7 Benefits of Chatbots

8 min read

Chatbots are here to stay, and product teams must adapt accordingly.

Frank L.
Frank L.
Published July 1, 2022

Research from Gartner predicts that by the end of 2022, 70% of customer interactions will involve technologies like chatbots and mobile messaging.

It doesn’t stop there. More and more companies are already adopting chatbots as part of their customer service experience. According to data from Mordor Intelligence, the chatbot market expects to grow 34% from 2021 to 2026, up to $102 billion.

So what are chatbots, exactly? A chatbot is a piece of software that conducts text conversations with human customers in place of a live agent. The tool uses conversational artificial intelligence (AI) to simulate discussion and allow customers to get the support they need with your product.

Any industry can benefit from the use of chatbots as part of their customer service. Chatbots improve the app experience by offering users 24/7 support and engagement, so they can efficiently navigate your app. Here are the seven main benefits that chatbots have to offer:

Benefit #1: Offer a More Personalized User Experience

Sixty-eight percent of customers expect their experiences with companies to be personal, according to a Zendesk study. In fact, says the study, most customers are willing to pay more for personalization. Chatbots can automatically study previous customer conversations and tailor the user experience based on those prior conversations.

For example, let’s say that you manage an ecommerce app, and a user purchases one of your blazers. Via a chatbot, you could recommend other products that complement the purchase, such as dress shoes or a nice pair of trousers.

To make the recommendation, you could program the chatbot to send a pop-up of related products based on the user’s previous purchases.

Or let’s say that a customer browses through your website but still doesn’t make a purchase. You can program the chatbot to reach out to the customer after a specific user session length and ask them questions about what they’re looking for.

“In a world where customer expectations are heightened, chatbots allow you to keep pace and stay ahead,” says Melissa Kandel, CEO at little word studio. “With the simple question, ‘How can we help you?’ you’re able to engage your consumer directly where they’re viewing your product and answer any questions they may have.”

Benefit #2: Easier to Collect User Feedback

It’s essential to frequently collect user feedback since you can then use these insights to improve your app and satisfy more customers. Chatbots offer users the opportunity to send you any feedback they have about your product (such as feature requests or complaints) that help you identify areas for improvement.

For example, a chatbot could automatically send a pop-up message to the user and ask them to rate your app. Or once you resolve a ticket or answer any question the customer had about your product, follow up to ask them to rate your service.

The chatbot will automatically log and categorize all of your conversations in one place. That way, you can quickly look at any of your customers’ previous feedback.

As a result, chatbots prevent you from having to reach out to users directly to collect their thoughts and feedback. It reduces your manual work and saves you time.

With chatbots, you might even collect feedback you won’t get in real-life conversations with customers. According to research by Goldsmiths University and Mindshare, one in four people is more willing to share sensitive information with a customer service chatbot than a human.

Benefit #3: Available 24 Hours a Day (Even on Holidays!)

More and more customers expect around-the-clock service from companies. According to research by Zendesk, 40% of customers believe that 24/7 support is an essential factor of quality service.

The good news is that a chatbot doesn’t need any sleep, unlike a human agent. A chatbot is available 24/7 for your users, even on weekends and holidays, to answer any questions your customers may have about your product. Chatbots are available regardless of location or time zone.

Just imagine one of your customers in Asia browses through some of the different pricing plans offered by your SaaS platform. However, no one on your U.S. team is currently available to help them at that time.

Instead, you can program the chatbot to reach out to the customer directly while your team is away. The bot will ask them questions about their goals and what they want from the product. Based on the customer’s response, the chatbot will help guide them through your pricing plans to see what best fits their needs.

Benefit #4: Can Handle Infinite Customer Interactions

Ticket backlog can be an obstacle to delivering the best customer service to users, especially during peak times like holidays. And when customers feel like companies take too long to respond to their requests, it affects their satisfaction level and makes them feel frustrated.

Thankfully, chatbots can handle unlimited requests from users. As a result, this immediate customer service improves user support and reduces the workload of your customer service agents.

Companies in the ecommerce space will benefit from being able to manage multiple customer requests. There are various peak periods throughout the year (such as Black Friday and Christmas) where customer purchasing behavior is at an all-time high, increasing the number of support tickets.

Benefit #5: Automate Repetitive Agent Tasks

DigitalGenius and Canam Research research reports that customer service professionals believe that over 40% of customer tickets are painfully repetitive. Customer agents have to do various repetitive tasks, such as flagging user requests based on their category, transferring tickets, resolving tickets, etc.

