128. 5 Benefits of Chatbots

(With Jennifer Etchegary)


Iron Man’s “Jarvis” is a science fiction example of artificial intelligence with which many of us are familiar. The idea of artificial intelligence in chatbots has become reality. Many businesses already implement chatbots, artificial intelligence that mimics the conversational abilities of a human.

Jennifer Etchegary, an expert in technology procurement and implementation, helps companies find and implement the right technologies in the most effective ways possible. Some of her specialties include virtual reality, augmented reality, and chatbots, along with a variety of other technologies.

In today’s episode, we’re going to discuss how businesses can effectively use chatbots and what benefits they can expect to see as it is done right.


In today’s market, we are seeing a shift towards everything digital. Jennifer said, “If you’re not digitally transforming, you’re losing.”

New technologies are being developed at a higher rate than ever before. Chatbots are one of those technologies businesses are starting to use a lot.

A chatbot is a conversational experience that uses artificial intelligence (AI) and natural language processing to mimic a conversation between real people. Essentially, it is a robot that can have a conversation.

Surprisingly, the first chatbot was developed even before the personal computer. Joseph Weizenbaum, a computer scientist, and professor at the MIT Artificial Intelligence Laboratory created the first chatbot in 1966 named Eliza (Source: Daffodil). The personal computer wasn’t developed until 1974 (Source: Britannica).

Eliza was designed to imitate a therapist by asking open-ended questions and follow-ups. She operated by recognizing a keyword or phrase and then produced a pre-programmed response (Source: Analytics India Magazine).

The world didn’t truly see the rise of chatbots until the smartphone era. In 2010, Apple acquired Siri and then revealed her as an integrated part of the iPhone in 2011 (Source: SRI International). After Siri, Amazon created Alexa in 2015 and Google created Google Home in 2016 (Source: Daffodil).

Since then, we have seen an increase in chatbots, even within smaller businesses. Chatbots are found on customer service phone lines, websites, and social media platforms. Chatbots have become increasingly popular as they offer many potential benefits.

5 Benefits of a Chatbot

Here are five potential benefits chatbots can give us in our business.

1. Saves Time

Chatbots can save time for both the company and the customer. They can maintain a 24/7 response system so the customers can have constant access to communication. With a 24/7 customer service line, customers can solve their problems faster without ever needing to come to a live customer service representative.

Over 50% of customers expect 24/7 availability with businesses (Source: AI Multiple). If we implement a chatbot, it can increase customer engagement and satisfaction to meet their expectation of constant service. And if a chatbot is doing it, we don’t have to spend so much time doing it ourselves.

A chatbox can also significantly reduce customer service response times, depending on how advanced it is programmed to operate. A chatbox can help answer any level 1 questions. This could include how to find something on our website, check the status of an order, or provide our business hours. Then, if a customer comes to us with a level 2 or 3 questions, they can transfer the customer to the direct person they need to communicate with for that question.

By answering the easy questions for us, we won’t have to take as many calls or chats, and we will have more time to help customers with bigger problems. This can help reduce the wait time on our phone lines or online chats. This benefits the customer since a chatbot can help them solve their easy questions without having to wait 30 minutes on hold to reach a customer service representative.

“Initially a chatbot might only save 5% of your customer service time, [but] as it gets smarter and smarter, as you train it, it can get up to about 30% to 40% to 60%,” Jennifer said. “It saves a lot of time.”

With reduced time, not only increases customer satisfaction but also employee satisfaction as they don’t have to constantly answer back-to-back calls.

2. Reduces Costs

By saving time, chatbots can also help reduce costs. Juniper Research estimated that chatbots could save the banking industry $7.3 billion globally by 2023, up from an estimated $209 million in 2019 (Source: Juniper Research).

Instead of paying a group of employees to answer phone calls or respond to chats, chatbots can do it. While chatbots may not be able to take over the role of the customer service representative completely, they can answer simple questions so we don’t need as many customer service employees. Chatbots can help businesses save up to 30% of their customer support costs by reducing response times and answering 80% of routine questions (Source: IBM).

As chatbots help reduce customer service response times and offer 24/7 availability, they can also increase customer sales. Business leaders have claimed that chatbots increased their sales by an average of 67% (Forbes). Customers often look for the fastest solution possible. If they have to wait 30 minutes on hold or wait until the next morning, we may have already lost their business.

3. Increases Efficiency

Chatbots can help increase efficiency. One way they can do this is by being programmed to speak many different languages. If someone calls in, but only speaks Spanish, we can have our chatbot instantly programmed to take their call. Our chatbot can be programmed to respond in any language we choose such as Spanish, Chinese, French, or Portuguese.

