How Are Customer Service Chatbots Revolutionizing Support

Much like every other aspect of virtually running a business, technology has drastically changed customer service. There are constantly new channels for customers to reach out to businesses. An important addition to this growing list of channels is a customer service chatbot.

In this blog, we talk about everything you need to know about a customer service chatbot. You can use this index to jump to the section that interests you the most:

 What is a customer service chatbot?

An AI and ML-powered chatbot that handles customer service related activities is a customer service chatbot or a support bot. This chatbot can answer customer questions, automate resolutions to issues or requests, and hand over the conversation to a human agent whenever required.

Is it necessary for customer service chatbots to be AI and ML-powered?
Broadly, there are two types of chatbots: the basic rule-based chatbot, and the advanced AI-and ML-enabled chatbot.

Chatbots that run on rule-based programs that are typically built on decision trees, and offer a few but useful functionalities. For instance, a museum’s chatbot could answer questions relating to when the museum is open, whether pets are allowed, etc. However, these chatbots cannot answer any question outside of the defined rules nor do they learn over time. This means that they cannot understand the same request when phrased differently. These limitations often lead to frustrating experiences. 

On the other hand, AI and ML-enabled chatbots allow for interactive two-way conversations – they understand the intent behind the conversation and offer assistance with context. Plus, machine learning enables chatbots to retain and learn from historic conversations and data.

For instance, chatbots that are powered by Freddy AI for CX are capable of understanding the customer’s request (regardless of how it’s phrased) as well as the intent behind the request, and execute the right workflow. So, in the same example from above, if the same museum had an AI-enabled chatbot, it could not only inform visitors of the time that the museum was open, it could also continue the conversation and guide visitors to current exhibits, links to buy tickets, and even the rules of bringing pets in!

Plus, AI-enabled chatbots can detect an emotional conversation, that is, when a customer has a pressing issue and is frustrated or even when the request is beyond the chatbot’s scope. This enables the chatbot to gracefully hand over the conversation to an agent, and helps ensure that the customer is able to walk away with a satisfactory resolution, and a good experience. 

Transactional vs emotional chatbot conversations

What are the advantages of using a customer service chatbot?

The advantages of using an AI-enabled customer service chatbot are manifold. We’ve detailed the top five benefits here:  

#1 24/7 customer service
Chatbots are available around the clock to offer fast and accurate answers to your customers. This is extra helpful when you:
– have a lean team
– offer support according to your business hours only
– are looking for cost-effective ways to scare your customer service.

If you pick a chatbot solution that is multilingual, you can further improve your accessibility in addition to offering 24/7 support

Customer service chatbot conversation example

#2 Instant resolutions
Apart from suggesting solution articles from your knowledge base, a customer service chatbot can automate resolutions to frequently reported issues such as refund and replacement requests. Building a chatbot with automated workflows helps ensure that customers do not have to wait for their requests to be resolved since the chatbot can offer resolutions instantly. 

Chatbots meet customer expectations

#3 End-to-end solutions
What sets apart a good customer service chatbot from the rest, is its ability to understand the intent of the customer’s message. By identifying the intent, a chatbot can take the conversation a step further and follow up with a relevant question or message. This way, the customer leaves with a seamless experience. For instance, when a customer asks if a product is available in a certain colour, a chatbot that responds to that and also asks the customer if they’d like to place an order, offers a far better experience than the one that only answers to the point. 

AI-powered customer service chatbot conversation

#4 Personalized experiences 

80% of consumers are more likely to make a purchase from a brand that provides personalized experiences.1 

Customers love experiences that are tailor-made to their preferences. Chatbots are capable of personalized customer experiences using customer details such as their geographical location or even their login credentials. 

#5 Increase in agent productivity
Chatbots can deflect upto 60% of incoming conversations and remove the repetitive questions from an agent’s plate. This eases agent bandwidth and enables agents to take on the more complicated customer requests, and finish them at a faster rate.

Examples of customer service chatbots that are game-changers

The use cases of chatbots are many, and we’ve already discussed chatbot applications from different industries in detail. Here are four examples of brands whose customer service chatbots have proved to be a bang for the buck.

Shipping: ShipTime

The full-service shipping solution, ShipTime, needed an effective solution to tackle the 60% jump in the average of number tickets they received per day due to the Covid-19 pandemic since businesses that transitioned to a digital setup had to ship products to customer doorsteps. So the customer service team at ShipTime deployed a chatbot. 

ShipTime’s customer service chatbot now eases agent workload by resolving commonly asked questions, and thereby enables the customer service team to handle more pressing customer requests.

