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How Do Chatbots Help Businesses: 11 ways to Improve Business

By Riajur Rahman Last Updated -- Thursday, 2023-11-02
how do chatbots help businesses

In this digital age, chatbots have gained vast popularity in businesses. The implementation of chatbots is growing day by day as they provide immense support to both businesses and customers. Here is an endeavour to explain to you how do chatbots help businesses.

Chatbot is not a new word. In every sector of our daily life, we are discovering their steps. They are extremely involved in the business, too. A chatbot allows businesses to provide a unique way for customers to keep in touch with them. Businesses can improve their conversion sales, productivity, revenue, activity and customer service using chatbots as well.

As chatbots have upgraded from the past, they play an inevitable role in increasing business efficiency. The chatbot for business use is important for multiple benefits in eCommerce to deliver better experiences to customers. With the chatbot benefits for business, the usage rate of chatbots is increasing day by day.

A report has been published on forecasting their CAGR of 29.7%. Reporters claimed that the chatbot market size is expected to be USD 2.6 billion in 2019 to USD 9.4 billion by 2024. (source: BusinessInsider)

What is Chatbot?

In technical language, a chatbot is a computer program that simulates human conversation to interact with customer queries. 

This era is an evolution of Artificial Intelligence (AI) used as a messaging application through both text and voice. However, all chatbots do not have Artificial Intelligence (AI) set up. Other modern automation Chatbots use Conversational AI like Natural language Processing (NLP) to solve the customer's questions. Chatbot helps visitors connect with businesses. It also helps to find information about the products when they need it. So, in a basic short language,

A chatbot is a “chatterbot” that acts like a human agent providing customer service.

If any user knocks via any channel, the chatbot greets them at first. Then, they instantly respond to their questions and solve their problems based on their processed language. 

For example, when you visit websites for the products. You will notice that the messenger or command option pops up on the screen in a few moments. These are the chatbots.

How Chatbot Works

At the primary stage of the chatbot, they can only answer the FAQ questions. Chatbots used to give options of questions to choose and they replied with answers. Thus, they continued their conversation with users. 

But if any complex questions used to come naturally instead of common queries, they were unable to reply. However, chatbots are now upgraded with modern algorithm technology. They are now being used in different industries for their easy user interface with unlimited benefits. 

A chatbot works based on many guidelines of programming that have been developed on it. 

Modern AI chatbots are natural language-processing chatbots that perform all-natural queries. In contrast, automated chatbots continue the conversation through scripted queries. Using (NLP), Natural Learning Understanding (NLU), AI, Automated rules, Machine learning (ML), and chatbots deliver the answers to the questions. They respond to the user's questions and answer them immediately like they are human. The procedures of how chatbot works are given below:

Interaction: When any visitor enters a chatbot via any channel, it greets them instantly. Plus, it allows them to write, command or select any script questions. 

Receiving: When they select or write queries to interact, the chatbots receive them.

Monitoring: Chatbots monitor the data and intent and search the related info with messages. 

Searching: They use NLP to determine the purpose of the queries and search for relevant information. Rule-based chatbots detect data with scripted rules which are written in their module by the owner. They allow users to 'click activities' or trigger options like 'yes' or 'no'.

Replies: After the final determination, chatbots deliver the appropriate relevant answers. Rule-based chatbot replies based on a written script in their user interface. They guide the users on some FAQs, such as: 

  • Log-in issues
  • Payment Issues
  • Booking Instructions

Besides, AI chatbots use NLU and ML to continue the natural conversation. They can answer any questions using predictive intelligence and analysis and provide recommendations. 

Join with Live Agent: If customers still need to get their proper answer, chatbots can take a request to join with a Live Agent.

To sum up, the working procedure is the same for all chatbots. Businesses use chatbots depending on their work efficiency. Moreover, any chatbot's working efficiency depends on the chatbot type. However, we have discussed what a chatbot is and how it works. Now, let's dig into types of chatbots. 

Types of Chatbots

Depending on the developed programming and conversational style in response, chatbots are mainly two types. 

