The advent of ChatGPT marked a turning point in the world of AI chatbots. However, as the saying goes, 'competition breeds innovation.' Today, many other models offer more advanced features, such as generative AI, extended conversational memory, empathetic responses, and personalized grounding in your data.

It is an exciting time for AI development, and we can only anticipate the limitless possibilities that await us in the future of AI-powered assistants.

More than 62% of consumers prefer using a customer support chatbot rather than waiting for human agents to answer their questions. Overall, chatbots are fast, clever, efficient, and operate 24/7.

Let's look at how AI chatbots work, their features, and how to implement them in your business.

What is an AI chatbot?

An AI chatbot is software that uses artificial intelligence (AI) to interact with human users in a conversational manner, providing personalized experiences.

Companies adopting AI-powered chatbots can transform their customer service, search engines, and financial services, improving efficiency and customer satisfaction. By utilizing advanced technology, businesses can streamline operations, increase productivity, and enhance customer engagement.

What does AI chatbot do?

AI chatbots revolutionize how businesses interact with their customers by providing a personalized and conversational experience. With advanced conversational AI, chatbots can understand natural language, answer questions, and offer quick solutions to queries, making them invaluable tools for businesses.

Rule-based chatbots vs. AI chatbots

Rule-based chatbots

They function based on predefined conversational flows. A bot follows a set of rules to respond to customers. For example, a chatbot can react to a specific keyword in a user message and send a pre-set response. These chatbots are suitable for answering common customer questions and sending follow-ups and messages with limited user selections (e.g., buttons.)

AI chatbots

They use Natural Language Understanding (NLU) and Natural Language Processing (NLP) to give more accurate and valuable responses. They understand user intent in a message context and provide relevant answers. AI chatbots follow the rules, too, but they are more flexible. For example, you can define a tone of voice and your business info, and your AI chat automation will use it to respond to customers.

AI chatbots use natural language processing (NLP) technology to understand text-based user input and generate appropriate responses. NLP is a complex and sophisticated technology that uses computational linguistics to analyze and interpret human language.

💡 By breaking down language into its constituent parts, an NLP system can understand the meaning of a sentence and respond accordingly.

In addition to NLP, AI chatbots also use machine learning algorithms to improve their performance over time. These algorithms allow the chatbot to learn from experience by analyzing the effectiveness of its responses and adjusting its behavior accordingly. This feedback loop is critical to a chatbot's success, as it allows the AI tools to continuously improve and provide better service to users.

Overall, an AI chatbot is a powerful tool that you can use to automate customer service, provide information, and even entertain users. By leveraging the latest advances in NLP and machine learning, AI chatbots are becoming increasingly sophisticated and capable of delivering more natural and human-like interactions.

As technologies and language models evolve, we can expect chatbots to become an even more integral part of our daily lives.

5 key features of AI chatbots

An advanced AI chatbot is a revolutionary tool for customer interaction. Its many features make it incredibly effective at providing excellent service.

1. Real-time interaction

It’s one of the most outstanding AI chatbot features. It lets customers get immediate answers to their queries, making the chatbot an incredibly useful tool for businesses.

2. Understand natural language

Thanks to this feature, customers can interact with a business more conversationally. This makes the chatbot easy to use and helps to create a more positive customer experience.

3. Ability to solve customer issues

This can be particularly helpful when dealing with customer service issues. The chatbot can also identify inappropriate requests, ensuring that customers are not exposed to inappropriate content.

4. Providing personalized experiences

For example, AI chatbots can recommend products or services based on user preferences, making customers feel valued and appreciated.

5. Protecting customer information

With AI chatbots’ advanced security features, they can effectively provide a high level of protection for customer data.

💡 These features make AI chatbots an essential tool for businesses looking to provide excellent customer service.

How an AI chatbot can be used in business

AI chatbots are revolutionizing the way businesses operate today. Their numerous applications in areas such as sales, customer service, and marketing make them valuable assets for any company looking to streamline its operations and improve its user experience.

Free up human employees

By automating mundane and repetitive tasks, AI chatbots free up human employees to focus on more complex tasks that require human problem-solving skills. This allows businesses to tap into the unique strengths of their human workforce, such as decision-making, critical thinking, and creativity.

