How Chatbots are Transforming Customer Service with AI

customer service chatbots

As Artificial Intelligence (AI) technologies proliferate, they are becoming imperative for businesses that want to maintain a competitive edge. It is claimed that AI will have the power to increase productivity by 40% or more by 2035. 

Businesses are greatly relying on AI for automating business functions across customer service, sales, or marketing verticals. 50% of consumers no longer care if they are dealing with humans or AI-enabled assistants”. It allows businesses to provide better prompt assistance at various touchpoints of the customer journey.

By deploying chatbots for customer service, businesses can meet the topmost customer expectation i.e. getting 24×7 support. Real time customer engagement increases their satisfaction rate. Thus,  a customer service chatbot delivers a superior experience.


Chatbots for customer service - effects of bad service

Source: American Express

Every business has different chatbot use cases starting from streamlining the business processes to enhancing customer engagement. With chatbots for customer service, businesses can dramatically enhance customer experience by promptly addressing the FAQs at scale.

How AI chatbots improve your customer service experience 

Businesses are choosing AI chatbots as an integral part of customer service There are several reasons for that but the biggest reason is the time saved: since chatbots resolve simple questions quickly, your team has more time to tackle more complex queries.

Bots help businesses to save operational costs and improve response time that enhances the customer service experience.

Here are the quick links for how customer service chatbots help businesses.

  1. Provide instant customer support
  2. Deliver better customer experience
  3. 24×7 availability
  4. Deliver seamless hybrid support along with live chat 
  5. Easy scalability
  6. Reduce customer support costs with bots
  7. Reduce the number of support tickets
  8. Collect real time customer feedback
  9. Improve productivity of customer support reps
  10. Automate your social media support
  11. Minimize IVR frustrations
  12. Better chatbot support = higher customer happiness!!

Let’s discuss the top advantages of using chatbots for customer service and increase customer loyalty.

#1. Provide instant customer support

Long queue times scare away the customers.  As businesses lost 75% of customers due to waiting times. Hence, one of the greatest customer frustrations is not able to get instant responses due to which they churn.

Implementing a chatbot along with other communication channels can help you to deliver instant assistance to the FAQs requested by customers. 

How chatbot services are best for customer support?

  • You can train your customer service chatbots to anticipate customer’s needs and deliver relevant answers. The zero wait time increases the customer satisfaction level.
  • Bots can be used as the first point of contact to reduce customer churn and make human handover for complex issues. 

Amtrak’s Julie is a good example of a customer service chatbot. Julie promptly responds to the queries from a comprehensive knowledge base on travel information and policies from across the Amtrak system. The bot has answered approximately 5,000,000 support queries in a year. Amtrak witnesses 25% of a significant increase in bookings and 30% more revenue with the help of Julie. 

Pro tips:

  • If your business receives repetitive queries, implementing chatbots can be a wise way to provide instant support without making customers wait.
  • Even if chatbots are not able to solve a problem immediately, they can at least provide an instant response relevant to the customer’s query. It creates a good impression on your customer of the brand being responsive.

#2. Deliver a better customer experience

One of the important aspects of customer experience is good quality support. With a chatbot for customer service, when you address their requests in real time they are more inclined towards the brand. 

Chatbot improves customer experience

A  chatbot on the website or a messaging app is able to provide a certain level of support 24/7. Even in the instance when the bot isn’t able to resolve a particular issue, it can still:

  • Identify the type and urgency of the issue.
  • Send the ticket to the right department or agent.
  • Push it to the top of the queue based on the level of urgency.
  • Help the customer schedule a chat/call during business hours to eliminate feelings of uncertainty.

#3. 24×7 availability

The time that customers spend waiting on hold, and how they feel when they do so, is a big frustration for average customers. 43% of consumers expect 24×7 customer service from e-Commerce/online retailers, and 36% expect customer service to be available for approximately 12 hours a day/7 days a week.

The direct outcome of 24×7 availability is obviously increasing in the resolution speed. Providing quick response and fixing an issue in a first contact itself is one BIG differentiating factor when it comes to retaining customers. This is one of the top reasons why chatbots are being deployed for delivering superior customer service round the clock.

The customer service chatbot can tap into the comprehensive resources and provide quick responses, any time, even when the support team is unavailable. Being able to engage customers at their preferred time improves satisfaction and loyalty towards your brand.