  • Declarative Chatbots

Nowadays, this type of chatbot is commonly used in many aspects. Generally, they interact with the FAQs related to the information about products. They can perform only common questions and are very specific. And this conversation is not natural at all. They use NLP, little ML, and the owner’s scripted rules to respond appropriately to the queries. Domino’s Messenger Bot is a good example of a declarative chatbot.

Normally, there is no chance to ask a customized variety of questions. Basically, they can assist you with products. If you ask about the pricing, warranty, materials, and delivery process of a product, they can provide the information. 

Also, they can ask you in repetitive transactions like feedback, logging a request, etc. Therefore, a chatbot never gets tired of doing repetitive work like human operators. This type of chatbot is the Best chatbot for business. Leading companies are using these amazing chatbots.

  • Conversational Chatbots

These chatbots are very sophisticated, interactive and conversational chatbots. They are also called “virtual assistants” or “digital assistants”. They can multitask. On the other hand, they can provide better-personalized services to customers than declarative chatbots. For instance, Kuki AI Companion and Google Assistant are the best Conversational chatbots.

However, they use NLP, NLU, AI, and ML to provide contextual replies to the queries. Also, they use predictive intelligence and analytics to provide personalized and customizable answers. 

In addition, before interacting with a customer, they monitor the data and intend to start a primary relevant conversation. Analyzing the previous chat and queries, they can also recommend products. 

What are Chatbots Used for?

Well, chatbots are now everywhere, from business to education or health. Chatbots are being used globally by the biggest businesses like Starbucks, H&M, Bizbike, etc. 

Chatbots are used to provide a system so that humans can interact with each other through technology. It is easier for a chatbot to interact with multiple humans instantly. They can answer users' queries and solve problems, ensuring better service. Now, let's talk about what are chatbots used for and why companies use chatbots.

Virtual Assistant: Many businesses use chatbots as their virtual assistant. This virtual assistant provides the best customer service.

  • Gather customer feedback
  • Allows customers to rate the business service
  • Collect consumer's contact details.
  • Inform the business working procedure.
  • Can make a call to the company’s agent

Helps to Reduce Business Cost: It reduces business costs. Businesses can place chatbots instead of hiring many customer agents.

‘A chatbot can play a responsible employee role in your business.’

Helps to Improve Customer Service: It helps to improve customer service, boost revenues and increase conversation sales.

Provide Seamless Customer Service: By using this, a company can provide 24/7 customer service that can not be possible for business employees.

Helps to Grow Business: Chatbot helps to grow a company's impression. 

Motivate Agents: Through this, other employees of the business can concentrate on other work more.

Response Quickly: Customers prefer chatbots more as they get quick responses. They don’t like the traditional system of a phone or email. They want quick responses to their issues from the business. According to statistics,

35% of customers desire to see more companies having chatbots.

HR Management: Businesses can also organize their policies for their employees, like

  • Business Policies
  • Working hours
  • HR policies
  • Internal systems and documentation

Benefits of Chatbot for Business


Chatbots became very popular in the coming days. In the last few years, chatbots have been performing in businesses, providing a multitude of benefits.

Chatbots play an important role in growing business. Chatbot benefits for businesses makes their customers delighted. Delighted customers are the main element of a successful business. 

For any successful business, the role of a business chatbot is incredible. The benefits of chatbots for business can be described after a while. Today, we are diving into some of the benefits of chatbots for business.

Provide Proactive Customer Service

Customers want fast and proactive service with quality. When customers ask the chatbot a question first, the chatbot answers immediately during the onboarding process.

Support 24/7 customer service

Chatbots are available to provide replies at any hour of the day. So customers can ask queries at any time and get replies with solutions within a second.

Improve Lead Generation automatically

One of the advantages of chatbots is they can qualify leads for your business. Before taking the sales funnel, the chatbot asks questions to customers to be sure of what they are looking for.

Increase Sales

Chatbots bring more sales and more profits. They proactively connect with customers to provide effective customer service to increase sales.

Support Multiple customers at the same time

The best thing about chatbots is they can support multiple customers at the same time. Chatbots can provide answers to thousands of customers at a moment. 

