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AI-Powered Customer Service Chatbots: Are They Worth The Investment?

AI is becoming an increasingly prevalent tool within many industries, from data management to web development to marketing. Artificial intelligence helps go-to-market teams automate repetitive tasks, so they have more bandwidth to meet the right audience, at the right time, in the places that matter to them.

The customer journey is changing, and customer expectations are higher than ever. Most people expect prompt replies from customer service and personalized communications all throughout the buyer’s journey. Even search engines are upping their game with AI, signaling a shift towards an AI-assisted future.

As HubSpot CEO Yamini Rangan said in her Spotlight talk at Inbound 2023, when customers arrive at your website, they don’t want to spend time clicking around and searching for the information they’re looking for. They want to have a conversation; a one-on-one chat experience that provides them with quick answers. 

“They don’t want to convert on your website, they want to converse on your website,” said Rangan. 

Further propelling marketers towards alternative strategies is the end of third-party cookie tracking. Old go-to-market strategies will no longer work in the near future, meaning businesses need to adapt to the age of higher personalization needs combined with fewer tracking capabilities.

With the rise of AI chatbots like ChatGPT, some customer service chatbot services are incorporating natural language processing technology into their offerings, giving their bots the ability to analyze customer inquiries and respond contextually.

Whether you’re already utilizing a chatbot for your business or are looking into it, you might be considering a bot with AI-enhanced capabilities. Is an AI chatbot right for your business, though? While they have the potential to offer a better customer experience, they may also require a longer “training” period. Let’s get into the pros and cons of AI-powered customer service chatbots.

What are all the customer service chatbot options?

Businesses have several types of chatbots to choose from, which differ based on complexity. The types, arranged from simplest to most complex, are:

  • Scripted chatbots. These bots rely on a menu of predefined questions that the user can pick from, and progress through programmed flows based on user input. They don’t allow the user to type in a response at all.
  • Keyword recognition based. Users are able to type in an inquiry when interacting with this bot. It then scans the input phrase for recognizable keywords to decide how to reply.
  • Hybrid. These bots combine the features of scripted and keyword recognition based chatbots. They give users the choice of either typing in a question or choosing from a menu of options.
  • Contextual. These bots utilize Natural Language Processing (NLP) and machine learning models to process inputs and come up with contextually relevant responses. They can also carry on a conversation - they are able to remember what has been said and build on existing ideas. As they’re introduced to more questions, they learn over time and are able to improve.

Uses for customer service chatbots

Chatbots help businesses enhance their customer experience in multiple ways, with features that:

  • Streamline customer service operations. No need for customers to sit in the waiting room of your phone system or live chat, or wait for a reply to an email. Chatbots are always available and can serve multiple customers at once. Some issues may even be able to be resolved fully without human intervention. And even in cases where referral to a live agent is needed, bots can collect customer information up front, allowing your agents to solve issues faster.
  • Provide multichannel support. Chatbots can be used across multiple platforms, from your website to social media messaging apps, allowing you to provide consistent support throughout all communication channels.
  • Collect customer feedback. After a customer service interaction or the use of special features on your website, automatic one or two-question surveys help you understand where you’re succeeding, and how you can improve.
  • Schedule appointments. Bots are excellent at booking appointments quickly and efficiently.

Are AI powered customer service chatbots worth it?

Chatbots are not one-size-fits-all. The one you choose will depend on what you’re using it for and your needs. 

Benefits of AI chatbots

AI chatbots can offer your customers a faster response rate and expanded availability. Bots have unlimited bandwidth and are available 24/7. This means you can serve more customers without the need to hire more customer service staff members.

AI bots are more versatile than other types of preprogrammed bots. While scripted or keyword-based bots are fine for simple questions, AI bots can respond to more complex inquiries in contextually relevant, personalized ways. AI-powered chatbots may be able to resolve customer queries more effectively on their own, with reduced need for human intervention.

They can also serve multiple uses beyond just answering customer inquiries - your leads could enjoy a smarter appointment booking experience or have quotes generated automatically for your services. AI bots can even identify upsell and cross sell opportunities based on past interactions with customers.

Drawbacks of AI chatbots

The depth of features that AI chatbots provide, while helpful, in some cases can require a significant investment of time to set up. If you want your bot to be able to answer complex questions about your business and guide your customers towards specific actions, you’ll need to provide it with the necessary information.

Programming an AI chatbot involves defining answer pathways and feeding the bot information about your business. Setup is not a one-and-done process, either. Regular maintenance and updates are necessary to ensure the bot is functioning properly. Though this is the case whether your bot is AI-powered or not, you’ll face more complex issues the more advanced your bot is.

It’s important to note that these drawbacks don’t fully apply to all chatbot services, especially some of the newest ones. It’s easier than it’s ever been to set up AI chatbots, with some chatbot services offering no-code setups and workarounds to the “training” period. They’ll frequently come pre-loaded with the power of ChatGPT or other generational AI programs.

Some chatbot services even pull from content on your website to answer questions about your brand, without you needing to feed the bot information. However, there are still additional considerations to bear in mind when it comes to AI chatbots that don’t apply to menu-based bots, and the upkeep of AI bots almost always tends to be more significant. 

How do I decide what type of chatbot is right for me?

There are three core aspects to keep in mind while deciding between chatbots:

  1. Your budget. How much time and money are you willing to spend on setup and upkeep? Will a no-code solution suffice for your needs, or will you have to hire a developer?
  2. Your goal. What are you trying to achieve, and why? What problems will your AI chatbot solve?
  3. The projected benefits. Will the end result justify the means? Will your investment be worth it, and how?

Beware of “shiny toy syndrome”. The most advanced chatbots are alluring because they’re new and they’re fancy, but will an AI bot ultimately improve your life and the lives of your customers? You can figure out where your current strategy is lacking by analyzing your customer service communication records. Do you need a conversational bot, or will a menu bot suffice?

What are some AI-powered chatbots for businesses I can use?

There are a plethora of companies that offer no or low-code options for AI chatbots. Here are just a few of the top-rated ones.


Ada uses the same language processing model that ChatGPT uses, GPT-3.5, to analyze customer intent and respond accordingly. Businesses can use Ada’s technology to create chatbots for their websites, SMS communications, and social media messaging channels.

Ada is made to learn and grow over time as it’s exposed to a variety of customer inquiries.


A leader in conversational marketing, Drift offers an AI-powered chatbot builder that’s designed to increase conversions by determining your site visitors’ intent. Companies can use Drift to create customized, personalized conversations and routing for their customers. Segment your audience with user data and craft curated experiences that resonate with leads. is a platform that allows companies to build and deploy no-code virtual assistants. Collect user feedback, provide recommendations, and answer common questions from customers.

HubSpot AI Support Bot

CRM and CMS platform HubSpot is releasing an AI-powered support chatbot for its users. Their bot pulls data from your website and (if available) knowledge base, and uses this information to answer questions about your business. It requires no programming or training.

The HubSpot AI Support Bot Beta will be available starting in October of 2023. Check out this video in which Andy Pitre, the Executive VP of Product at HubSpot, unveils HubSpot’s upcoming chatbot features.

Why use a customer service chatbot at all?

Looking for more information on why chatbots are an excellent tool for optimization? Read our blog post to find out how you can optimize your customer experience with a chatbot.