account balance?” a traditional chatbot might just answer, “Sorry, I don’t have that information.”
• Chatbots are still not human: No matter how good your chatbots are, there are some individuals and circumstances where only the human touch will do. A frequent complaint of chatbots is that they take too long to route queries to a human, or that they are setup to handle queries best left to real agents.

Here’s how we fixed chatbot issues: Meet Customerly Aura

Meet Aura AI — Customerly’s in-house AI-powered live chat solution!

Aura overcomes the limitations of traditional chatbots with a suite of advanced AI capabilities. Aura’s NLP ensures it understands complex queries, sarcasm, and emotions, delivering human-like responses that reduce user frustration. 

Aura’s adaptive learning means it’s constantly working to improve itself by analyzing chat interactions, the knowledge base, and canned responses. So, you won’t have to hold its hand every step of the way.

Did we mention that setting up is easy, too? Thanks to guided onboarding, Aura will become a part of your team in no-time and with minimal headaches.

Unlike other chatbots, Aura seamlessly maintains context across channels, ensuring consistent user experiences. It integrates directly with your databases, enabling it to provide account-specific answers. 

While it can automate over 50% of all queries out of the box, smart escalation is there to route complex issues to agents when needed. So, your customers will never feel like they’re getting anything but the best. 

Ready to see what Customerly Aura can do? Book a free demo today and see our world-beating chatbot in action! 💪🏻