Provide Personalized Support

The significant benefit of a chatbot is that it can provide personalized service to customers. They ask queries to customers and reply based on their answers. Also, they can recommend the best products or information to customers.

Enhance Customer Engagements

Chatbots enhance customer engagement by allowing real-time conversation with great responses. With instant and consistent responses, chatbots let customer engagement go to the next level.

Improve Customer Experience

Chatbots give a smooth and easy shopping journey to customers. Through chatbots, customers can easily query for anything and can purchase them with the best experiences.

Automation with Human Touch

With chatbots, businesses can automatically provide better customer service to customers. They also can update customers about their new products, campaigns, or other information through chatbots.

Reduce cart Abandoned Rate

Chatbots give customers instant and fast replies. They continue conversations with customers and help them to find their desired products. This fast and appropriate service makes sales and reduces the cart abandonment rate of any website. 

These chatbot benefits are very important for any business growth. Thus, chatbots can make businesses trendy with the help of their features. 

How do Chatbots Help Businesses?


In this globalisation era, many businesses have yet to realise the value of chatbots till now. They actually didn’t assume yet the impact of chatbots on business. Chatbots improve your business base and boost its growth level to go high.

Now the question arises: can you make money with chatbots? The answer depends on your chatbot business plan. It would help if you implemented a relatable and applicable chatbot based on your chatbot business ideas. 

Chatbots are self-help tools that help businesses provide better customer service and experience, multilingual support, conversational interaction, and omnichannel support.

Furthermore, chatbot for business use helps to reduce business costs and increase sales and revenue. Moreover, they collect customer data and feedback to provide excellent productivity and quality. So, let's dive into the details of 11 ways of how do chatbots help businesses.

1. Available 24/7

Running a business as a Brand, a 24/7 customer service must-have. The basic attribute of deploying a chatbot is it can work full days in a year. Chatbots are always available to provide service to their audience. Businesses don’t need customer agents for a whole day standby.

For this convenience, customers also get benefits regardless of business hours. Besides this, chatbots respond to customers instantly and offer the best deals to them. As a result, they don't have to wait for replies, and their time can be saved.

Otherwise, if customers don't get proper care about your business, they tend to move to other businesses. Instant replies with a solution within a second can solve this problem. By implementing a chatbot, businesses can provide prompt solutions and solve all the customer's problems. Otherwise, they may lose their valuable customers. 

According to the survey, 78% of customers have abandoned a purchase due to a poor customer experience. So, a business should focus on time management, especially on providing customer service. 

2. Boost sales and Revenue

Chatbots are really game changers that have been performing in dealing with customers. They respond proactively to make deals successfully when dealing with corporate high-volume customers like banks, insurance, healthcare, and industry. Their useability and versatility help to take a business to the next level.

In addition, chatbots can make fast and appropriate sales replies. Businesses can offer clients the ability to book appointments using chatbots. Clients also can use the messenger chatbot to place orders and make appointments. According to statistics, business leaders claimed that their sales have improved by 67% using chatbots.

For example, the trendy beauty Brand Sephora published a report. They said that 11% of sales have increased after deploying the chatbot into business.  

3. Improve Service and Productivity

Chatbot helps businesses to improve communication with their audiences. Customers can frequently interact with the business through the chatbot. 

When a customer repeatedly contacts a business, they might get a different operator. Then, the possibility of solving the problem can be lost. Because all operators can not be equal to solve the problem or might shift. If the business has a chatbot, there will be no such difficulties. Because chatbots save data and collect customers' points of view. Then, they provide the best solution to them. 

In case the chatbot is incapable of answering or is unstoppable in understanding, it can connect customers to Live Chat Operators. This is how chatbots make service easier for businesses to provide customers. For this reason, businesses get lifetime customers. 43% of customers tend to shop repeatedly from a Brand after a good customer service experience.

4. Reduce Customer Service Costs

Chatbots can assume and diverge the potential customers.  Today, the use of chatbots is increasing in business to reduce the service cost.

Chatbots can handle all general questions and answer the FAQs. They ease the agents' workload so they can concentrate more on complex work where the human touch is needed. 

