Customers today have high expectations: proactive service, personalized interactions, consistent experiences across channels, etc. In fact, Salesforce found that 80% of customers value the overall experience as much as the product itself.

So, how do you deliver the expected levels of customer experience?

Sure, you can hire more people and train them to provide better customer support, but this increases costs in the long run. Plus, you cannot overrule human errors.

An AI customer service chatbot is the solution to overcoming these limitations. They are available 24/7, offering personalized interactions, consistent service across channels, and scalable support while reducing costs and errors.

This blog post discusses AI chatbots for customer service, their types, benefits, and best practices to help you get started. We also explore the key chatbot features you should look for and highlight how Plivo CX can help.

What is an AI chatbot? 

An AI customer service chatbot is a computer program designed to simulate conversations with humans. These intelligent chatbots leverage NLP and ML algorithms to understand customer queries better, initiate human-like conversations, and offer appropriate responses.

From basic questions like "What's the price of this product?" to complex queries like "Can you help me choose the best moisturizer for my skin type?" you can use these chatbots to engage users and guide them to the next step in the sales process. 

What sets AI chatbots apart is their ability to go beyond pre-programmed responses and generate human-like answers using large language models and semantic understanding. They can even complete tasks and guide users through the sales process. 

The best part? You can create an AI customer service bot to work seamlessly across different platforms, including apps, websites, social media, and messaging services.

Key features to look for in an AI customer service chatbot

Zendesk’s CX Trends 2024 report shows that 83% of CX leaders using generative AI and evolved chatbots report positive ROI. However, due to the abundance of AI-powered chatbots in the market, choosing the right chatbot platform is not quite easy. Look for these key features before selecting the best AI chatbots for customer service: 

• Omnichannel support: An AI support chatbot that can help you serve customers across multiple channels—websites, email, social media, SMS, live chat, and messaging platforms. It helps you meet customers at their most-used channels and provide a consistent brand experience

• Live chat handover: Live chat tools should seamlessly transfer complex queries to human agents, ensuring customers receive the specialized support they need

• Data security: AI customer service chatbots must prioritize data security. This requires robust protocols like end-to-end encryption, secure data transfer (HTTPS and SSL/TLS), and strong encryption for stored data (AES-256).
  Also, RBAC, regular security audits, and penetration testing are essential.
  
  Chatbots should minimize data collection, implement strict data retention policies, and comply with regulations like GDPR and CCPA. Transparency about data usage and user control are also required.

• Reporting and analytics: An AI customer support chatbot platform with advanced reporting and analytics tools helps you track customer behavior, chatbot performance, and conversational flows to understand how effective it is in improving customer experience 

• Multilingual capabilities: Multilingual customer support helps you expand your business and cater to diverse audiences across the globe

• Integration: A chatbot that can integrate with CRMs, supplier databases, inventory management systems, help desks, and knowledge bases can easily get a unified view of customer data and provide instant responses

• Customization and branding: Look for AI chatbots that allow you to customize the user interface, tone, and personality to align with your brand identity
  
  
• Scalability: As your business grows, the chatbot should be able to handle increasing volumes of customer interactions without compromising performance
  
  
• Knowledge base integration: Tools that can integrate with your existing knowledge base can provide instant, accurate answers
  
  
• Sentiment analysis: AI chatbots with sentiment analysis capabilities can detect and respond to customer emotions, allowing them to provide empathetic support

Benefits of AI chatbot for customer service

According to an Ipsos report, 68% of consumers have used a customer service chatbot. As we delve into the benefits of AI chatbots, it becomes evident that they offer a multitude of advantages that can significantly improve the customer service experience, such as:

• More efficiency: AI chatbots relieve your agents of repetitive tasks like answering simple queries, routing and categorizing customer issues, collecting feedback, and scheduling appointments. An IBM report states that chatbots can resolve up to 80% of routine customer inquiries.
  
  The result? They can save time and concentrate on more productive and strategic tasks, improving the overall efficiency of the business

• 24/7 availability: Looking to expand your business across countries and planning to hire support agents to work in shifts? Instead of employing agents in different shifts, you can utilize an AI customer service bot to offer 24/7 customer support and solve customer issues across different time zones without any hassle
  
  
• Reduced operational costs: With an AI customer service chatbot, you can maintain the same number of agents while scaling your business as they decrease the reliance on humans to handle multiple customer service queries, reducing operational expenses. Invesp notes that AI chatbots can reduce customer service costs by up to 30%

• Enhanced customer experience: Hubspot's research shows that 90% of customers rate immediate responses from businesses as an “important” or “very important” factor when they have a customer service question. 

