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The Rise of Intelligent Chatbots
Black woman with the laptop in the coffe shop

The Rise of Intelligent Chatbots

Introduction

What if you knew that many of the customer service agents you have talked to in the past are not humans? What if many of the conversations you engage in on websites, apps, and messaging platforms are not with humans? What if that exiting conversation you had with a ‘customer service agent’ was actually with a robot?

Chances are you have been on the other end of a conversation with a chatbot. But that is not a bad thing. If you read to the end, you will see it is mostly a good thing.

In this article, we will look at how artificial intelligence has led to the transformation of Chatbots and how intelligent Chatbots are helping organizations in different industries.

A Brief History of Chatbots

Before we consider the history of Chatbots, let us look at a simple definition of Chatbots. According to Investopedia, “A chatbot is a computer program that simulates human conversation through voice commands or text chats or both.”

Other names for Chatbots include Talkbots, IM bots, intelligent bots, and conversation bots.

The history of Chatbots goes back to ELIZA, a program created in 1966 by Joseph Weizenbaum at MIT. He designed the program to convince many users they were speaking to a human when they talked with a machine.

By using pattern matching and some scripts, the machine could carry out conversations with humans. ELIZA was one of the first Chatbots to pass the Turing Test. Since ELIZA, there have been significant developments in Chatbots from Parry in 1972 to IBM Watson in 2006.

Apple launched SIRI – an intelligent personal assistant that uses natural language processing – in 2010. Google, Microsoft, and Amazon have followed suit with Google Assistant, Cortana, and Alexa.

The introduction of Facebook Messenger in 2016 led to a significant rise in the use of Chatbots. There are currently more than 100,000 Chatbots powered by Facebook Messenger.

Rule-Based Chatbots

There are two major types of Chatbots: rule-based Chatbots and intelligent Chatbots.

Rule-based Chatbots are pre-programmed to answer specific questions or information requests. A playbook guides and directs the operation of a rule-based chatbot. The playbook will have a decision tree that guides the Chatbot on what action to take in response to the user’s request.

Let us take an example. A rules-based Chatbot on a website can ask if you want to register for the service the company offers. If you answer ‘Yes,’ the Chatbot guides you further down that line until you register. If you answer ‘No’ and request more information, it guides you on another path (an article or e-book that will give you all the information you need).

These Chatbots use a target keyword system, much like search engines. If your question contains a particular keyword, the bot will provide you an answer or information based on the programming.

Rules-based Chatbots can answer questions, provide information, take an order, or perform an action in response to a request. However, they cannot do anything outside of the initial programming.

Intelligent Chatbots

Artificial Intelligence has created a new type of Chatbots – Intelligent Chatbots. These intelligent Chatbots use machine learning to program Chatbots that can self-learn and become better at interacting with users. As they engage in more conversations, they gain more knowledge, which improves the quality of their conversations the next time.

Rather than following some programmed rules, intelligent Chatbots will read the input message, analyze the input message to understand the context and deliver an output based on its understanding of the input message. These Chatbots will grow in their understanding of the input message as they learn and improve. Consequently, they can deal with new words, new dialogues, and new conversations. They can ask questions; switch from one form of discourse to another, and handle different communication styles.

Intelligent Chatbots can analyze sentiments and understand the preferences of a particular user by studying her behavioral patterns. Consequently, they can deliver a personalized experience in conversations based on previous interactions. They can give you the feeling you are talking to a friend who knows you.

Applications of Intelligent Chatbots

Here are some of the applications of Chatbots in today’s world:

  • Customer Service: This is the most significant application of Chatbots. Organizations use Chatbots to answer customers’ questions and respond to their requests/complaints/inquiries. Chatbots help organizations save 30% in customer support cost
  • Retail: There are Chatbots designed to create orders on behalf of customers. You can order a pizza (or what have you) through the retailer’s Chatbot.
  • Health: Dr. AI and Melody are two examples of Intelligent Chatbots in medicine. The former can collect medical histories, analyze probable cause, and give recommendations based on those data. The latter gathers information that helps physicians make diagnoses.
  • Finance: Users can apply for financial services through a Chatbot that walks them through the process.
  • Marketing: Companies also use Chatbots to deliver personalized content to potential and current customers.
  • Sales: Chatbots can guide customers on the purchase path.
  • Psychology: Chatbots like Insomno can keep you company if you cannot sleep at night. There are friendly bots that talk to people in need of a friend.

Here are some examples of companies using Chatbots. You will find a longer list here.

Advantages of Intelligent Chatbots

Below are the reasons why more companies are embracing Chatbots, especially intelligent Chatbots.

  • Better Customer Service: Chatbots can engage with customers 24/7. They are easy to access, and they provide instant response. Customers (current or potential) do not have to wait for a free agent before receiving a response.
  • Lower Cost: Companies that use Chatbots reduce their customer support cost by 30%.
  • Increase Website Conversion: The use of Chatbots can help organizations increase the conversion rate on their websites. When website visitors can get the information they want at the right time, they are more inclined to go down the funnel – more leads, more customers.
  • Lower Churn Rate: As conversion rate increases, the churn rate reduces. The quality of customer service is inversely proportional to the church rate.
  • Greater Customer Insights: The conversations customers have with Chatbots can provide a well of data that companies can turn into consumer insights. These insights will help them make decisions that will improve marketing and sales.
Black woman with the laptop in the coffe shop

Conclusion

Artificial Intelligence has improved and enhanced the capabilities of Chatbots. Businesses now use intelligent Chatbots to enhance the performance of their marketing, sales, and customer service department.

While the application of intelligent Chatbots is widespread, we expect to see an increase in adaptation and improvement in technology.

In the next article, we will look at artificial intelligence and predictive analytics. To be notified when the article is live, subscribe to the mailing list.

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