Improve customer interaction

AI chatbots are changing the way businesses interact with their customers. As consumers value relationship building and always-on connectivity, an AI model helps businesses provide efficient, effective, personalized service around the clock.

Integrate with other tools

Integrating AI chatbots with other systems, such as CRM systems and marketing automation software, can provide businesses with even more value.

In short, AI chatbots are a game-changer for businesses looking to stay competitive in today's fast-paced and ever-changing world.

💡 By harnessing the power of AI chatbots, companies can enhance their customer service, optimize their operations, and unlock new opportunities for growth and success.

5 benefits of AI chatbots in business

1. Increasing productivity and efficiency

AI chatbots automate time-consuming tasks for humans. This not only frees up employees to focus on other tasks but also increases efficiency and productivity company-wide.

AI chatbots help with:

• Gathering data. AI chatbots collect customer data to provide more accurate and personalized responses.

• Learning. AI assistants comprehend which response is best in each type of situation.

• Tracking. AI customer service assistants track and analyze how customers respond to every answer provided.

• Refining. Over time, AI chatbots become better at determining which questions to answer and which are best to pass on to a human agent.

2. Improving employee retention

According to SHRM, employee turnover rates in 2020 varied from 13% to 30% across all industries. And they were significantly higher in the service sector. AI helps businesses improve employee retention rates and keep their best talents by automating repetitive and mundane tasks, which gives employees more time to focus on their work-life balance.

AI chatbots help to:

• automate tasks,

• deflect tickets,

• simplify workflows,

• streamline onboarding.

3. Enhancing customer service and satisfaction

AI improves customer service in many ways, from providing quick and accurate responses to common questions using chatbots to routing customers to the best support agent. As a result, businesses improve customer service and satisfaction by avoiding long wait times and human errors.

AI chatbots help with:

• Collecting customer feedback following interactions or resolved issues;

• Proactively sending messages to customers regarding their order status, tracking information, or payment issues;

• Sending reminders and appointment confirmations to customers;

• Engaging with customers in real-time across various channels;

• Personalizing messages to match your brand's voice and tone.

4. Boosting sales

With the help of an AI chatbot, you can automate your marketing and sales processes, such as lead generation and qualification, follow-ups, and other parts of the sales funnel. For example, chatbots can book appointments, send personalized marketing messages, and make product recommendations. AI sales software tools can also help businesses keep track of customer sentiment and feedback, which can improve your service, engage return customers, and drive up sales as a result.

AI assistants help to:

• reduce bounce rate,

• increase conversion,

• recover abandoned shopping carts,

• automate cross-sell and upsell activities.

5. Making better business decisions

As AI gets more intelligent, it can help you with business decisions by providing accurate data and insights.

AI chatbots help to:

• Quickly process large amounts of data and identify patterns that humans may be unable to see.

• Understand what your customers want and need. This allows you to create better products and services to solve their problems, identify new business opportunities, and make better decisions about where to invest your resources.

Best AI chatbots

Here are 7 examples of the best AI chatbots used by brands across industries:

1. Chatfuel

2. Tidio Lyro

3. Kommunicate

4. HubSpot Chatbot Builder

5. Intercom

6. Drift

7. Infobip

Let's discover each of them in detail.

1. Chatfuel

Chatfuel is an advanced messaging platform for automating business communication on WhatsApp, Facebook Messenger, and Instagram. It's a user-friendly platform that allows businesses to create AI-powered chatbots without needing to code.

It's favored by both small brands and industry giants for its ability to automate tasks and facilitate customer communication. With its built-in ChatGPT by Open AI, Chatfuel enables the creation of human-like, friendly chatbots and AI agents.

Pricing

Also, Chatfuel can create a custom chatbot for your specific use case. Check the table below for rough estimates, the final price will depend on the size and scale of your chatbot.

2. Tidio Lyro

Tidio Lyro is a chatbot platform that excels in its ability to engage with customers in real time. It's known for its conversational AI capabilities, providing businesses with a tool that can effectively interact with customers in a human-like manner. It uses Claude (Anthropic AI) and Tidio's in-house models to power Lyro.

Pricing

3. Kommunicate

Kommunicate offers a live chat and chatbot platform for businesses aiming to improve their customer support. It provides advanced automation and rich messaging features, helping businesses to improve response time and customer satisfaction.

