The Ultimate Guide to Customer Support Chatbots

Introduction

Good customer support is essential for retaining customers and growing revenue.

Maximizing the effectiveness and efficiency of customer support is a crucial goal for most businesses.

In recent years, many companies have turned to chatbots to enhance customer support. However, traditional chatbots often leave customers dissatisfied.

The advent of generative AI chatbots promises a significant change in this trend.

This article will guide you in selecting the right customer support chatbot, including insights from the latest industry statistics.

Recent studies reveal some compelling statistics about chatbots in customer support:

In 2022, Tidio.com found that around 88% of customers talked to a chatbot at least once in the last year. This highlights their widespread use in customer interactions.

A survey conducted by Uberall.com revealed that 80% of chatbot users had good experiences.

Businesses can reduce customer service costs by up to 30% by deploying AI chatbots, indicating a significant financial incentive for their adoption (Revechat.com).

These statistics indicate a growing trend towards using AI-powered chatbots in customer support. They offer quick responses, cost savings, and overall positive user experiences.

This guide will provide you with essential insights and considerations for selecting a customer support chatbot.

What's a Customer Support Chatbot?

A customer support chatbot is a software tool that automatically answers customer questions. Businesses deploy chatbots to make customer service faster and more efficient.

Here are the four main functions of a customer support chatbot:

(1) Answer Customer Questions

The chatbot's main job is to answer questions from customers. It uses AI to understand and respond to various queries. This can include anything from simple FAQs to more detailed queries about products or services.

(2) Enable Customer Self-Support

Chatbots allow customers to help themselves. This is great for answering common questions without needing a human agent. Customers can get instant help with things like checking an account balance or tracking an order.

(3) Hand-Off to Live Agents

Sometimes, a chatbot can't answer everything. In these cases, it hands off the conversation to a live agent. This could be through live chat, email, or a phone call.

The goal is to make this switch smooth so customers don't have to repeat their questions.

(4) Agent Assist

Chatbots can help customer service agents instead of (or in addition to) customers.

They find information and draft responses, speeding up the time it takes to reply to customers. This mode is all about supporting agents, making their work faster and more effective.

These functions show how chatbots are transforming customer service. They're not just tools for answering questions but also play a key role in supporting both customers and customer service teams.

The primary role of a customer support chatbot is to provide instant answers to customer queries. These can range from simple FAQs to more complex issues, depending on the chatbot's programming and AI capabilities.

Key Business Outcomes of a Customer Support Chatbot

A customer support chatbot can greatly impact a business. Here are the key outcomes of a good customer support chatbot.

1. 24/7/365 Availability

Chatbots are available around the clock, providing constant support to customers whenever needed.

2. Scalability During Peak Times

Chatbots can handle high volumes of customer inquiries, scaling up automatically during peak periods.

3. Faster First Response Time

Chatbots significantly improve the first response time to customer queries. They offer immediate answers, enhancing customer satisfaction and engagement.

Chatbots reduce wait time, make a good first impression, and improve the customer experience.

Learn more strategies and insights about reducing customer service response time.

4. Faster Average Response Time

Chatbots greatly reduce not only first response time but also average response time.

They provide quick, automated responses to a customer's questions, including all follow-up questions, speeding up the overall support process.

This efficiency not only enhances customer satisfaction but also frees up human agents to handle more complex issues.

5. Faster Mean Time to Resolution

Chatbots can significantly reduce the time it takes to resolve customer issues, known as mean time to resolution (MTTR). They do this by providing instant responses and guiding customers through troubleshooting steps or providing information quickly.

This efficiency not only improves the customer experience but also enhances the overall effectiveness of the support team.

Read this article toor MTTR.

6. Higher Deflection Rate

Chatbots effectively increase the deflection rate, handling routine inquiries that don't require human intervention. This allows customer service teams to focus on more complex issues, enhancing overall efficiency.

By automating responses to common questions, chatbots can significantly reduce the workload on human agents.

Read this article to learn more about deflection rate

7. Lower Abandonment Rate

Chatbots can significantly reduce the rate at which customers abandon customer support interactions. By providing immediate responses and assistance, chatbots keep customers engaged, preventing frustration that often leads to abandonment.

