FAQ chatbots: What it is, types, use cases, and how to build one for your business

how to build faq chatbot

Already a critical department in any organization, customer support teams have also evolved into one of the major deciding factors in swaying target customers to buy their product/service.

Even the roles and responsibilities of the support teams have extended beyond just answering queries. They now own the key metrics for establishing and nurturing a relationship with the customers, which in turn has a direct impact on the LTV (Lifetime Value) businesses get out of their customers. The better service customers receive, the longer they stay.

As their workload increases, they usually operate in a packed schedule, often understaffed, and have to decide where they want to focus. Initially, rule-based FAQ chatbots were developed to encourage self-service and free up agents' time. Now, they've evolved into powerful chatbots with the inclusion of AI.

In this blog, we'll discuss what an FAQ chatbot is, how it benefits support agents, its types, and how to easily create one for your business.

Table of contents:

What is an FAQ chatbot?

An FAQ chatbot is a bot designed to provide answers to visitor questions in a conversation interface.

Over the years, FAQ chatbots have taken various forms with the addition of technology. Here are the 4 types of FAQ chatbots we've seen.

Types of FAQ chatbots

Rule-based FAQ chatbots

Traditional rule-based chatbots are pre-defined bots. Based on the type of business and the queries they usually get, questions and answers will be fed to the bot. If customers ask any questions, the bot will search the added resources and show the pre-programmed answer associated with the question.

Customers have to input the query exactly as it's fed to the bot to get answers, which isn't fair to the visitors as everyone phrases their questions differently. This is where rule-based FAQ chatbots failed.

Keyword-based FAQ chatbots

The next evolution is the keyword-based FAQ chatbot, which addressed the key challenge the earlier generation faced. The bot will share the attached answer if the keywords in customer queries match those in the flow/decision tree.

Though better than rule-based, it wasn't perfect either. If the entered keyword matches with more than one resource in the knowledge base, the bot doesn't have the intelligence to analyze which one to share.

NLP-based FAQ chatbots

Next came NLP chatbots, which shifted the dynamics of the FAQ chatbots from traditional and rigid to conversational. With NLP (Natural Language Processing), bots were trained to understand the context of the conversation and the emotions behind it.

It also nullified the disadvantage of keyword-based FAQ chatbots. NLP bots can understand customer needs and decide which answer to share with them. In addition, they were able to provide a personalized experience to customers, as they no longer felt they were talking to bots.

Gen-AI FAQ chatbots

Generative AI completely changed the way FAQ chatbots operate. It also raised the bar for personalizing the conversation and understanding the question's intent.  

AI will read a business' resources, crawl the website, and answer customer queries by referencing those materials. AI chatbots can also be configured to predict what questions customers might have based on the questions they ask.

Adding a Gen-AI FAQ chatbot will free up the support teams' time for minor repeated questions, allowing them to focus on queries that require customized replies.

Why should you have an FAQ chatbot?

Should you get FAQ chatbots for your website?

Zoho SalesIQ, the Engagement Intelligence, is an all-in-one engagement platform that combines the might of live chat, chatbots, analytics, and visitor identification. To answer visitor queries, we've created an Answer Bot, our own NLP-driven knowledge base chatbot that understands and answers queries using our own AI technology, Zia.

Our support team is using SalesIQ's Answer Bot as our first line of communication, and let's see the impact it's making.

Duration: May 2024

Total chats: 3602

General inquiries: 703 chats

Result: 20% of the total chats are resolved by FAQ chatbots

During the month of May 2024, our customer support team of 8 members handled 3602 chats in total. Among them, around 703 chats (~20% of the total chats) are how-to queries and general inquiries about the product, pricing, and demo booking requests, which are resolved by our FAQ chatbot, Answer Bot.

Resolving 20% of our monthly chat queries without any input from our support team frees up their time to take care of other complex queries, enhancing the productivity of our team, all the while providing the instant answers and best experience to our customers.

That's not all.

Our team also receives queries related to our features, setting up the product, integrations we offer, and more. The FAQ chatbot interacts with those queries and shares relevant materials with them.

Only when they require further assistance will the query be handed off to the available agents to attend to. 

