Chatbots: what are, how do they work, how to use them

Anyone who uses the Internet today has tried at least once to use chatbots, however only very few people will have wondered about what they are, how they work and how it is possible to exploit them to the best.

To use chatbot in the best possible way it is necessary to know how they work and what regulates them. Here is therefore a guide with all the fundamental aspects that you need to be aware of.

What are chatbots

Chatbot are softwares capable of simulating and processing conversations as if they were human thanks to artificial intelligence. The conversations they have can be simple or complex, depending a lot on how they are programmed.

The more rudimentary ones are able to provide answers to very simple prompts such as "what time is it?" or "what day is it today?", while the more powerful ones can be used as real personal assistants.

What are the types of chatbots

Chatbots can be mainly of two types: task-driven (declarative) and data-driven (conversational). The first type is simpler than the second and is also the most widespread. Let’s see what their characteristics are.

• Dedicated activity chatbots (declarative): Also known as transaction chatbot, these are designed to provide a limited set of options for the user to choose from, depending on what they want to do or the problem they have want to solve. The interaction between the user and the chatbot continues until the user’s question or need is resolved, or until a human agent takes charge of the matter. This type of chatbot is used for example in companies that very often receive common questions, such as opening/closing hours.
• Conversation chatbots: commonly known as virtual assistants, these chatbots are far more complex than the previous ones. Compared to declarative chatbots, conversational ones are trained with a lot of data to ensure that they always learn new concepts. They use predictive intelligence and analytics for personalization based on each user’s profile and past behavior. To achieve this, they combine Natural Language Processing NLP and Machine Learning (ML). Apple’s Siri and Amazon’s Alexa are examples of consumer-oriented, data-driven predictive chatbots.

How do chatbots work

Chatbots work quite simply. Essentially, the human-chatbot interaction can be summarized in three phases: emission of input by the human, reception of input by the chatbot, emission of output by the chatbot. Now let’s see how it works in more detail:

In stage one a user sends a message (outputting input) to a chatbot through an app, website or text message or even through an audio message. This message can be a command or a question.

In stage two the chatbot receives input and captures the information, then uses natural language processing to understand the purpose of the message and identify its purpose.

In stage stage the chatbot determines an appropriate response and returns it to the user via the same channel (emission of the output). This process continues throughout the conversation.

How companies can use chatbots

The applications of chatbot in the corporate world are almost endless, much depends on the type of chatbot you have available or want to implement. The more the chatbot is "trained", the more the tasks it can perform are numerous. Let’s see some examples of use.

• Customer service: one of the simplest and most basic services that chatbots are interested in is customer support service. Often, in fact, the requests that customers make when they ask for the help of an employee can be processed in a rather simple way. By exploiting this technology, companies can save a lot of money, obtaining an even better result, since a chatbot is able to provide an answer in a very short time.
• Human Resources: in the human resources realm, chatbots can be used to do things and help different people. For example, with chatbots it is possible to help both employees of a company and aspiring ones. As for employees, the chatbot can help them to fill and submit requests for vacation or sick leave; while for aspiring employees, i.e. potential candidates, chatbots can help submit an application for employment.
• Sales: in the sales sector chatbots can do many things; perhaps one of the most useful is to offer customers what they might like based on the data the virtual assistant has available. But not only that, once the sale of a product has ended, the chatbot can try to cross-sell, offering the customer a similar product.

In which sectors can chatbots be used

Job positions like these are present in all structured companies. But can chatbot also be used in different sectors? The answer, as expected, is yes. Let’s see some examples.

• Tourism sector: chatbot can be used in the tourism sector to answer common customer questions, or to recommend a place where to go on vacation based on the answers it provides.
• Healthcare sector: in the health sector chatbots can be used to help patients make an appointment for visits, or to provide them with more general information, such as the street of the hospital or clinic and possibly its opening hours.
• Financial sector: in the financial sector chatbots can be very useful for both employees and customers. For employees, they can be useful for keeping order their documents (in general, they can be used as personal assistants). While as customers they can be used to check your bank balance, the status of your investments or information of a simpler nature, such as opening hours and availability for an ATM in the area.

The future of chabots with ChatGPT

Finally, it is impossible to conclude without mentioning ChatGPT, the chatbot implemented by OpenAI, the company led by Sam Altman. To date, ChatGPT has an immense set of data, which allows it to answer many questions and consistently help its users.

The company recently announced that it has made 12 plugins available for the paid version. Thanks to them, ChatGPT overcomes one of its greatest limitations, namely that of not having updated data available.

Now that this limit seems to be potentially exceeded, ChatGPT will potentially have more and more data available and consequently become more and more convenient, if not essential.

So this could be the future of chatbots: becoming more and more useful to the point of making human intervention unnecessary in some tasks.
Original article published on Money.it Italy 2023-04-03 10:00:00. Original title: Chatbot: cosa sono, come funzionano, come usarli