AI has exploded across the small business world in the last year, particularly when it comes to chatbots — computer programs designed to simulate human interactions. Some chatbots operate on a website, while others work through messaging apps or social media. Their major advantage is the ability to offer 24/7 support and reduce operating costs. But not all chatbots are created equal. There are multiple types of chatbot, each with their own unique strengths and capabilities, and when choosing a chatbot, it’s important to know how to best use them. With this in mind, here are five different major types of chatbots, and some examples on how a small business can use them to their advantage.

1. Rule-Based Chatbots

Rule-based chatbots, also known as decision-tree chatbots, work (as the title implies) according to a predefined set of rules. These are structured as “conditionals” or if-then statements: if a customer makes a specific query, they get a specific response, based on that input. This is ideal for simple, repetitive inquiries, but not very effective if the queries require creative or flexible output. Common examples of using a rule-based chatbot might include programming answers to questions about operating hours, return policies, and so on.

The major advantage of a rule based chatbot in business is that they’re cost-effective, easy to implement, and can handle a lot of simple queries quickly, giving your support team more time to handle more complex requests.

2. Menu-Based Chatbots

The next kind of AI chatbot is the menu-based chatbot, which works by presenting users with a series of predetermined menus. Similar to the way a rule-based chatbot works, menu-based chatbots ask questions and offer pre-defined options for responses, keeping the interactions simple and straightforward. for example, a restaurant offering food ordering
online might guide a customer through the process by asking what they would like to order and then walking them through options such as appetizers, main courses, and desserts.

Much like rule-based chatbots, menu-based chatbots give customers easy-to-follow prompts and run a very low risk of being confusing. The structured interface can keep customers from getting turned around, feeling overwhelmed, or walking away frustrated, which in turn means a better overall customer experience.

3. AI-Powered Chatbots

A step up from simpler, more rigidly structured chatbots, AI chatbots use artificial intelligence and machine learning in order to respond to natural, everyday language. An AI chatbot can analyze complex sentences and form proper responses, as well as learn from past interactions and improve their responses over time. AI chatbots are well-suited to more complex, sophisticated tasks that can still be automated, such as answering product inquiries, addressing complaints, or offering personalised recommendations. A common use case for a small business might be an AI chatbot that can answer questions about different products, offering comparisons, and making recommendations based on customer needs or wants.

AI chatbots can be a powerful tool for customer satisfaction when properly implemented. Their ability to understand natural language and adapt and learn from interactions makes them powerful flexible, meaning the customers feel they’re having a more “human-like” interaction.

4. Voice Chatbots

Voice chatbots, also known as voice assistants, provide an even more “human-like” experience, as they allow a customer to interact via voice commands instead of typing. Like other AI-based chatbots, they use natural language proccessing (NLP) to interpret and answer spoken requests or commands. For example, a small hotel in Brighton might use a voice chatbot on its website to assist with booking rooms and making reservations. A customer can simply ask verballt instead of typing out a response or clicking through menus.

While voice chatbots can sometimes create frustrations if they’re poorly implemented, the opportunities for a hands-free, convenient customer experience are many. They are particularly useful for businesses catering to customers who are frequently on the move, or simply those who prefer talking over typing.

5. Generative AI Chatbots

Finally, we come to generative AI chatbots, the most advanced kind currently on the market. Unlike rule-based or AI-powered bots, generative AI creates responses by — you guessed it — generating it based on user input. Rather than responding with predetermined answers, bots use deep learning models to generate responses spontaneously, meaning they can engage in detailed, realistic conversation, possibly providing creative solutions to customer queries or problems.

The use cases for this are numerous. For example, a small Brighton marketing agency could use a generative AI bot to provide campaign ideas and product suggestions to a client in real time, or creatively answer questions about how to improve their social media presence. The possibilities are wide open.

The potential positive impact of generative AI chatbots is clear. A generative AI can simulate real human conversation and simulate creative responses to queries and requests, meaning they can respond on a much broader and more sophisticated range of subjects.