Pro tips:

  • Bots are always active to engage your customers by providing instant answers to common queries, which improves customer satisfaction.
  • With customer support chatbots, you can reduce the number of support tickets raised by addressing simple queries instantly.
  • By having chatbots in place, you can allow agents to focus more on the critical aspects of customer service.

#4. Deliver seamless hybrid support along with live chat 

Businesses who want to provide live chat support can have three options: live chat, chatbots, or a hybrid approach of using both. The right balance of both communication channels helps to deliver better customer support.

Prior to going into details of hybrid support, you need to understand when to use live chat vs chatbot by learning the pros and cons of both platforms.


Following the hybrid support, empowers you to make a balance between providing relaxation to your support team and offering qualified services to your leads. It will be like embedding your bot in the first stage and putting human support backstage.

Businesses can automate the repetitive queries with bots and the complex queries can be seamlessly transferred to the human agent. 

Pro tips:

  • There is a seamless transition between the chatbot and human agents so that customers do not face any inconvenience.
  • Hybrid support reduces the number of touchpoints for overall resolution. When the bot is unable to resolve the query, it is directed to the agent for an effective solution in the first contact itself.

#5. Easy scalability

Having an option to scale its support is the first thing any customer-centric business can ask for. There are times when you expect a hike in traffic like the festive seasons or peak hours. 

But how do you estimate to handle such scenarios?

In the event of managing your conversations during peak hours, you can encounter challenges such as adding more support experts, providing training, etc. Adding chatbots provides the scalability to handle conversations in real time. With chatbots for customer service, you can improve your business productivity without any extra costs and resources. 

Let me explain with a simple example. If your business receives 100 chats daily and suddenly there is a 200% hike in the chats. How would I manage such an unpredictable scenario? It is really not possible for your support agents to handle those many chats and deliver real time quality assistance. With a customer service chatbot, you can scale your chats during peak time so that your resources are managed effectively.

Pro tips:

  • You can easily balance scalability with both chatbots and live chat. The simple queries will be managed by the bot and the complex queries are handed over for human support. 
  • If you are an SMB (small & medium business) and customer service is the key priority, using a chatbot can help you to scale easily whenever required.
  • Bots can engage in endless conversations irrespective of time and volume that brings business growth as well as customer satisfaction.

#6. Reduce your cost of customer support with bots

There are many chatbot benefits of how businesses can optimize their costs without compromising their customer service quality. It is important for businesses to harness the benefits of deploying chatbots to optimize business costs.

Adding more support agents requires extra time and costs in terms of agent salaries, customer service training, and infrastructure costs. 

By deploying a customer service chatbot, you can handle numerous conversations at the same time. This makes it an excellent solution to deal with an increased volume of customer requests while keeping costs reasonable.

Investing in Artificial Intelligent for customer support helps businesses to optimize costs and deliver a great chatbot customer experience. 

Pro tips:

  • As a business, you can estimate when you can be the peak time for your business so that you can deploy chatbots for that particular time.
  • If your cost per chat is high, you can implement a customer support chatbot to handle conversations efficiently without extra investment.
  • You can train your customer service bots regularly with the FAQs to make them smarter to understand the user intent and provide a relevant response.

#7. Reduce the number of support tickets

Automating the simple queries with a customer service bot helps to provide instant answers that reduce the number of support tickets raised by customers. 265 billion customer support tickets and calls are made globally every year, resulting in $1.3 trillion in customer service costs.

The company increased employee productivity by 3.5 times. And their customer satisfaction increased by 22 percent. As one of the important KPIs of customer service is “how many tickets resolve per day?” it provides immense time for agents to focus on priority tasks.

The chatbots designed for customer service help to resolve the simple queries in the first go and improve first contact resolution. Bots help in freeing up the agent’s time for complex service tasks.

Pro tips:

  • You can automate simple queries such as order status, return policy, and delivery time with bots so that you can manage your bots efficiently.
  • Customer support bots are the best way to deliver error-free service and avoid complications. As chatbots are programmed with all the information there is minimal chance of errors with higher accuracy assured.

#8. Collect real time customer feedback 

Customer feedback is vital for every business. Feedback helps you to know how much your customers are satisfied with your products and services. For businesses, however, it is difficult to get your customers to fill up feedback forms or answer questionnaires.

By implementing chatbot services, you gain a better feedback loop and improve customer relationships while providing better data to the business. 

Customer service bots can make the process interactive, quick, and easy by gaining real time feedback at any of the various stages of your customer’s journey, such as at the end of the chat conversation or purchase of a product.