In this case, chatbots can take care of 30% of live chat communication. They can significantly improve customer experience by providing instant and more personalized responses. They provide personalized recommendations to customers as well 

Types of AI chatbots for customer service

AI chatbots for customer service solve different purposes according to your business needs and requirements. The three major types of AI customer service chatbots include:

1. Social media bots: AI-powered social media bots are built to integrate seamlessly with platforms like Facebook Messenger, Instagram DMs, Twitter/X, WhatsApp, and others. They can manage numerous customer conversations simultaneously and access customer data to provide more personalized responses

2. Support bots: Customer support bots leverage AI algorithms to interpret human conversations and respond to queries with relevant information, which reduces customer wait times 

‍Agent-assist bots: Often, agent-assist bots act more like ‘personal assistants’ for human customer support agents by automating tasks like onboarding, training, and collecting information from new support agents

10 tips for using AI customer service chatbots

According to Hubspot’s 2022 report, 90% of customers consider an immediate response to be "important or very important" when they have a customer service question.

 Implementing the best chatbot practices can help you achieve this and improve customer service. The following tips can help you maximize the use of AI chatbots:

1. Deliver personalized customer experience 

Personalized user experience improves customer centricity and gains users' trust.  AI chatbots help deliver a personalized customer experience by:

1. Analyzing data from diverse sources, including browsing history, purchasing patterns, previous interactions, and preferences, to understand users' preferences  and pain points and personalize product recommendations 
2. AI chatbots for customer service can also personalize conversations by using NLP algorithms, interpreting users' language to adjust its tone, and offering more empathetic responses to users

2. Use buttons to accelerate conversations 

Your customers don't always have to type it out entirely to express themselves. You can offer buttons with suggested responses for them to easily click and provide responses, ensuring a faster and more convenient experience. 

3. Disclose your AI chatbot 

Be transparent with your customers by letting them know they're talking with an AI customer service bot, not a real human support agent. This will set clear expectations for your customers and promote trust. 

For example, the chatbot can announce this at the beginning of the conversation with a statement, “Hi (customer name), I’m Mike, Company X’s AI-powered chatbot. How can I help you today?”

4. Escalate complex queries to human agents 

If you train it properly, an AI customer service bot can efficiently handle most of the complex queries. However, it can struggle during instances that demand critical thinking, deep reasoning, and multi-step problem-solving. 

In such cases, your chatbot must automatically transfer these complex queries to a dedicated team of human customer support agents to maintain a consistent customer experience.

Plus, you can train the chatbot to understand the user's sentiments, such as frustration and dissatisfaction, and include a feature that allows users to connect seamlessly with human agents.

5. Humanize the chatbot

If customers receive blunt responses from a salesperson in a brick-and-mortar store, they might feel disconnected from the brand. 

Similarly, answering customer queries with dull and robotic responses can make your customers feel unheard, misunderstood, and disconnected. This is why humanizing your AI customer service chatbot is critical to improving response rates and delivering a delightful customer experience. 

Here are some ways to humanize your chatbot:

• Give your chatbot a name, personality, and character to connect with your users and differentiate your bot from competitors
• Include images, GIFs, videos, and emojis in your chatbot's database, and train your bot to use these visual media appropriately 
• Choose the language and tone for your chatbot depending on your brand and target audience. It can range from formal, conversational, friendly, playful, and professional tone to answer queries according to the user's expectations 
• Integrate contextual memory and enable your chatbot to remember and refer back to previous interactions within the same conversation. This allows for more natural, flowing dialogue and demonstrates attentiveness
• Use conversational fillers like "hmm," "well," or "let's see" to make responses feel more natural and less robotic
• Implement advanced NLU to better interpret user intent
• Apply proactive engagement to allow the chatbot to initiate conversations based on user behavior, like offering help if a user seems stuck on a page

6. Train the AI chatbot 

Your AI chatbot for customer service is only as effective as it understands user queries and responds appropriately. Therefore, training and equipping your chatbot with the right knowledge bases and resources is critical to providing exceptional customer service. 

The ML model should include relevant and clean data, such as transcripts of customer-agent conversations and a history of customer queries. Let the chatbot study these interactions to analyze patterns, different queries, and human emotions to address user issues accurately.

