12 Undeniable Benefits of Chatbots for Your Business

It doesn’t seem that long ago that the idea of robots taking over the world was merely the plot of a movie. Now, chatbot marketing is a common expression in global business, and the benefits of chatbots are rapidly enticing more companies to begin experimenting with the capabilities of artificial intelligence (AI).

The chatbot market size is expected to grow from $2.6 billion in 2019 to $9.4 billion by 2024 at a compound annual growth rate (CAGR) of 29.7%.

Wondering why companies are investing so heavily in chatbots?

Because your marketing, sales, and customer service operations can all benefit from AI-powered chatbots. In this article, we’ll discuss the top 12 benefits of chatbots for your business. Plus, we’ll show you how to get started today.

What is a Chatbot?

A chatbot is a computer program that is designed to simulate conversations with human users, typically on the Internet. Chatbots act as automated virtual assistants, capable of communicating with people through text messages on instant messaging platforms, forums, and onsite live chat apps.

While they have their limitations, AI-powered chatbots are getting “smarter” over time. Soon, it may be hard to distinguish whether you are communicating with a human or a computer.

How Do Chatbots Work?

Chatbots use natural language processing (NLP) and advanced machine learning (ML) algorithms to learn from data insights. 

NLP is the computer’s ability to understand and process human speech, and respond in a language that’s understandable for humans. This way, it makes the interaction seem like communication between two humans. 

When it comes to NLP in chatbots, there are 2 processes involved: 

Natural Language Understanding (NLU) – This allows the bot to comprehend a human, converting text into structured data for a machine to understand.

Natural Language Generation (NLG) – It transforms structured data into text, making it possible for the human to understand the conversation. 


3 Types of Chatbots

There are three different types of chatbots:

Rule-based Chatbots

You can interact with rule-based chatbots by clicking on buttons and using predefined options. However, you can only make limited selections, which makes these chatbots the slowest to help your customers find their answer. 

Intellectually Independent Chatbots

These chatbots use ML to learn from user’s inputs and requests. You can train these bots to understand particular keywords and phrases that trigger their replies. Over time, these bots can train themselves to understand more and more queries.

AI-powered Chatbots

AI-powered chatbots are a combination of the other two kinds of bots. These bots use ML, AI, and NLP to understand and remember the context of the conversation and the user’s preferences.

So, now that you understand the fundamentals of how it work and the three types of bots your business can use, it’s time to look at the benefits of chatbots.

12 Benefits of Chatbots for Companies and Customers

  • 1. Facilitate Seamless Live Communication
  • 2. Make Customer Service Available 24/7
  • 3. Save Time and Money
  • 4. Reduce People-to-People Interactions with Customers
  • 5. Eliminate Tedious Time-Consuming Tasks
  • 6. Offer a Smoother Customer Journey
  • 7. Reduce Stress for Consumers
  • 8. Eliminate Interactive Voice Response (IVR) Systems
  • 9. Humanize Your Brand
  • 10. Marketing is More Targeted
  • 11. Help Grow Your Business
  • 12. Constant Improvement Over Time With Machine Learning

Forbes reports that chatbots are killing customer service as we know it. While there may be some credence to the claims that the rise of the robots inevitably spells disaster for some human jobs, the revolution is ultimately a good thing from a business perspective.

More importantly, the benefits of chatbots bring good news for consumers. In a customer-centric world, anything that helps you improve the user experience and foster greater brand trust and loyalty is a good thing.

Here is a video which explains about the benefits of chatbots:

So, let’s look at the main benefits of chatbots for your business.

1. Facilitate Seamless Live Communication

Nobody likes to wait around for a solution. When a customer has an issue with your products or services, they’ll quickly lose patience if your brand can’t rectify the problem in a timely manner.

Reports that humans have an attention span akin to a goldfish are widespread, and while it may not be totally conclusive, the fact remains the way in which people interact with brands is changing.

If you have a chatbot integrated into your customer support system, people can engage it easily without any learning curve or prior training. Through NLP, chatbots can analyze questions and respond with the most suitable answers.

As many companies now use this in smartphone apps and on their website, customers don’t have to waste time trying to get in touch. Live chat functions seamlessly on all devices, and on popular messaging apps like WhatsApp or Facebook Messenger.

2. Make Customer Service Available 24/7

Unlike your support team, chatbots don’t need any sleep. When a customer needs assistance, your company can be there, even outside of normal business hours.

This facilitates greater customer satisfaction as people know they can get help without waiting around for a reply to an email or voicemail.

benefits of chatbots - Webio stats graphic
Image Credit: Webio

3. Save Time and Money

You may imagine it’s an expensive venture for a small business to use this technology. However, when we consider this study by Retail Dive, the return on investment (ROI) is worth the punt:

  • Chatbots will save a combined total of $11 billion for banking, retail, and healthcare business sectors by 2023. This is almost double the $6 billion savings from 2018.
  • By 2023, the companies and consumers in these three industries will save a combined total of over 2.5 billion hours.
  • In the same time, e-commerce is expected to grow to more than $112 billion because of chatbots.

