Jul 10, 2023


Min Read


Gourab Majumder

Enhancing customer experience - How chatbots are transforming customer support?

customer experience


Customer Support

When Ginni Rometty, Former CEO of IBM, said - "The future of customer service is built on AI," we could hardly imagine the world of today where AI is the buzzword, and it seems Asimov’s fiction has come to life.

In today’s digital landscape, where customer experience is the battleground for organizations to showcase their edge, ML and AI-fueled solutions are becoming indispensable for businesses to stay competitive.

"Automation applied to an inefficient operation will magnify the inefficiency." - Bill Gates, Co-founder of Microsoft.

Staying relevant to Mr. Gates’ context, we have found that with the exponential progress of technology, chatbots have emerged as a powerful tool for businesses. Companies can leverage them

customer experience management (CXM)

to automate their critical operations and transform customer support to deliver new highs of customer satisfaction.

In this article, we will explore how chatbots are revolutionizing customer experience and discuss real-world examples of successful implementations. Let's dive in!

Before everything starts, let’s take a few steps back and ask the most pertinent question here.

What are Chatbots?

What are Chatbots?

Chatbots, also known as virtual assistants or conversational agents, are AI-powered software programs designed to simulate human-like conversations with users.

These intelligent bots utilize natural language processing (NLP) algorithms to understand and respond to customer queries, provide information, and offer personalized assistance.

The first chatbot was created in 1966 by Joseph Weizenbaum at the Massachusetts Institute of Technology (MIT).

It was called ELIZA, and it was designed to simulate a psychotherapist.

ELIZA worked by using pattern matching to identify keywords in the user's input and then responding with pre-programmed responses. For example, if the user said, "I'm feeling sad," ELIZA might respond with, "Tell me more about how you're feeling."

ELIZA was not very sophisticated by today's standards, but it was a significant breakthrough in the field of AI. It showed that it was possible to create computer programs that could simulate human conversation, and it inspired the development of many other chatbots in the years that followed.

Here are some other early chatbots.

PARRY (1972): Developed by Kenneth Colby at Stanford University, PARRY was designed to simulate a paranoid schizophrenic.

JOSEPH (1978): Developed by Joseph Weizenbaum at MIT, JOSEPH was a more sophisticated version of ELIZA.

ALICE (1995): Developed by Richard Wallace, ALICE was one of the first chatbots to use natural language processing.

Mitsuku (2012): Developed by Rollo Carpenter, Mitsuku is one of the most advanced chatbots in the world. It has won several awards for its ability to hold human-like conversations.

Since their inception, chatbots have been employed in simplifying complex human tasks by simulating human reactions while minimizing manual errors.

And for this reason, chatbots are being used in a wide variety of applications like education and entertainment. However, with their increasing sophistication, they are becoming more conversant in performing complex tasks like customer service.

Even when brands fail with their initial customer service endeavors, chatbots are being deployed to make the service recovery procedures more seamless and collect data about how well they performed.

But customer experience essentially being a sector that is dependent on human intervention, you might have the following doubt.

How Can Chatbots Improve Customer Experience?

How Can Chatbots Improve Customer Experience?

While the global chatbot market generated nearly $40.9 million USD in 2018, the market is projected to encounter an exponential rise and generate nearly $454.8 million USD by 2027.

We already know that the recent developments in Generative AI have helped refine your CX strategies.

As quite old AI-fueled tools, chatbots, too, have played their part in revolutionizing customer experience by providing efficient and personalized support across various industries.

Let's explore some examples of how chatbots have improved customer experience.

1. Automation and Self-Service


Chatbots enable businesses to automate repetitive tasks and provide self-service options to customers, allowing them to find answers and resolve issues quickly and conveniently.

If we talk about the global banking industry, then Bank of America’s Erica stands out.

Erica is BOA’s proprietary chatbot which assists customers with their banking needs, including account balance inquiries, bill payments, transaction history, and personalized financial guidance.

