How Chatbots Will Reduce Business Operating Costs

Anastasia Morozova
Chief Operating Officer

Let’s start with a figure – a study by Juniper Research predicts that by 2022 chatbots will save about $8 billion for businesses. The study included chatbots in the healthcare and banking industry. However, we may safely assume that in other industries the situation is about the same.

What’s so special about chatbots that allows them to generate such impressive savings?

In fact, a chatbot is just a cleverly written piece of software that imitates human conversation, so how chatbots can possibly save costs for their owners? Let’s look closer.

The main point of implementing a chatbot is replacing the human that was doing the same tasks before. If we look at the cost saving issue from this point of view, we will see a number of definite advantages that a chatbot can bring to a business.

chatbot reduces orepating costs

Taking over low-skill tasks

Using chatbots allows reducing the number of human operators by assigning the low-level tasks to chatbots.

In many cases, customer inquiries can be fulfilled by searching a database or providing a link. For example, chatbots can be used to handle the following requests:

  • Answering general questions about the company, such as office locations or opening hours.
  • Answering frequently asked questions about the business. Usually, the chatbot is programmed to offer the user to select a question from a predefined list and to return a standard response.
  • Handling standard operations, such as taking orders or processing returns.
  • In ecommerce businesses, helping customers to find the product they are shopping for by asking a series of leading questions.
  • Assisting customers to retrieve information about their previous or current orders and track their delivery.

This is by no means a complete list of functions that can be assigned to a chatbot, but you can get a general idea.

Of course, at the moment chatbots are not intelligent enough to fully replace humans in customer service, but they can process the first interaction with the customer and in many cases successfully complete the inquiry.

In more complicated cases, the chatbot will transfer the conversation to a human operator – most chatbots provide the “Customer service” or similar option allowing to communicate with an operator.

chatbot development burberry

24/7/365 availability

This may be one of the most significant benefits of customer service chatbots – their constant availability. A chatbot is always running and can be accessed at any time and from any point on the globe.

From the cost-saving aspect, you may appreciate the following factors:

  • 24-hour service. If a business intends to run around-the-clock customer service, they need to employ enough operators to handle three shifts per day, with night shifts usually paid at a higher rate.
    24-hour operation requires careful staff planning with the proper rotation so that each employee gets enough rest between shifts.
    Of course, you cannot leave your entire customer service to a chatbot, but you can reduce the number of people that work each shift, thus reducing the salary costs immediately.
    An additional benefit is a convenience for the customers who can have their problems solved at any time of the day.
  • 7-day per week availability. The principle is the same as in the previous point – to operate a customer service on weekends, you need to have enough people and, sometimes, pay higher rates for weekend shifts.
    With a chatbot, your weekend staff can be reduced to an absolute minimum.
  • No vacations. All human operators need vacations and should be replaced for the time of their absence.
    In this case, the business can even face higher costs, as the person going on vacation still receives their salary while others need to work more, often with overtime that is again paid at a higher rate.
    Chatbots need no vacations. Thus the load on the rest of the staff is lower.
chatbot availability

See also: 7 Benefits of Adopting Chatbot by Small and Medium Business

Better customer satisfaction

At first glance, this point has little to do with cost saving. However, if we look closer, we will see a direct relation. A happy and satisfied customer is much more likely to complete a purchase and return again.

At the same time, the statistics say that only 1 out of 26 unhappy customers actually complains about the bad service. Moreover, out of the non-complaining customers, 91% leave silently not to come back ever.

Chatbots can dramatically improve customer service raising the number of satisfied clients and the overall retention rate.

When communicating with a chatbot, customers usually appreciate the following factors:

  • No waiting times. A chatbot can serve hundreds of customers simultaneously without making anyone wait for the available assistant. Probably, everyone can remember a case when they had to wait twenty minutes on the line to ask a simple question.
    A chatbot experience eliminates such frustration entirely, as you get answers immediately. In this respect, chatbots beat all communication channels – offline visits, telephone call centers, online forms – as all of them can have a certain waiting time.
    In some cases, it is critical for a customer to be served immediately, and any delay will cause them to leave and search for other options.
  • Personalized service. This benefit is especially pronounced in ecommerce applications when chatbots assist customers with their shopping. The personalized shopping experience is going to leave customer much better satisfied with a strong probability of return.
  • Fewer errors. Chatbots work according to predefined algorithms; thus they can be relied on to provide correct and up-to-date information in all cases.
    Contrary to human operators, chatbots are immune to fatigue, sickness, attention distraction. Thus, they are less likely to overlook an important detail or make an incorrect recommendation.
chatbot customer support

Read also: How Chatbots Can Drastically Improve the Customer Service

Another point worth considering is that both good and bad service experience triggers viral loops with customers sharing their impressions with friends and relatives, or even making public statements in social networks.

