How to choose the best AI chatbot for your business

Khoros Staff


Chatbots have the power to radically improve your brand’s customer care, but not all chatbots are equally effective.

In fact, “chatbots” is a catch-all phrase commonly used to describe all messaging bots, but there are actually two different types: Rule-based chatbots and AI chatbots.

Rule-based chatbots are limited because they follow a pre-set list of rules, often requiring users to click through a series of buttons to generate a relevant result. On the other hand, AI chatbots are advanced and use natural language processing (NLP) to detect customer sentiment and provide personalized care. While rule-based chatbots may be appropriate in some situations, AI chatbots are often the superior option for brands looking to increase efficiency and enhance their customer experience.

Rule based vs AI powered

If you’re interested in using an AI chatbot to improve your brand’s customer care, our guide will help you assess needs and select the best option based on your goals.

What is an AI chatbot?

An AI (artificial intelligence) chatbot is software that uses natural language processing (NLP) to understand what people are saying and simulate a conversation using pre-programmed information and data from other interactions.

While AI chatbots may be limited when first implemented, over time they become better as they learn from interactions in chats, users posts in online communities, and new resources that are added to the site. Although AI chatbots are not always commercial in nature, they’re becoming increasingly popular with brands because they offer the ability to provide customer care without involvement from a human agent.

How does an AI chatbot work?

Unlike rule-based chatbots, which provide pre-programmed responses based on a limited set of inputs, AI chatbots process information to understand user intent and provide unique responses.

AI chatbots work by following this basic process:

  1. Receive an inquiry from a user

  2. Analyze the text to understand the general intent of the inquiry

  3. Follow up with additional questions to gather specific details (known as entities)

  4. Once enough information has been collected, the AI delivers what it believes is the right answer

How an AI chatbot works

Throughout the interaction, the AI chatbot will also monitor responses for verbal cues to understand the user’s sentiment — that is, whether they’re satisfied or frustrated (or something else). Over time, the AI chatbot will learn which answers are right by analyzing previous interaction data and identifying whether it resulted in satisfaction or frustration. Much like human agents, these chatbots can be smart enough to increase their percentage of satisfied customers, just by providing better responses to similar questions. (Still, you should never try to pass your chatbot off as a human.)

What are the benefits of an AI chatbot?

The main benefit of the AI chatbot is simple: customization and flexibility. Brands can configure AI chatbots in specific ways that meet their unique needs. While the way each brand uses an AI chatbot will be different, here are a few common benefits everyone can enjoy:

1. Provide 24/7 immediate customer service

AI chatbots enable brands to provide around-the-clock support all year round, so customers can reach out when they have time instead of working around your contact center’s hours of operation.

Do's and Don'ts of Conversation Design

2. Increase conversions

Not all chatbot inquiries are support-related. Sometimes a customer may ask an AI chatbot for information about features, reviews, or other information to help with their purchasing decision. In these instances, AI chatbots can help direct people towards relevant products. This can increase conversions if you find customers often struggle with finding and selecting a product to meet their needs. Teleperformance’s Laura van Vlijmen, Project Lead Social Messaging & Innovation, recently spoke on pushing the boundaries and enhancing their customer experiences through automation and optimization.

3. Reduce customer care costs

According to VentureBeat, each year brands spend over $1 trillion on customer service calls. Considering the high costs of call-based support, it’s not surprising that 56% of companies have started investing in conversational AI to reduce these expenses. In fact, the same article notes that AI can help reduce customer service costs by up to 30%, and shaving one second off average call center handling times can save brands as much as $1 million in annual customer service costs. So, when AI chatbots resolve inquiries and deflect calls, brands save on the bottom line.

For instance, Jawwy deployed a chatbot to the tune of over $1 million in annual support savings, including a 20% reduction in support agents — all while improving customer satisfaction and maintaining SLAs.