Chatbots can also get instant access to information. Jennifer had a vice president come to her for help because she was having a really difficult time with her contact center. They were seeing many inefficiencies such as not being able to access information as easily as they would like. Jennifer connected her through another person in her network and they were able to develop a chatbot that helped increase efficiency in access to information by about 40%.

A chatbot can also be custom-built to better respond to our customers’ needs. “[There is] the intelligence advantage there, meaning [chatbots] have a deeper understanding of how people are speaking, and you’re able to respond better to their needs,” Jennifer said. As we program chatbots to understand our customers’ needs, we can increase our efficiency.

4. Is Data-Driven

Chatbots are scalable and data-driven. When a customer asks a question in our online chat, our chatbot can record and store that information. They can take frequently asked questions or common problems and turn them into data we can use to improve the customer experience.

Jennifer explained that one of the biggest business tectonic shifts is the increase of data. “A lot of the data captured, especially in chatbots, is very powerful,” Jennifer said. We should lean towards the increased data we get from chatbots and use it to understand what our customers are telling us. Instead of going off of a gut feeling, we can use actual data to make customer-based decisions. As we do this, our products and services will resonate with customers a lot more.

Beyond answering questions, chatbots can also reach out with surveys to gain customer information and track a customer’s purchasing patterns. With this data, we can find new ways to direct our customers’ responses and guide them in their journey to making a purchase decision.

5. Increases User Engagement

Chatbots can also increase user engagement. With 24/7 availability, chatbots can always communicate and engage with our customers when needed. A survey found that 83% of online shoppers need support while shopping (Source: Econsultancy). By having a chatbot readily available, we will be able to communicate with our audience more frequently.

Research also found that companies that engaged with their customers on social media increased their customers’ spending by 20% to 40% (Source: Bain & Company). As chatbots increase our user engagement, we can also increase our sales.

Jennifer shared the example of a large beverage company that did a big campaign for one of their soft drinks. They used a chatbot with a Halloween theme and gamified it. When a customer clicked on the chatbot, it took them through a game that eventually ended with a coupon for their drink. This helped the company increase its engagement by about 60%.

Another example Jennifer shared was from a retail company. She helped them create an augmented reality chatbot experience. While a customer shopped for sunglasses through the chatbot, they could “try on” different sunglasses through an augmented reality layer to see what they looked like on their face. “The user engagement exploded and the buy-ins were just unbelievable,” Jennifer said.

The Dangers of Chatbots

Just because a chatbot may be beneficial for some businesses, this doesn’t mean it will benefit every business. If we want to install a chatbox, there has to be a great use for it. We should ask ourselves, “How will this improve my customer’s experience?”

Jennifer said that one of the biggest mistakes she made in her career was overcomplicating things, which was a waste of time and money. There is a power in simplicity and sometimes a chatbot may take away from that. We should only use a chatbot if we believe it will help the customer.

Chatbots have the danger of taking away the personalized touch. With chatbots, we need to be very careful with the fine line between efficiency and human connection. There is a certain extent to which technology can help. Past that point, it makes the experience more frustrating. Chatbots are an effective way to help with level 1 customer service questions. However, if customers have a more complex issue, they should be able to reach a real person. If a chatbot can’t provide the right help, it begins to feel more like an obstacle standing in the way between the customer and the customer service representative.

When I asked Jennifer for her best advice about retaining human touch while implementing a chatbot, she said we should:

1. Get multiple opinions and feedback on our chatbot.

2. Make sure the chatbot has the right personality and brand voice.

3. Focus on conversational design. We need to make sure the conversation is natural.

If we decide a chatbot is right for our business, we can take the next steps to create one that fits our brand’s personality. We should only choose to use a chatbot after significant research and time to determine if it is the right solution for our business.

Key Takeaways

Thank you so much Jennifer for sharing your stories and knowledge with us today. Here are some of my key takeaways from this episode:

1. Chatbots can help save a company and customers lots of time. They can maintain a 24/7 response system so the customers can have constant access to communication.

2. Chatbots can help reduce customer service costs and increase customer sales.

3. Chatbots can help increase efficiency.

4. Chatbots are scalable and data-driven. They can take frequently asked questions or common problems and turn them into data we can use to improve the customer experience.

5. Chatbots can increase user engagement.

6. If we want to install a chatbot, there should be a great use case for it

7. Chatbots have the danger of overcomplicating things and reducing personalized connection.

Connect with Jennifer

If you enjoyed this interview and want to learn more about Jennifer or connect with her, you can find her on LinkedIn or her company’s website chatc.ai.

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