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The AI chatbot market is growing at an unprecedented pace, and by 2029, it’s expected to increase by $3.79 billion, at a whopping 24.3% CAGR. And it’s not difficult to figure out why that is.
An increasing number of businesses are now adopting AI chatbots, or AI agents, to serve as the first line of customer support. As we noted in our annual Live Chat Benchmark Report, the number of chats handled by AI chatbots jumped up from 62.7% in 2023 to 73.8% in 2024.
In a study published in the Journal of Consumer Psychology, it was shown that 62% of participants were more willing to provide their email address to an AI chatbot than a human.
AI chatbots don’t just benefit the end consumer. Chatbots can also reduce manual work and improve efficiency by automating a significant portion of frontline customer service requests. When built well, AI chatbots can help businesses sharply reduce support costs.
In this guide, we are going to go into comprehensive detail about all things AI chatbots, from their most popular use cases to key benefits, as well as how to build an AI chatbot. But first, let’s talk about what AI chatbots really are.
As we get started in our guide on chatbot apps, it’s worth starting by answering some of the common questions among those new to this technology:
Standard chatbots are automated conversational programs that leverage rule-based systems designed to simulate human dialogue through text-based interfaces. At their core, they function as software applications that process user input, interpret the intended meaning, and generate contextually appropriate responses.
The basic architecture involves several key components:
An AI chatbot, or AI agent, takes things to another level altogether. They’re capable of understanding intent, expressions, and language. AI chatbots can understand conversational dialogue and more quickly identify what the requestor’s needs are.
With AI driving their responses, the bots can leverage machine learning to improve their responses over time based on customer confidence in their answers.
There are plenty of benefits of deploying AI chatbots for organizations today. In the following paragraphs, we are going to discuss how AI chatbots can transform the digital customer experience (CX) through improved service, availability, and accessibility, as well as the ROI they can generate for the organization through automation.
We are used to getting our questions answered instantly. A HubSpot Research study showed that 90% of customers rate an immediate response as essential when asking an important question.
This has become an increasingly important factor in the quality of support that customers receive. AI chatbots go a cut above conventional rule-based dialogs, asking follow-up questions, getting clarity, and then responding empathetically.
This speed advantage is particularly crucial for time-sensitive inquiries like password resets, order status checks, or technical troubleshooting. Traditional support channels often involve wait times measured in hours or days. AI chatbots process queries and deliver responses within seconds, meeting modern customer expectations for immediate gratification.
AI chatbots can resolve a large portion of routine questions at a fraction of the cost with studies showing significant operational savings.
According to research published in Electronic Markets, a peer-reviewed journal, AI chatbots can reduce global business costs up to $1.3 trillion, while dealing with up to 80% of routine questions!
Academic research emphasizes the dual benefit of cost reduction and service improvement. Both researchers and practitioners emphasize the potential advantages of customer self-service, including increased time-efficiency, reduced costs, and enhanced customer experience.
The technology enables organizations to handle high-volume, routine inquiries automatically while freeing human agents for complex problem-solving tasks that require empathy and critical thinking.
Today’s customers have fundamentally different expectations than they did just a few years ago. They want answers immediately, expect service to be available around the clock, and have little patience for traditional barriers like business hours or queue times.
AI chatbots meet these expectations head-on by providing instant, always-available support that can handle multiple conversations simultaneously without any degradation in service quality, round the clock.
Rather than replacing human interaction, well-implemented chatbots enhance the performance of human customer service representatives.
The technology handles routine inquiries and provides suggested responses, freeing agents to focus on building genuine connections with customers who need more complex help.
One of the most significant experience improvements comes from the consistency that chatbots provide. Unlike human agents who might have varying levels of knowledge or different communication styles, chatbots deliver uniform service quality every time.
They access the same knowledge base, follow the same protocols, and maintain the same helpful tone regardless of how many customers they’re assisting simultaneously.