By leveraging AI and natural language processing, Erica provides seamless and convenient banking support, improving customer experience and enabling self-service banking.

2. Improved Response Time

Improved Response Time

Chatbots offer real-time responses and round-the-clock availability, reducing customer wait times and enhancing the overall speed and efficiency of support interactions.

We all understand the importance of improved response time in customer interactions and 24/7 support when it comes to the travel industry.

KLM Royal Dutch Airlines' BlueBot assists customers with flight bookings and check-in procedures and provides real-time flight updates - making your worries about missed flights disappear!

BlueBot, available on Facebook Messenger and other platforms, uses AI and machine learning to understand customer inquiries and offer relevant information. By providing quick and accurate responses, BlueBot enhances the travel experience and reduces customer wait times.

3. Omnichannel Support

Omnichannel Support

Chatbots can be seamlessly integrated across various communication channels, including websites, mobile apps, social media platforms, and messaging apps, ensuring consistent and personalized support experiences.

In some cases, you even get the flexibility of interacting with chatbots using your voice!

4. Personalization

customer experience

By leveraging customer data and machine learning algorithms, chatbots can deliver personalized recommendations, tailored product information, and customized solutions, creating a more engaging and personalized customer experience.

If you are concerned with e-commerce, the stellar Virtual Artist from Sephora has become the epitome of personalization!

Sephora's Virtual Artist chatbot utilizes augmented reality technology to help customers try on different makeup products virtually.

Customers can upload their photos or use the front camera on their mobile devices to explore different looks and shades. This interactive chatbot enhances the shopping experience by providing personalized recommendations and allowing customers to virtually try before they buy.

Now that we understand how integrating chatbots in business operations can elevate customer satisfaction by providing enhanced support let’s try to gauge the experience from the other end of the spectrum.

How Might Customer Behavior Change if Customers Interacted with Bots Versus with Humans?

We all know Newton’s fabled Third Law of Motion applies almost everywhere - ‘To every action there is an equal and opposite reaction.’

Although not exactly ‘equal or opposite' the introduction of chatbots can lead to potential shifts in customer behavior and expectations. Here are a few ways customer behavior might change.

1. Preference for Convenience

Customers value convenience, and interacting with chatbots offers instant, 24/7 support without the need to wait for a human agent.

For instance, Domino's Pizza's chatbot allows customers to place orders and track deliveries seamlessly, catering to the growing preference for on-demand services.

2. Increased Acceptance

As chatbot technology improves, customers are becoming more accepting and comfortable with interacting with bots, recognizing their efficiency and accuracy in resolving queries.

A study by Business Insider found that 67% of consumers used a chatbot for customer support in 2016.

Brands like Amtrak, the US-based railroad service, implemented chatbots to handle customer inquiries and found that customers appreciate the efficiency and accuracy of chatbot interactions.

According to their study, 5 million questions are answered by chatbots annually.

3. Higher Expectations

Customers may develop higher expectations for personalized and proactive support as chatbots become more capable of understanding and anticipating their needs.

Starbucks' chatbot on the Starbucks mobile app, known as My Starbucks Barista, takes customer orders, remembers preferences, and provides recommendations based on previous orders. This level of personalization sets a higher standard for customer expectations.

It seems that we, as humans, are more or less comfortable with the help offered by our friendly, neighborhood ‘chatbots!’

So, let’s understand the key benefits that customers can reap by interacting with chatbots.

Key Benefits of Chatbots for Customer Support Concerns

Implementing chatbots for customer support brings a range of benefits. Let's explore some of the significant advantages.

1. Chatbots are on 24/7

Customer Support Concerns

Customers can engage with chatbots at any time, providing round-the-clock support and immediate assistance.

For instance, H&M's chatbot helps customers with product recommendations, styling tips, and order tracking, ensuring support is available even outside regular business hours.