This improvement in response time and availability directly translates to better customer retention during service interactions.

Read this article to learn more about how to decrease abandonment rate in call centers

8. Higher CSAT

Chatbots contribute to higher Customer Satisfaction (CSAT) scores by offering quick and accurate responses to customer queries. This immediate assistance improves the customer experience, leading to greater satisfaction with the service provided.

Chatbots improve how customers view a company's customer service by effectively meeting their needs.

Read this article to detailed strategies on improving CSAT scores

9. Higher NPS

Implementing chatbots can lead to a higher Net Promoter Score (NPS).

NPS is a measure of customer loyalty and satisfaction. By efficiently addressing and resolving customer queries, chatbots enhance the overall customer experience.

This improved service quality is likely to increase the number of customers who would recommend the company. As a result, chatbots can boost NPS.

Read this article to how to calculate and improve NPS.

Why Have Chatbots Failed Customers Thus Far?

Historically, customer support chatbots have faced several challenges impacting their effectiveness:

(1) Inability to Comprehend Customers Questions

Chatbots often struggle with fully understanding customer questions.

This difficulty stems from their reliance on specific keywords or phrases. It limits their ability to grasp the full context or intent behind a query.

As a result, chatbots might provide responses that don't accurately address the customer's actual needs or concerns. Thus, leading to frustration and a less effective customer service experience.

(2) Inability to Take Action

Chatbots help increase customer satisfaction (CSAT) scores by providing fast and accurate answers. This quick assistance improves the overall customer experience, leading to greater satisfaction with the service.

Efficiently meeting customer needs, chatbots significantly enhance the perception of a company's customer service quality. They streamline the support process, reducing wait times and increasing resolution speed.

(3) Inability to Understand Question Context

Chatbots sometimes don't understand the full context of a customer's question.

For example, they might miss the real point or tone of the question.

Older chatbots struggle to understand customer questions and usually rely on pre-set answers.

So, customer support chatbots might give answers that don't quite fit the customer's problem. Understanding the full context of a question is key to giving useful support.

(4) Lack of Personalization

Chatbots often miss adding a personal touch in their responses. They usually offer generic answers that don't consider the customer's unique situation or history.

This can make customers feel like they're just getting standard replies, not tailored help. Personalization is key to making customers feel understood and valued.

(5) Infinite Loops

Sometimes, chatbots may become stuck in a loop and repeat the same responses.

Customers end up going in circles, getting the same set of responses over and over.

This can be extremely frustrating and makes it hard for customers to get the help they need. Avoiding these loops is important for a good chatbot experience.

(6) Inability to Escalate to a Live Agent When Needed

Chatbots often don't transfer customers to a live agent when needed. They might not recognize if a question is too complex for them.

Or, someone may have configured them to minimize transfers to live agents.

This leads to customers feeling stuck and frustrated. Being able to escalate to a live agent is important for complex issues.

(7) Lack of Empathy/Emotional Intelligence

Chatbots often don't show empathy or emotional understanding. They can't sense a customer's feelings or tone in a conversation.

This makes it hard for them to respond in a way that shows they understand what the customer is going through. Empathy is key in customer service to make customers feel heard and cared for.

(8) Inability to Reach Resolution

Chatbots often can't solve complex problems, making customers still need to talk to a live agent.

When chatbots fail to resolve issues, customers feel the underlying brand doesn't value their time.

Customers think a bad chatbot is blocking their way to a human agent who could help.

Why Do Chatbots Fail Customers?

Chatbots often fail customers because of old, outdated technology. These technologies result in bad customer experiences and frustrations.

Here's a list of old chatbot technologies and their limitations.

(1) Rules or Decision Trees

Rules and decision trees rely on a structured set of guidelines to respond to customer queries.

This method uses a flowchart-like structure where each decision leads to a specific outcome or response.

This technology can only handle set situations. It lacks flexibility to handle different or unexpected customer queries.

(2) Keyword Matching

Keyword matching identifies specific words or phrases in a customer's query. It then displays predetermined responses based on those keywords.

This method can quickly provide answers to common questions by matching keywords to a pre-set list of responses.