“For us, the chatbot wasn’t launched to reduce agent headcount. It was launched so our agents can spend less time on simple queries, and more on the complicated and high-value queries… It’s thanks to Comm100 Chatbot that we can give more time and care to our donors.” – Denny Michaud, Customer Relations Manager at Canadian Blood Services.
Read the full case study: Canadian Blood Services improves customer & agent experience with Comm100 AI Chatbot
We’ve already discussed how an increasing majority of people in today’s world prefer self-service options. Traditional self-service options have always felt like a compromise; static FAQ pages that never quite address your specific situation, phone trees that lead nowhere, or web forms that disappear into the void.
AI chatbots transform self-service from a frustrating last resort into an empowering first choice. Instead of hunting through endless documentation or waiting on hold, customers can simply ask their question in natural language and receive immediate, personalized assistance.
The real power of modern chatbots lies in their ability to understand context and provide actionable guidance. Unlike traditional self-service tools that simply point customers to information, AI chatbots can walk them through complex processes step by step.
AI chatbots can reference internal documents, review knowledge base articles, and can even perform specific actions based on the conversation.
Customer service representatives spend an enormous portion of their day answering the same basic questions over and over again.
“What are your hours?” “How do I reset my password?” “Where’s my order?”
These routine inquiries, while important to customers, don’t require the problem-solving skills, empathy, or expertise that human agents bring to their roles.
AI chatbots excel at handling these repetitive tasks, instantly providing accurate answers while freeing human agents to tackle challenges that actually matter.
When chatbots handle routine inquiries, human agents naturally evolve into specialists and problem-solvers. They become the experts who handle escalated cases, work with frustrated customers who need a personal touch, or manage complex account issues that require judgment and experience.
This evolution benefits everyone: customers get more skilled attention for their difficult problems, agents find their work more engaging and meaningful, and businesses see improved resolution rates for complex cases.
There’s a variety of different types of AI chatbots that are commonly used in customer service. While the whole list is exhaustive (do check the link above!), here are the most common types of chatbots used today:
Customer-facing AI agents are the most visible and widely deployed type of chatbot in customer service. These agents interact directly with customers through live chat widgets, messaging apps, mobile interfaces, and voice channels.
They serve as the digital face of your organization, handling initial customer interactions and serving as the first point of contact for support inquiries.
They’re built with conversational flow builders that can be rule-based or hybrid, incorporating conditional logic and context windows to maintain natural dialogue structure.
Advanced implementations feature memory objects that retain information across conversation turns, enabling them to remember details even if a customer drops off and returns later.
Employee support AI agents work behind the scenes to transform how internal teams access information and complete work-related tasks.
Instead of employees sending emails, filing tickets, or repeatedly asking questions in communication channels, they can simply ask the AI agent for immediate assistance.
These agents are trained on company-specific internal documentation, HR policies, IT procedures, and reference materials.
What makes these agents particularly valuable is their speed and contextual understanding of internal processes.
They can access HR documents, IT knowledge bases, and help desk logs using natural language understanding tuned specifically for internal workflows and company terminology.
When an employee reports a technical issue, the agent doesn’t just provide generic help articles; it asks relevant follow-up questions, diagnoses whether it’s a hardware or access problem, and either guides the employee through a solution.
“The combination of Comm100 Live Chat and AI Chatbot (now AI Agent) has really transformed our service offering to our diverse stakeholder base. While live chat lets our agents deliver fast and convenient support, the integrated chatbot automates all our common and simple queries. The benefits are threefold – it increases our overall support capacity, lets our agents focus on more complex queries, and allows us to provide much-needed 24/7 help.” – Sue McKinlay, Senior Manager, Client Services, McMaster University
Read the full case study: McMaster University Boosts IT Support Capacity & Student Satisfaction with Comm100 Live Chat & AI
Process automation AI agents operate quietly in the background, handling the heavy lifting of routine administrative tasks that keep customer service operations running smoothly.
These agents don’t engage in conversations. Instead, they monitor for specific triggers and events, then execute predetermined actions to streamline workflows and eliminate manual processes.
