Chatbots For Online Business: Everything You Need To Know

Companies today can use chatbots for their online business to instantly communicate with customers and resolve their issues on multiple platforms, such as Facebook or their online store.

Online shopping doesn’t follow a single path. Enter “conversational commerce,” or businesses and buyers connecting through messaging apps.

These round-the-clock bots use AI to infer customers’ preferences and create a valuable, individualized shopping experience.

Learning how to set up your business for conversational commerce isn’t always clear since bot technology is still developing. To help sellers out, we’ve created this guide to cover everything from defining exactly what a chatbot does to measuring your bot’s ROI.

Apply this knowledge to your online business, and you’ll be set to launch your first bot. With this new technology, your business can immediately meet customers’ wants to create a personal and helpful shopping experience.

What is a Chatbot?

A chatbot is a computer program that simulates conversation with human users to complete some sort of service.

Chatbots for e-commerce companies are typically designed to:

• Complete buyers’ purchases
• Offer buyers product recommendations
• Provide customer support
• Execute tasks

Even with this list of functions, it might be difficult to imagine how online sellers use chatbots since the technology is relatively new. Here are a few examples of how e-commerce chatbots can help businesses connect with their customers:

HelloFresh

HelloFresh’s chatbot not only answers questions asked by its users, but also shares discount offers to relevant prospects.

The bot, Brie, redirects you to the company’s Hero Discount Program page when you ask for a discount. Obviously everyone loves to save money, but add the benefit of instant access and minimal research and you’ll have some happy campers.

Sephora

Does your business utilize scheduling portals? Check out what Sephora’s been up to. Their Messenger chatbot allows customers to schedule in-person services such as makeovers or facials.

Through a series of basic questions such as preferred location, type of service, and available appointment dates, Messenger pulls the name and email of the customer and sets them up for their appointment.

By using Messenger, Sephora opens up a whole new stream of prospective customers without having a salesperson even pick up the phone.

H&M

The clothing brand H&M created a chatbot that asks users questions about their style and offers photo options for users to select. With this information, the bot creates a fashion profile of each user to make outfit suggestions and direct the user to purchasing the clothing.

Users can also create their own outfits and browse and vote for other users’ outfits on the bot for an interactive shopping experience.

All of these brands show that chatbots are more than just computer programs in e-commerce — they’re a way to create helpful, enjoyable shopping experiences for buyers. Customers today recognize the usefulness of this technology and are ready to integrate bots into their online shopping.

Why Bother with Chatbots for Your Online Business?

Conversational commerce isn’t just a cool-sounding concept — user research shows that buyers are more ready and willing than ever to shop online with bots. Here are a few reasons why your online business should be using a messaging app to host a bot and boost sales.

People Are Increasingly Using Messenger Apps

Just as the number of social media users keeps growing, so does that of instant messengers.

Globally, there are over 2.5 billion people using mobile messaging apps, with WhatsApp and Messenger being the leaders. By 2023, that number is expected to be over 3 billion.

Using chatbots puts your business where plenty of customers are, so your brand stays visible and more buyers have purchase opportunities.

People Want to Shop with Messenger Apps

People aren’t just using messenger apps to chat with friends — they’re also excited about shopping with brands’ bots. Here are a few stats to show buyers’ willingness to shop with messenger apps:

• 62% of consumers would prefer to use a customer service bot rather than waiting for human agents to answer their requests.
• 82% of consumers claim that instant responses to their questions are critical when contacting brands.
• 24/7 service of chatbots is most preferred, but when it comes to more complicated issues, human interactions are preferred.
• 66% of consumers report more confidence in their purchase decision when a company is active in messaging apps.

These high figures show that a large chunk of buyers trust chatbots as a way to interact with businesses. These numbers are only expected to grow, so adopt a messaging app now to meet the increasing bot demand.

Rather than trying to replace all of your tasks with a chatbot, start small and test your options.

More Businesses Are Using Bots

E-commerce is a competitive space — with so many other merchants, you have to stay ahead by tracking other sellers’ activity to see how they’re reaching their customers. Right now, the data shows that merchants are embracing bots.

By 2024, global consumer retail spend via chatbots is expected to reach $142 billion (up from just $2.8 billion in 2019).

Messaging apps aren’t just a quick fad—more and more businesses are integrating chatbots to serve their customers in the long-term. Adding messaging app technology to your business now will allow you to support your buyers efficiently and personally instead of falling behind your competitors’ levels of service.

How Do Chatbots Work?

Before you add a chatbot to your business, it’s important to understand how this technology works. Understanding the different types of bots out there will allow you to generate one that serves your online business’ needs.

Chatbots work through two systems. The first type functions based on a set of rules, and the second type functions using machine learning.

Rule-Based Chatbots

Chatbots that function based on a set of rules are restrictive. They can only respond to specific commands rather than interpreting a user’s language.

Rule-based chatbots are great if users are only expected to have simple questions that refer to a limited set of information. They’re also more financially accessible and don’t require as much programming.

AI Chatbots

Chatbots that function through machine learning use AI to handle a wide range of conversations and requests from users. Instead of only responding to specific commands, AI chatbots can interpret a user’s language to understand and meet their needs.

