What are Chatbots? Is ChatGPT a Chatbot?

Have you noticed that little icon at the bottom of your screen?

Yes, the same one that is often asking you, "How can I help you today?”

Well that little icon, who is always willing to help you, is exactly what we call a ‘Chatbot”.

I’m pretty sure 80% of your  competitors are using it right now, so you have come across it at least once. Well there is a reason for that. This tiny icon has great potential to solve your problems. Take ChatGPT only for example, it has definitely solved your problems… 

But do you know how it exactly does that? And why is it so popular ?

Do you know how it can talk to you just like a human?

No need to worry, we are here to tell you all about it in our article…

In this blog, we will uncover all of what chatbots can do for businesses right from- What are chatbots? Is ChatGPT a chatbot? What are the prime chatbot benefits? Is conversational AI the future of business? And a lot more than just that...

What are Chatbots?

“A chatbot is a type of software that can help businesses to automate customer conversations and interact with them through different messaging platforms.”

A Chatbots is a software programs designed to automate conversations with customers through messaging platforms. For example,

What would you do if you have a query regarding a recent purchase from an online store, but all the customer care lines are busy?

That's where this software can help you out, you can simply reach out to them on WhatsApp or even the site you have purchased from. You can put in your query & instantly get a reply for it. 

Today, chatbots can communicate through various messaging platforms, including Facebook Messenger, Twitter, Slack, etc., and have evolved to become more sophisticated with advanced capabilities. With the help of AI and Natural Language Processing (NLP), chatbots can understand and respond to customer inquiries, provide personalised recommendations, and even complete transactions. Some chatbots can also be integrated with voice assistants like Amazon Alexa or Google Assistant, making them even more advanced in their capabilities. As a result, chatbots have become an essential tool for businesses to improve customer service, increase sales, and enhance the overall customer experience.

How do Chatbots add value to businesses and customers?‍

Chatbots allow you to pinpoint their queries and deliver relevant answers rather than scrolls and click-to-find the information customers and decision-makers are looking for. According to IBM, chatbots can handle 80% of routine tasks as well as customer queries.

Of course, bots eliminate the need for traditional call channels, inconsistent customer service, and wait and drop times. You can integrate these chatbots on your company websites or any other social media platform to be present wherever your customers and employees are. 

56% of people prefer text over call to customer service.

- Microsoft report on future of chatbots

Here are some chatbot benefits to businesses and their customers-

1. They provide customers with personalised experiences

With advanced machine learning and AI technologies, chatbots can analyze vast amounts of customer data, enabling them to deliver tailored and personalized experiences to each customer. This level of personalization can help build stronger customer relationships, increase engagement, and drive sales.

2. They're faster and accurate

Chatbots are lightning-fast and accurate in providing responses to customer inquiries, which can save customers a lot of time and frustration. With chatbots, customers no longer have to wait on hold for an agent to become available or deal with a long wait time to get a response. Plus, chatbots can handle multiple inquiries at the same time, which means that customers don't have to wait in a queue to get their questions answered.

3. They work round the clock

Since they are machines, they don’t need breaks as humans do. They are alert 24/7 and are always working. Another advantage that the bots have is handling multiple requests and chats simultaneously without making a mistake. This 24/7 availability is especially helpful for customers who need assistance outside of regular business hours. Chatbots are like your own personal customer service representative that's available to you anytime, anywhere.

4. They're economical

Although it is impossible to replace humans with chatbots in customer service, some reports already show that implementing chatbots can be a more cost-effective solution for businesses than hiring additional employees. With chatbots, businesses can handle a large volume of inquiries without requiring additional staffing costs. Plus, chatbots are self updating and can handle a wide range of tasks, from answering basic inquiries to more complex issues, which can save businesses a lot of money in the long run.

5. They provide a better experience for customers

Chatbots can help businesses provide a better customer experience by providing quick and accurate responses to inquiries. When customers receive a fast and accurate response, they feel heard and valued, which can lead to a more positive experience. Plus, chatbots can help customers make purchasing decisions, which can lead to increased sales. In fact, 95% of consumers believe customer support will benefit the most from chatbots.

