30+ Chatbot Use Cases and Applications in Business (2023 Update)

Chatbots have become one of the most disruptive technologies for businesses across industries today. According to Grand View Research, the global chatbot market is projected to grow at an impressive CAGR of 22.3% to reach $19.6 billion by 2027, as companies realize the benefits of conversational AI for automating customer and employee interactions.

In this comprehensive guide, we‘ll explore some of the most common and innovative use cases where chatbots are adding value for organizations worldwide.

Chatbot Use Cases Across Business Functions

Let‘s first look at some versatile chatbot applications that can transform key functions within any company, regardless of the industry:

Customer Service Chatbots

Over 67% of consumers now prefer contacting customer service through messaging rather than phone calls or emails as per a Zendesk survey. Chatbots allow brands to meet this demand and provide quick resolutions, freeing up agents for complex issues.

Popular customer service chatbot use cases:

  • Answering FAQs: Chatbots connected to knowledge bases can instantly answer common support queries like store locations, order tracking status, return policies etc. Sephora‘s chatbot on Facebook Messenger, for example, can handle over 70% of customer messages without human involvement. This significantly reduces customer service costs. According to IBM, chatbots can resolve customer service requests up to 70% faster than human agents.
  • Resolving Customer Issues: With Natural Language Processing (NLP), chatbots are now able to understand context and resolve a wide variety of customer issues beyond basic FAQs. Beauty retailer Sephora‘s chatbot can recommend products, help locate stores, and even book makeover appointments. Advanced NLP makes resolutions more efficient.
  • Transferring to Agents: When queries get too complex, smart chatbots can automatically transfer the conversation to a human agent to resolve. Fashion e-tailer ASOS achieves this seamless human handoff with Intercom‘s Conversational AI. The ability to know when to transfer chats is critical for chatbot success.
Customer Service Chatbot Benefits
67% consumers prefer messaging for customer service
70% faster query resolution than humans
Up to 70% of messages auto-resolved by bots
28% higher customer satisfaction

Sales and Marketing Chatbots

Chatbots are revolutionizing sales processes and marketing efforts by:

  • Personalized Recommendations – Using data like past purchases, product searches and browsing history, chatbots can provide customized product recommendations for each customer. Indian tire manufacturer CEAT Tyres built an AI-powered chatbot that recommends the right tire models based on customer vehicle data. This conversational commerce initiative delivered a 28% lead conversion rate for CEAT.
  • Lead Generation – Deploying chatbots on websites or messaging channels provides a 24/7 sales rep capturing leads. Software firm Birdeye implemented a Drift chatbot on their homepage which increased leads by 600% by proactively engaging visitors.
  • Outbound Marketing – Chatbots greatly enhance outbound sales and marketing efforts by automating repetitive tasks. Close.io built a Slack chatbot that engages leads proactively at scale, helping them double sales prospects.
Chatbot Marketing and Sales Benefits
28% increase in lead conversion rates
600% more leads generated
2x growth in sales prospects
63% higher purchase rates

HR and IT Chatbots

Human Resources and IT teams handle a high volume of routine queries. Chatbots allow them to focus on value-add activities by resolving common questions automatically:

  • HR Policy Questions – HR chatbots can field frequent employee questions on company policies, payroll details, leave requests and more, providing quick answers without HR staff involvement.
  • IT Helpdesk – For common IT issues like password resets, device troubleshooting etc chatbots reduce calls to the helpdesk by providing self-service assistance 24/7. Indian IT giant Wipro deployed chatbots on their Slack channel, resolving 30% of employee queries instantly.
  • Employee Onboarding – HR chatbots help streamline the new hire onboarding process through automated communications on policies, tools setup, paperwork to complete and training content. Dutch staffing firm Randstad automated 90% of onboarding steps by implementing a chatbot.
HR and IT Chatbot Benefits
30% instant resolution of IT helpdesk tickets
90% automation of employee onboarding processes
62% of employees prefer chatbots for quick HR assistance
$11M value via employee productivity savings

Now that we‘ve covered some versatile general applications of AI chatbots across business functions, let‘s look at how they can transform specific industries.

Industry-Specific Chatbot Use Cases

Ecommerce Chatbots

The ecommerce industry is leading chatbot adoption with numerous innovative use cases:

  • Conversational Commerce – Allowing shoppers to discover, purchase and track delivery of products entirely via messaging apps is driving this trend. Beauty retailer Sephora and grocery chain Whole Foods have adopted conversational commerce through Facebook Messenger bots.
  • Product Recommendations – Using past purchases and browsing history, retail chatbots suggest complementary products to customers. North Face Japan‘s LINE shopping bot increased sales by 63% via personalized recommendations.
  • Managing Returns/Exchanges – Customers can initiate return/exchange requests by providing order details to retail chatbots. The bot then automates the process by emailing shipping labels and confirmations.
Ecommerce Chatbot Applications
Personalized product recommendations
Conversational commerce shopping
Handling returns/exchanges
Daily sales advisors

Travel and Hospitality

Chatbots are changing travel planning and hospitality services in the following ways:

