19 Benefits of Chatbots for Businesses in 2023-24

Surbhi Nahata

December 27, 202310 min read

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Chatbots often get a lot of flak for being clunky and limited in their capabilities. However, as the underlying technology of chatbots (conversational AI) matures, there is a massive shift in perception.

Today, chatbots are invaluable tools in the corporate toolkit that not only complement human agents with query resolution but also drive sales, boost engagement and control customer churn.

If you're still on the fence about investing in chatbots for your business, here is a list of 19 benefits of chatbots that will blow you away and help you take the leap of faith into this winning AI self-service tool.

Table of Contents

What is a chatbot? 

A chatbot is a computer program designed to simulate conversation with human users, especially over the internet. This customer self-service option uses natural language processing (NLP) and artificial intelligence (AI) to understand user inputs and respond contextually. Chatbots can be deployed on websites, messaging apps or other digital platforms, in a chat-like interface.

Early chatbots were rule-based and linear in their "understanding." They used simple yes/no decision trees and algorithms to guide users towards resolving their issues. If the question-answer mapping didn't work, these chatbots became unresponsive.

Today, conversational AI powers chatbots and enables them to have free-flowing humanlike conversations that users find engaging and meaningful. These super-smart chatbots can understand the finer nuances of human language and automatically detect the underlying intent and sentiment. Thereafter, they either respond aptly or hand off the conversation to a live agent.

Sprinklr chatbot detects context and intent - benefits of chatbots

Learn more: 8 reasons to use conversational AI chatbots

19 Significant benefits of chatbots for brands and users

Chatbots are most widely used in customer support since they empower customers to find answers and access information independently and quickly. The section below explores how chatbots and their sophisticated cousins - voice bots - benefit brands and users. Let's get started.

1. 24/7 availability

Chatbots neither sleep nor break down. They are available 24/7, allowing businesses to engage with customers outside of business hours. A whopping 75% of consumers anticipate a response within five minutes of initiating contact and chatbots adeptly fulfill this expectation. They provide relevant and contextual responses within seconds of receiving input.

2. Cost efficiency

Chatbots can handle rush hour traffic and multiple users simultaneously, without charging overtime. Businesses and contact centers can expand their operations, product lines and target markets without adding agent headcount since they have chatbots to man the frontline support.

Moreover, any kind of automation invariably leads to cost savings through saved labor costs and efficient operations.

Sounds unbelievable?

Read this story of a top FinServe brand that handled a 110% traffic surge with AI chatbots.

3. Improved customer engagement

Modern chatbots are designed to engage users in natural, conversational interactions. They can answer questions, provide product recommendations and offer assistance in a personal and engaging way. Enhanced customer engagement leads to higher customer satisfaction (CSAT) and loyalty.

Need a pro tip?

Opt for chatbots with generative AI support since they can hyper-personalize conversations and boost customer engagement more than traditional chatbots. These chatbots come loaded with industry-specific intents and lexicons, speaking with users in their own language, instantly establishing connection and rapport.

Suggested Read: The Future of CX with Generative AI

4. Instant responses

In this age of instant gratification, chatbots are your best bet to satisfy click-happy users who will abandon a brand if they are kept waiting. There are FAQ chatbots that present users with menus of frequently asked questions so they don't have to type their questions. Thereafter, based on user input, they drill down on the actual issue and resolutions in a matter of seconds.

With chatbots delivering speedy support, customers needn't wait in long call queues or abandon their purchases altogether. Positive customer experiences result in positive overall sentiment and better customer retention.

5. Scalability

As businesses grow, chatbots can easily scale with them. They can handle increasing interactions without a corresponding cost increase, making them a flexible and scalable solution.

Self-training bots (such as those powered by generative AI) can simply design and add new intents to their database when new customer service scenarios emerge. There is no added coding effort or service disruption.

Sprinklr edge: Sprinklr's conversational AI platform comes with "Discovery Run" which discovers the top intents (contact drivers) by analyzing user-bot interactions so brands can develop their chatbots rapidly. This enables businesses to scale up their self-service with less effort and more direction.

6. Data collection

Chatbots are data-driven tools. They collect valuable user data during interactions, such as preferences, browsing history and behavior. This data can be used to tailor marketing strategies, improve products and make informed business decisions.

What's more?