Besides this, implementing a chatbot is cheaper than hiring human operators. Chatbots discourage businesses from hiring extra agents. Getting an operator for out-of-working hours or for night shifting is very difficult and might be costly. However, chatbots also work full day including business hours

  • Answer the FAQ
  • Respond quickly
  • Give instant solution
  • Assist the customers
  • Provide purchase information
  • Provide order status and tracking information
  • Collect feedback
  • Offer self-service

5. Scalability

The biggest advantage of a chatbot is it can handle multiple customers at the same time. They can provide thousands of replies to thousands of customers at a time

For an operator, answering multiple customers is very challenging and tough. Because there is a chance to provide wrong answers or inappropriate answers. But a chatbot can respond to thousands of customers at a time.

When a special day or special celebration comes, businesses have extra pressure for these occasions. In this case, chatbots can handle this pressure. They can provide the best customer service at any time.

6. Collect Customer Data and Feedback

Customer feedback helps a business to grow well. Customer feedback and data are essential in growing a business. To become a successful business, companies should concentrate on customer feedback. 

Chatbots are very smart. They can collect data and feedback and can analyze them. With the help of a chatbot, the business is able to gain knowledge of what their customer needs. Businesses can improve their product quality and productivity by surveying customer data. They also can change any business format on the basis of customer feedback.

Chatbots can ask customers to give feedback on their service. They can give options to customers to write briefs or choose any tag. Many companies offer customers a rating by giving a rank or star on their services or products. Research has found that,

  • 80% of businesses use customer experience and feedback for analyzing to improve their service.
  • 72% of companies believe they can improve their service by analyzing customer experiences.

7. Increase Customer Engagement

Chatbots use conversational marketing to engage customers on websites. 

Engaged customers are more likely to go to the bottom line faster to your sales funnel.

Chatbots work like a Brand ambassador of a business. They promote businesses and products. Moreover, they offer discounts, the latest products, coupons etc to increase the engagement of customers. 

As soon as customers interact with the business, they lead them quickly to the purchase or booking process. Chatbots make it an easy way for a brand.

Besides, they ask for customers' experiences and feedback to make them feel personalized. Customers also get excited to get interesting offers easily through a chatbot. Customers who engage with businesses over social platforms spend 20 to 40% more on those businesses than other customers. (

8. Produce Conversational Marketing

Conversational marketing means streaming your customers from the first interaction to the sales funnel, providing real-time conversation. Modern chatbots use natural language processing for conversational marketing. 

Through the conversational strategy, chatbots create a strong bond with customers. They also create authentic experiences and long-term journeys for customers. 

Chatbot conversational marketing can take a business to the next level. This way of interaction plays a significant role in more conversion sales. The benefits of Conversational marketing are,

  • Improve Customer Experience
  • Create Smother Shopping Journey
  • Increase the leads and sales
  • Provide personalized customer service

For example, Domino’s Anyware promotes its Business using a conversational marketing strategy. It allows customers to order food items through a number available on food menus.

9. Flow Customer Onboarding Process


Customers always want organized business websites

They love to find products or something easily without any hassle. Besides, they prefer quick guides or navigation instead of any article on guidance. If they get it, they like to spend more on your website. 

However, chatbots for onboarding can help you provide this comfort and ease the way to customers. Chatbots have features called chatbot onboarding that guide the customers. The onboarding chatbot helps to find the products and information rapidly. 

The chatbot onboarding process is actually an interaction when the customer meets your business chatbot for the first time. 

  • Chatbot onboarding flow first welcomes the customers and then asks what they need. Based on their queries, a chatbot for onboarding can show the accuracy of what they are looking for.
  • Chatbot can handle customers' simple common queries automatically. 
  • Chatbot can ask personalized questions to them and also recommend related products. A chatbot can give a smooth shopping journey to create a good customer experience.

​​​10. Omnichannel Support

Chatbots come with an omnichannel support feature. Many businesses use chatbots for this amazing feature. AI chatbot offers omnichannel mode so that customers can communicate with businesses from various platforms like Facebook, Websites, etc.

Business gets huge benefits from this feature. In fact their sales and revenue increase because of this. To clarify chatbot allows a straight and effortless way for customers and businesses to connect together.

