Chatbot vs. Virtual Agent: Key Characteristics that Call Centers Should Know

Chatbots and virtual agents provide a number of benefits, and as technology evolves, they will play an increasingly important role in how companies provide customer service and superior CX. That doesn’t mean they will replace human agents. Rather, they should be viewed as team members handling simpler tasks so that agents can focus on higher-value interactions.

Consumers already know the value of chatbots and virtual agents. They are effective self-service options that are available 24/7 and can answer common queries. According to a Drift study, the number one reason people say they would use a chatbot is to get a quick response in an emergency.

Response speed is a key benefit of using chatbots and virtual agents. In fact, Userlike research revealed that 68% of users like that these self-service options are quick to respond.

Despite these similarities, chatbots and virtual agents have key differences that make them standalone solutions. Let’s see what they are.

What Is a Chatbot?

A chatbot is software that interacts with users according to a set of programmed rules. Unlike virtual agents, chatbots do not use Artificial Intelligence (AI), which limits their capabilities.

Most of us are probably familiar with menu-driven chatbots. When interacting with this type of bot, you typically navigate the conversation by selecting a series of menu options. Hopefully, these lead to a satisfactory resolution, such as an answer to a question. Otherwise, CX-focused brands will make it easy to refer to a customer service agent.

Another type of rule-based chatbot focuses on keywords. They are programmed to identify keywords and get the most probable answer from a knowledge base. This type of bot can be ineffective if users don’t use words you can identify or if keywords have multiple meanings, which may be why Userlike’s research found that 80% of consumers still believe chatbots they have to be smarter to use them regularly.

Despite these limitations, chatbots can provide great CX when programmed well and used appropriately. Rule-based chatbots are good at completing simple and predictable tasks; such as providing password reset instructions or collecting customer information.

What Is a Virtual Agent?

A virtual agent is also a program that interacts with users by simulating a human conversation, but unlike chatbots, AI powers it. Artificial Intelligence gives them capabilities beyond a normal chatbot, which means that virtual agents are often capable of handling a wider variety of interactions.

Additionally, virtual agents that use Natural Language Processing (NLP) can create a better customer experience by allowing users to use normal language. This means users don’t need to navigate menus or guess the right keywords. Interacting with a virtual agent is similar to interacting with a virtual assistant like Siri or Alexa.

Machine learning (ML), a form of AI, also gives virtual agents an advantage over chatbots by making them smarter with use. This means they can learn to understand user intent and predict the next question a customer will ask based on follow-up questions users have asked in the past.

Like chatbots, the performance of a virtual agent depends on how it is set up and maintained. Virtual agents using AI need to be “trained” by consuming large amounts of data, preferably real interactions that have taken place before. This allows the solution to identify patterns that it can use to understand concepts such as user intent.

Key Benefits of Chatbots and Virtual Agents

While it is important to understand the differences between chatbots and virtual agents, it is equally necessary to understand the similar benefits that both can offer.

1) Effective Self-service

When designed well and used in the right context, chatbots and virtual agents can be an effective way for customers to manage their own inquiries.

Today’s consumers want to be able to solve their problems and find their answers for themselves. In this sense, the use of self-service is growing substantially. Userlike research revealed that 95% of businesses reported year-over-year growth in self-service requests in 2021, with an overall average increase of 37%. In addition, 81% of users demand more self-service.

Chatbots and virtual agents can play a prominent role in a company’s self-service strategy. Here are some sample use cases that both can perform:

• Provide users with a link to the company’s return policy and process.
• Gather information about the nature of a customer’s problem and then escalate the inquiry to a live agent.
• Recommend products.
• Provide information on prices.

Also, because they have more capabilities, virtual agents can help customers complete transactions, such as opening an insurance claim or activating a new credit card.

2) Improve Agent Experience (AX)

Chatbots and virtual agents don’t just satisfy customers; they can also make an agent’s job easier. If a bot can provide a link to a video showing customers the products, that means agents can spend their time on more complex, higher value-added tasks.

By making agent roles more fulfilling, call centers can increase their engagement, which is key to delivering exceptional customer service experiences. Additionally, this can help curb the high agent turnover many contact centers face.

3) Reduce Operating Costs

Agent salaries are the largest cost category in a call center. Most contact centers struggle to find a balance between containing costs and satisfying customers with shorter wait times. It’s hard to find a call center that doesn’t feel constrained by its budget.

This brings us to one of the many attractive features of chatbots and virtual agents: they produce a very low cost of service. In fact, Gartner estimates that an average self-service transaction costs $10, compared to $8 for the average agent-assisted interaction. In other words, live agent support is about 80 times more expensive than self-service.

The savings can really add up for contact centers that successfully shift a portion of their agent-assisted call volume to chatbots or virtual agents. That savings allows them to invest in areas like new technology or salary increases that will strengthen their operations and ultimately lead to better CX.