At Numr CXM, we have been developing our proprietary AI-powered chatbot that will be your ultimate support assistant. By analyzing your responses through an intelligent, adaptive survey, it will detect customer experience during any form of brand interaction like an in-shop purchase. Using these data, it helps organizations craft more efficient CX strategies and streamline their customer journeys.

2. Chatbots can Improve Email Automation

Chatbots can Improve Email Automation

Chatbots can efficiently handle email inquiries, automating responses to common queries and freeing up human agents to focus on complex issues.

Bank of Montreal's chatbot, BMO Bolt, processes customer emails, categorizes inquiries, and responds with relevant information, reducing response time and improving overall email support efficiency.

3. Chatbots can be used in Social Media

Integrating chatbots with social media platforms allows businesses to provide real-time support, resolve customer issues, and engage in personalized interactions.

4. Chatbots can Enhance Personalization

By leveraging customer data and preferences, chatbots can deliver tailored recommendations, offers, and solutions, fostering a more personalized customer experience.

5. Chatbots can Save Business Money

Automation of customer support tasks through chatbots reduces the need for extensive human agent resources, resulting in cost savings for businesses.

Southwest Airlines' chatbot, SWABOT, handles a wide range of customer inquiries, from flight booking to flight status updates, resulting in cost savings and improved operational efficiency.

If you know CES meaning in customer service, you will understand that the presence of a chatbot has helped minimize the CES score for businesses.

Although we are enjoying the upsides offered by chatbots, some of our industry experts and thought leaders feel that the future is not so colorful.

Although there is a lot of exciting stuff, some concerns exist as well.

What Excites You and What Worries You About Using Chatbots?

The implementation of chatbots brings both excitement and concern. Here are a few points to consider.

We can summarize the following as exciting aspects of chatbot adoption.

1. Improved Efficiency

Sundar Pichai, CEO of Google, expresses excitement about chatbots' ability to handle customer inquiries at scale, providing efficient and accurate responses. This automation can significantly improve operational efficiency and customer experience.

 improve operational efficiency and customer experience

2. Personalization

Satya Nadella, CEO of Microsoft, highlights the potential of chatbots to deliver personalized experiences through AI and machine learning.

By leveraging customer data, chatbots can provide tailored recommendations and solutions, fostering stronger customer relationships and loyalty.

3. Convenience and Availability

Customers value convenience, and the round-the-clock availability of chatbots is a significant advantage. This excites industry leaders as it allows businesses to offer support anytime, anywhere, without the need for human intervention.

4. Enhanced Customer Engagement

Chatbots can engage customers in interactive conversations, provide recommendations, and deliver personalized content.

This level of engagement excites industry experts as it fosters deeper connections with customers and drives brand loyalty.

However, there could be some concerns regarding chatbot usage, as observed by some industry leaders and experts.

1. Maintaining Human Touch

Customer Engagement

Mark Zuckerberg, CEO of Facebook, acknowledges the concern of maintaining a balance between automation and human touch.

While chatbots offer efficiency, there is a worry that customers may miss the personal connection and emotional support that human agents can provide. Ensuring a seamless transition to human agents when needed is crucial to address this concern.

2. Data Privacy and Security

As chatbots collect and process customer data, there is a valid concern about data privacy and security. Tim Cook, CEO of Apple, highlights the importance of prioritizing data protection and adhering to privacy regulations to alleviate these worries and build trust with customers.

3. Complex Query Handling

Complex Query Handling

While chatbots excel at handling common inquiries, there is a concern about their ability to handle complex queries effectively.

Industry leaders emphasize the need for continuous improvement in chatbot algorithms to ensure accurate and satisfactory responses to more intricate issues.

4. Overreliance on Chatbots

There is a worry that businesses may become overly reliant on chatbots, neglecting the human element of customer support.

Balancing automated interactions with the need for human intervention is essential to provide a seamless and empathetic support experience.