6. Customers just love chatbots!

Customers love chatbots! They offer a quick and convenient way to get assistance with their inquiries, without having to navigate complicated phone menus or wait on hold. Plus, 24x7 free chatbot support can provide a more immediate and personalized experience that feels like a conversation, making customers feel more comfortable and at ease.

7. They help with scaling

Chatbots can easily scale up or down depending on the volume of customer inquiries. If a business experiences a sudden surge in customer inquiries, chatbots can handle the increased volume without requiring additional staff. This scalability allows businesses to provide consistent customer service, regardless of the demand.

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How do chatbots work?

After a better understanding of what are chatbots it's simpler to understand how do chatbots work, simply said they are computer programs that talk to people through text, voice, or other modes of communication. They work by processing what a person says or types, then figuring out what the person wants and how to respond. Chatbots use natural language processing (NLU) to understand the human language and then use natural language generation (NLG) to generate human-like responses..

Natural Language Understanding (NLU) - NLU involves processing of human language as data to derive meaning and context from it.

Natural Language Generation (NLG) - NLG involves the use of algorithms and software to automatically generate human-like text or speech from structured data or other input sources.

Overall, chatbots are becoming increasingly common and can be found in a variety of settings, from customer service, marketing, sales to personal assistant applications. They allow people to communicate with computers in a more natural way and can help automate many routine tasks. As technology continues to advance, chatbots are set to grow more and more.

All the working chatbots today are mainly based on this model:

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Knowledge Base/CMS

The knowledge base provides a real-time, personalized customer experience to engage and retain customers.

NLP Layer

The Natural language processing (NLP) layer consists of two systems; Natural Language Understanding (NLU), and Natural Language Generation (NLG). The NLU system analyzes the different aspects of the language. While the NLG system maps the given input in natural language into a useful representation.

Data Store

To train your chatbot effectively, it needs data and AI. Chatbots use artificial intelligence to learn from the queries and text that is provided. Training a chatbot is an ongoing process, so the data needs to be kept in a store for the chatbot to continue automated learning.

‍Is ChatGPT a chatbot? What's the difference?

Yes, ChatGPT is a chatbot. The main difference between ChatGPT and other chatbots is that ChatGPT is an AI language model, whereas a chatbot is a software application designed to mimic human conversation.

One key difference between ChatGPT and chatbots is that ChatGPT can generate responses based on its training data and past interactions, whereas chatbots typically follow pre-programmed scripts or decision trees.

However, both ChatGPT and chatbots require training to improve their ability to understand and respond to user inputs. Chatbots can be trained either manually or using advanced technologies like GPT-4, which can learn from vast amounts of data to generate more natural and nuanced responses.

So, while ChatGPT and chatbots may seem similar on the surface, there are important differences in their capabilities and the ways they are trained to interact with users.

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What are the different types of Chatbots? 

There are many types of chatbots, here are the six main types of chatbots you need to know, each of these are classified based on the deployment platform and capability.

Rule-based chatbots

These chatbots are like rule-following students who can only answer questions that they've been specifically taught. While they're not the most creative, they can be effective at handling simple tasks and providing quick answers.

Machine Learning Chatbots (AI Chatbots)

These chatbots are like smart students who learn from data and improve their responses over time. They use complex algorithms and statistical models to understand human language and then generate a response that is appropriate for the conversation.

Virtual assistants

These chatbots are like personal assistants who can help you with specific tasks, like scheduling appointments or setting reminders. They can be accessed through various interfaces, making them easy to use.

Social media chatbots

These chatbots are like social butterflies who love interacting with users through messaging apps. They can be used for a variety of purposes, including customer service, lead generation, and marketing.

Voice-activated chatbots

These chatbots are like personal assistants who can be controlled through voice commands. They're commonly found in smart speakers like Amazon Echo or Google Home and can provide users with a range of services, like weather updates, news briefings, and personalised recommendations.

Hybrid chatbots

These chatbots are like multi-talented individuals who combine rule-based and AI-powered technologies to provide accurate and personalised responses to user inputs. They can be particularly effective for handling complex queries and providing personalized recommendations.

