Definition: What is an AI chatbot?
An AI chatbot is a technical dialogue system that enables dialogue between humans and technical systems. The conversation takes place via spoken language or in text form. An AI chatbot always offers an option for voice input and output. Usually using a so-called chat widget, also known as a chat window. As the name suggests, an AI chatbot is based on artificial intelligence and understands human language based on natural language processing — the system does not simply process keywords, but understands a user's intent within their message.
artificial intelligence In combination with a chatbot, it offers great development potential: AI can solve simple tasks itself, makes recommendations to users independently using so-called predictive analytics (in German: predictive analysis) or can use dreaming to cluster user insights and then formulate new topics. All of these features and options distinguish an AI chatbot from a rule-based chatbot that is not based on artificial intelligence.
What is the difference between a rule-based chatbot and an AI chatbot?
There are now a great many chatbot providers and solutions. The chatbots themselves can be very different. There are essentially two Chatbot types: Chatbots based on predefined rules and chatbots based on artificial intelligence. In practice, rule-based chatbots are also often referred to as “click bots”, as users rarely enter their request as free text with these chatbots, but click on buttons given by the chatbot.
The table below provides an overview of the differences between rule-based and AI chatbots:
How does an AI chatbot work?
Although there are so many different chatbot solutions, the operating principle is always the same:
There is a chat window, e.g. in the form of a chatbot widget or integrated into a messenger app (e.g. Facebook Messenger). Here, the user can write or speak the request, question, or command. The AI chatbot contains the message. Using natural language processing, it processes them and identifies the intent, i.e. the user's intent. The AI chatbot then answers the user, in which form is variable. For example, there are so-called voice bots that answer via spoken language, but also AI chatbots that can answer with texts, videos, images or other multimedia elements.
It should not be neglected that an AI chatbot develops independently based on every conversation — in other words, there is much more happening in the background than “just” the conversation that is being made with users. Large amounts of data are important for learning the artificial intelligence of chatbots. The more conversations an AI chatbot has, the more it learns, can adapt to user behavior, analyze conversation processes and generate recommendations from them.
In short: The self-learning AI chatbot works in three steps.
- In the first step, the AI processes the user's request based on natural language processing (NLP). This means that the AI does not explicitly search for keywords in the request, but rather determines semantic relationships and derives the user's concerns from this.
- After the AI chatbot has determined the user's intention, it searches for the appropriate answer and sends it out, for example, in the form of a stored text answer.
- In the third step, the chatbot learns with every request using AI features and can therefore automate more and more queries. We explain exactly how this works in the section “Self-learning: How does an AI chatbot learn? ”.
Self-learning: How does an AI chatbot learn?
In the case of the AI chatbot moinAI, self-learning works using two special AI features: Dreaming and Reassuring.
Dreaming: Generate insights and find out what users are really interested in
Step by step: That's how it works Dreaming
- Trained topics
The chatbot's AI is trained on a set of topics and can answer questions on just these topics.
- Didn't understand request
The chatbot receives a question about a topic that is not yet known. The question cannot therefore be answered.
- reflection
The AI registers that although it does not know this topic and cannot answer it, it could be relevant for users.
- clustering
If an unknown topic appears again and again, the AI clusters the said queries into a large “topic cloud” in which all appropriate queries are collected.
- Topic suggestions
These topics are then suggested to the company, i.e. the chatbot owner.
- Topic extension
In this way, AI automatically expands the topics that the chatbot covers and automatically and clustered to the respective company what else users would like to know apart from familiar topics.
Reassuring: The exact answer, even for inaccurate questions
Step by step: That's how it works Reassuring
- The AI chatbot receives a request
The chatbot receives a request that is either worded imprecisely, contains spelling mistakes or rather unknown synonyms.
- Processing the request
The AI is not 100% sure which topic is meant. Like every request, this request is also compared with existing topics.
- Select the topic
The AI will decide which topic this request is most likely to belong to.
- Suggest a topic
This topic is suggested to the user in the chat via a query or reassuring, e.g. “Do you mean with your request that you want to reset your password?” The user now has the option to decide whether this was the topic in question.
- Any sharpening of the topic
If the user chooses “yes”, this goes back to the thousand-dimensional space of the AI as a positive signal and refines the subject area with a further formulation.
- learning process
The AI learns with every request, sharpens topics and usually provides users with a suitable answer even when uncertain.
Benefits of an AI chatbot
An AI chatbot provides companies with many benefits through accelerated and automated communication:
- Faster response processes: Customers don't have to hang on hold on the phone, click through FAQs or set up an email and wait for an answer. With an AI chatbot, the question can be typed in and an answer appears within seconds.
- Self-learning and independent development: Once an AI chatbot is initially trained, it develops independently based on conversations that it has with users. Since it develops on the basis of real conversations, it also grows in parallel with the real wishes and needs of chatbot users.
- Easy to use and handle despite complex technology: This applies to both companies and users. The AI mechanisms and technology itself may be complicated, but most AI chatbots offer user-friendly and UX-optimized interfaces on the interface, i.e. in the front end, that can be used without further technical understanding or IT skills.
- Little effort and quickly amortizing costs: Once the AI chatbot is set up and implemented for the first time, it doesn't cost companies much effort to operate it. Since AI develops independently and the AI chatbot can answer thousands of queries at the same time, the costs of an AI chatbot are also quickly amortized.