You’re probably wondering how it will save so much time and money.

Read on…

4. Reduce People-to-People Interactions with Customers

The massive savings come from slashing the time your staff normally spend dealing with customer queries.

By phasing out customer support staff to bring in chatbots, you can dramatically cut interaction times on all channels, including phone calls, social media, and messaging apps.

So, chatbots will take human jobs?

benefits of chatbots - Aircall graphic of stressed customer service rep
Image Credit: Aircall

5. Eliminate Tedious Time-Consuming Tasks

One of the benefits of chatbots is that they take over a lot of tedious, repetitive tasks that are currently performed by people. While that may seem like bad news for people in those positions, it can be a good thing.

These jobs can be dull and draining for people, but a bot will never complain, not even when a customer gets frustrated or belligerent.

David Cancel is the CEO of the leading chatbot development company, Drift. He asserts that people should not look to view chatbots as a human simulator, but instead see them as a better way of satisfying customer needs.

6. Offer a Smoother Customer Journey

One of the best benefits of chatbots is the ability to make the customer journey smoother. Anyone in e-commerce will know the pain of losing prospects halfway through a marketing funnel. It doesn’t take much to deter people from completing a purchase online, whether it’s a confusing check-out system or hidden costs.

Businesses can use bots to streamline the buying process, popping up on any page to do things like:

  • Offer additional information on products or shipping.
  • Give customers more insights from related video content.
  • Provide discount codes.

Measures like these can help reduce cart abandonment rates, which are a problem for practically every online store.

benefits of chatbots - MyClever bar chart
Image Credit: MyClever

7. Reduce Stress for Consumers

Research by Helpshift revealed that most consumers “dread” contacting the customer support team of a company. For some people, these phone calls are inconvenient, while others find them frustrating, time-consuming or socially challenging.

The same survey also discovered that 79% of people prefer live chat over other channels, and 55% would choose to use chatbots if it was available. This is widely considered to be a quicker, more efficient, tailored road to resolution.

8. Eliminate Interactive Voice Response (IVR) Systems

Have you ever called a customer support line and been greeted by an IVR system that attempts to route your call depending on specific voice responses? It usually goes a bit like this:

IVR: “Please tell us how we can help you.”

You: “Lost bank card.”

IVR: “Did you say, ‘post bank card?’ Press 1 if that is correct.”

You: “No. I lost my bank card.”

IVR:  “Okay, lost bank card. Is this your credit or debit card?”

You: “Debit.”

IVR: “Did you say ‘credit’? Press 1 if that is correct.”

You: “NO! Debit! C’mon…”

IVR: “I’m sorry, I didn’t catch that. Is this your credit or debit card?”

You: “DEBIT!”

It’s a frustrating experience almost all of us have encountered at some time. Thankfully, these structured systems are on the brink of extinction.


Because of chatbots, of course!

Thanks to machine learning, chatbots have much greater flexibility and capability, allowing customers to feel their voice is actually being understood. This makes effective problem-solving one of the greatest benefits of chatbots.

9. Humanize Your Brand

That flexibility has another advantage – it makes it possible for chatbots to engage customers on a whole host of different levels. This means businesses can use it to help people with technical support, sales information or account management.

You can program chatbots to have a “personality” that suits its role, such as an affable tech helper or quirky sales associate.

Domino’s Pizza gave their customer service chatbot, “Dom”, a friendly personality that interacts with customers, making the order process easy and enjoyable.

This personification of chatbots is a great way of building relationships with people, as it helps display your brand voice, and also dispels people’s concerns about interacting with chatbots.

10. Marketing is More Targeted

Brand awareness is a top priority for virtually every company nowadays. You should always be looking for more customers for your existing products. In fact, marketing guru Seth Godin believes it’s the other way around:

“Don’t find customers for your products, find products for your customers.”

Chatbots can help you here as they make it easier to broadcast your brand message. By eliminating dreary tasks and excess cold call issues, you can use chatbots to streamline customer communications and build greater brand trust. Throughout all of this, you are collecting valuable data on consumer behaviors, interests, and purchasing habits.

By using chatbots for marketing, it’s easier to promote new products and services, as they can help you target the right people, with the right offer, at the right time.

benefits of chatbots - Medium
Image Credit: Medium

11. Help Grow Your Business

One of the biggest benefits is that they help you grow your business by reaching more people and increasing your customer base. From marketing to sales to customer services, chatbots can help you improve and expand nearly every operation of your company. 

Chatbots improve customer engagement by establishing personalized interactions with consumers, offering reliable shopping recommendations based on their buying history and preferences. Plus, they help quickly push your prospects further down the marketing funnel by seamlessly guiding them through every aspect of the transaction and answering each question as it arises.

As chatbots are able to predict customer behavior, you can use them to send the right notifications to the right people, every single time. You can also broaden your reach by interacting with a large number of prospects via social media bots that’s humanly just not possible. For example, Uber is leveraging social media bots, allowing its customers to place their order through Facebook Messenger.

