small business owner

How Chatbots Can Help Small Businesses Grow

Preparing for new products, managing finances, running your businesses social media and fulfilling customer engagements. As a small business owner, you know there’s a ton to do daily without looking for ways to stay ahead of the competition. One innovation that has been gaining momentum are conversational AI chatbots.

AI-powered virtual assistants are revolutionising how businesses interact with customers and streamline their operations. Automation can allow small business owners to focus on their broader strategy and decision making. The rule based chatbots have given way to conversational AI chatbots. In this blog, we will explore how conversational AI chatbots can benefit small businesses while recognising limitations.

Shop window sign says Thank you for shopping local
Photo by Tim Mossholder on Unsplash

What is a Chatbot

Let’s consider what a chatbot is and why it is becoming increasingly more helpful for small businesses. A chatbot is a computer program designed to simulate conversation with human users. There are rule based chatbots that guide the user down a specific path and there are AI chatbots that learn from conversations with users.

With the growing importance of digital tools for small businesses, chatbots have emerged as powerful assets for enhancing customer engagement, improving efficiency, and boosting sales. However, despite the advancements there appears to be very little research on chatbot implementation specific to small businesses.

Improving Customer Service

Conversational AI Chatbots play a pivotal role in enhancing customer service for small businesses. They provide 24/7 customer support, ensuring that customers can get assistance at any time of the day. Immediate responses to common queries reduce wait times and significantly improve customer satisfaction. From answering frequently asked questions to tracking orders and booking appointments, AI chatbots handle a wide range of customer service tasks effectively.

Increase Customer Engagement

Virtual assistants enable small businesses to engage with their customers in real-time. They can be integrated into various platforms, including websites, social media, and messaging apps. They serve as a means to keep customers informed about new products, promotions, and updates. While also offering interactive and engaging features like quizzes and polls to attract and retain customer interest.

One such example is HelloFreshFreddy, designed to improve customer engagement. The bot managed surveys and quizzes, rewarded customers with automated deals and suggested recipes. Reportedly the bot reduced response times by 76% and increased incoming messages by 47%.

Through interactions with customers, chatbots gather valuable data on preferences and behaviour, providing businesses with a wealth of insights. Analysing these interactions helps identify trends and areas for improvement, ultimately contributing to product and service improvements.

Show Customers New Products

Chatbots can help customers find products by looking through your inventory based on parameters provided by the customer in conversation. According to a recent survey asking how often do chatbot recommendations influence buying decisions 61% said ‘always’ or ‘frequently’. By analysing customers previous purchases chatbots can offer personalised recommendations. This improves customer engagement and increases the likelihood of future sales.

Increasing Sales and Conversions

Small businesses have used chatbots to guide customers through the sales process, provide information and offer product recommendations. By personalising the shopping experience based on customer data and preferences, chatbots contribute to increased sales and higher conversion rates.

Real-life case studies of small businesses that have succeeded in boosting their sales through chatbot implementation further emphasise their effectiveness. Conversational Design improved conversion rates by scrapping web-based forms and using chatbots instead. As a result, their lead conversion rate increased by 40% with 20k leads in a year.

 

Saving Time and Resources

AI chatbots can reduce time small businesses spend on repetitive tasks, such as scheduling and basic inquiries. By doing so, they free up valuable time for staff to focus on more complex issues. Ultimately improving overall productivity.

Furthermore, chatbots offer a cost-effective solution compared to hiring additional staff. With the potential for a substantial return on investment over the long term.

The development of chatbot platforms in recent years, have proven to allow smaller businesses to implement chatbots. AI chatbots are mostly used in sales and chatbot builders have significantly increased their availability. Chatbot building platforms tend to be less resource intensive for small businesses and don’t require any coding knowledge.

Chatbots can also directly connect customers to live agents automatically when they recognise their limitations.

Easy Integration and Scalability

One of the key advantages of chatbots is their seamless integration with existing systems, such as CRM platforms and e-commerce solutions. This makes them highly scalable, allowing businesses to adapt and grow without incurring significant technical challenges. Small businesses can explore various platforms (WhatsApp, Slack, WordPress, Shopify etc) that offer chatbot integration. To integrate Japeto Chat into a website only requires a single line of code.

There’s way too many benefits to having a website chatbot, so small businesses should definitely hop on the trend. Taking advantage of your business chatbot now will only benefit your business in the long run.

When Not to Use Chatbots

Despite the numerous benefits of conversational AI, it’s crucial to acknowledge situations where they may not be the best solution. Highly sensitive or complex customer issues may require human intervention. Also very small businesses with low query volumes may not reap substantial benefits from conversational AI chatbots. However lead generating chatbots can help small businesses grow.

B2B businesses possibly have less use for chatbots than B2C. A balance between human and automated customer service is beneficial, because there are instances where human interaction adds value to the customer experience. A more accurate picture is of AI assistants as helpers to human workers, not replacements.

FAQs

What tasks can a chatbot perform for a small business?

Chatbots can handle customer queries, take orders, schedule appointments. They can also help with marketing initiatives such as promotions and follow-ups.

The majority of people prefer to use a chatbot. 82% of customers would use a chatbot instead of waiting to talk to a customer service agent.

 

Not necessarily. Most chatbot builder platforms provide no-code or low-code chatbot builders.

Costs depend on the platform and features you want.

No. Chatbots are designed to support your team by managing routine tasks, allowing staff to prioritise more valuable customer interactions.

Yes, chatbots can integrate with websites, social media platforms, messaging apps, and email.

Chatbots can guide customers through the sales process. They can recommend products based on conversation, offer promotions and collect customer preferences which all contribute to higher conversion rates.

Chatbots are most beneficial for businesses with moderate to high levels of customer interaction or sales activities. However, businesses with very low volumes of queries might find limited value in their use.

If you’re looking to grow your business then you need a lead generation chatbot. These are among the most popular chatbots for business out there. If you’re looking for a chatbot platform, then you want it to have lead scoring, CRM integration, and multi-channel deployment.

Also consider the technical expertise required to use the platform, is it a no-code, low-code chatbot builder? And if it is a no-code AI chatbot builder, how much control over the input do you have. Often you sacrifice customisability with some of these options.

Lead generation chatbots greet and ask visitors questions, collecting names, emails and preferences. But using NLU to understand visitors better so they can respond naturally. They can qualify the collected leads and pass them onto your sales team, schedule demos, followups.

Conclusion

The benefits of using conversational AI chatbots for small businesses are undeniable. From enhancing customer service and increasing sales to saving time and resources, chatbots have the potential to streamline and grow your business. It is important, however, to recognise their limitations and adopt a balanced approach when considering their implementation. Small business owners can explore the possibilities of integrating chatbots into their operations but to leverage them where appropriate.

If you’re a small business owner looking to harness the power of chatbots for your business, we invite you to contact us today for a consultation. 

*Updated: 08/01/25*

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Emily Coombes

Hi! I'm Emily, a content writer at Japeto and an environmental science student.

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