Healthcare: Pharmeasy

PharmEasy, one of India’s largest pharmacy e-commerce platforms, needed an efficient way to handle the surge in ticket volume (~200% increase). Launching a robust self-service module using Freshdesk was the first step they took to scale their customer service. 

Example of a customer service chatbot - PharmEasy

With its knowledge base and customer service chatbot, PharmEasy now achieves 45% ticket deflection and realizes a 50% reduction in support costs per order. 

Fintech: PhonePe

India’s fastest-growing mobile payments app, PhonePe, has 150 million users transacting with 6.5 million businesses. Since queries related to payments and transactions are often quite pressing, delivering instant resolutions was a top priority for PhonePe’s customer service team. 

To this end, the team deployed a chatbot to automate resolutions to frequently reported issues and FAQs by integrating their ERP systems with their Freddy-AI-powered chatbot. Today, PhonePe resolves 60% of their customer service queries without human intervention, and also realized higher CSAT scores for bots compared to traditional channels of service.

On-demand delivery: Dunzo

Dunzo, a 24×7 on-demand delivery platform fulfills over 2 million orders per month for users across India. Known for getting things done well on time, Dunzo set out to do the same in customer service with the goal to reduce their average response time, and maintain high standards of customer experience. Since Donzo’s customer base is predominantly made of GenZ and Millennials, it was important that the solution they picked allowed them to 
– offer instant and accurate responses,
– engage with customers through mobile-first messaging and, 
– monitor social media support. 

The powerful combination of Freddy-AI-powered chatbot, plus Freshchat for messaging, and Freshdesk for social media support helps Dunzo achieve its goals and keep customers happy.

Dunzo’s chatbot resolves 48% of queries without human intervention and reduces 30% of support costs.

Dunzo chatbot as an example of a customer service chatbot

3 customer service chatbot solutions for businesses 

With so many solutions available in the market, narrowing down on the right one for your business might be quite challenging. We’ve written extensively about chatbot features that ensure successful deployment and intuitive customer experiences. Here’s a quick list of all the features should be looking for:
– No-code chatbot builder 

– Third-party app integrations (API connectors)

– Omnichannel solution

– CSS customization

– Reporting and analytics

– AI-enabled with ML and NLP

– Multilingual capabilities

– Rich media messaging formats

– Option to speak to a human agent

Here are three popular solutions that you can use to implement your own customer service chatbot: 

Freddy AI for CX (Ideal for businesses of all sizes)


Freddy AI for CX

If you’re looking for an AI and ML-powered customer service chatbot that offers friction-free customer experiences and can be deployed without any technical assistance, then Freddy AI for CX is the right solution for you. Right from a no-code chatbot builder to robust analytics, this solution comes with powerful features that will help you revolutionize customer engagement. Here are the benefits of using this solution:

– Drag and drop to design and deploy a chatbot without any technical assistance  

– Offer a uniform experience across all messaging channels using the same solution

– Customize the appearance of your chatbot to match your brand 

– Provide complete experiences with automated workflows and intent-based interactions

– Improve your chatbot’s accessibility by deploying the same solution in different languages

– Add a visual appeal to conversations using rich media messaging formats

 – Offer contextual assistance in case of failovers by integrating with your customer service software

To add on, Freddy AI for CX is unlike the other customer service chatbot solutions available in the market – Freddy AI also be used to deploy an agent facing bot that helps agents with their everyday tasks and improves their productivity by:

– Suggesting the next best response, resource, or action

– Offering relevant solution articles and canned responses

– Automatically classifying incoming customer requests by updating ticket properties  

– Automating complex backend support processes

– Preventing ‘thank-you’ messages from reopening tickets

– Identifying important requests that come in on social media and altering agents to take action. 

Free trial? Yes (21 days – sign up for free here

Botsify (Ideal for small and medium-sized businesses)

Botsify is a great solution for you if your primary goal of deploying a chatbot is for sales and marketing purposes, and your secondary goal is to offer customer service. This solution is compatible with Facebook Messenger. The ‘Growth tool’ is a cool feature that offers different ways for you to interact with customers such as scheduled messages and broadcast messages. 

Free trial? Yes (14 days)

Botkit (Ideal for enterprises)

If you have the time and talent required to build and completely customize your customer service chatbot, then Botkit is the right platform for you. This solution is an open-source developer tool for building enterprise-grade chatbots for various messaging channels.

Free trial? Not applicable

Customer service chatbots for the win

Although chatbots are still a relatively new addition to the world of customer service, they present a huge opportunity for businesses that are willing to invest in them. With well-designed bots, you can meet your audience’s communication preferences, address their needs more efficiently, and enable your support team to make the most of their time. 



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