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Chatbots are everywhere. Unless you’re in a place where technology has not been developed yet, you sure have conversed with a chatbot even just once. These bots are usually present in every sales, marketing, and customer service-related activities.

The popularity of these bots today is undeniable. In the enterprise side along, 70-80% of conversations with customers are done by nonhumans.

Although chatbots are everywhere for almost any sort of conversation, some people may still perceive it complexly. To clear up some mystery about this technology, here are some facts about chatbots and their impact in shaping up the business industry.

The Basics of Chatbot and its Functions

A chatbot is an artificial intelligence system, similar to virtual robots, that virtually communicates with humans through text, voice, or a combination of two. Chatbots have scripts containing pre-planned messages that are conversational and easily understandable by humans. The script depends on the business and the buyers, and serves as a response to a human’s query.

Bots can understand and match with different human language using Natural Language Processing (NLP), a branch of artificial intelligence that processes interactions between virtual systems such as computers and human languages.

This can be achieved through different factors such as Text Classifiers, Suitable Algorithms, Artificial Neural Networks and Natural Language Understand (NLU). The Natural Language Generation (NLG), on the other hand, is used to make the bot’s replies sound more natural.

Types of Chatbots

There are two main types of chatbots: the text-based bot and the voice bot.

Text bots rely on messaging mediums when communicating with a human user or customer. This bot type paved the way for the Chatbot industry and has attracted 3 billion active users and potential paying customers across 4 major messaging apps.

VoiceBots, on the other hand, acts like a personal assistant in addressing your concerns through calls, messages, and event alerts. They have an intelligent voice interface for auditory interactions. Voice Bots has two categories: the hybrid bots (text+voice based) and the voice only (voice controlled devices).

Impact On the Business Industry

Chatbots have tremendous impact on the business industry. This technology provides better user experience and data-driven product suggestions, improved customer service quality, automated lead generation and qualification, and rewards customer loyalty as well.

The Chatbots market has reached $88.5 million global value in 2015, and it is expected to have an overall annual growth rate of 35.08% between 2016-2023. Over 63% of people would choose to communicate with the online chatbot of a business or brand they are interested with.

More than 40% of consumers would prefer businesses providing quick customer assistance, according American Express’ report. Companies who will focus using bots over human customer service representatives are anticipated to have a more competitive edge over the others.

Challenges for Chatbots

Despite the worthy impact of bots in today’s digital era, there are still challenges that need to be addressed.

Chatbot security is one of these challenges. In a study published by Informs PubsOnline, 79.7% of consumers will likely decline purchasing a product or service if they knew ahead that they will converse with a chatbot to get the details of that product or service.

Data privacy and sensitivity is still a huge issue this era, and convincing and assuring the customers about the safety of their private and personal data is an important matter to focus on when using a chatbot for your business.

Also, VoiceBots may fail in understanding the sentiments and emotions of your clients. The bot needs proper training in dealing with real human sounds and responding to them with the right intent and emotion.

Similarly, bots can mess up in adopting to multilingual approach too. Humans are fond of using nonstandard words like slangs, misspelling words, and using emojis and special characters. Working with a native speaker can help your bot become multilingual.

The Future of Chatbots

An average of 70% of consumers will likely replace their store or bank visits with their VoiceBots, on the next three years.

By 2020, 80% of businesses are predicted to choose chatbots for their customer service departments. On this same year, an average person will most likely spend more time conversing with chatbots than with their spouses.

With these growing statistics, we can expect a more virtual-dependent future. The advancement of digital era makes the market competition, with the customer’s buying decision on the line. With sales bots on the business, you can directly sell and place orders for your clients without the hassle of meeting and speaking to them in person. It is an advantage for your client’s time, too.

Although having a human customer service agent guarantees a more personal and intimate communication with clients, bots will eventually change this scenario. Human efforts alone will not satisfy the impeccable experience expectations of your users, from time to time.