They’re designed for speed, consistency, and reliability, watching for events like new ticket creation, unresolved chat sessions, or agent status changes, then jumping in to fill operational gaps.
AI chatbots are now being used in a plethora of different industries. In the following paragraphs, we’ll talk about some of the most important use cases of AI chatbots in different industries.
Higher ed chatbots are the most cost-effective tool for universities and colleges looking to increase student intake.
By offering prospective students the ability to get support 24/7 via a fast and convenient channel, schools can connect with more students and begin developing relationships with them that can turn into admissions.
Cambrian College is a great example of this. The Canadian college recognized that many prospective students were trying to connect with them outside of the typical 9-5 business hours, particularly international students in different time zones.
Not able to afford hiring more agents or extending their support hours, Cambrian College chose to set up Comm100 AI Chatbot within their recruitment department. Set up to answer the most common FAQs 24/7, the bot now handles over 70% of all incoming chats. The rest are handled by the support staff on live chat.
The result? The college now engages with more prospective students and has increased enrolment, from national and international students alike.
“Our AI chatbot was going to be active when live agents couldn’t be so we wanted to make sure that he could provide the level of customer service that we expected from everyone in our Recruitment department.” – Alison Caruso, Manager of Student Recruitment, Cambrian College
Read the full story: Cambrian College Improves Recruitment with Comm100 Live Chat & Chatbot
Banking and financial institutions face an enormous volume of routine customer inquiries that follow predictable patterns: account balance checks, transaction history requests, branch locations and hours, interest rate information, and basic product details.
These queries, while essential to customers, don’t require complex financial expertise or personalized consultation.
AI chatbots excel at handling these high-frequency interactions instantly and accurately, providing customers with immediate access to their account information and general banking services without wait times or the need to speak with a human representative.
They can walk customers through password resets, help them understand fee structures, explain different account types and their features, or provide step-by-step guidance for common tasks like setting up direct deposits or automatic bill payments.
“Today’s credit union members expect a great digital experience, so we knew we couldn’t just rely on phone and email support anymore. It’s also essential to offer live chat so you can meet members’ support expectations and let them connect how they want to.” – Robert Griffith, Chief Executive Officer, Motor City Community Credit Union.
Read the full story: Motor City Community Credit Union joins growing digital support switch with Comm100 Live Chat & Chatbot
The gaming industry is all about fast responses and providing timely support. Most gaming businesses routinely track a set of key metrics that showcase how players are engaging with their platform.
AI chatbots are ideally suited to handle the most frequent iGaming support requests:
The fast-paced nature of sports betting, live casino games, and tournament play means that delayed responses can result in missed opportunities or player frustration that directly impacts revenue. AI chatbots excel at providing instant support, and if the query is of a specialized nature, connecting users directly to human agents.
Telecom customers are often in crisis mode when they contact support; their internet is down, their phone won’t work, or they’re trying to understand why their bill suddenly increased. These aren’t leisurely inquiries; they’re urgent disruptions to daily life and business operations.
AI chatbots prove invaluable by instantly addressing the bread-and-butter issues that flood telecom support lines: service outage status, data usage checks, bill explanations, plan details, and device troubleshooting.
Instead of being stuck on hold for hours on end, AI chatbots can work with customers to address their problems, from reviewing their account status, confirming service interruptions in their area, or walking them through basic device resets.
Technology companies exist in a world where user questions range from “Why can’t I connect to my server?” to incredibly sophisticated technical scenarios that would stump seasoned engineers.
AI chatbots shine in this environment because they can instantly parse whether someone needs basic onboarding help or is dealing with a more complex integration challenge.
When users are stuck trying to configure API endpoints or can’t figure out why their software won’t authenticate with their company’s systems, chatbots provide immediate diagnostic assistance and step-by-step troubleshooting without the delays that come with traditional ticket systems.
