Chatbots Can Improve Customer Service & Prevent Chargebacks 

As a merchant, your customer service department is one of the most crucial factors in your success. No matter what your industry or offerings, customer service agents are the main communication channel between you and your customers. 

The larger the business grows, however, the harder support management becomes. Automating a portion of your communications could be the solution. This is where customer service chatbots can come into play.

Chatbots can streamline and improve the customer experience. But, can removing the personal element have a negative impact on your bottom line over the long haul?

In this post, we explain what chatbots are, how they work, and some of the benefits and risks associated with automating your customer service. We’ll list some of the best chatbot providers, and help you decide if a chatbot program is right for your business.

What is a Customer Service Chatbot?

Customer Service Chatbot

[noun]/kəs • tə • mər • sər • vəs • CHat • bät/

A customer service chatbot is a conversational interface that interacts with customers to resolve issues and answer simple questions. It uses rudimentary AI and “yes/no” programmatic decisioning to streamline customer interactions and resolve customers’ questions.

In essence, a chatbot is a script that performs basic communicative tasks. Primarily used for customer service and support, chatbots streamline interactions between consumers and merchants. They are often the first interaction a customer has with your business, answering simple inquiries or guiding callers to the proper human agent. 

Many retailers also employ bot technology to engage with customers through social media and direct messaging apps like Facebook Messenger, Kik, and WhatsApp. Experts say that, thanks to chatbots, as many as 85% of all customer service interactions are already being managed without human employees.

Chatbots save time for both customers and merchants, providing quick and efficient service that is cheaper than live agents. There are pros and cons to their use, though, and you need to weigh those carefully.

What Do Chatbots Do?

Support chatbots can be fully automated, or they can function as a tool for live agents. Simple automated systems are often rules-based, whereas more complex systems leverage artificial intelligence to resolve user queries.

How Popular Are Chatbots? 

While chatbots have not completely replaced human support agents, it’s safe to say that their usage will continue to climb in the future. Roughly 42% of B2C companies use a chatbot on their site. Research shows that 15% of people have communicated with a business through a chatbot, and as many as 40% of millennials say they interact with bots on a daily basis. 

An estimated 33% of consumers want to be able to use a chatbot in certain scenarios, such as making a hotel or restaurant reservation. And, when it comes to actually making a purchase, nearly half would be open to making a purchase directly from a chatbot.

Users are also clear about their reasoning: convenience and accessibility. Survey respondents claim that, for the online services they use, having 24/7 access to customer support is the greatest benefit offered by chatbots.

Direct Benefits of Customer Support Chatbots

It’s not surprising that chatbot usage is on the rise. The direct benefits are substantial for both customers and merchants:

Customer Service Chatbots Deliver Secondhand Benefits

The immediate impacts of customer service chatbots are self-evident. However, the long-term benefits are equally important in preserving and enhancing merchant profitability.

Individuals satisfied with today’s support experience are more likely to shop with you again in the future. Plus, while chatbots help your customers, they can also collect valuable data. 

Information about sales preferences and common questions can help you develop target marketing based on individual shoppers’ needs. This type of personalized service can help build customer loyalty for life.

Bots can handle many of the repetitive, frequently asked questions that don’t require human decisioning, letting you reallocate staff to where they’re needed more. Advanced chatbots can even offer feedback surveys and record customer interactions for training and development.

Finally, streamlined customer service practices can significantly decrease customer disputes (also known as chargebacks). This is achieved by cultivating goodwill between the customer and the merchant, and providing rapid response to inquiries that might otherwise have devolved into disputes.

It’s crucial to note, however, that this is only true when chatbots are properly deployed. Otherwise, chatbots may have the opposite effect. A bad chatbot experience could result in greater customer frustration and thereby increase your chargebacks, as we’ll see in the next section.

Are There Downsides to Using Chatbots?

Only if deployed ineffectively.

Over-reliance on any single technology or solution can be problematic, and chatbots are no exception. Customer service chatbots still require close supervision and human oversight. AI technology continues to improve every year, but chatbots you can trust with full, genuine autonomy are still many years away.

Other potential downsides or limitations to using chatbots include:

Chatbots are powerful tools overall. But, without monitoring by human agents, they can lead to trouble. They may even prove to be a security liability.

Are Chatbots Secure?

It’s not pleasant to talk about, but the truth is that no system is entirely hacker-proof.

Technology of any sort can be exploited. With chatbots, however, many of these weak links are simply the result of merchant carelessness. A breach could occur because:

• The chatbot references an insecure host, database, or third-party software.
• Chatbot communications lack proper encryption, particularly when accessing personal data.
• Agents and other employees do not receive enough training, resulting in accidental exposure.
• New or evolved threats are ignored or are not properly assessed.

Any of these issues can potentially be used to attack your systems, your data, or even your entire network. Data can be stolen, corrupted, or used to commit ID theft or criminal fraud.

Viruses, malware, and ransomware can take over entire systems, exposing data or holding it hostage. Hackers may even use your chatbots to sneak malware or other troublesome software onto your customers’ devices. If that happens, your company will likely take the blame.

Chatbots & Human Oversight: An Ideal Combination

Customers want access to live, effective, human-based customer service at every stage of their interaction. If you wish to integrate chatbots into your support strategy, the technology should be balanced by human oversight. Best practices for this include:

Remember: automation is there to simplify and streamline customer interactions. If chatbots open vulnerabilities, they are counter-productive.

Do I Need a Chatbot System?

Like all technology, chatbots are made to augment your existing system… not replace it.

You’ll need a good customer support strategy already in place. As we discussed above, chatbot responses depend on accessing existing data. AI-based chatbots analyze interactions to fine-tune their knowledge base over time, but they need a good core of data to start.

Beyond that, there are a few other things to consider when deciding if your company would benefit from a chatbot feature:

If any of that sounds like your business, you should definitely look into the possibilities of chatbot technology.

The Best Customer Service Chatbots for 2023

The success of your chatbot strategy depends on partnering with the right provider. There are many different bot software platforms… far more than we could cover in even a ten-part series.

Some specialize in customer service chatbots, while others offer bots as one part of a wider customer support package. Still others focus on only one type of product, such as AI bots. Major brands such as HubSpot, WordPress, and Salesforce have chatbots developed to work specifically (but not exclusively) with their own products.

When looking for the best customer service chatbot, here are things to consider:

• Your business type
• Chatbot type (AI, Voice-based, etc.)
• Ability to integrate with your existing software/hardware/platform
• Turnkey vs. DIY model
• Cost

With all that in mind, there are platforms that are generally recognized as being powerful and reliable. A list of the most popular service providers (in alphabetical order) includes:

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Love them or hate them, chatbots have almost become a necessity for modern customer service providers.

Whether it’s answering simple questions, routing calls to live agents, or interacting with customers through social media, customer support, chatbots are here to stay. If deployed properly, a customer service chatbot will save time, improve your customer experience, and go a long way toward keeping your business sustainable.