AI chatbots make sense if you want to handle complex queries and comments from users, such as a user asking for a product recommendation or checking inventory.

Whether you opt for the simpler rule-based chatbot or advanced AI chatbot all depends on what you’d like your chatbot to do. If you only want your bot to handle simple customer service requests, a rule-based chatbot may do the trick. With that said, most e-commerce merchants would benefit from the more advanced AI bot that can learn about customers’ preferences to encourage more purchases and provide personalized service.

How Do I Build a Chatbot for my Business?

You may feel too intimidated to launch your first chatbot if you know little to nothing about programming — don’t worry! There are plenty of platforms out there for building chatbots that accommodate all skill levels.

To get started, here is a list of a few bot-building platforms. Some require basic coding, but many have basic drag-and-drop models for those without programing experience. We’ll list the required skills needed for each platform and the channels where the platform can publish your bot, such as Facebook or a Shopify store.

Facebook (Meta) Messenger

Facebook Messenger offers a Messenger Platform for building bots to publish on, of course, Messenger. The platform does require basic to advanced coding skills, though it does offer a design kit with drag-and-drop elements for UI prototyping. The Messenger Platform is free to use.

Once you’ve created your bot on Messenger Platform, you can release it to the public by following this guide to submit to Facebook. Any Messenger bot can be launched through the Messenger app.

• Coding skills: Basic to none
• Price: Free
• Bot mediums: Facebook Messenger

For more assistance in building your Messenger bot, check out this list of integrative platforms that can help streamline the process for you.

Tidio

Tidio provides a conversational AI chatbot that is easy to use and fully customizable.

What we liked most about Tidio is their resource bank of 35 templates and 16 different triggers for bots, making it seamless to get started for any business.

• Coding skills: None
• Price: Free option or Premium plan starting at $19/mo
• Bot mediums: Facebook Messenger, MailChimp, Zapier, etc

Wati.io

WATI is an AI chatbot best suited for companies based on WhatsApp for communication needs.

You can also record and send videos through WhatsApp whenever you need a visual aid to help with customer experience.

• Coding skills: None
• Price: Standard plan starting at $49/mo
• Bot mediums: (primary) WhatsApp; (unofficial) Google Sheets, Shopify, Zapier, etc.

How Do I Measure My Bot’s ROI?

It’s not enough to build and launch a chatbot — buyers won’t chat with your bot if it’s not helpful or engaging. Roughly 40% of users will stop chatting with a bot after the first message, and 25% will stop chatting after the second.

To ensure that your bot is actually benefiting your buyers and driving sales, you have to measure its activity with chatbot analytics. This data includes basic metrics that indicate your bot’s helpfulness, like engagement and retention rates, as well as advanced metrics to measure sales conversions.

You can begin collecting analytics on your bot by either using analytics tools offered in some of the bot-building platforms, or you can tie your bot to an outside bot analytics platform.

These platforms offer basic metrics, like tracking your bot’s conversations amount and total users, to identify and understand your bot’s level of reach and engagement with users.

Outside Platform Analytics

For advanced metrics, consider using a third-party analytics service to integrate with your bot. These providers are solely focused on analytics, so they can track a ton of deep insights on your bot. They’re also useful for analyzing bots across multiple mediums.

Here are a few third-party analytics services to consider:

• Chatbase: Google’s chatbot analytics platform Chatbase shows basic metrics, like active users and conversations, as well as advanced metrics, such as a Funnels report to indicate conversions.

If your bot is able to facilitate orders, this Funnels report is especially useful as a way to track bot-driven sales.

Chatbase is free to use, and it can integrate with any chatbot platform, such as Facebook Messenger, as well as voice assistants, like Amazon Alexa and Google Assistant.

• Taplytics: Instead of solely focusing on bots, this analytics provider focuses on entire web and mobile user experiences.

Its comprehensive reporting is useful for understanding your bot if you’re planning on embedding it into your online store or app, rather than just launching it on a messaging app. Taplytics can track the engagement rate of users with your bot in different locations of your site and app. With these insights, you can determine which placement creates the most personal and useful shopping experience on your app and online store.

• Botanalytics: This analytics service supports 13 chatbot platforms and assistants, including Facebook Messenger, and Twitter. It takes a deep dive on basic metrics by identifying the best re-engagement times for users and the most commonly used conversation phrases.

Botanalytics also allows you to measure the conversion rates of conversation goals you’ve set. For example, you can measure your bot’s purchasing completion rates. The service offers a free plan with limited reporting, a $99/month plan with conversion funnel and conversation segmentation reporting, and a $349/month plan with customized reporting.

It’s Just the Beginning for Bots

Talking to a robot sounds foreign, cold, and impersonal. And yet, chatbots have made many brands more human and approachable to buyers. These bots are personal in remembering customers’ preferences and are convenient as a 24/7 service.

As long as companies are upfront about bots being technology and not actual people, this technology is a surprisingly intimate and useful way to communicate with buyers.

It’s up to you as a merchant to figure out how your company’s chatbot can easily reach and serve your key customers. Figure out which chat platforms your buyers use most frequently, and track your bot analytics to understand how the technology can better serve your customers.

The more you gear your bot towards your buyers, the more surprised you’ll be at your bot’s human-like, personal customer service.

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