Home Are Customer Service Chatbots Worth the Hype?

Are Customer Service Chatbots Worth the Hype?

When was the last time you attempted to make a customer service inquiry with a major company? Did you place a phone call, send an email, or utilize the “chat” function on the company’s website?

If you’re like a growing number of consumers, you turned to the chat – and you probably interacted with a chatbot. In case you aren’t familiar, chatbots are simple, automated programs that utilize conversational AI and knowledgebases to provide information and assistance to customers.

Depending on the sophistication of the program, the chatbot may simply attempt to figure out the purpose of the customer’s inquiry and send them a link to the proper FAQ page – or it may go further and help the customer with real processes, such as submitting a product return or transferring money.

Are Customer Service Chatbots Worth the Hype?

If you talk to an average tech-savvy startup entrepreneur, they’ll probably espouse the benefits of using chatbots. Online, chatbots are highly promoted and are frequently the target of sensationalist journalism describing them as equally capable of humans.

But are chatbots really worth all the hype? Are chatbots worth the investment?

Current Chatbot Capabilities

Current chatbot technology is impressive, especially compared to the earliest iterations of the technology. Today’s chatbots tend to be perfectly capable of executing actions based on simple algorithms. They can recognize thousands, or even tens of thousands of customer prompts — and can handle basic tasks (like sending a link or providing a paragraph of information) with ease.

On the back end, it’s relatively easy to set up a chatbot if you purchase one specifically designed to help various business owners. You’ll likely be able to take advantage of formulaic, template-based potential interactions, load your intended content, and customize the chatbot to your liking in a matter of days (especially if you’re using it for something simple).

At the advanced end of the spectrum, conversational AI is beginning to cross the threshold of “human-level” communication. Fluid sentences, an expansive vocabulary, and recognition/comprehension of almost any sentence is possible.

That said, many businesses use chatbots only for the simplest and most rudimentary tasks. They’re designed to answer basic questions that are already answered in the FAQ, or handle customer requests that can already be handled somewhere else in the site.

The Good Side of Chatbots

There are a variety of benefits you can enjoy by using chatbots.

  • Speed. Chatbots have the potential to serve people with much greater speed than human operators. People who call into a call center are typically forced to wait at least several minutes, if not hours, to get in touch with someone who may not even be able to help them. Even sending an email usually requires at least a few hours to get a response. But with a chatbot, users can begin talking to an entity representing the company immediately, and can often find solutions in a matter of minutes.
  • Efficiency. Overall, chatbots are highly efficient. They don’t require much in terms of ongoing effort, maintenance, or investment. They can also be used to handle an almost infinite number of customers simultaneously. They don’t need to be trained and once they have a clear directive, they don’t make any mistakes.
  • Convenience for customers. Though some customers with bad experiences might tell you something otherwise, the majority of customers do have a positive experience with chatbots. If you need help with something, you don’t have to bother drafting an email or waiting on hold to talk to somebody. You can also skip the effort of trying to track down the correct information page on the website by yourself. If served appropriately, the chatbot can greatly improve your customer experience and therefore improve your customer retention.
  • Labor reduction. If you have a chatbot on your side, your need for training customer service employees is going to plummet. Assuming the chatbot is capable of everything, or nearly everything, that your human agents could do, a chatbot can replace several members of your team. Depending on your goals, that could mean restructuring your team to save money or reallocating those resources to more important matters.
  • Flexibility. There are no real rules for how you’re supposed to use chatbots. While their most popular application is in customer service, there’s nothing stopping you from reprogramming your chatbots to serve a variety of functions. Even if you focus exclusively on customer service chat thoughts, you can program them to behave and interact with customers in any way you choose.
  • Future potential. The future potential for chatbots is incredible. Already, programmers and entrepreneurs are looking into ways to use conversational AI for things like psychological therapy and personal companionship. A convincing simulacrum of a human being may be several years — or even decades away, but the future of conversational AI appears bright.

The Bad Side of Chatbots

However, there are also some downsides of using chatbots that we need to recognize.

  • Industry dependency. Some industries and types of businesses benefit from chatbots more than others. If you only invest in a chatbot because it sounds interesting, and not because you have a firm plan for how to use it in place, you could end up regretting it.
  • Fixed, limited responses. Chatbot dialogue is impressive compared to the robotics of the 1990s, but these bots aren’t masters of the English language. For the most part, bots are limited in how they can respond and what they can respond with. The moment a user deviates from expectations, the bot is useless — and must send the user to a human for further assistance.
  • User frustration. Dealing with chatbots can also be frustrating for users. If the chatbot doesn’t understand what you’re trying to say, despite repeatedly attempting to rephrase it, you may grow impatient. If you spend several minutes trying to navigate the problem with the chatbot, but they end up being unable to help you, you may feel like you’ve completely wasted your time.
  • User alienation. Even if the chatbot is helpful, some users may find it to be alienating. Talking to a machine, rather than a human being, can be an empty experience. If you want to make memorable experiences and improve customer loyalty, you can’t afford to neglect this.
  • Initial expense. While bots can save you tons of costs in the long term, They may be expensive in the short term. Template-based bot systems tend to be inexpensive and easy to set up, but if you want something more robust or capable of more advanced functionality, you’re going to pay thousands, or tens of thousands of dollars for a custom solution.
  • Built-in flaws. Chatbots follow an algorithm, for better and for worse. They’re predictable and they never deviate from their programming – but if their programming contains a significant flaw, the negative effects of that flaw could be exacerbated. No chatbot is perfect and no programmer is perfect, so these flaws always exist.

Are We Too Fixated on Automation?

Are we too fixated on fixing every problem with automation? Our disproportionate attention on chatbots, which have clear weaknesses and flaws, suggests this possibility.

On one hand, automation has enormous potential, giving us a comprehensive technological tool that can help us in everything from creating new music to, obviously, serving customers. At its best, automation can reduce costs, streamline operations, and free up human time to tackle more complex tasks.

But at its worst, automation paints a different landscape. Overreliance on automation can result in the magnification of existing issues, the frustration of your users, and additional expenses that eclipse the cost of your original customer service team.


New technology is always exciting, but we have a tendency to look at new tech with hungry eyes and optimistic expectations.

Rather than eagerly jumping at every new potential way to optimize business operations, we should take a step back, analyze the costs and benefits, and only proceed when it’s a better fit.

Image Credit: Arina Krasnikova; Pexels; Thank you!

About ReadWrite’s Editorial Process

The ReadWrite Editorial policy involves closely monitoring the tech industry for major developments, new product launches, AI breakthroughs, video game releases and other newsworthy events. Editors assign relevant stories to staff writers or freelance contributors with expertise in each particular topic area. Before publication, articles go through a rigorous round of editing for accuracy, clarity, and to ensure adherence to ReadWrite's style guidelines.

Timothy Carter
Chief Revenue Officer

Timothy Carter is the Chief Revenue Officer of the Seattle digital marketing agency SEO.co, DEV.co & Law.co. He has spent more than 20 years in the world of SEO and digital marketing leading, building and scaling sales operations, helping companies increase revenue efficiency and drive growth from websites and sales teams. When he's not working, Tim enjoys playing a few rounds of disc golf, running, and spending time with his wife and family on the beach -- preferably in Hawaii with a cup of Kona coffee. Follow him on Twitter @TimothyCarter

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