Chatbots also empower you to elevate your brand value by capturing customer attention through past interactions. You can easily collect and analyze customer feedback, and then use it to effectively communicate to the right people in the right manner.

12. Constant Improvement Over Time With Machine Learning

Over time, chatbots need constant evaluation and optimization. You must track it performance depending on relevant areas such as user experience, linguistic capabilities, and usability. This will help you improve your chatbot experience and devise changes necessary to attain definitive business goals.


To optimize your chatbot, consider:

  • Changing invites and welcome messages.
  • Setting appropriate goals.
  • Including extra info about your business.
  • Including new products.
  • Varying prices.
  • Communicating new and more enticing offers.

Chatbots are making huge advances, and you have to be ready to migrate with the times. Think about collecting data and building the training sets of the future. You can’t always rely on the chatbot services you’re using today. Why? Because though their preliminary offerings may be inexpensive or even free, their price steeps upwards once you need to support some real traffic coming to your chatbot.

This particular niche in ML is about to change in a huge way, and you must remain as flexible as you can to roll with the wave. Don’t be too tightly coupled to a service that’ll ultimately charge you a lot more for a generic (non-personalized) solution. Instead, think about hiring your own ML experts to create the bespoke bot your company deserves.

How to Get Started With Chatbots

  • 1. Define Your Goals
  • 2. Consider Your Audience and Channels
  • 3. Devise Your Content Strategy
  • 4. Create Your Chatbot’s Personality
  • 5. Offer a Welcoming Experience

Okay, now that you can see the undeniable benefits of chatbots, it’s time to take the next step. Let’s show you how to use it for your own business.

1. Define Your Goals

Chatbot marketing isn’t as alien as you may think. As with other sales and marketing tactics, goal-setting is an important step at the beginning. What do you want to achieve?

Speak to your team and define clear goals before proceeding.

2. Consider Your Audience and Channels

You could use it only on your website, or also in social media pages and instant messaging apps. The important thing to realize is that chatbots conversations vary from one platform to the next. For instance, website visitors may know more about your products than someone who visits your social media for the first time.

Your chatbots must be programmed to suit the needs of different visitors. Facebook users may ask different questions than those on Twitter. Ultimately, you must understand your audience personas before moving forward.

3. Devise Your Content Strategy

How will your customers engage with your chatbots?

Start out by building up an FAQ section. This will help you devise a flow system that guides users to the quick answers they need.

Bring your key departments together to get a holistic view of the organization:

  • Customer Service – The main point of contact for customers. Ask them about common issues they normally deal with when people get in touch.
  • Sales – Get insights about conversations with prospects. What is stopping people from completing the customer journey?
  • Marketing – Think about your social channels and brand voice on here. What queries does your social media marketing team handle?

Once again, remember your goals here to guide your content. Think about how the content will support your goal and help customers at the same time.

benefits of chatbots - Messenger people
Image Credit: Messenger People

4. Create Your Chatbot’s Personality

Now it gets interesting. It’s vital that your chatbot has a likable personality that customers will enjoy working with. Give it a friendly voice and a memorable name, and ultimately, encourage your copywriting team to let their creative juices flow.

This will pave the way for a friendly, helpful chatbot that can bond with prospects and customers over time. Thus, one of the benefits of chatbots is that they help you humanize your brand by humanizing your customers’ experience with a bot.

5. Offer a Welcoming Experience

Remember that many people are still unsure about chatbots, both as business owners and customers. Therefore, it’s crucial that your chatbot makes a great first impression.

Consider the following when you are writing your welcome message:

  • Compelling – It may be an automated robot, but it doesn’t have to be stiff and boring. Let that personality shine through by having some fun with the brand voice. Your aim is to make people want to engage in conversation with your bot.
  • Set Expectations – Don’t try to trick people into believing this is a human. Let customers know it’s a bot early on, so there’s no confusion about the limits of the conversation. Also, make a point of letting people know they can also contact a real human if needed.
  • Ask Questions – Questions fuel conversation, and they help your bot get valuable information. The more information it gets, the more effective it can be for customer service and marketing.
benefits of chatbots - Monetate - AI outcomes graphic
Image Credit: Monetate

Chatbots Can Bring Customers and Companies Together

The potential for AI-powered chatbots is almost limitless, which makes them an incredible addition to any business. Amidst the current Coronavirus pandemic, a chatbot can be your silver bullet. You can not only use chatbots to educate your employees about COVID-19, but also minimize human interaction in the administration department, call centers, and more.

If you’re willing to push the boundaries with AI and ML, you can reap the innumerable benefits. These bots not just offer customer support and product recommendations but also help you sell. They have improved so much that they can now hold payment options. Around 37% of customers and 48% of millennials are eager to purchase via chatbots, making them a dominating acquisition channel.

Today, chatbots combined with cloud-based operations is a winning formula for small businesses. From customer relationships and data management to internal communication and business agility, you can improve everything without worrying about the exorbitant costs of additional infrastructure and security threats.

Note: EngageBay rolled out its live chat functionality, try now.

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