The importance of Customer Service Chatbots

The importance of Customer Service Chatbots

Intelligent customer service chabots are reshaping the dynamics of customer-business interactions in e-commerce, by leveraging artificial intelligence (AI).
The importance of Customer Service Chatbots
Riccardo Russo | CEO
Riccardo Russo | CEO
December 1, 2023

In the ever-evolving landscape of online customer service, businesses are continually seeking innovative solutions to meet the growing demands of consumers. 

The main transformative technology at the forefront of this revolution is conversational AI and, in particular, customer service (new generation) Chatbots.

As a matter of fact,  according to recent statistics, 64% of consumers expect to receive a quality service from AI bots, comparable to that of human agents.

Before diving into how AI can help you increase your customer experience, let’s start by listing some significant data.

  • Last year, 90% of customers had at lest 1 conversation with a chatbot.
  • 62% of consumers would prefer to use a customer service bot rather than wait for human agents to answer their requests.
  • 80% of customers who have used chatbots report the experience as positive.
  • According to MIT Technology Review, 90% of businesses using chatbots report large improvements in the speed of complaint resolution.

As you can see, these intelligent bots are reshaping the dynamics of customer-business interactions, by leveraging artificial intelligence (AI) and machine learning (ML).

In particular, customer service chatbots tackle simple, repetitive (and “boring) tasks that don’t require the soft skills and experience of a human agent. 

For example, if a customer asks how to reset a password or wants to know an estimated delivery time, a customer service chatbot quickly answers the question by accessing relevant information automatically. 

At the same time, your customer service agents will stay focused on solving only complex problems and can dedicate time to other activities.

In this comprehensive exploration, we will delve deeper into the critical aspects of customer service chatbots, fortified by data and insights drawn from leading industry sources.

Availability of customer service chatbots: 24/7
Availability of customer service chatbots: 24/7

The power of customer service chatbots

Customer service chatbots, as data shows, represent one of the most relevant paradigm shifts in customer engagement for the next years. These bots take advantage of the power of AI (and, in particular, ML applications) to engage with customers in real-time, offering instant support, answering queries, and automating routine tasks.

It’s clear that customer service chatbots will help you build better relationships with your customers, but they will also save you a lot of costs and time! In fact, according to IBM, Businesses spend over $1.3 trillion per year to address customer requests. Chatbots can help to reduce customer support costs by at least 30%.

Not bad, huh? But it doesn’t end there.
In fact, according to recent statistics, businesses implementing chatbots, gain an impressive 67% increase in customer satisfaction.
So these conversational AI tools, not only are saving you money and costs, but they are also making a positive, tangible impact on the overall customer experience.

Lastly, according to recent statistics, in 2022, the average queue waiting time was 5 min 16 sec. Let’s be honest: it’s a lot of time. 
Customers don’t like to wait that long. Chatbots could shorten that time helping companies to increase customer satisfaction.

According to Drift, 59% of customers expect a chatbot to respond within 5 seconds.

Ok now that you know why chatbots are so helpful, maybe you’re wondering how AI chatbots function. No problem, in the following paragraph we will dive into it.

How AI customer service chatbots work

So if you want to understand better how customer service chatbots work, you need to understand (even just a little bit) AI applications.

First of all, Natural Language Processing (NLP) is a fundamental process that underpins Conversational AI, enabling programs to comprehend, interpret, and generate human language contextually.
So basically, NLP algorithms are AI applications that analyze, process, and interpret text-based data.

But how NLP is useful for chatbots?

Well, basically, NLP and NLU (Natural Language Understanding) empower conversational AIs to understand customer inquiries, respond accurately, and make tailored product recommendations.

Simply put, these types of AI applications enable software systems that can understand, interpret, and generate human language, allowing them to engage in complex and meaningful conversations with users.

In particular, NLP applications give customer service chatbots the ability to understand which phrases tend to work best in response to customers’ questions about shipping, orders, product features and so on.
If you would like to learn more about NLP, ML and conversational AI, here is a great article for you.

Now that you know how AI chatbots work, it’s time to understand what are the main benefits of having customer service chatbots implemented in your website or e-commerce.

3 main Benefits of customer service chatbots

The advantages of integrating customer service chatbots into a business ecosystem are diverse and impactful.

Here are the main three.

Efficiency Boost 

Chatbots, being capable of handling multiple customer queries simultaneously, significantly reduce response times

In fact, according to Salesforce, 64% of customer service agents who utilize AI chatbots are able to spend most of their time-solving difficult cases.

Moreover, recent data shows that about 90% of customer queries are resolved in 10 messages or fewer.

Most chatbot conversations are short and to the point: almost all cases and scenarios are resolved within a few messages. 

This allows not only to increase efficiency, but also to control and personalize the user experience, conversation flow, and response rates for different message choices.

Customer service chatbots and human agents excel at different tasks
Customer service chatbots and human agents excel at different tasks

24/7 Availability 

Another crucial aspect of customer service is availability.
As we all know most customer service agents follow office working hours, with chatbots you don’t have to deal with this problem.

In fact, AI chatbots like TextYess are available 24/7,  365 days a year and don’t need to follow standard office working hours. 

This unique feature ensures that customer needs are addressed promptly, regardless of time zones, contributing to increase customer satisfaction.

This is a key benefit.
In fact, 64% of consumers claim that the best feature of chatbots is their availability 24/7.