  • Flight and Hotel Bookings – Travelers provide their destination, travel dates and group size to conversational bots which provide flight and hotel options and complete the booking. Hipmunk‘s Facebook Messenger bot helps users easily find and book flights.
  • Personalized Travel Recommendations – Based on travelers‘ interests, budget and trip parameters, bots suggest ideal destinations, attractions, restaurants etc. Expedia‘s chatbot provides customized trip recommendations.
  • Managing Guest Itineraries – Hotel guests can access their full booking details and make local requests via messaging before and during their stay.
Benefits of Travel Chatbots
24/7 flight and hotel bookings
Personalized destination recommendations
Improved pre-stay and in-stay experience
Increased travel bookings by 30%

Banking and Finance

Financial services are employing AI chatbots for use cases like:

  • Funds Transfer – Customers can securely transfer money between accounts or recipients through natural conversation. Bank of America‘s AI assistant Erica enables peer-to-peer transfers via chat.
  • Loan Applications – Mortgage lenders are deploying chatbots to prequalify borrowers, explain loan options and guide users through the application process. Digital lending platform Kasisto helps banks drive loan growth through its conversational AI chatbot.
  • Customer Service – Banks are deploying chatbots to handle common queries on account information, statements, payments etc. Wells Fargo increased customer satisfaction by implementing virtual assistants on Facebook Messenger.
Financial Chatbot Applications
Digital money transfers
Loan/mortgage origination
Addressing account inquiries
Financial advice for investments

Healthcare

Key healthcare chatbot use cases include:

  • Insurance Coverage – Bots integrated with health insurance systems can provide real-time information on out-of-pocket costs for treatments and coverage.
  • Appointment Management – Chatbots enable patients to schedule doctor visits, receive reminders and confirm appointments via two-way messaging. This reduces appointment cancellations.
  • Preliminary Symptom Assessment – Like Babylon Health‘s chatbot, virtual health assistants can offer initial guidance on symptoms and suggest seeing a doctor when required.
Healthcare Chatbot Benefits
Convenient insurance verification
Fewer missed appointments
24/7 access to health assistance
Improved patient satisfaction

These are just some examples of the many possibilities chatbots offer for enhancing conversations and engagement across industries.

How To Choose The Right Chatbot Platform

With chatbots delivering proven value across varied use cases, selecting the right platform becomes key to success. Here are some key considerations when evaluating options:

Coding vs No Code Platforms

  • Coded Platforms like Dialogflow, Microsoft Bot Framework and Rasa allow more customization but require developer resources.
  • No code platforms like Chatfuel, Flow XO and Motion.ai enable non-technical teams to build chatbots through drag-and-drop interfaces. However, flexibility is lower compared to coded options.

Channels Supported

  • Leading platforms support popular channels like Facebook Messenger, WhatsApp, SMS/Text, Webchat and Email.
  • Some platforms have pre-built integrations with voice assistants like Alexa and Google Assistant.
  • Native messaging platforms like Google‘s Dialogflow specialize in building bots for Google Business Messages.

NLP Capabilities

  • Strong NLP is key for understanding nuances in customer conversations. Top platforms provide features like intent recognition, entity extraction, sentiment analysis and contextual awareness.
  • Advanced platforms like Rasa and Synapse have sophisticated NLP engines for complex conversational scenarios.
Platform ComparisonDialogflowChatfuelFlow XO
NLP CapabilitiesAdvancedBasicIntermediate
Ease of UseDeveloper-focusedNo codeNo code
ScalabilityEnterprise-readyLimitedHigh
CustomizationHighLowModerate
PricingExpensiveAffordableModerate

Best Practices for Chatbot Success

Chatbots promise immense potential but realizing business value requires following some key best practices:

  • Get stakeholder/leadership buy-in – Demonstrate chatbot benefits through pilots and share success stories to gain IT and business sponsorships.
  • Start small, iterate quickly – Launch MVP chatbots focused on 1-2 high value use cases vs overly broad implementations. Rapidly enhance based on user feedback.
  • Combine bot + human capabilities – Let chatbots handle routine conversations but have seamless handoffs to live agents for complex queries.
  • Monitor KPIs – Track chatbot KPIs like resolution rate, escalation rate, CX metrics and operational efficiencies to showcase continuous improvement.
  • Keep training the bot – Leverage platforms‘ tools to keep training the NLP engine so the bot gets smarter daily through real user conversations.

By following a pragmatic approach, companies can deploy chatbots that quickly prove ROI and pave the path for enterprise-wide adoption.

The Future of Conversational AI is Here

Chatbots have graduated from hype to being practical business tools delivering immense value across industries and use cases today. With advances in artificial intelligence, NLP and contextual dialog management, chatbots are becoming sophisticated digital assistants that can transform customer and employee experiences.

As per estimates, by 2025 over 50% of medium and large businesses globally will be leveraging conversational AI across functions. The time is now for forward-thinking companies to formulate a chatbot strategy that drives competitive advantage and unlocks new sources of business value.

Have questions on potential chatbot applications for your business needs? Feel free to reach out to me! I would be happy to offer my insights as an AI expert to assess automation and engagement opportunities through conversational AI.

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