How Chatbots Can Reduce Customer Service Costs

‍The way businesses communicate with their customers is rapidly changing. As calls to customer service centers are quickly being replaced by innovative tools such as chatbots, AI offers many benefits to both business owners and consumers. One of the main advantages is a reduction in customer service costs. 

Utilizing the power of chatbots alongside internal teams can be a very cost-effective solution.

Not only can you free up your human workforce and allow them more time to work on complex tasks — therefore getting better use out of your teams — but chatbots can work around the clock and you’ll still pay the same amount for the platform.

If you’re considering adding a chatbot to your customer service strategy, here’s all you need to know about its cost-saving benefits.

What is a chatbot?

A chatbot is an AI-powered chat interface that enables businesses to respond to user queries in natural language — using a subset of artificial intelligence called natural language processing (NLP).

They can help with all kinds of customer service areas and work on a number of different platforms, not just standard websites. From simple responses that free up time for customer support agents to more integrated solutions, chatbots can help your business in more ways than one.

Why are chatbots so cost-effective?

Chatbots are a cost-effective way to deliver customer service because they utilize the power of AI, which can be a faster and often more convenient way of handling customer queries.

For example, suppose you’re looking to answer commonly asked questions quickly, instead of having your internal team spend time handling these conversations.

In that case, a chatbot can deliver fast responses so your human employees have more time to work on more important, more complex tasks. In other words, a chatbot can lead to more efficient use of resources and is a great way of improving your ROI.

Chatbots won’t completely replace human employees, of course (many customers still value a human-to-human connection), but they are increasingly helping businesses to cut down on recruitment and staffing costs, since having an AI-powered solution to many common customer queries can enable the streamlining of customer service operations

How can chatbots save your business money?

Chatbots can be a great asset to any business. As a valuable tool in the customer service process, this type of software can help scale up your customer service efforts while saving you money at the same time. 

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Here are some of the top money-saving benefits of using chatbots:

They can operate outside of employee working hours

Today, customers expect instant gratification. They want fast responses and quick-fire solutions, and that demands innovative changes to customer service departments — such as the introduction of a chatbot.

Customer service isn’t a 9-to-5 job; customers will always have questions and queries around the clock (especially if you have an international customer base) and that’s where chatbots can help.

In fact,  24-hour service was deemed the top benefit of using chatbots by 64% of respondents in a recent survey.

Employing human workers around the clock can be costly, especially if you have to pay double time for unsociable working hours. This quickly adds up.

However, using chatbots can be a cost-effective solution for saving money on night shifts while still providing excellent customer service — and ensuring your employees aren’t burning out due to demanding work schedules.

Chatbots can offer faster responses, so you get more for your money

Modern customers are impatient, and they want instant replies and rapid solutions to their problems. If your competitors offer a more seamless communication channel and can provide faster support, your customers are likely to go there instead.

Without a chatbot, the pressure on customer service representatives to provide lightning-quick responses can actually be detrimental to your business; it can lead to customers feeling that their concerns have not been fully addressed, as your customer support staff simply won’t have the time to dedicate to each customer’s query.

Chatbots typically don’t need time to think about a question before they answer it, and therefore they can offer on-the-spot responses to customer requests. This is a great asset to have alongside your customer service team for boosting overall productivity.

Not only can you increase the number of queries answered (response time is a key metric in customer service) but with a chatbot, you can churn through backlogs of queries quicker without damaging the customer experience, leaving your customer support team more time to dedicate to complex issues that require a more ‘personal’ touch. 

You can save money on training costs

Hiring and training a new customer service representative can be expensive as well as time-consuming.

This is another area where a chatbot can help, as it can reduce the need for recruitment, minimize employee turnover, and scale down training requirements — saving you money and increasing operational efficiency. 

With an efficient chatbot at your disposal, you may not need to hire as many employees, and those you do hire may require less training if basic tasks are performed by chatbots.

Furthermore, agents who are happier in their jobs (possibly as a result of delegating mundane interactions to chatbots) are less likely to leave, which means less time and money spent on recruiting, hiring, onboarding, and training new agents.

Chatbots can improve satisfaction rates and increase sales

Customer service is a huge part of how your business is viewed by your customers and potential leads. Slow resolution times, for instance, don’t create a good first impression.

However, incorporating a chatbot into your business can help improve satisfaction rates and therefore, prevent people from going to your competitors and investing in you instead.

Failure to provide the right response or answer to even simple questions can leave people feeling unhappy about the service provided. Who wants to spend their money with a company that offers poor customer service?

Research has shown that 68% of consumers say they are willing to pay more for products and services from a brand known to offer good customer service experiences. Improve the way customer service interactions are handled and maintaining loyal customers will be a lot easier! 

Are chatbots reliable?

One of the great things about using chatbots in your customer service department is that they improve over time.

The more interactions the chatbot has, the better it gets at understanding information and providing relevant responses, which is incredibly valuable when dealing with different types of customers. 

Of course, you have to consider the context of your business. Chatbots aren’t always appropriate for all types of communication, such as responses that require more of an emotional understanding —  in this case, human interactions may be best.

Nevertheless, there’s probably a use case for chatbots in other areas of the business. 

Natural language processing (NLP) helps provide context and meaning to text-based user inputs so that AI can come up with the best response.

It makes it possible for computers to read text, hear speech, interpret it, measure sentiment, and determine which parts are important, all of which improve the reliability of chatbot software.

Chatbot ‘training’ will also speed up the learning process: over 22 weeks of training, some chatbots have shown an increase in accuracy from just over 10% to nearly 35%.

How do you find the best chatbot option?

Chatbots can easily be built around your needs as a business, so consider what it is you need help with — whether that’s booking appointments or answering questions about orders. is a great option; the software tool comes with an easy-to-use, code-free chatbot builder, so you can start creating workflows in just a few clicks. You can even integrate the software with an existing knowledge base to provide detailed answers to common customer queries and questions. 

With any chatbot software, there are many different features and functions available, so it’s essential to do your own research to ensure the tool is right for your business. When deciding on the best chatbot software, you should consider:

  • Do I need a basic chatbot software or one with complex understanding?
  • How will the software fit into my existing customer service team?
  • Which features will save me the most money?
  • Do I want to build chatbots for other platforms such as Facebook Messenger or Whatsapp?

Chatbots are a cost-effective way to deliver customer service because they don’t involve a human employee. You can set up a bot that sends automated responses to a range of questions, enabling it to work 24 hours a day and help a much wider range of people without increasing your staffing costs. Sounds like the perfect addition to your customer service department!

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