How Chatbots Help Customer Service In 2021?

As chatbots evolve, more and more businesses integrate them into their customer service processes so they save costs, speed up daily processes and free up human resources.


How are businesses using chatbots in customer service in 2021
Source: analyticsindiamag.com


Whether we are talking about the AI in your smartphone or chatbots in general, these digital assistants are known for increased customers satisfaction and higher customer retention rates.


Today, we are looking at how chatbots are helping improve customer service in 2021. So, if you are planning on adding an AI to your team but are not sure which is the right one for you, you’re in the right place.


Let’s dive in!


What is a chatbot?

Chatbots, formerly known as conversational agents, were initially a system of written answers for frequently asked questions a company would encounter. In other words, they were automated FAQs.


This helped in a few ways:

  1. It saved time – chatbots tend to be a bit faster than people
  2. Customer service operations were no longer limited by a schedule – chatbots are available 24/7;
  3. It saved some costs – chatbots can answer several people at the same time, so companies needed fewer people in customer support.


How chatbots for businesses improve customer service in 2021
Source: hostingfarm.net


Today however, chatbots have evolved past the basic written interaction. Moreover, they are able to have almost human-like conversations, and are available on more platforms.


How popular are chatbots in the customer service industry?

Back in 2018, Gartner predicted that 15 % of all customer service interactions globally would be handled by AI by 2021. A more recent research by Invespcro’s shows that 67% of global consumers interacted with a chatbot over the last 12 months.


Forbes also says that 62% of US consumers like using chatbots to interact with businesses and that 60% of millennials have used chatbots, out of which 70% reported positive experiences.


Based on a Juniper Research, by 2023 approximately $112 billion in revenue in the retail sector will be driven by conversational AIs and 75-90% of healthcare & banking queries will be handled by chatbots according to CNBC.


Needless to say, chatbots are only growing in popularity as they continue to evolve. But, what types of chatbots are there?

Types of chatbots based on communication channel

Based on the communication channel, chatbots split into two categories:

  • Text-based – using channels like Messenger, Slack, and Telegram.
  • Voice-based – virtual assistants such as Alexa, Siri, and Google Assistant.


chatbots categorized based on communication channel
Source: Medium


Both types of artificial assistants are used nowadays by almost everyone all around the world via smartphones, tablets, smart TVs, laptops, even cars!


Main types of chatbots based on functionality

Based on the technology behind them we distinguish six main types of chatbots. The type you choose for your business depends strictly on your needs and budget.


1. Scripted/Quick reply bots

This type of chatbot is used to interact with the end user by answering only basic questions registered in its database. So they are quite limited:

  • The queries must match the script to get and answer;
  • There are limited answers the chatbot can give;
  • The chatbot cannot carry a conversation.
2. Natural Language Processing (NLP) Chatbots

Natural language processing (NLP) chatbots don’t use scripts, they use context. Simply put, they recognize intentions through the language personalization process, and are able to use variables to respond.


Compared to their scripted counterpart, NLPs:

  • Are not limited by specific queries;
  • Can have a variety of answers for the same query;
  • Could learn from and hold a conversation by asking questions;


Natural language processing technologies behind chatbots
Source: canopylab.com


Moreover, NLP chatbots are also categorized into 4 main types:


2.1. Service/action chatbots

Service or action chatbots fulfill a user’s request by challenging the conversation to collect relevant information by or taking a specific action.


Interestingly enough, this type of chatbots is most common within the aviation industry where they are used by customers to check flight reservations, flight booking prices, and also check statuses.


2.2. Chatbots for social communication

This kind of chatbots are integrated with communication platforms such as Messenger, WhatsApp, Telegram, Slack, etc., allowing users to reach a company without accessing their website.


Thanks to their personal feel and availability on a popular platform with a company’s target group, these chatbots have an incredible potential of boosting your visibility and build loyalty with your users.