For a business, it is critical for making customers happy to attract others and maintain a good reputation. True, this factor is more about profit increase than cost saving, but isn’t it the ultimate purpose of any business?

Improved operator happiness

Yes, a smart business owner should take care not only of their customers but of their staff, too. Training a skilled customer service agent is a costly matter, and it is critical to retain such agents for as long as possible.

When a valuable employee leaves the company due to unsatisfactory working conditions, it is a significant loss and a possible deterioration of customer service.

How can chatbots make their human colleagues happier? There are quite a few aspects to consider:

  • Taking over mechanical and repetitive tasks. It can be frustrating for an agent to have to answer the questions “How can I track my delivery?” or “Where is your nearest store?” dozens of times within a day. When such inquiries are handled by a chatbot, the operators are free to process more complicated matters that need individual approach.
  • More time for professional growth. When an agent is not swamped with repetitive tasks, they can use their time to master some advanced skills. A business should encourage such initiatives on the part of its staff, as the service is going to benefit from them.
  • Promotional opportunities. Freeing the operators from the low-level tasks allows promoting them to higher positions that can improve the employee’s satisfaction and create a stronger bond between the company and the worker.

In general, the satisfied staff is as important as satisfied customers. People who love their jobs will radiate this love to clients improving their experience of the service.

Employees that feel appreciated and rewarded are much less likely to search for other jobs leaving the company with an urgent necessity to hire and train a replacement agent.

Happy and satisfied staff create a healthy climate in the company that eventually increases the performance and effectiveness of the entire business.

Customer service agents build the image of the business, and happy agents are sure to form a positive image.

chatbot customer service

Increased brand awareness

Single successful communication with a chatbot establishes a channel with the customer that the company should use to drive revenue and promote its brand.

Chatbots become a very cost-effective vehicle of informing the customer of upcoming sales, special promotions, events, new collections, policy changes – you name it.

A message received via a messenger service is much more likely to be read than an email, thus sending notifications via chatbots is more productive than using other channels.

Besides, using chatbots reduces the costs of lead generation.

Source of analytical data

Conversations via chatbots are a vast source of analytical data that is available almost free. There is no need to create and conduct individual surveys or approach customers online and offline with questionnaires.

With proper analytical tools, the chatbot activity can tell a lot about the customer service situation.

Through a chatbot, you can measure user engagement and retention, track user flows, identify patterns and trends.

In addition to the overall user statistics, you can use this analytical data to assess the performance of the chatbot itself. The analytics will show how well the chatbot handles different conversations, whether there are any gaps in its flows that should be filled, what makes users abandon the discussion.

Customer analytics can sometimes be costly, as it requires extensive work of data collection. Chatbots can significantly reduce these costs by storing the conversation data.


Again, monetization is not precisely cost-saving, but effective monetization methodologies implemented through chatbots can save costs for other resources.

How can you monetize via a chatbot? There are several strategies to consider:

  • Use a chatbot as a landing page. To make a chatbot serve as an effective landing page, consider the following features:
  • A short and relevant name leaving no doubt about the brand the chatbot belongs to;
  • A recognizable brand icon;
  • A clear call-to-action;
  • Quick loading leaving the user no time to get annoyed and close the window.
  • Include sponsored content. Here, you need to find that delicate balance between performing your agreement with partners and not overloading the chatbot with ads and links.
  • Offer subscriptions. You can give users an option to subscribe to some exclusive content or get access to limited offers via a chatbot. This strategy is already widely used in ecommerce applications; why not apply it to chatbots?
cost-saving chatbot

This is just a brief account of the cost-saving opportunities you can get by implementing a chatbot as part of your customer-facing infrastructure.

Of course, building a chatbot is an investment, but a cleverly developed chatbot is going to pay back quite soon.

The key is creating a truly smart chatbot that is learning from communication with customers and is capable of resolving the issues effectively.

If your business involves direct contact with your customers, implementing a chatbot is highly recommended, from both the service quality and the cost-saving point of view. Depending on the specifics of your business, you can select a chatbot of different complexity and with a different set of features.

For some applications, a simple rule-based chatbot is more than enough, while others may require truly advanced technologies, such as augmented reality or deep learning.

Contact us for a professional consultation on chatbot development, and we will be happy to discuss your project and design the chatbot functionality that suits your purposes best.

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