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What are chatbots used for?

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Here are some industries that chatbots are used for as well as their applications across these domains:

1. Customer service

Benefits of chatbots in customer service is that it can be used to handle customer queries and provide support 24/7, reducing the need for human customer service representatives. They can provide instant responses to frequently asked questions and help customers navigate through a company's products or services. They can also be used to handle customer complaints and provide personalized solutions to customers. Use-cases can include:

• Quick and instant responses: Chatbots provide quick and instant responses to customer queries, improving customer satisfaction and loyalty.
• Multilingual support: Chatbots can be programmed to support multiple languages, making them ideal for businesses with a global customer base.
• Reduced workload: Chatbots help reduce the workload of human customer service representatives, allowing them to focus on more complex customer issues.

Click here to know more about Customer service chatbots.

2. Sales and marketing

Businesses can leverage chatbots to engage and reach out to their audience, gather feedback, and conduct surveys. Chatbots are versatile and can be utilized for a variety of purposes, including product or service promotion, personalized recommendations, and coupon or discount offers. Furthermore, they can facilitate the collection of customer feedback, enabling businesses to enhance and improve their offerings. Use-cases can include:

• Personalised recommendations: Chatbots can analyze a customer's browsing history and purchase behavior to provide personalized product recommendations.
• Increased engagement: Chatbots can increase customer engagement by providing interactive experiences, such as quizzes or games.
• Improved lead generation: Chatbots can be used to capture leads and qualify them based on predefined criteria, making lead generation more efficient.

Click here to know more about Marketing Chatbots.

3. Lead generation

Chatbots can assist with lead generation by capturing leads and qualifying them based on predefined criteria. They can be programmed to ask qualifying questions and provide customers with personalized recommendations based on their answers. Use-cases can include:

• Increased lead volume: Chatbots can capture leads 24/7, increasing the volume of leads generated by a business.
• Improved lead quality: Chatbots can ask qualifying questions to ensure that the leads generated are high-quality and more likely to convert.
• Cost-effective: Chatbots are more cost-effective than human representatives, reducing the cost of lead generation for businesses.

4. Personal assistance

By assisting customers in managing their finances, some benefits of chatbots is that it can check account balances, transfer funds, and open new accounts, while also providing personalized advice on savings, investments, and debt management by analyzing customer financial data. Additionally, chatbots enhance customer security by detecting and preventing fraudulent transactions and offer 24/7 support, which reduces waiting times and increases customer satisfaction. Use-cases can include:

• Convenience: Chatbots can provide users with a convenient way to complete tasks without having to leave their messaging platform.
• Personalised recommendations: Chatbots  work by analysing a user's preferences and behavior to provide personalized recommendations.
• Time-saving: Chatbots can save users time by automating tasks that would otherwise require manual input.

5. Healthcare

Chatbots can help patients book appointments, provide medical advice, and answer common health questions. They can be programmed to provide patients with medical information, remind them to take their medication, and even monitor their symptoms.Use-cases can include:

• Improved accessibility: Chatbots can provide patients with instant access to medical information and advice.
• 24/7 support: Chatbots can be available 24/7, providing patients with support outside of regular business hours.‍
• Reduced workload: Chatbots can reduce the workload of medical professionals, allowing them to focus on more complex medical issues.

‍Click here to know more about healthcare chatbots.

6. Education

The benefits of chatbots in education is that it can be used to help students with their studies, provide personalized learning recommendations, and even answer homework questions. They can be programmed to provide students with study resources, help them with test preparation, and even grade their assignments. Sub-pointers can include:

• Personalised learning: Chatbots can analyze a student's learning style and behavior to provide personalized learning recommendations.
• Increased engagement: Chatbots can increase student engagement by providing interactive learning experiences, such as quizzes or games.‍
• Time-saving: Chatbots can save teachers time by automating tasks such as grading assignments, allowing them to focus on teaching and providing personalized feedback.

‍Click here know more about education chatbots.