“To date, we have $6 million in opportunities sourced from chat and have closed about $4 million of that. In addition, our sales team loves it. The handoff from support is seamless, it’s brought in great leads, and has led to shorter sales cycles. Comm100 is a great way to interact with customers in real time. Instead of taking 24 to 48 hours to respond to a request for information through our ‘Contact Us’ form, we can get it to the sales team instantly. When we’re more responsive, we’re a lot more likely to close the deal, and do it faster too.” – Joanie Gentile, Sr. Business Operations Manager, Google Fitbit.
Read the full story: Fitbit generated $6M in pipeline with help from Comm100 Live Chat
The insurance landscape is built on specificity: coverage varies dramatically based on individual circumstances, policy types, and regional regulations.
Customers usually reach out to insurance companies in times of urgency. It could be a fender bender, a medical emergency, or when they’re frantically trying to understand their coverage before a major purchase.
These moments are rarely convenient or stress-free. Chatbots transform these potentially overwhelming experiences by providing instant clarity on policy details, coverage limits, deductible amounts, and claims status.
Instead of customers having to decode complex policy language while dealing with real-world crises, AI agents can translate insurance jargon into plain English explanations of what’s covered, what isn’t, and what steps need to be taken next.
Building stronger patient relationships is a cornerstone of modern healthcare. AI chatbots can help healthcare organizations manage an overwhelming volume of basic patient inquiries that don’t require medical expertise but need immediate attention.
Appointment scheduling, prescription refill requests, insurance verification, billing questions, and basic procedural information consume significant staff time that could be better spent on patient care. AI chatbots can take over these tasks and provide answers 24/7.
This constant availability proves especially valuable for working patients who cannot call during standard business hours or for urgent but non-medical questions that arise outside office schedules.
They can explain what to expect during routine procedures, provide medication timing instructions, or offer guidance on preparing for diagnostic tests. When patients need clinical assessment, symptom evaluation, or personalized medical advice, chatbots appropriately direct them to qualified healthcare providers while collecting relevant background information.
AI chatbots play a critical role in improving service delivery in the public sector and government organizations.
Questions about permit applications, tax deadlines, benefit eligibility, office locations, and document requirements represent a substantial portion of citizen interactions with government entities.
AI chatbots provide consistent, accurate responses to these standard inquiries while reducing wait times and improving service accessibility.
Citizens can quickly determine what documentation they need for a driver’s license renewal, check the status of permit applications, or find contact information for specific departments without navigating complex phone systems or waiting in long queues.
Public sector chatbots excel at guiding citizens through multi-step processes like benefit applications, license renewals, or permit submissions. They can explain eligibility requirements, provide current fee schedules, and direct citizens to the appropriate forms or online portals needed to complete their transactions.
Cut costs while improving the customer experience.
In the following section, we are going to talk about the ease with which you can deploy a Comm100 AI chatbot. Here’s how it works:
Log in to your Comm100 Control Panel. From the left navigation pane, go to AI & Automation > AI Agent.
Expand the AI Agent drop-down list and click “Manage” on the Manage AI Agents area. An AI Agent drawer will appear from the right side of your screen.
On the AI Agent drawer, click “New AI Agent” and choose “AI Agent” from the drop-down menu. This will open the New AI Agent drawer where you’ll configure your settings.
Fill out the following configuration options in the New AI Agent drawer. Remember that the AI Agent’s language and channel cannot be changed once it’s created:
Click “Save” to complete the creation process. Your AI Agent will be created successfully and ready for the next steps of adding support content and deployment!
For more details, here’s our guide on How to Create an AI Agent. Here are some other useful articles:
Now that you’ve seen the benefits of AI chatbots across many industries, you’re ready to introduce a chatbot to your organization. Bringing an AI chatbot to your support team will mean:
There’s never been a better time to add AI agents to your support team. Supercharge your support operations with the Comm100 AI Agent and gain a critical competitive advantage.
There’s a lot more where this came from!
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Article by
Najam is the Content Marketing Manager at Comm100, with extensive experience in digital and content marketing. He specializes in helping SaaS businesses expand their digital footprint and measure content performance across various media platforms.