Not long ago, chatbots were fairly basic. They were programmed to perform specific tasks, responding to straightforward command scenarios where information revolved around single points. Many chatbots were used as online or search pop ups and could send only simple messages like “How can I help you,” to online users.
Today, chatbots have evolved to be able to discern the meaning of queries by analyzing and comparing different elements. Innovative technologies like artificial intelligence (AI) are making this transformation possible, thereby transforming how businesses and marketers use chatbots to interact with consumers.
Science has made leaps and bounds in AI and natural language processing (NLP) to allow individuals to interact and converse with computers much more naturally.
As a result, chatbots have become more than greeting tools. They now play significant roles within marketing and customer service for organizations across every industry, including retail, e-commerce, banking, and healthcare. Chatbots are helping customers with almost any function, from ordering pizza to online shopping.
For marketers, some of the key benefits of AI-powered chatbots include:
- Instant communication with customers that avoid long wait times and complicated explanations;
- Driving more personalized customer experiences by understanding specific customer needs, wants and concerns to ultimately boost brand advocacy and increases business revenue; and
- Better engagement and open rates when compared to methods of old, like direct email or mail-ins, which audiences typically (and easily) ignore.
In industries like retail, companies can use chatbots for personalized marketing systems. For instance, a floral retailer can use the system to help detect user tone. With an AI-powered gift concierge to interact with online customers, the chatbot can be designed to use NLP and ask users questions about the specific occasions for their purchases. With this information, the chatbot agent can then suggest personalized gift options.
More companies are realizing the competitive advantage of chatbots. According to an IBM report, chatbots could bring cost savings of USD $8 billion annually by 2022, up from USD $20 million in 2017. A recent Gartner study  states that by 2018, 30% of our interactions with new technologies will be through conversations with smart machines.
IBM believes organizations can use AI platforms to build chatbots that assist customers at a higher level of understanding and intelligence and with a wide range of tasks than ever before. Here are several ways companies can use chatbots to boost the customer experience:
Man and machine working together. Many companies are tapping virtual assistants to help human customer service agents provide more personalized guidance. Incorporating a chatbot into a customer service program is an opportunity for human and machine to work together to give the best outcome for a customer.
For example, an e-commerce site could use a virtual customer service to reach out to customers and help marketers better, and more quickly, understand customer queries. After a few months of training, the chatbot can respond to questions with 80% more accuracy, leading to more satisﬁed customers.
AI makes chatbots customizable. AI-enabled chatbots are built on many different technologies, such as cloud, that equip them to accomplish various tasks like analyzing huge amounts of data and NLP to understand customers’ tones and sentiment. Chatbots can be built to suit the specific needs of their organizations rather than fit into standard models.
As a result, businesses and marketers can provide personalized experiences, advertising and promotion items that are tailored to the specific customer.
Building emotional intelligence into chatbots. Advances in AI will progress and allow businesses to add emotional intelligence to their chatbots. Cognitive computing capabilities can gather data about users’ preferences and intentions through the words they use. The primary purpose of every conversation with a chatbot should be to certify the customer feels understood.
The future of customer service
The progression of AI means that chatbots will continue to become more skilled in natural communication, emotional intelligence, and data analysis. To better serve customers, automated conversational agent systems have to be trained. Chatbots cannot just be programmed to perform specific tasks. They have to learn. They have to fundamentally interact with us like humans and know that we have emotions that can vary throughout the course of a conversation.
That said, as more AI conversation agents have a deeper level of understanding of people and become more skilled at mimicking human behaviour, it will be critical that businesses become transparent about whether the system interacting with the end user is human or AI. To maintain customer loyalty, users should never be misled into thinking that the agent they are interacting with is a real person if it is not.
Companies must also take responsibility for protecting customer data that is presented in a conversation and maintain strict privacy of the individual to ensure that they are not unnecessarily revealing information that is irrelevant to specific issues. Users must adhere to compliance with PIPEDA, GDPR and other privacy laws and regulations.
The future of the customer service experience will ultimately be fueled by AI through learning, reasoning, and understanding customers’ intentions. AI will help businesses and marketers make smarter, responsible decisions that will benefit customers by providing them with respectful loyalty-building service.
Michael J. Martin is senior executive, of Internet of Things Lead, Broadband Networks and Network Services, IBM Canada
 IBM, “Chatbots worth talking to” study, October, 2017
 Gartner, “Gartner Says Smart Machines Will Enter Mainstream Adoption By 2021”, news release, December, 2016