7. Customize the chatbot 

Keeping your brand identity in mind, customize your chatbot with open-response or multi-choice questions, media elements, emojis, and design elements to enhance your brand image, hook audiences, and increase response rates. 

Additionally, you can program the chatbot to provide responses that are relevant to the user's current situation, such as their location, time of day, or recent actions on your website. 

Moreover, adapt your chatbot's appearance or responses for special occasions, holidays, or promotional events to keep the experience fresh and relevant.

8. Set up KPIs and metrics and analyze performance

How is your chatbot performing? Is it helping you achieve your customer support goals? To answer these, set up relevant KPIs and monitor them consistently to gain insights into customer satisfaction and improve the performance of your AI chatbots for customer service.

Some of the common KPIs that you can start measuring include: 

• Average resolution time
• Average handle time 
• Number of tickets 
• Number of resolved tickets
• CSAT
• Chat handoff 
• Daily conversation volumes 
• Bounce rate 
• Bot-to-human escalation time
• FCR rate
• Goal completion rate
• Cost per conversation

Track these metrics to make data-driven decisions and build strong relationships with your customers. 

9. Don't send huge walls of text

Don’t let your AI customer service chatbot respond to users with large blocks of text. This can overwhelm or frustrate users, pushing them to leave the site and switch to competitors. 

Break the text into simple and easy-to-digest sections to help your customers understand the context of the conversation and interact further. Add images or interactive elements to facilitate the narrative flow and illustrate solutions. 

10. Ensure customer data security and privacy 

Implement and follow stringent data protection measures while collecting, storing, and accessing customer data to ensure compliance with GDPR, SOC 2, and HIPAA regulations. 

You can also communicate your AI customer service bot’s data security measures with your customers to enhance trust. 

Real-life examples of AI chatbots in customer service

Now, let's explore the efficiency and ease that AI chatbots for customer service offer with two real-life examples. 

Dominos

‘Dom, The Pizza Chatbot’ by Domino’s offers customer support service in a humorous and conversational tone. It helps users order food, track their delivery status, and reorder via various messaging platforms such as Amazon Alexa, Facebook Messenger, and X. 

This chatbot has helped the brand improve customer engagement and satisfaction. 

Sephora 

Sephora is another brand that revolutionized the customer experience with an AI customer service chatbot. From providing personalized beauty product recommendations and matching virtual experiences with real ones to recognizing customers' faces and tracking facial elements, Sephora transformed its customer experience. 

Plivo CX AI chatbot overhauls customer service

Plivo CX's self-service chatbot, developed and powered by OpenAI, delivers exceptional omnichannel customer service for businesses of all sizes. The AI chatbot does the following:

• Resolves queries instantly: Acts as an AI-powered customer service agent, providing immediate answers and support
• Improves team efficiency: Handles simple inquiries automatically
• Offers 24/7 support: Is available around the clock to answer customer questions, even letting customers pause and resume conversations
• Provides consistent and on-brand support: Reflects your brand identity and adheres to your company's policies and guidelines
• Takes action: Can handle tasks like processing exchanges, updating information, and tracking orders
• Escalates seamlessly: Summarizes and passes complex issues to human agents when needed
• Easy to update: Can be quickly updated with new product info, promotions, or policy changes

Beyond chatbots, with a wide range of other features, Plivo CX’s omnichannel customer service platform efficiently handles huge volumes of customer queries and reduces the workload for human agents. These features include:

• Omnichannel capabilities: Unify, track, and manage customer conversations across channels, including email, voice, SMS, WhatsApp, and live chat
  
  
• Visual workflow builder: Create custom workflows  without coding and use automations using a simple drag-and-drop interface
  
  
• Streamline support: Plivo CX uses AI to prioritize urgent tickets, improving response times. It also ensures brand consistency by training AI agents to reflect your company's voice and policies
  
  
• Integration: The Plivo CX platform seamlessly integrates with your existing tools, such as homegrown systems, ERP, CRM, and helpdesk tools

• Real-time analytics: Analyze real-time customer interactions to identify loopholes and improve chatbot performance and service
  
  
• More productivity: Streamline agent workflows with message templates and internal notes, facilitating efficient conversation transfers and task management
  
  
• Agent coaching tools: Train your human support agents with features such as call recording, barge, and whisper to enhance human agent performance 

‍Book a demo to learn more.