A chatbot helps automate all of these repetitive tasks for the agents, saving them time. For example, when a customer opens a ticket with a chatbot, the chatbot can assign a tag to the ticket and transfer it to the right agent.

Companies will save on operational costs when they use chatbots to automate repetitive tasks. According to a study by Juniper Research, the automation of chatbots is estimated to help the banking sector save over $7.3 billion globally by 2023.

Benefit #6: Reduce Your Costs of Hiring

Building a customer service team can be pretty expensive. According to research by Zippia, the average cost per hire across all industries is $4,425, which can quickly add up as you hire more and more members for your team.

Chatbots offer the opportunity to reduce your customer service hiring costs significantly. You’ll reduce spending on training costs and staff salaries, and you won’t have to hire as many agents. That’s extra money each quarter you can re-invest in your business.

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Aside from reducing your hiring costs, chatbots allow you to scale during peak periods without spending more money.

It’s worth noting that the role of chatbots isn’t to replace agents since there needs to be a human touch in customer service. You'll still need agents, but chatbots help you reduce the number of staff you'll need on hand.

Benefit #7: Have a Variety of Applications

Chatbots can have different use cases beyond customer service to engage customers, depending on your industry. Here are five examples:


Chatbots allow students to drop in any questions about school topics or homework. Teachers can also use chatbots to send important announcements about the school, send assignments, remind students of upcoming tests, and share resources to help them better understand the subject.

Web Conferencing

With chatbots, web conferencing users can drop in any link or valuable resources during the call to improve communication. Chatbots allow users to communicate effectively even when the audio or video is glitchy.

During live streams, hosts of web conferencing events can also use chatbots to engage with their audience and start a discussion.


Users can use chatbots to ask questions about products they’re interested in or want to purchase. For example, let’s say a customer reaches out to you via chat because they can’t find a particular product in your store that’s out of stock. Via chat, you can explain the situation to them and recommend a similar item.


For patients, chatbots can be a valuable tool for telemedicine patients to ask questions about any health issues they may be experiencing. Through the chatbot, the patient can also fill out a form to include more information about their health that the doctor can review before the consultation.

Doctors can use chatbots to follow up with their patients after the consultation to see how they’re doing. The follow-up is also an opportunity for the patient to rate the doctor’s service on the platform.


Logistics companies send millions of packages to their customers every single day. The result is that these companies have to deal with a high amount of queries from customers.

On top of that, many factors can get in the way of delivery, such as transportation roadblocks, which could frustrate customers if no one informs them of the delay.

Logistic companies can use a chatbot to send customers notifications and status updates about their orders. The chatbot will give customers peace of mind knowing that their order is in the right hands.

Customers can also message the chatbot if they want to change their delivery address or provide drop-off instructions.

Implement a Chatbot with Stream’s API

You can try to build a chatbot for your SaaS platform or app in-house. However, not only will it take longer than building your chatbot with APIs, but you’ll also run into scalability and maintenance issues.

Something to keep in mind as you build your chatbot is optimizing your chatbot with the right security features, which can get complex. You don’t want to make it possible for any third-party vendor to collect and misuse your customers' data.

You must also think about how your chatbot will handle a growing customer base. If your chatbot’s infrastructure isn’t strong enough to handle more bandwidth, then it will get slower and buggier the more customers you get.

Instead, to deliver the best user experience, it’s best to use a ready-made API solution like Stream to build your chatbot. Here’s why:

API Is Fully Customizable

Stream’s API suite comes with all the tools you need to build an engaging user chat experience. You can customize your chatbot in a variety of different ways with Stream, thanks to features such as reactions, threads, and typing indicators.

It’s all due to Stream’s pre-loaded UI designs. Each design comes with its own light, dark, mobile, and web version that you can integrate instantly into your chatbot.

Advanced Security Features

Our chatbot keeps user data secure and adheres to all online data security regulations, including HIPAA, GDPR, and SOC 2.

Fast Integration

Our chat SDKs and components make integrating messaging as part of your product experience easier. As a result, you’ll be able to reduce your time to market and quickly launch your chatbot.

To learn more, try out our free demo that showcases four different example chat apps that you can build with our APIs. We also give developers access to a vast library of tutorials to help them navigate through our APIs.

Regardless of Niche, All Apps Benefit from Chatbots

With chatbots, your app will have better user engagement and efficiently solve your customers' issues. You’ll improve your user experience while satisfying more customers.

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