Chatbots transfer cases to agents with all the context and gathered data. Armed with this data, agents can personalize responses and curate product recommendations based on each user profile. Businesses can then use this intel for designing targeted marketing campaigns and product development.

Going back to generative AI-led customer support, chatbots need not be fed with customer data during implementation. They scrap data publicly available on the web and use it to produce brand-new responses every time. Meanwhile, the user profiles get more and more enriched after every interaction, unlocking a treasure trove of insights for sales, marketing and communication teams.

7. Lead generation

Chatbots engage visitors, qualify leads and start the sales process. They gather contact details, preferences and purchase intent, giving businesses a pipeline of potential customers to pursue.

Read more: Your detailed guide to lead generation

That's not all. Chatbots can guide users through the sales funnel, from initial inquiries to product recommendations and purchase assistance. This way, they contribute to higher conversion rates and revenue.

8. Global appeal

Most chatbots can communicate in multiple languages, expanding the global reach of businesses. Sophisticated chatbots can understand humor, satire and colloquialisms as well, which enables them to converse intelligently with regional users.

Sprinklr bot switches to customer’s preferred language - benefits of chatbots

Conversely, if a brand had to establish contact centers in every region of operation, it would entail a lot of hiring and training effort to equip agents with the regional language nuances.

9. Consistent brand messaging

Ensuring a consistent brand message is crucial for building brand identity. Chatbots are free of subjectivity and bias, thereby delivering uniform, on-brand messaging across all interactions. This helps reinforce the brand identity and customer trust.

Voice bots, the voice-activated version of chatbots, can speak in your brand ambassador's voice, again building brand recall. You can customize the look and feel of your bots to reflect your brand personality and keep it front and center at all times.

10. Reduced human error

Chatbots are highly effective in reducing human error, especially in tasks involving repetitive data entry or processing. This improves the accuracy and reliability of outcomes, particularly in areas such as data management and order processing.

Point to note: Your bot's response accuracy is as good as the AI technology that powers it. Sprinklr AI has best-in-class accuracy that hits the mark 90% of the time. With accurate responses, customer satisfaction and engagement soar organically.

11. Simplified feedback collection

Chatbots can solicit customer feedback in real-time, providing a convenient platform for customers to voice their opinions and concerns. Feedback prompts are engineered within chatbot conversations so users are asked for feedback at opportune times.

If feedback from in-chat customer surveys is implemented diligently, businesses can boost support metrics like CSAT and net promoter score (NPS) while delivering more satisfactory experiences.

12. Improved personalization

The modern customer is averse to bland, cookie-cutter responses from brands they engage with. Chatbots can personalize the approach by fuelling communication with customer insights. They can integrate with CRM systems to learn more about customer behavior, actions and preferences and then curate the right responses and content for each interaction.

In industries like e-commerce, personalization can be instrumental in garnering engagement. The more personalized the chatbot response, the more it engages users and elicits their desired response.

13. Multi-channel integration

Omnichannel chatbots can integrate seamlessly within varied customer touchpoints and channels, with a native look and feel. For example, a WhatsApp chatbot can be tweaked to fit into Messenger, engaging users on both platforms.

Additionally, multi-channel chatbots maintain context even when users switch customer service channels to pick conversations from where they were left and prevent user fatigue.

14. Smoother user onboarding

Chatbots can assist new customers and employees in getting acquainted with products, services or company policies. This helps reduce the learning curve and ensures a smooth onboarding experience.

Integration with your company's internal knowledge base enables chatbots to provide curated resources during conversations, giving users all pertinent information within the chatbox.

15. Complementary human support

Chatbots can complement human agents by providing them with customer data, insights as well as relevant information during interactions. With timely assistance, your agents can solve complex issues efficiently and meet their service level agreements (SLA) every time.

While chatbots may never fully substitute human interaction, they certainly enhance agent productivity as trusty sidekicks and virtual assistants.

16. Reduced cart abandonment

In e-commerce, cart abandonment is a common issue. When users show signs of leaving their shopping carts, chatbots can step in by offering assistance and answering questions about pricing, returns and other policies that might be holding back customers from completing checkout. They can also be engineered to provide offers and discounts to sweeten the deal and avoid abandonment. This proactive approach helps recover potential lost sales.

17. Compliance and security

Chatbots can ensure that all interactions adhere to legal and security standards. They can help guide users through secure transactions, verify identities and provide information while maintaining data privacy and compliance. They can flag profanity, bias and negative undertones in conversations, which can get brands into trouble.