However, keyword matching often lacks the depth to understand the full context or nuances of customer inquiries. This often leads to the predetermined responses not actually meeting the needs of the customer.

In addition, you need to maintain the predetermined list of questions and answers.

(3) Question Matching

Question matching uses Natural Language Processing (NLP) and Natural Language Understanding (NLU) to "understand" customer queries. It then matches the customer query to a predefined list of questions and answers.

This method aims to identify the intent behind a customer's question and provide a relevant response.

When the customer's question doesn't closely match a predetermined question, the chatbot provides wrong and frustrating answers.

Like in keyword matching, you need to maintain the predetermined list of questions and answers.

Generative AI Significantly Improves Customer Support Chatbots

Generative AIrepresents a massive leap forward in chatbot technology.

This new type of AI makes chatbots smarter without using decision trees, rules, or fixed Q&A lists. Instead, these chatbots utilize Large Language Models (LLMs) like GPT-3.5 or GPT-4.

LLMs enable chatbots to fully understand any customer question, even complex ones. Generative AI chatbots get the context and details right.

In addition, LLMs enable chatbots to generate highly relevant and human-like responses to customer questions.

This makes the chat feel more real and helpful. These chatbots are not just for typing; they can also work in voice assistants, making them sound more human.

Generative AI chatbots can also detect the language of a customer's question and respond in the same language.

Generative AI chatbots respond with more empathy than humans, not less.

The difference between a chatbot that uses generative AI versus one that doesn't is huge. Interacting with a generative AI chatbot is similar to interacting with a real person.

This change in chatbot technology leads to higher customer satisfaction and greater customer service efficiency.

What are the Downsides/Risks to Generative AI Customer Support Chatbots?

Generative AI chatbots have a tendency to "hallucinate," or generate responses that have no basis in fact or reality.

Any customer support chatbot that hallucinates could create massive frustration with customers.

As such, any good customer support chatbot must solve the hallucination problem.

What Causes Hallucination?

Any generative AI chatbot that uses an LLM can hallucinate.

The root cause of hallucination is that LLMs simply predict the next most probable word in a conversation. LLLMs, however, are unable to determine if a generated response is accurate or not.

LLM responses can seem extremely credible because they use proper grammar and understand the context of the question.

The same LLM responses, however, can contain inaccuracies or are completely unrelated to reality.

Is Hallucination Preventable?

LLMs will always hallucinate.

However, good generative AI chatbots can prevent hallucination. For example, Gleen AI is a generative AI solution for customer support teams that doesn't hallucinate.

Here's a video of Gleen AI and a custom GPT trained on the same knowledge. The GPT tends to hallucinate, but Gleen AI doesn't hallucinate.

Criteria for Selecting a Customer Support Chatbot

Selecting a customer support chatbot involves several key criteria:

Generative AI Use

Look for chatbots that employ generative AI, ensuring they can handle complex queries with more accurate, context-aware responses.

This technology understands nuances and can adapt responses to specific situations.

(2) Custom Knowledge Ingestion

The chatbot should allow for uploading specific knowledge bases relevant to your business for more tailored responses.

(3) Response Accuracy

High accuracy in responses is crucial to avoid misleading information. A good generative AI chatbot, like Gleen AI, should be extremely accurate and not hallucinate.

(4) Security and Privacy

Ensure the chatbot adheres to stringent security and privacy standards. This involves safeguarding the chatbot from unauthorized access, data breaches, and ensuring compliance with data protection laws like GDPR.

Secure chatbots encrypt communications and store user data safely, maintaining privacy and trust.

Look for a customer support chatbot solution to be SOC 2 Type 2 compliant. SOC 2 Type 2 is the SaaS industry standard for data security and privacy.

(5) Monitoring

The ability to monitor chatbot interactions is essential for quality control. It involves tracking and analyzing the chatbot's conversations with users to ensure they are responding appropriately and accurately.

Monitoring helps in identifying areas where the chatbot may need improvements or additional training.

It helps understand how users behave and what they like, which can improve the chatbot's performance and abilities in the future.