For example, the online shopping platform Alibaba Express offers many ways to connect with them through their chatbot Tongyi Qianwen

11. Offers Multilingual Customer Support

Last but not least one of the vital roles of chatbots is supporting Multilingual conversation services. Chatbots can be programmed to carry the conversation in multiple languages with customers. 

Customers are not bound to shop within limited boundaries while online shopping. They tend to shop anywhere in the world. In that case, chatbots are helping to break the language barriers by offering multi-language support. Also, they help businesses to get benefits by allowing multilingual support to ensure better customer service.

Some benefits of Multilingual chat support for Business:

  • Multilingual chatbots can connect customers through voice, text or chat.
  • At the beginning of the conversation, they ask customers their preferred language to start the conversation.
  • AI chatbots use NLP and ML to gauge the sentiment behind the word people interact with. 
  • They try to predict and detect user language. And try to understand the user's emotions and feelings to provide appropriate, better service.

Which type of business will be beneficial by chatbot?

Chatbot is a distinct tool that offers numerous benefits across different types of business. Regardless of the industry, they offer a wide range of advantages for various types of applications. You can use chatbots on your social media and website marketing. They are now being used in marketing including customer care, sales and IT, and service helpdesk etc. 

Some of the chatbot business ideas which can use chatbots every day for their upbringing and nurturing are given:

  • E-commerce Business

By integrating chatbots in e-commerce, businesses can provide a virtual assistant to their audiences. Chatbots can support providing better customer service, product information, order tracking, recommendations, personalized experiences, conversational marketing, payment-process information, etc.

  • Software Developments 

Chatbots are great for software development companies. With new use cases, AI chatbots are getting more and more amplified in these companies. Software companies can assign AI chatbots to describe their task and roles, constraints, communication protocols, and termination criteria

  • HealthCare

There are numerous benefits of chatbots in Healthcare. They provide information to find the right doctor, appointments, and prescriptions, and send medical reports, etc. They also offer medical advice, symptom analysis, medicine reminders, answer FAQs and updates on Lab Reports, etc. 

  • Retail 

    Retail businesses can use chatbots to increase sales online. Chatbots can stream customers straight from the onboarding process to its sales funnel through real-time conversation. They can recommend personalized products and perform all the queries and FAQs.

  • Human Resource 

Another important use case of chatbot is human resources. Chatbot can provide information about company policies and aims, management, job postings and vacancies, contact information, etc. Moreover, they do HR activities automatically, like employee attendance, leave applications, evaluating candidates' qualifications, searching for the right candidate, etc.

  • Finance & Banking 

Chatbots can revolutionize the business of the finance & banking sector. They provide banking information such as account opening, account balance, transaction history, bill payments, fund transfers, investment procedures, etc.

  • Real Estate 

Real Estate companies are using chatbots more for their great prevalence and influence on their users. Chatbot helps real-estate businesses by providing information to its users. They can provide property details, booking and registration process and visiting hour information, answer queries and FAQs, etc. 

  • Food & Beverage 

Restaurant businesses can use chatbots for taking orders, booking appointments, table reservations, etc. They can provide lucrative offers to customers to grab different and newly launched food items and discounts through chatbots. 

  • Travel & Tourism 

Chatbots are a prominent invention in the travel & tourism industry. Chatbot helps users to book hotels, flights, reservations, food, etc. They also can provide travelling history and recommendations, local attractions and, weather updates on places, etc.

These are some of the few examples of businesses that can be benefited through chatbots. So, businesses will benefit from chatbots if they deploy them in business sooner or later. 

The Verdict

Since we discussed broadly the aim of Chatbots, I hope you get a clear idea of how do chatbots help businesses. Chatbots not only reduce business costs but also ensure business's exclusive customer service. They are gradually transforming the communication way of business. At the same time, they help businesses to promote and upgrade worldwide. Moreover, chatbots added a new dimension to the aspects of business sales, revenue, customer insights, engagements, onboarding and scalability. 

However, chatbot's benefits for a business are endless. No business can deny the help of chatbots. Implement a chatbot for your business sooner, then see how it boosts your business to a new height. 

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