Chatbots for Business

Every business will find that there are many ways that it can benefit from using chatbots as a channel to interact with their customers. It’s easy to see this if you think about chatbots in two ways:

  • As a form of automated messaging
  • As an application (even a graphical application) that lives inside a messaging application (such as Facebook Messenger, Kik or Telegram).


Two of the main advantages of chatbots are that they can be used directly in the chat app (so unlike an app there is no need to download the bot or to authenticate the user) and they are shareable in that they automatically benefit from the fact that chat apps already have a critical mass of users that can participate in the bot experience.

Imagine you received an email asking you to pay a bill. This email may contain a link to the system on which you could pay your bill. In order to pay your bill you need to open that system, log on, navigate to the relevant page and then go through the relevant steps required to pay the bill.

Now imagine you received a message asking you to pay your bill within a chat app, from a chatbot. Not only does the chatbot send you the message, but it also allows you to click a button in the chat app to pay the bill. If you click the button, a graphical screen will appear in the chat app with all the main details of the transaction already filled in. All you need to do is click on the pay button.

It’s easy to see that the second example is much better experience for the user and will have a much higher success rate. The bot experience allows the user to benefit from the fact that they are already a verified user of the chat app and that the message requesting payment is tightly integrated with the functionality to pay.

There are countless of these sorts of examples that can be imagined. There are also examples where the user may be seeking information from the bot and can access this information directly in the chat app or examples where the user wants to perform an action directly in the chat app rather than downloading and using an app to do so.


Before discussing different potential use cases for bots it’s important to note that there are some limitations to the use of bots.

On the one hand there needs to be a compelling reason why it is better to use a bot than an app or a website (i.e. the experience of the bot needs to be better than using an app or website all things considered including the setup experience). And that is assuming the bot solves a real problem for the end user and is not just vanity software.

On the other hand it is important not to overcomplicate the bot or try to make the bot do too much. For example while natural language processing works really well for broad but superficial tasks, it’s impossible to get it to replace human agents for more context oriented tasks. These limitations need to be understood and mitigated through the design of the bot, including using features that escalate the conversation to humans if necessary (called human in the loop functionality).

Other limitations of chatbots that must be understood is that the chat interface is suboptimal for completing many tasks including tasks where the user may need to change their mind or needs a compact overview of many possible choices. A graphical interface (still controlled by a bot) is often a better option in these cases.

Use cases

One overlooked important use case for bots is geolocation. Using beacons or gps, the bot will be shown to the user only in a specific physical context. There are many powerful use cases for this sort of bot. The following is a list of potential use cases for bots in different industry verticals. It is not an exhaustive list but rather an illustration as to how bots might be used in different industries and across industries.

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Chatbots for Customer Service

Customer service is likely the most popular use case for chatbots right now. Technology exists to easily enable chatbots to answer questions that are posed in natural language. These systems can work very well provided that the chatbots are mainly limited to simple, frequently asked questions and the conversations are reliably escalated to humans if the chatbot cannot answer appropriately.

It is worth adding that the capabilities of the chatbots in customer service can be expanded so that they can go beyond just responding with information, but can actually allow the user to do things, either via text or voice commands or through a graphical interface. And as mentioned above, this can apply for human in the loop as well.

For example, the bot could allow customers to book appointments, track orders, or buy warranties via a graphical interface in the chat window.

Chatbots for Financial Services

Financial services companies have already embraced chatbots in a big way, recognizing that they can not only reduce the customer services cost of the financial institutions, but can also provide many services in a much more convenient form.

It is already possible to do simple tasks such as balance inquiries or payments via chat or sms. More sophisticated tasks, such as purchasing insurance, are becoming a reality. With a judicious use of human in the loop and graphical interfaces, financial institutions will be able to offer their customers the ability to complete many of the most common transactions conveniently from within their chat application.

Chatbots for Ecommerce

The obvious application of a chatbot for ecommerce is the online equivalent of a store assistant in a physical store who tries to help you find the item you want in the store. That chatbot would ask you what you would like and try to assist you in finding it. This use case however has issues in that search and filter functionality in an online store is easy to use and therefore the user does not have the same problems that they would face in finding relevant items in a physical store.