This perpetual availability not only caters to global customers but also aligns with the changing lifestyles and expectations of consumers who seek instant assistance at any hour and shop mostly in the evenings and on the weekends.

Cost Savings 

Gartner reports that businesses integrating chatbots can achieve substantial cost savings, with up to 30% reduction in customer service costs,  by handling up to 80% of routine inquiries.

This cost-effectiveness makes chatbots an attractive proposition for businesses seeking to optimize their operational expenditures.

Beyond direct cost savings, the streamlined processes enabled by chatbots contribute to resource allocation efficiency, allowing businesses to invest in strategic growth initiatives.

Improving Customer Engagement

Beyond mere issue resolution and FAQs, customer service chatbots play a pivotal role in increasing customer engagement.
So with chatbots you’re also able to “delight” your customers, offering advanced and “premium” experiences, with the result of increasing the relationship with your brand.

Proactive Assistance 

First thing first, we must mention a unique feature of chatbots: their proactive nature and their ability to initiate conversations with customers.
By offering assistance in complex tasks or with product recommendations based on customer behavior and preferences, chatbots create a personalized and engaging customer experience.

If you think about it, for a human agent, it would be impossible to manage thousands and thousands of product recommendation requests.

And, most of the times, customers are happy after these interactions.

In fact, recent statistics show that 69% of consumers were satisfied with their last interaction with a chatbot.


The data-driven capabilities of chatbots enable personalized interactions. By analyzing customer data, chatbots can offer tailored recommendations, promotions, and support, fostering a sense of individualized attention.

As a recent Statista report shows, 64% of businesses trust chatbots to provide personalized customer support rather than regular customer service.

According to a study by Epsilon, 80% of consumers are more likely to make a purchase when brands offer personalized experiences.
This means that online businesses need to leverage customer data to provide tailored experiences that meet individual customer needs.

Continuous learning & customer insights 

The integration of AI in chatbots, goes beyond merely responding to queries. 

Conversational AI tools like TextYess leverage Artificial Intelligence not only to address immediate questions but also to learn and recognize customer preferences and loyalty overtime, enhancing the quality of support

For instance, when a chatbot successfully addresses a query like "How do I add another user?",  it has the capability to autonomously recognize variations of the same question, such as "Where do I add another user?" Both phrases can seamlessly be incorporated into the chatbot's “knowledge bank”, ensuring that future questions are understood and addressed in a similar manner.

Moreover, the learning process extends to user feedback.
If a customer rates a response, provided by the chatbot, as unhelpful, the chatbot intelligently adapts.
So basically it learns from all types of feedback, making it less likely to offer the same (negative) response in a different conversation.
This feedback loop is crucial for refining the chatbot's understanding and its ability to provide accurate and helpful information.

It's important to regularly review and analyze user feedback to identify patterns and trends.
By doing so, businesses can gain valuable insights into customer expectations and requests, ensuring that the chatbot's learning process aligns with evolving needs. 

Of course, this commitment to continuous improvement not only enhances the effectiveness of the chatbot, but also contributes to an elevated customer engagement.

Real-world Applications in E-commerce

The versatility of customer service chatbots extends across diverse industries and business models. But they are best suited for e-commerce websites.

In the realm of e-commerce, chatbots streamline the shopping experience by helping customers find products, track orders, and resolve FAQs and purchase-related queries. In particular, chatbots are helpful for multi-products e-commerce websites, because, thanks to data collection and analysis, they can suggest products based on the customer’s needs and even create up-selling or cross-selling strategies.

The results of implementing an AI chatbot like TextYess in your Shopify e-commerce are:
1) improved customer service
2) a more complete and personalized customer journey and
3) an average in chat conversion rate of 15%

For example, the perfume e-commerce Olimpia Home, has generated 132 orders from 797 conversations, by using TextYess, reaching a ROAS of 72.

Here are other success stories:

TextYess success cases of customer service chatbots in eCommerce
TextYess Chatbot Success Cases in eCommerce

Future Trends

As you keep navigating the evolving landscape of online customer service, AI chatbots are emerging more and more as a game-changer. 

Here are some interesting data about the future of customer service:

  • As per Juniper research, a staggering 75-90% of queries will be fielded by chatbots by the end of 2023.
  • By the end of 2023, chatbots are expected to save businesses up to 2.5 billion hours of work.
  • According to Statista, the chatbot market is supposed to amount to $454.8 million in revenue by 2027, up from $40.9 million in 2018.

Chatbot market revenue worldwide: 2018 - 2027 (projected)
Chatbot market revenue worldwide: 2018 - 2027 (projected)

As online businesses navigate the complexities of a competitive marketplace, the adoption of customer service chatbots emerges not merely as an option but as a strategic imperative. 

As the data-backed insights mentioned in this article show, chatbots will have, in the following years, a positive transformative impact on customer satisfaction, operational efficiency, and overall business success. Embracing this cutting-edge technology positions e-commerce websites as pioneers in customer service, advancing towards an era where seamless, personalized interactions are not just desired but expected.

In conclusion, the journey toward customer service excellence is incomplete without the integration of these intelligent bots, marking a significant step towards a future where customer-centricity is the key for e-commerce businesses success.

Now it’s your turn. It’s time to embrace the AI chatbots revolution and you can start to do so by implementing TextYess in your Shopify store.