Pricing

4. HubSpot Chatbot Builder

HubSpot Chatbot Builder is a part of HubSpot's comprehensive marketing, sales, and service software. It allows businesses to automate conversations with customers and leads, gather data, book meetings, and more, all integrated seamlessly with HubSpot's CRM.

Pricing

5. Intercom

Intercom is a Conversational Relationship Platform (CRP) that enables businesses to build better customer relationships through personalized, messenger-based experiences. Its chatbot, Operator, can answer simple questions, collect customer data, and route conversations to human teammates.

Pricing

See also our article Best Intercom alternatives.

6. Infobip

Infobip is a global cloud communications platform that offers solutions for business automation, customer engagement, and connectivity. Its chatbot platform provides businesses with the ability to automate customer interactions across various channels, enhancing the customer experience and streamlining operations.

Pricing

On demand.

7. Drift

Drift specializes in conversational marketing and sales. Its AI chatbot, Driftbot, is capable of booking meetings, qualifying leads, and routing conversations, helping businesses to engage with customers in a more personalized and immediate way.

Pricing

Drift's Premium plan starts at $2500 per month. It also has Advanced and Enterprise plans, and customers are invited to contact the sales team to discuss the final cost.

Where to build an AI chatbot

If you’re looking to start your own journey and claim the benefits of AI chatbots for your business — we recommend you start by using Chatfuel.

Chatfuel is one of the biggest code-free platforms in the market. Small brands and giants like Visa, Lego, Adidas, Netflix, Nivea, and many others have used it to automate their tasks and customer communication since 2015.

With built-in GPT-4 by Open AI, Chatfuel lets you create human-like, friendly chatbots empowered with the latest AI generation for Facebook Messenger, Instagram, WhatsApp, and your website. And it takes a few minutes.

Our customers already use Chatfuel to automatically educate prospects about their brands, respond to their questions, recommend products and services, and improve sales.

Popular use cases of Chatfuel AI-powered chatbots:

• lead generation,

• customer support,

• sales of your products,

• personalizing content,

• engagement and re-engagement in comments and direct messages.

At Chatfuel, we help you select the most suitable conversational flows for each stage of your customer engagement. We also feature AI assistants trained in the market best practices to help you achieve the goals of each funnel stage and use case:

Use free template to create an AI agent with Chatfuel

An AI agent with ChatGPT built-in is a powerful tool for a wide range of cases, including customer service, lead generation and qualification, and sales. By providing quick and accurate responses, it helps companies improve efficiency and customer satisfaction. Building one might sound complicated.

But in Chatfuel, you don't need specific tech knowledge to create and train an AI assistant for your business. That way, you can automate customer communication, keeping it based on your tone of voice and business specifics.

Below, you'll find a free template and a step-by-step guide for building an AI automation for WhatsApp. Using our code-free platform, you can also build AI chatbots for Facebook Messenger, Instagram, or your website.

Let's dive into creating an AI assistant for your business using Chatfuel.

1. Connect your WhatsApp number to Chatfuel

To do this, follow the video tutorial below:

2. Copy the template and customize an AI agent

💡Get your free template here → click Save to Chatfuel in the bottom right corner.

This template already includes an AI agent that chats without a script. You can customize it as you wish:

• In the agent's settings, add common customer questions. If a customer demands to talk to a human, your AI assistant will send them to live chat.

• Fill out the Info tab with the needed information.

• Fill out the Connectors tab with the rules. You can also add up to 5 new connectors or delete the ones you don't need.

💡 Test your AI agent Once you’re done with the settings, click Test this flow in the bottom right corner to see how your flow is working. You will have a conversation with the AI assistant you have set up. After that, you can make the required edits to make your AI agent work better for your business case.

3. Activate your AI agent

When activating your AI agent, make sure to add and enable an entry point. It's where users start the conversation with it.

Watch the full video on creating an AI agent for sales in 10 min below, and follow the Chatfuel YouTube channel for more insights and tutorials.

✅ Done. This way, you can create an AI assistant that suits your business needs best, and start getting benefits soon.

Revolutionize your business operations with an AI agent

Today, using chatbots isn’t something really new. But AI assistants, as a new generation of automated solutions, are definitely worth implementing in 2024.

Don’t wait — sign up today and get a cost-effective AI solution to automate your tasks and enhance your overall business performance.