Anything else?

Indeed, chatbot interaction history can be evidential proof during dispute resolution and PR crises if they arise. Conversation transcripts can also be used in agent compliance training and best practices to handle angry customers adeptly.

Dig Deeper: The complete contact center compliance checklist for 2023-24

18. Adaptive learning

Chatbots are self-learning entities that improve service delivery and quality through continuous training and refinement. They can adapt to new information and understand evolving customer support trends, ensuring they remain relevant and effective through changing times.

19. Visual content

Some chatbots can process and display visual content like images, videos or infographics. This capability enriches the user experience by catering to diverse tastes and preferences. Moreover, troubleshooting complex technical products and issues becomes easier and faster. Screen sharing, co-browsing and video calling are other bot basics that aid visualization and resolution.

Need inspiration? Read how AkzoNobel UK reduced response times and increased engagement using chatbots

Advantages and disadvantages of chatbots

Now that you are familiar with the benefits of chatbots let's quickly understand the advantages and disadvantages of using chatbots for businesses.



Enhanced productivity

Technology dependency


Potential for privacy breaches

Crisis management

Complex initial configuration

Language support

Over-reliance on automation


Ethical and biased data concerns

Data collection

Impersonal interactions

Reduced customer churn

Legal and compliance hurdles

Improved decision making

Possible loss of human touch

Smooth integration

Potential for frustration

Predictive analytics

User experience variability

Challenges of implementing chatbots for businesses

Implementing chatbots can bring significant benefits to businesses. However, some challenges must be considered and solved when adopting them.

  • Initial development costs: Developing and implementing a chatbot can be a significant upfront investment. This includes expenses related to software development, integration with existing systems and customization to meet specific business needs. Smaller businesses may find this cost-prohibitive.

  • Integration complexities: Integrating chatbots with existing systems, such as CRM, ERP or databases, can be technically complex. To achieve smooth communication and data exchange between the chatbot and existing systems, expertise in the chatbot platform and business infrastructure is crucial.

  • User frustration: Chatbots must provide relevant and accurate responses to user queries. Users may become frustrated if they fail to understand user intent or provide irrelevant answers, translating into a poor user experience and churn in the worst cases.

  • Maintenance requirements: Chatbots are not static; they require ongoing maintenance and updates. As technology evolves and user expectations change, chatbots must adapt. This includes refining their language capabilities, updating their knowledge base and ensuring compatibility with new platforms and devices.

  • Dependency on the Internet: Chatbots rely on an Internet connection to function. This means that users in areas with unreliable or limited internet access may have difficulty accessing chatbot services. It's essential to consider the potential limitations of the user base.

  • Security concerns: Handling sensitive customer data or confidential information through chatbots can raise security concerns. Ensuring that data is encrypted, stored securely and protected from unauthorized access is crucial. Security breaches can have severe consequences, including legal and reputational damage.

Sprinklr’s continued commitment to responsible AI: Crafting stellar customer experiences with robust governance

By proactively understanding and addressing these challenges, businesses can better navigate the implementation of chatbots and maximize the benefits while mitigating potential risks and obstacles. Careful planning, ongoing monitoring and a commitment to improving the chatbot's capabilities can help overcome these challenges and ensure successful integration into business operations.

Reap the benefits of chatbots with Sprinklr's advanced AI

The benefits of chatbots are undeniable. These intelligent digital companions have evolved significantly, offering numerous advantages, from cost-efficiency and 24/7 availability to improved customer engagement and lead generation. Businesses of all sizes and industries are harnessing the power of chatbots to streamline their operations, enhance customer experiences and ultimately boost their bottom line.

As technology advances, chatbots will likely become more integral to the business landscape. Their ability to adapt, learn and provide increasingly personalized experiences will only become more pronounced.

This is where Sprinklr shines as a visionary leader in customer experience management. With its comprehensive suite of self-serve solutions like Conversational AI chatbots, Sprinklr empowers businesses to design chatbots that:

  • built once deployed across 30+ channels with no coding effort

  • understand intent and sentiment with unmatched accuracy

  • leverage generative AI to deliver human-like, meaningful answers

  • improves over time with comprehensive datasets and algorithms

Sprinklr bots deliver contextual and multi-lingual support, demonstrating 40% improved agent productivity and 21% lower response times.

Book a demo today and watch the bot drive your unique business cases.

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