By taking into account these concerns and leveraging the exciting aspects of chatbot technology, businesses can strike a balance that maximizes efficiency while maintaining a personalized touch.

Case Studies Using Real-World Businesses and Organizations

IKEA's Chatbot Billie has been a revelation in the AI-powered chatbot industry. It not only ensures a terrific customer experience but is also empowering employees and helping them deliver the best services.

Ingka Group, the largest retailer of Ikea, has successfully implemented an AI-powered chatbot named Billie, transforming the way the company interacts with customers in real-time.

● Billie understands customer queries, provides detailed product information, offers personalized recommendations, and assists in designing interior spaces without human intervention.

● Availability around the clock and multitasking capabilities ensure efficient and prompt customer support.

● Billie has resolved approximately 47% of customer inquiries, resulting in cost savings of nearly €13 million.

● The implementation empowered Ikea's co-workers to take on more value-adding roles and contributed to sales growth.

Best Practices for Designing a Customer Support Chatbot

Customer Support Chatbot

To maximize the benefits of chatbots in customer support, consider these best practices.

● Define Clear Goals

Identify the specific objectives and use cases for your chatbot to ensure alignment with customer support goals.

● Design Intuitive Conversations

Create a chatbot with a user-friendly interface, employing natural language understanding to enable smooth interactions and accurate responses.

● Integrate with Existing Systems

Seamlessly integrate chatbots with existing CRM, ticketing, and knowledge base systems to provide comprehensive and consistent support.

● Continuously Train and Optimize

Regularly update and improve chatbot algorithms through machine learning, using customer feedback and data analysis to enhance performance.

● Provide a Human Handoff

Enable a seamless transition to human agents when necessary, ensuring a personalized touch for complex queries or emotional support.

customer support

Key Takeaways

1. Chatbots are transforming customer support by automating tasks and providing self-service options.

2. They offer improved response time, omnichannel support, and personalized experiences.

3. Customer behavior may shift towards convenience and increased acceptance of chatbots.

4. Benefits of chatbots include 24/7 availability, improved email automation, social media integration, enhanced personalization, and cost savings.

5. Exciting aspects of chatbot adoption include enhanced experience and operational efficiency, while concerns include complex query handling and data privacy.

6. IKEA's chatbot Billie showcases the successful implementation of AI-powered customer support.

7. Best practices include defining clear goals, intuitive design, integration with existing systems, continuous optimization, and providing a human handoff.


The era of chatbots has revolutionized customer support, enhancing the overall customer experience.

By leveraging automation, personalization, and round-the-clock availability, businesses can significantly improve customer satisfaction, operational efficiency, and cost savings.

To streamline your customer experience strategies, consider reaching out to Numr CXM for AI-powered resilient solutions.

Embrace the transformative power of chatbots and unlock new possibilities for your business.

Have questions about chatbots?

Here are some FAQs

1. What is the role of Chatbots in Customer Experience?

Chatbots play a vital role in enhancing customer experience by providing instant support, personalized recommendations, and efficient issue resolution.

2. How do Chatbots Help Customer Service?

Chatbots help customer service by automating tasks, reducing response time, offering self-service options, and providing consistent support across multiple channels.

3. What are Customer Support Chatbots?

Customer support chatbots are AI-powered virtual assistants that interact with customers to provide support, answer queries, and resolve issues in a personalized and efficient manner.

4. Do Chatbots Increase Customer Satisfaction?

Yes, chatbots can significantly increase customer satisfaction by providing quick responses, personalized assistance, and round-the-clock availability, ensuring a seamless and positive support experience.

5. How do Chatbots Reduce Customer Service Costs?

Chatbots automate repetitive tasks, handle a large volume of inquiries simultaneously, and free up human agents to focus on complex issues. This automation leads to cost savings by reducing the need for extensive human resources in customer support operations.

Remember, embracing chatbot technology can be a game-changer for your business, enhancing customer experience and driving growth.

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