(6) Continuous Improvement

A good chatbot should evolve with user and admin feedback. This process ensures the chatbot remains effective, relevant, and up-to-date.

Continuous improvement is key to adapting to changing user needs and maintaining a high-quality, responsive chatbot service.

(7) Agent Assist

A good customer support chatbot should be available in agent assist mode.

Agent assist helps agents by giving them timely information, suggesting responses, and even writing replies based on customer questions. Agents can then edit responses and forward them to customers.

Agent assist streamlines the support process, making agents more efficient.

(8) Ease of Maintenance

Easy maintenance and updating of the chatbot’s knowledge base are important.

The chatbot should automatically update its knowledge with new knowledge, so it always has current responses for customer support.

Regular maintenance ensures the chatbot remains effective and can adapt to new trends or changes in user behavior.

(9) Availability of Integrations

The chatbot should work with current systems and support channels like email, live chat,Slack,Discord,Discord,text or SMS, and social media.

This ensures that you're providing a consistent support experience across all channels.

Integrating chatbots effectively is important to make them a valuable part of the customer service strategy.

(10) Ability to Take Actions

A good generative AI customer support chatbot should assist users in completing tasks.

This includes guiding users through processes, answering queries that lead to actions, and facilitating transactions or services.

Taking actions makes the chatbot more practical and further enables self-service.

(11) Multiple Chatbots

The platform should support the simultaneous operation of multiple chatbots.

A company can better meet customer needs by optimizing each chatbot for specific customers or customer groups.

(12) LLM Agnostic

Ensure that your chatbot is LLM agnostic, i.e., it can work with multiple LLMs.

Companies seemingly announce new LLMs every month. As such, your chatbot shouldn't be locked into one LLM.

If an LLM experiences significant unscheduled downtime, the chatbot can switch over to a different LLM in the meantime.

(13) Cloud Agnostic

A customer support chatbot should operate on your preferred public cloud: AWS, Azure, or Google Cloud.

(14) Single Tenancy

You should have the option to operate the chatbot on a dedicated application server and database instance.

Single Tenancy enhances data security by isolating data and operations from those of other customers.

(15) Dedicated Hosting

Check if hosting on a dedicated server is available. This provides enhanced performance, security, and control over the hosting environment.

Dedicated hosting is particularly suitable for businesses that require high levels of data security and server customization.

(16) Private Network Connection

Secure connections between the customer support chatbot and your Virtual Private Cloud can enhance data protection.

This feature can significantly reduce the risk of data breaches and unauthorized access.

(17) Scalability

The platform should scale horizontally to meet growing demands. This means the chatbot system can expand its capacity to meet growing business needs and customer demand.

Scalability is important for businesses that want to grow or have changes in customer interaction. It ensures the chatbot can still give good service as usage goes up.

(18) Service Availability

Look for defined uptime guarantees to ensure reliability. This aspect is crucial as it determines how often the chatbot is operational and accessible to users.

High service availability is vital for maintaining consistent and reliable customer support, ensuring that the chatbot is available whenever customers need assistance.

Businesses should seek chatbots with strong service availability commitments to avoid disruptions in customer service.

(19) Customer Service Commitment

The vendor should commit to specific response times. This includes how quickly the support team will respond to queries and the standard of service to be expected.

Businesses must understand and agree on service level commitments to ensure the chatbot meets customer support expectations.

A strong commitment to customer service is crucial for maintaining customer satisfaction and trust.

(20) Graceful Failure Mode

The chatbot should maintain acceptable behavior even during downtimes.

This ensures customers still get help if the chatbot has issues, keeping some service level and preventing total stoppage.

Conclusion

Generative AI permanently changes the chatbot landscape and improves your customer service efficiency.

You need a customer support chatbot that uses generative AI, leverages your proprietary knowledge, and doesn't hallucinate. You also need a customer support chatbot that protects your proprietary data and leverages your existing IT investments.

We've outlined 20 different criteria you should use when selecting a customer support chatbot.

Gleen AI is a leader in generative AI solutions for customer support teams. Gleen AI meets or exceeds all 20 criteria outlined.

Get a demo of Gleen AI, or
create your own generative AI chatbot for free using Gleen AI.