What are chatbots? (with 3 great examples)

Chatbots are one of the biggest marketing trends of recent times and they’ve come a long way over the past few years. The latest AI bots like ChatGPT are increasingly capable of simulating human-like conversations, but what does this really mean for marketers? Let’s be honest, chatbots have a history of being hyped up and, then, failing to meet expectations–so does this technology deserve a place in your marketing strategy?

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What is a chatbot?

A chatbot is software that simulates human-like conversations inside an instant chat user interface – or something very similar. Chatbots replicate the back-and-forth conversational experience you’ll find on instant messaging apps like WhatsApp and Messenger.

At this point, most bots facilitate two-way conversations with a single human user submitting messages/prompts on one end and the chatbot responding on the other.

Some chatbots use the latest AI technology – namely, natural language processing and machine learning – to interpret user prompts and provide original(ish), relevant responses. Others are programmatically scripted to detect keywords in user prompts and provide a limited set of relevant responses. Some only allow users to select from a series set of options without any real conversational input on the user’s end.

While some chatbots are more advanced than others, they all have their uses – as long as your expectations are reasonable. In fact, most marketers don’t need to implement the latest AI bots into their strategies. Generative AI responses may create a more realistic conversational experience, but this isn’t particularly helpful if you want to drive the conversation towards specific actions: purchases, enquiries, customer support cases, etc.

In most marketing scenarios, you want a certain level of control over the conversation. So, instead of implementing ChatGPT-like experiences, you might want to incorporate a mix of the latest AI tech with programmatic scripting. This way, you get all of the interpretational power of AI for your bots to understand user messages while controlling the direction of the conversation in your bot’s responses.

How are marketers using chatbots?

Interest in chatbots has fluctuated intensely for almost a decade. Unrealistic media hype means the technology never manages to live up to expectations in the public eye. However, marketers have been using chatbots throughout this period with plenty of success.

chatbot interest

In January 2023, Search interest in “chatbots” surpassed the previous peak in August 2017 for the first time – source: Google Trends.

As chatbot technology continues to improve, its impact on day-to-day marketing strategies only increases. So, without any hype or speculation, let’s look at some of the most effective ways marketers are using chatbots today.

1. Personalise shopping experiences

As the web abandons third-party cookies, personalisation becomes increasingly difficult. Chatbots provide a crucial channel that allows us to create hyper-personalised, one-to-one experiences with visitors, leads and customers.

Designed properly, chatbots can collect and store key information with every interaction and refine the experience to make it more relevant to each individual. For example, a clothing retailer can ask users to select men/women, styles, sizes, product types and provide a list of relevant results.

handm chatbot

Intelligent bots can even get feedback on their suggestions and feed this back into refined results. In theory, every interaction personalises the experience further, making conversions both more compelling and convenient along the way.

2. Reduce friction, increase sales

Speaking of convenience, this is one of the biggest strengths chatbots bring if you implement them properly throughout the customer journey. By offering personalised product recommendations, allowing customers to buy from your chat UI, providing instant responses to customer support issues and other applications, you can reduce friction at key moments.

If you can reduce friction while also increasing relevance (personalisation) and motivation, this should drive more sales.

Don’t put all your focus on the initial conversion, either. Acknowledge the value of making life easier for existing customers and the impact this has on repeat purchases. You’ll often find potential customers are less keen to buy through bot conversations than existing ones are to use bots for things like customer support.

Test bots across the customer journey and split your experiments so you’re not bombarding everyone with bots everywhere. See where conversational experiences have the strongest impact on results and prioritise these interactions.

3. Instant customer support 24/7

Customers inevitably run into problems but how you deal with them is what really matters. Running an effective customer support system is challenging but chatbots are great at automating the first interactions when customers have a problem.

Unlike your support team, bots can run 24/7 and provide instant responses to every customer query. Of course, chatbots can only provide limited support but don’t underestimate the importance of response times.

According to SuperOffice, 46% of customers expect a response from companies within four hours of raising a ticket. Obviously, bots are no replacement for a human member of your support team but they can help fill the gap between responses. Even if your bot only solves 10% of cases without human intervention, that’s 10% of customers whose issues are resolved almost instantly and a reduced workload for your team.

4. Keeping customers in the loop

Aside from running into the odd problem, customers will often need access to information. They might want to check on the delivery status of their order, retrieve a lost password for their account or simply have a frequently asked question they need answering.

Chatbots are perfect for these interactions that don’t require human intervention. This is where you’ll see the biggest impact of instant responses for tasks customers would, otherwise, have to wait for. At the same time, automating these interactions with chatbots will save your team handling tasks they don’t need to – time they can use to focus on more pressing cases.

A few examples of the latest chatbots in action

If you’re looking for inspiration from quality chatbots in action, it’s not always easy to find current examples. Sure, everyone was jumping on the botwagon back in 2017 but how are marketers using them to make things happen in 2024?

Let’s look at some of the best examples out there right now.

Erica® – Bank of America’s virtual financial assistant

Bank of America’s virtual financial assistant, Erica®, provides a personalised service to customers through its mobile banking app. Customers can set up things like bill reminders or get the bot to track recurring payments for price increases.

Bank of America's chatbot called Erica

The chatbot can also help customers explore investment opportunities to make more of their money. The bank’s customer support team and investment experts are available to help customers upon request but Erica® can take on its share of the workload while helping customers manage their accounts faster.

Sephora’s Live Beauty Help

Sephora has implemented a dual-purpose chatbot for providing customer support and live beauty help for visitors. If users select the customer support option, they can place and cancel orders, manage returns and exchanges and report missing, damaged or incorrect items – among other things.

The Sephora chatbot
sephora chat bot

Alternatively, if they click “Product & Beauty Recommendations,” they’re asked to provide a little info about what they’re looking for. So, if a visitor sends something like “help me choose skincare products,” the bot will connect them with real, human beauty advisors.

Intercom’s all-purpose bot

Intercom is one of the biggest and oldest names in conversational technology. The company has always focused more on the sales and customer support aspects of chat widgets and bots, particularly with integrating automated bots with human reps/support teams.

Intercom's chatbot

Intercom’s latest AI-powered bot allows you to add an all-purpose conversational widget to your website. Visitors can ask questions about your product/services, raise customer support tickets, quickly access content (FAQs, documentation, etc.) and speak directly to members of your team (when available).

The company is also making good use of the latest generative AI technology. Its intelligent bot is called Fin and Intercom says it can resolve up to 50% of support cases without any human intervention. Keep in mind that you’re relying on generative AI to understand user inputs and generate a response – so information accuracy is always a question.

We can build one for you!

If you think it’s time to implement chatbots into your marketing strategy or an existing bot of yours could do with an upgrade, our team can help. To explore your options and get a quote, call us on 023 9283 0281 or submit your details here and we’ll call you.

Chris Pitt profile picture
Chris Pitt

Chris is Managing Director at Vertical Leap and has over 25 years' experience in sales and marketing. He is a keynote speaker and frequent blogger, with a particular interest in intelligent automation and data analytics. In his spare time, he enjoys playing the guitar and is a stage manager at the Victorious Festival.

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