7. Entertainment

Chatbots have the ability to offer users entertainment, which may include playing games, telling jokes, or providing personalized recommendations for movies or TV shows. Additionally, they can be used to connect users with others who have similar interests, serving a social purpose. Use-cases can include:

• Personalised recommendations: Chatbots can analyse a user's preferences and behavior to provide personalized entertainment recommendations.
• Interactive experiences: Chatbots can provide users with interactive experiences, such as playing games or telling stories.
• Social connection: Chatbots connect users with others who have similar interests, promoting social connection and community.

8. E-commerce

Chatbots can help customers find products, track orders, and make purchases. Chatbots can analyze a customer's browsing history and behavior to provide personalised product recommendations, increasing the chances of a sale. They can also provide customers with real-time updates on their order status, reducing the need for them to contact customer support. Additionally, chatbots can guide customers through the checkout process, reducing cart abandonment rates and increasing sales. Use-cases can include:

• Product recommendations: One of the benefits of chatbots is, that it can analyse a customer's browsing history and behavior to provide personalized product recommendations, increasing the chances of a sale.
• Order tracking: Chatbots can provide customers with real-time updates on their order status, reducing the need for them to contact customer support.‍
• Simplified checkout process: Chatbots can guide customers through the checkout process, reducing cart abandonment rates and increasing sales.‍

Click here know more about ecommerce chatbots.

9. Banking and finance

Providing assistance with banking needs is one of the ways chatbots can be of help. Customers can check account balances, transfer funds, and even open new accounts with the help of chatbots. Besides these, chatbots can provide personalized financial advice by analyzing customers' financial data, offering advice on savings, investments, and debt management. Customers are also safeguarded against fraudulent transactions by chatbots, which provide an extra layer of security. Chatbots can offer support round the clock, reducing wait times and boosting customer satisfaction.Use-cases can include:

• Personalised financial advice: Chatbots have the ability to examine a customer's financial information and offer customized guidance on how to manage their savings, investments, and debt.
• Fraud prevention: Chatbots can detect and prevent fraudulent transactions, providing an added layer of security for customers.
• 24/7 support: Chatbots can provide support around the clock, reducing wait times and improving customer satisfaction.

Click here to know more about Banking Chatbots.

10. Real-Estate

Chatbots can revolutionize the real estate industry by assisting customers in finding properties, answering their queries, and making the buying and selling process seamless. They can provide personalized property recommendations based on the customer's search history and behavior, increasing the chances of a successful sale. Some use-cases of chatbots in real estate are:

• Property recommendations: Chatbots can analyze a customer's search history and preferences to provide personalized property recommendations. For example, if a customer has been searching for a specific type of property or location, chatbots can suggest similar properties that match their preferences.
• Answering queries: Chatbots can provide real-time answers to customers' questions regarding property details, pricing, location, and more. This reduces the need for customers to contact customer support or agents, leading to faster responses and increased customer satisfaction.
• Simplified property search process: Chatbots can guide customers through the property search process by asking relevant questions such as location, budget, property type, and amenities. This reduces the time and effort required by customers to find the right property.‍
• Real-time updates: Chatbots can provide customers with real-time updates on the status of their property transactions, including offers, contracts, and payments. This reduces the need for customers to contact agents or customer support and increases transparency in the buying and selling process.
  Click here know more about Real-estate chatbots

11. Social media

Chatbots can be used to automate social media engagement, respond to messages and comments, and provide personalized recommendations. Chatbots can respond to customer inquiries and complaints, providing quick and efficient support. They can also distribute content such as articles, videos, or promotions to followers, increasing engagement and driving traffic to a website or landing page. Additionally, chatbots can analyze a user's behavior and preferences to provide personalized recommendations for content or products. Use-cases can include:

• Customer service: Chatbots can respond to customer inquiries and complaints, providing quick and efficient support.
• Content distribution: Chatbots can distribute content such as articles, videos, or promotions to followers, increasing engagement and driving traffic to a website or landing page.
• Personalised recommendations: Chatbots can analyze a user's behavior and preferences to provide personalized recommendations for content or products.