Pro tips:

  • Customer feedback helps you to know the areas to improve in your products, services, or bot flow for better interaction.
  • You can use chatbot support to gather the preliminary information before connecting the user to the right support representative can shorten the wait times for customers and make customer support agents more efficient.

#9. Improve productivity of customer support reps

Implementing chatbots not only enhances support quality but also increases the efficiency of your customer service team. The team is 3x times more productive in handling priority tasks as bots seamlessly address the FAQs promptly round the clock.

Here are a couple of ways how bots help to increase the productivity of the support team.

  • Handle voluminous support requests – Bots are capable of attending to several customer interactions simultaneously. It ensures your customers are not waiting long for getting a response. 
  • Escalate issues to the right team – Configure chatbots to handle routine queries. However, some customer issues may require expert assistance and bots can route these issues to the expert support agents.

#10. Automate your social media support

Users are rapidly turning to social media to request and receive customer service. However, the majority of these requests were not addressed timely or even not addressed at all. Chatbots can overcome this problem through automated generated responses for users’ requests on social media. 

Social bots seamlessly carry conversations with users, with the purpose of assisting them. They help in building stronger relationships with customers by delivering targeted content and anticipating user reactions. With social media bots:

  • You can connect with customers more efficiently.
  • You can respond to the user requests, comments on time, which improves the experience. 

Many sectors like retail, travel, entertainment, and even health and finance can use social bots as assistants. They help you grow your social image by providing real-time customer support 
One good customer service chatbot example is the Lufthansa Airlines Elisa bot on the Facebook Messenger app.

Customer service chatbot - Lufthansa

Lufthansa Group is designed to be a customer service bot to help users find and book cheap flights without ever leaving their iPhones.The bot is bilingual, speaking both English and German, and is extremely easy to use. In order to boost customer satisfaction, the bot is made available on other channels such as airline apps, Whatsapp.

#11. Minimize IVR frustrations

You can not find a single customer who likes to use interactive voice response (IVR) systems during phone calls. It is time-consuming listening to the menu and still not getting personalized responses. 

Some of the IVR inconveniences faced by the customers are calls routed to the wrong teams, hang up of calls, limited options offered, etc. 

Chatbots for customer service is the best way for customers to get relief from the frustrating IVR system. The straightforward answers without having to wait or choose options indeed improve user satisfaction.

Pro tips:

  • The customer support bots can engage customers instantly by providing the answers they are looking for.
  • The bot automatically routes the chats to the right team automatically for quick and effective resolution without making users wait.
  • You as a business save time and cost associated with transferring a customer between different departments.

#12. Better chatbot support = higher customer happiness!!

Three in five millennials have used chatbots at least once in their lives. It means customers are happy using the chatbot and habituated to it. When you build your chatbot for customer service one of the fundamental practices is defining the end goal of the bot.

Once the bot is deployed, you need to find out if your chatbot is meeting your goals. But the question is how do you identify if your customer service chatbot is meeting your end goals as planned. In order to find that you need to measure whether your customers are happy interacting with your bot? Is your bot able to meet their expectations? 

The Customer Satisfaction Score (CSAT ) or Net Promoter Score (NPS) are the key metrics to measure your customer service. With the help of the KPIs, you will be able to know how far your customers are happening interacting with your bot. You can improve your bot flow based on the scores to improve the chatbot customer experience.

When customers have few positive experiences communicating with brands via chatbot, they will look for the same convenience in other interactions. Customer service chatbots can help you create a consistent brand experience for your customers. 

Pro tips:

  • You have to evaluate your CSAT score or NPS score of your bot conversations and understand whether your customers are happy with both or not.
  • Based on your measurement scores, you should really check if both are helping or not. And you need to revisit the flow /design to make sure it is helping customers.
  • You should monitor performance regularly to enhance customer satisfaction rates.

Final thoughts

Artificial Intelligence is greatly changing how businesses support their customers. Bots are becoming an integral part of user engagement strategies. By using customer service chatbots, you can provide immediate responses and reduce the chances of two-way human intervention. Thus, reducing the operational costs and results in greater levels of customer satisfaction.

Going further, chatbots will be using the advanced capabilities of Artificial Intelligence (AI) and Machine Learning (ML) to understand the context and sentiments of customer queries so that the response is similar to users’ language.


Snigdha Patel
Author’s Bio

An avid reader, eclectic writer, blogger, and content writer by profession at REVE Chat, Snigdha Patel endeavors assiduously to understand complex support channels and provide information regarding them through comprehensive blog posts.

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