2.3. Context-enabled chatbots

Context-enabled chatbots use a more complex artificial intelligence technology called machine learning or ML that allows them to remember conversations and create contextual connections.


Simply put, they learn from them, constantly adapting, which makes them one of the most advanced form of conversational chatbots for business development.


2.4. Chatbots with voice control

Voice-enabled chatbots  such as Siri, Alexa or the Google Assistant, also use machine learning and are able to learn from user interactions.


But, voice-enabled chatbots can receive and respond to queries out loud through technologies like text-to-speech (TTS) and voice recognition APIs.


Overview of chatbots in previous years


Boomtown’s research presents a graph about the popularity of chatbots showing that in 2018 only 0,5 % of the Business to Business Sites own chatbot assistance on their websites which gives an overview of chatbot possibilities.


How chatbots for businesses looked like in 2019

The Collect chat research posted in 2019 shows that an industry profiting the most from chatbots is real estate due to their ability to lead generation.


Secondly, the travel industries profit from chatbots because of their use in fastening the process of answering and filtering through travel bookings. Additionally, they use the advantage of a chatbot as a 24/7 tool.


Thirdly, the healthcare industry uses a chatbot to enable employees and customers to effectively manage bookings through the chatbot’s conversational interface.


Moreover, the education industry uses chatbots to easily communicate with students and their parents. Eventually, financial institutions more and more often use chatbots for evaluation and consultation with their potential clients.




How chatbots help customer service in 2021.

In a survey made by Drift, the top reasons why users would use a chatbot is to wither get a fast response regardless the time of day, or getting the answer to a complaint or problem quickly.


Natural language processing technologies behind chatbots
Source: drift.com



However, the survey also shows that chatbots are not only made for answering simple questions, and users start to see their use and possibilities. For example, some of the respondents are interested in features like paying a bill or buying an item..

So, as your users are becoming more and more accustomed to chatbots, how can these digital assistants help your business?

1. One chatbot replies to more than one person at the same time.

A human customer service employee is only able to chat with one customer at a time. So, if you want to keep up with market demands, you need a large budget.


On the other hand, A chatbot can have multiple conversation with thousands of your visitors at the same time.


2. Chatbots work 24/7, which means that the customer can ask questions at any moment.

Customers nowadays expect to have contact  with your company 24/7 and the fastest responses to their questions. And, chatbots are the solution to this problem.


But, remember that chatbots differ in quality and functionality, and a chatbot that fails to help your users is useless even when it “working”24/7. So, keep an eye on its logs and train it thoroughly.


  3. They benefit from immediate and consistent responses due to the data stored in the system.

Providing the same quality of information to each of your customer’s chatbots proves the consistency and reliability of both the company and its products.


4. Chatbots can be multilingual – as multilingual as your budget allows

Chatbots can be trained to be multilingual, and depending on how advance they, they can have different approaches.


For example, some chatbots are trained to speak several languages, but the user needs to select their preferred language. Other context-enabled chatbots are simply trained to reply to one intent in several languages based on input.


  5. Chatbots have endless patience characteristic only of a robot.

While humans might get irritated, or tired, AIs will patiently answer every question, every single time, no matter how many times it is asked.  It is difficult for humans to match chatbots in this matter.


The self-learning system, personalizing responses to the interlocutor, and memorizing the conversation to characterize the client, makes buyers a huge difference.



No matter what business your run, small or big , the benefits of adding a chatbot to your customer service team are undeniable. Albeit, chatbots still need trining and supervision, but they have come a long way.


From a little helper with simple questions to the irreplaceable, self-sufficient, sometimes sole contact with customers, chatbots have evolved so much, that we can have almost human-link conversations with them.


Moreover, they learn from your users, increasing efficiency and customer satisfaction, which implicitly will create customer loyalty as well as attract new customers.


However, while chatbots are a crucial milestone we overtook in technology, we do not think that chatbots will replace human beings, but they do facilitate customer service processes and better companies’ lives.


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