12. Business

A business chatbot is like a digital assistant that can communicate with customers and help them with various tasks or answer their questions through messaging platforms like Facebook Messenger, WhatsApp, or Slack. Its purpose is to save time and provide 24/7 support, making it an excellent tool for businesses to improve customer satisfaction and engagement. Plus, with advancements in AI and natural language processing, chatbots are becoming even more capable and intelligent.

Here is an example of a chatbot flow

What are the must-have features for Chatbot? 

Following are the 10 must-have features that can change the mechanism of business functions and help increase customer success.

1. Easy customization

2. Emotional intelligence

3. Quick chatbot training

4. Easy omnichannel deployment

5. Integration with 3rd-party apps

6. Interactive flow builder

7. Multilingual conversations

8. Easy live chat

9. Robust API

10. Security & privacy

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Here's a reference article to learn about all the chatbot features in detail.

What are the examples and use cases of Chatbots? 

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1. Tokio Marines Nichido Fire Insurance

The multichannel solution optimizes processes by providing insurance policy quotes, tracking claims, and renewing requests online. It also serves clients by answering FAQs round the clock, effectively working as a stream for lead generation. 

2. University of Rochester

The university wanted to provide all its students and faculty with easy access to OBGYN and mental well-being information and decided to opt for an AI chatbot.

They succeeded in building an almost human-sounding bot in fourteen days, that helped them achieve better-than-expected results for students and faculty members.

3. Blaupunkt

Blaupunkt has a large number of customers from different regions. Due to which it got difficult for agents to handle queries as per the different regions.

With Engati’s bot, they were able to connect the user to an agent in their region & answer customer queries 24x7. Using the extensible integrations, they were able to collect and store customer details. 

4. Coolberg

Coolberg identified a pressing need to enhance user engagement and maximize the effectiveness of their marketing campaigns.

After deploying the WhatsApp chatbot solution, they've utilized the broadcast feature to reach out to their target audience, increased lead generation and round the clock availability.

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How can you build your own chatbot with Engati?

Once you’ve registered, you can build your own free chatbot step-by-step -

Step 1: Select the Create a Bot button on the portal’s homepage.

Step 2: Give your chatbot a name, a description, and assign a category.

Step 3: Then you’ll be presented with a library of our templates. You can either browse through and select the one that suits your use case or click Skip and build the chatbot from scratch.

Step 4: Next is channel setup. Here, you can customize your chat window for web chat and select which channels you’d like to deploy the chatbot. Then click Next for the live chat menu.

Step 5: If you’d like to support your chatbot with live chat, enable it in this menu.

Step 6: The conversational intelligence step will allow for quick FAQ set up and customizing the welcome path for your bot.

Step 7: Finally, review all changes, and your bot is ready to be deployed!

You can watch the complete step-by-step tutorial on getting started with Engati!

Guess what? We also provide free chatbot templates that you can try -101+ Free Chatbot Templates

These chatbots can be deployed on multiple platforms that have over a billion active users like WhatsApp, Facebook, Telegram, Instagram, etc.

Conclusion

And that's a wrap on everything you need to know right from 'What are Chatbots?' to know 'How to make your own chatbot?' and ultimately discovering that even a platform like ChatGPT is indeed a chatbot.

FAQs‍

How much time does it take to build a chatbot?

The average time required to build a chatbot system could range from a few mins to maximum few hours. You can get started with pre-designed templates and customize them as per your requirements!

Are chatbots successful?

The success of chatbots is the impact it’s creating on customer experience. Chatbots help the business to provide overwhelming customer service which pushes more and more companies to try them.

How effective are Chatbots?

As per IBM's research, chatbots can successfully answer up to 80% of routine questions without human intervention. In addition, the capacity to manage multiple customers at once makes the chatbot a better choice when compared to a human. Chatbots can increase operational efficiency in your sales, marketing, and customer support teams.

Do Chatbots increase sales?

When used smartly, chatbots will improve your revenue significantly. They not only help in lead generation & sales but also play an important role in customer support and nurturing. They provide omnichannel support to your customers throughout the entire journey.

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