4. Improve agent efficiency

Even an advanced AI chatbot won’t be able to address every inquiry on its own, as more complex inquiries may require a human agent to step in. But in these cases, the AI chatbot can work as an agent’s assistant by gathering information so the agent is prepared when they enter the engagement. Doing so saves the agent time and increases their efficiency, as they spend less time writing down information and more time quickly helping customers resolve inquiries.

Considerations for choosing the best AI chatbot for your business

Great, so AI chatbots are super important and powerful and can really help your business. But there are so many options out there! How can you make sure your brand chooses the right one with the right features to make a real impact? It starts with assessing your needs.

Bot Balancing Act

Do you need an AI chatbot or rule-based chatbot?

As noted earlier, an AI chatbot offers more benefits — but those benefits aren’t always required. A lot of brands can get by with a more limited offering. If you offer a smaller number of products or services and rarely receive support requests, you may find a rule-based chatbot provides enough functionality for you to get by.

However, brands with a large catalog of products and services will likely want to invest in an AI chatbot to make it easier for customers to get the information they need without clicking through a long series of button prompts. Furthermore, the machine learning capabilities of an AI chatbot will enable it to automatically scale as this catalog grows.

What will be the purpose of your AI chatbot?

What do you want to get out of the AI chatbot you select? Are you looking for an agent assistant, or something that can independently interact with customers? Is it enough for the bot to welcome customers and provide basic info like support hours, or do you want it to gather information and help resolve inquiries?

Determining your intended purpose for the AI chatbot will help with your decision because you’ll know what features it needs to offer.

What integrations do you need?

You’ll need to ensure the AI chatbot you select integrates seamlessly with your systems and workflows to ensure there are no issues or service disruptions for customers. For example, a retailer’s AI chatbot should be able to check product availability through the brand’s inventory management system, and it should be able to look up previous order information from their CRM. All of your systems should communicate with each other to provide helpful information for customers and internally.

What pricing model does the AI chatbot use?

Budget is always an important factor when making a purchasing decision, but in this case it’s important to note that not all AI chatbots give you a straightforward sticker price. In fact, AI chatbots can be priced using a variety of models that influence costs. For example, one AI chatbot may charge using a recurring license fee, while another charges based on the number of site users or chat interactions. Some AI chatbots even charge for extra features such as chat routing and form integration. When choosing an AI chatbot, carefully review the pricing model — noting which features your brand needs — and make sure it aligns with your budget.

How does the AI chatbot offer personalization?

Almost all AI chatbots offer some level of personalization, but the level and the ease of doing so may vary significantly from option to option. For example, a difficult back end user interface could make it difficult for support teams to update regularly. Regarding the degree of personalization, some AI chatbots may provide tailored responses based on what a user says during their chat session, while more advanced AI chatbots may be able to recommend products and services based on previous user actions.

Does the AI chatbot need training?

While all AI chatbots come with an existing data set, more complex bots often require training at the start and on a regular basis to teach industry-specific vocabulary and other information relevant to the business including new products, services, and policies. This is important to consider if you’re looking to have an AI chatbot operating by a deadline such as the start of the holiday season.

What kind of data does the AI chatbot provide?

You’ll want to collect analytics regarding the AI chatbot’s interactions such as the number of engagements, speed of resolution, CSAT, NPS, and more. By collecting this information, you’ll be able to identify trends and generate insights about your customers — which can help you make improvements for your customer care among other areas.

When choosing an AI chatbot, find out what data it will provide and how it will present this information. You’ll want this data to be organized in a way that’s easy for your team to understand and analyze.

Upgrade your customer care with Maia, the Khoros Bot

If you’re looking for the best AI chatbot for your business, Maia, the Khoros Bot, can help reduce contact center costs, improve agent efficiency, and provide 24/7 support for your customers.

Maia can easily handle common customer inquiries to free up agents for higher-value tasks. Our advanced AI uses sentiment analysis to identify appropriate messaging based on how the customer is feeling, and can priority-route customers to agents if a situation warrants it. Maia also comes with pre-built use cases and features a simple configuration process so you can get it running quickly.

These are only a few of Maia’s many benefits. Schedule a demo today to learn more.

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