Rather than trying to replace search and filter functionality which already works well, the chatbot could offer other services that support the buying experience. It might be possible for the chatbot to offer a more seamless payments solution for example from within the chat. It also might be possible for the chatbot to assist in answering questions about a specific item once it has already been identified through a broad search.

Chatbots can also function at a higher level especially on purchases where the customer might value convenience over value. For example, a chatbot may allow a customer to buy and send flowers much more efficiently than ordering off a website. This could be particularly true if all the relevant address and payment information was already stored within the chat app.

The fact that chabots can be used in groups will likely result in some interesting use cases for ecommerce, especially in social purchases, perhaps as versions of the Groupon model. It is also possible to use geolocated chatbots to deliver discounts or information to customers in a shopping mall for example. The bot could give them a discount voucher for a particular store when they walk past that store.

Chatbots for Marketing

Marketing is also a current big use case for chatbots. There is clearly value for marketers in being able to reach customers inside the chat apps. Currently the open rates on chatbots are much higher than for email because they still have some novelty value.

Although there may be some economic merit in the short term due to the novelty value of bots, in the longer term this channel is likely to become as saturated as email and others.

Bots however have a big advantage over other marketing channels because they are not just a channel of communication but also a channel of operation. Not only can a bot advertise a product or service, but a customer can purchase that product or service, or book an appointment using the bot, without leaving the channel. This is potentially very powerful for marketers.

The potential virality of bots and the use of graphical interfaces will open up opportunities for gamified, social marketing campaigns. Of course, there is also potential for marketers to leverage popular bots using affiliate or native advertising.

Chatbots for Education

Besides the obvious customer service type applications for education such as answering administrative questions (in groups) and booking appointments, bots could be used to bring educational services within the chat app.

For example, bots that teach a language could interact with students within a chat app. Students could interact with the bot, answer questions and record messages for it. This type of testing and interactions could be expended to other subject domains.

It’s also possible that the social properties of chat apps could be exploited to create social educational experiences. Groups of students could compete to answer questions or create content.

In short many of the experiences that are delivered by an application today could be converted to bot experiences that can take place directly within the chat app.

Chatbots for Healthcare

Again there are many opportunities for reducing the cost of administration and improving the convenience for patients in healthcare by using chatbots. Booking appointments with doctors and for tests is an obvious use case. Making the insurance process more seamless could be another huge application of chatbots.

Patients will be reluctant to download an app for each doctor or hospital they visit, so a chatbot is potentially a good solution in this space.

Although AI in healthcare will become huge and will be used extensively to augment the capabilities of health professionals, chatbots will not replace doctors anytime soon.

Chatbots could however have an immediate impact in areas such as tracking prescriptions and medication use, and allowing doctors and patients to share health diaries.

Geolocated chatbots could guide people through hospitals and allow them to ask questions relevant to the section of the hospital they are located in.The obvious application of a chatbot for ecommerce is the online equivalent of a store assistant in a physical store who tries to help you find the item you want in the store. That chatbot would ask you what you would like and try to assist you in finding it. This use case however has issues in that search and filter functionality in an online store is easy to use and therefore the user does not have the same problems that they would face in finding relevant items in a physical store.

Chatbots for Governments

There is a particularly good case for chatbots for governments. This is because citizens will be reluctant to download apps for all the government services that they want to use, particularly if they will only use these services very infrequently.

Instead of using apps governments can offer a wide range of services using chatbots. Citizens can get information on services, particularly usage of services, pay bills and ask questions. They could also provide information for visas, passports and permits and ask questions about the processes without leaving the chat platform.

Chatbots for Hotels

Again there is a good reason why hotel guests will be reluctant to download the hotel app unless they are frequent guests.

There are many services however that could be provided by chatbots. Questions about hotel facilities, ordering room service are obvious use cases.

It’s also possible to use geolocation to geolocate the services. It’s possible for the chatbots to appear when required by the physical context. When the customer enters a coffee shop or restaurant for example the relevant bot could take their order.

It could also be possible for guests to leave feedback or ask questions based on where they are. For example they could leave feedback on the swimming pool facility when they are by the pool.

Related articles

There are a huge number of ways that chatbots can be used to improve the customers’ experience of a business. It is likely that soon all businesses will offer chatbots as a way of not just communicating with businesses but a way of interacting with many of the services that the businesses offer.


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