A chatbot is essentially just a computer program, which is designed to simulate a conversation with users over the Internet. Online chatbots save time and money by automating customer support.

Gartner forecasts that by 2020, over 85% of customer interactions will be handled by bots. However, the opportunities provided by chatbot systems go far beyond giving responses to customers inquiries. They are also used for other business administrative tasks, like collecting information about users, helping to organize meetings and reducing overhead costs.

A chatbot is a service, powered by rules and sometimes artificial intelligence, that you interact with via a chat interface on your device. The service could be any number of things and it could be deployed on any major chat product (Facebook Messenger, Slack, Telegram, Text Messages, etc.).

 

“Many businesses already have phone trees and they do work though most users get grumpy using them. Text-based response trees are much easier and faster and that is what I expect a lot of early bot interactions to be. Sometimes with the ability to chat with a live person.” — Josh Elman, Partner at Greylock

 

Why use a chatbot

For the first time ever, people are using their messaging platforms more than they are using social networks.

“Major shifts on large platforms should be seen as an opportunity for distribution. That said, we need to be careful not to judge the very early prototypes too harshly as the platforms are far from complete. I believe Facebook’s recent launch is the beginning of a new application platform for micro application experiences. The fundamental idea is that customers will interact with just enough UI, whether conversational and/or widgets, to be delighted by a service/brand with immediate access to a rich profile and without the complexities of installing a native app, all fueled by mature advertising products. It’s potentially a massive opportunity.” — Aaron Batalion, Partner at Lightspeed Venture Partners

This creates a huge opportunity for businesses/startups to develop chatbots that consumer/users will use.  More and more users are preferring the customer service they receive from a chatbot over a customer service agent.  Chatbots can deliver information quickly and efficiently compared to a human agent.  They can also send funny tips or jokes to the users, keeping the customers engaged and leave the conversation with a smile.  The novelty of chatbots sparks curiosity. People want to explore their abilities and to try something new.