Chatbots and Artificial Intelligence

November 8, 2022 Maitri Katti
Reading Time: 7 minutes

What is meant by Chatbot?

At the most basic level, a chatbot is a computer programmer that simulates and processes human conversation (either written or spoken), allowing humans to interact with digital devices as if they were communicating with a real person. The term “ChatterBot” was originally coined by Michael Mauldin(creator of the first Verbot in 1994 to describe these conversational programs.
Users in both business-to-consumer (B2C) and business-to-business (B2B) environments increasingly use chatbot virtual assistants to handle simple tasks. Chatbot assistants allow businesses to provide customer care when human agents aren’t accessible, cut down on overhead expenses, and make better use of support staff time. Chatbots are used in dialogue systems for a variety of tasks, including information collection, request routing, and customer service.While some chatbot apps make use of advanced AI, natural language processing, and complex word categorization procedures.
Here are few examples of how Chatbots are being used in the real world:

  • Verizon uses them to answer initial customer support issues.
  • The Transportation Security Administration (TSA) uses them to automateAskTSA on Twitter and Facebook.
  • Bank of America’s Erica reported 19.5 million users, over 100 million interactions and 90% efficacy for useful answers.

Types of Chatbots:

  1. Menu/button-based Chatbots : The most fundamental form of Chatbots now used on the market are menu- or button-based ones. These Chatbots are often just fancy decision tree hierarchies that appear to the user as buttons. These Chatbots demand the user make a number of decisions in order to go deeper and get at the ultimate solution, much like the automated phone menus we all deal with on an almost daily basis.

  2. Data-driven and predictive (conversational) Chatbots: They are often referred to as virtual assistants or digital assistant, and they are much more sophisticated, interactive, and personalized than task-oriented Chatbots. These Chatbots use natural language understanding (NLU), natural language processing (NLP), and machine learning (ML) to learn as they go. In order to offer personalization based on user profiles and previous user behavior, they utilize predictive intelligence and analytics. Digital assistants may gradually learn a user’s preferences, provide suggestions, and even foresee requirements.
  3. Linguistic Based (Rule-Based )Chatbots: Linguistic chatbot might be the solution for multiple questions asked by the customer. . Linguistic or rules-based Chatbots create conversational automation flows using if/then logic. Conversational automation flows are created by linguistic or rule-based Chatbots employing if/then logic. You must first specify the language requirements for your Chatbots. To evaluate the words, their placement in a sentence, synonyms, and other factors, conditions can be constructed.
  4. Task-oriented (declarative) Chatbots These single-purpose programs that focus on performing one function. They provide automatic conversational responses to user inquiries by using rules, NLP, and very little ML. These Chatbots interactions are highly organized and specialized, and they are best suited for support and service roles. Task-oriented Chatbots may manage frequent inquiries, such as inquiries regarding company hours or straightforward transactions, without a lot of variables. Although they employ NLP to provide conversational user experiences, their powers are somewhat limited. These Chatbots are presently the most popular ones.

Value of Chatbots to business and customers:

Chatbots have become popular as a time and money saver for businesses and an added convenience for customers. Chatbots increase operational effectiveness and save costs for organizations while providing convenience and extra services to both internal staff and external clients. They lessen the requirement for human engagement while enabling businesses to quickly address a wide range of client inquiries and difficulties.
An essential distinction for businesses is the ability to expand, customize, and be proactive simultaneously with Chatbots. A firm, for instance, may only accommodate a certain number of customers at once while using just human labor. Human-powered firms are constrained in their capacity for proactive and individualized outreach since they must concentrate on standardized models in order to be cost-effective.
Businesses may engage personally with consumers with Chatbots without suffering the cost of hiring human agents. The majority of client queries or problems have straightforward solutions. For this reason, businesses provide FAQs and troubleshooting manuals. In place of traditional FAQs or guides, Chatbots provide a more personalized option. They can even triage queries and refer customers with difficult problems to real people.

Role of Chatbots in Artificial Intelligence:

Artificial Intelligence gives a human touch to every conversation chatbot strikes. The bot understands the user’s query and triggers an accurate response. The way humans are able to understand each other’s concern and give a response accordingly.

Components of Artificial Intelligence in Chatbot:

Artificial Intelligence uses two important elements that help the chatbot to strike accurate response.

  1. Machine Learning: In every interaction a chatbot has is given a human touch via artificial intelligence. The way humans are able to understand each other’s concern and give a response accordingly, the bot recognizes the user’s request and generates an appropriate answer.
  2. Natural Language Processing(NLP): NLP provides assistance to the bot to understand and interpret the information closely. With NLP, you train your chatbot with various intents that the user will type during the conversation and these intents will streamline the response to the query.

How Artificial Intelligence in Chatbot makes a difference?

  • Chatbot with AI powers makes bot capable and intelligent to answer complex queries. The interaction is engaging, conversational, and lively.
  • Chatbot learns from every conversation it has with the customers. It goes through the previous interaction to improve the current response. This activity helps to improve the efficiency of bot response.
  • Helps in understanding customer’s choices and preferences.
  • Smart interactions help customers discover the appropriate information and solve their problems while saving them time.

 Use Cases:

  1. Schedule appointments: All business types, ranging from healthcare organization to home maintenance providers, can benefit from leveraging Chatbots to schedule and modify customers’ appointments. In order to educate customers about personnel availability and available time slots and to enable them to make appointments without contacting front desks, Chatbots are connected to the company’s calendar.
  2. Track orders: Chatbots may inform customers of the shipment of their items, the package’s current location, the anticipated delivery time, and any delays. They can also gather feedback to improve customer service in the future.
  3. Customer engagement : A case study shows that assisting customers with a chatbot can increase the booking rate by 25% and improve user engagement by 50%. This case study comes from a travel Agency Amtrak which deployed a bot that answered, on average, 5 million questions a year.

Advantages of using AI Chatbots:

  1. Availability: Chatbots can answer your consumers’ questions right away and are accessible around the clock. This implies that they may expect a prompt answer anytime they message you about anything. They will feel happy with your brand as a consequence, and you will be able to advance them along your sales funnel.
  2. More Engagement: Real-time chatbot communication is possible with users of your website and followers on social media. This stands out in sharp contrast to other brand content that is typically just passively accessed. Such interaction can help consumers stay on your website longer, increase purchases, and boost SEO.
  3. Data Collection : Using Chatbots may be a terrific method to learn more about your audience. They may interact with your audience and learn things like their names and email addresses, among other things. By linking the chatbot with your CRM, you can quickly access these facts. Additionally, you can use Chatbots to question clients about their preferences and subsequently tailor your offers to better meet their requirements.


With a chatbot, organizations can easily offer high-quality support and conflict resolution at any time of day and to a large quantity of customers simultaneously. Chatbots enhance operational effectiveness and save costs for organizations while providing convenience and extra services to both internal staff and external clients. With the help of Chatbots, businesses can quickly address a variety of client concerns and issues while minimizing the need for human involvement.

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Reading Time: 7 minutes


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