If you would like to find out whether a chatbot pays off for your use case or what the return on investment is doing, feel free to use our calculators, which calculate how much you can save in marketing & sales and customer service with an AI chatbot:
Return-on-investment of an AI chatbot in marketing and sales
Return-on-investment of an AI chatbot in customer service
- Self-service saves employees and customers time: Self-serviceopportunities — such as those offered by an AI chatbot — bring real benefits both within the company and for users. It saves time and work on the part of the company, while users receive the answers they need around the clock or can carry out activities themselves, such as downloading a certificate or changing the mobile number.
- AI chatbot human handover: There are issues that cannot be solved by a chatbot, but require human intervention, such as very complex issues or emotionally charged cases (read more in the article:”What can a chatbot do? What can't a chatbot do?”). Although communication via an AI chatbot means a conversation between man and machine in the classic sense, this process can be interrupted at any time and handed over to a person at the user's request. Users are never “trapped” in a chatbot conversation. Thanks to the so-called Human Takeover Conversations can be handed over from the AI chatbot to a human employee via email or live chat. There is therefore nothing standing in the way of ideal cooperation between humans and AI chatbots.
What areas of application are AI chatbots suitable for
The main areas of application of AI chatbots are in companies' customer communication, primarily in marketing & sales and customer service. In both cases, they ensure that questions and concerns are answered automatically and that users/interested parties/customers receive a quick answer and are advised.
AI chatbot in customer service
AI chatbots are traditionally known primarily from the area of customer service. They are often used there as digital assistants who help website visitors, customers, partners or interested parties. They usually answer recurring and simple questions that arise again and again. Around 80% of all incoming customer service questions are recurring. This offers great automation potential, which can be ideally filled by AI chatbots. The AI chatbot answers repetitive questions and ensures that employees have more time to address complex problems.
Insight into practice — these companies are already using an AI chatbot in customer service:
- Cyberport [Webinar]
- AdmiralDirect [Case Study]
- TEAG [case study]
- Blinds Scout [Webinar]
- BLS [Webinar]
- ROSE Bikes [Webinar]
AI chatbot in marketing and sales
Also in the area marketing and Sales Can AI chatbots be used successfully. For example, they provide product advice, inspire with temporary activities such as a quiz built into the chatbot, and automatically ask for contact details when there is interest in a product or service. They also make it easier to navigate the website, which is particularly valuable for large online stores or websites where a lot of information must be stored.
Insight into practice — these companies are already using an AI chatbot in customer service:
AI chatbot in HR and HR
In addition to customer service, marketing and sales, a AI chatbot also in the HR sector be used. There are various areas of activity in which it is worthwhile to use a chatbot, such as in recruiting, applicant and employee management or for onboarding and offboarding, training and continuing education of employees.
In which industries are AI chatbots used?
Since AI chatbots are highly changeable and adaptable, they can be used in almost every industry. They can be used wherever questions need to be asked and answered. moinAI's chatbot, for example, is used by over 100 companies from a wide range of industries. What are the most popular industries for AI chatbots and what benefits AI chatbots bring to these same industries below:
AI chatbot in ecommerce
- Convert website visitors into paying customers
- Helping customers find their way around the shop better
- Increase customer satisfaction with help in a matter of seconds
- scalable services — even during seasonal peak or growth phases
AI chatbot in Finance
- Maintain quality in customer service
- First-class service — offer at very favourable conditions
- Set yourself apart from competitors through service quality
- Real-time support that helps customers anytime
AI chatbot in tourism
- Provide 24/7 global service
- Dynamic multilingualism that can change depending on how you are addressed
- Automatically display up-to-date information (e.g. weather information)
- Omni-channels: An AI chatbot can be used in parallel in Facebook Messenger and on the website
AI chatbot in Energy sector
- Provide simple self-service, e.g. in the event of a change of address
- Relief for support staff
- Automated, quick answers to standard topics, such as down payment
- More time for employees to address complex issues and concerns
AI chatbot for educational institutions
- Stand out from other institutions through a modern and innovative communication channel
- Multilingual contact point for international students
- Barrier-free contact options for students and interested parties
- Generate more applications automatically
AI chatbot in the industry
- One channel for all target groups: Whether B2B, B2C, B2B2C — the chatbot provides answers for everyone
- Generate leads using forms built into the chatbot
- Pre-qualification of contacts: A chatbot navigates users and pre-qualifies them
- Automate recurring questions from end customers
AI chatbot in Verlag
- Preventing paywall jumps: turning visitors into paying customers
- Improve subscription shop service: An AI chatbot advises customers
- Automate recurring questions efficiently
- The editorial design of the chatbot is always up to companies
Conclusion: AI chatbots, the customer communication of the future
An AI chatbot is a digital assistant that takes on and performs many tasks that would normally require human intervention. Regardless of whether you are looking for reliable customer service consistency or want to entertain your target group and offer an innovative communication tool, communication with the use of AI chatbots works at all levels.
In summary, chatbots are definitely the future of customer communication in companies. The term “artificial intelligence” has been used inflationary and sometimes very loosely in recent years. We hope that after reading this article, you now have a better understanding of what AI is and how it can be used in modern business applications.
Your thirst for knowledge has not yet been quenched and would you like to know what a chatbot could look like in practice? Create an AI chatbot that fits your use case in four steps — completely free of charge and without obligation.