Our team is resolving approximately 30-35% of the queries by employing FAQ chatbots without disturbing the support team. It helps the team look at the customer queries that require their attention and nurture a relationship with the customers. 

That's just for Zoho SalesIQ. 

We also conducted an internal study with the whole Zoho and ManageEngine organization to assess how the support teams are managing the huge volume of chat queries.

Zoho and ManageEngine during 2023
Total chats: 4640 chats/day
Chats handled by chatbot: 2078 chats/day
Chats handed off to agents from bots: 141 chats/day
Result: 94% of the chats are resolved by FAQ chatbots

Zoho and ManageEngine are using SalesIQ to serve their 100 million users. We found that, on average, these organizations receive 4640 chats/day. Among them, 2078 chats are handled by the chatbots, and only 141 chats/day are handed to agents. Just 6% of the chats the chatbots attend are handed off to the operators.

It has helped the teams provide instant support, increasing their first response time. It has also helped provide faster resolutions, which helps teams register the best CSAT (Customer satisfaction) scores and NPS (Net promoter score) scores. 

The results may vary based on the type and size of your business, but these stats prove why you should have an FAQ chatbot for your support team. 

Benefits of FAQ chatbots

Once considered a convenience, FAQ chatbots have now become an integral part of customer support teams. They're crucial in helping the teams handle large volumes and provide instant responses and resolution whenever needed. For businesses, this comes with a half-dozen other benefits.

1) Develops trust thanks to instant response

The foremost and obvious benefit of FAQ chatbots is the instant response customers get, which increases their chances of getting the answers they need. Instant assistance helps customers develop trust in businesses, as it implies that the latter will always be available when needed.

2) Reduces support operating costs

FAQ chatbots can resolve 30-35% of queries without human intervention. In that case, it helps the customer support teams stay lean without compromising on the quality of the support provided to their customers.

Using an FAQ chatbot to resolve routine queries, businesses can save up to 30% of their support operating costs by assigning human agents to critical tasks. This percentage will increase as their business scales and their volume increases. Unlike human agents, FAQ chatbots can be scaled across your business operations.

3) Decreases resolution time due to precise and personalized answers

Compared to the traditional models, the GenAI FAQ chatbots were developed with NLP (Natural language processing) technology, which helped them understand the context of what's been asked and grasp the intent of the questions.

Adding Machine Learning and Deep Learning to modern-day FAQ chatbots can enable them to converse like human agents and deliver precise and personalized answers to customers, helping businesses decrease the time taken to resolve queries.

4) Increases answered queries for your marketing teams

Customer support isn't the only place where businesses get enquiries. Having FAQ chatbots on the website will encourage the prospects and visitors to clarify their queries, which they otherwise might not feel comfortable doing. Feeding the chatbot with information about your features, offerings, pricing, and other frequently asked prospect queries will help clarify them, and it can increase the chances of converting them.

5) Provides answers to internal teams

Businesses can deploy the FAQ chatbots for their internal use. For example, HR teams can add the relevant documents employees would need during their course of employment about the internal policy, taxation, etc. It can help everyone get clarification without having to go through a series of documents—they can just ask the FAQ chatbot for answers.

6) Offers a better customer experience

Overall, having an FAQ chatbot helps businesses deliver a better customer experience to their customers during interactions and leaves a positive impression in customers' minds about them.

Metrics to measure the performances of FAQ chatbots

FAQ chatbots offer businesses all the benefits mentioned above. Setting up such chatbots, too, is simple as they're often plug-and-play. They doesn't require much supervision, but the DRIs should monitor how they perform so they can be tweaked to achieve their ultimate potential.

First-response time

Though chatbots are instantly responsive, it'd be wise to measure the average first response time of the FAQ chatbot. If it's taking longer to respond to the queries, it can impact the customer experience. So, businesses should make sure their first response time is instant.

Response accuracy

Are you expecting the resolution rate to be the next metric? There is one vital metric businesses should monitor closely: Response accuracy

With GenAI support, FAQ chatbots can provide the exact answers customers require. But it's also a growing tech yet to be proven foolproof, as AI can sometimes hallucinate. Following the accuracy of the responses shared with the customers can help customer support chats take over the queries in case hallucinations happen.

Resolution rate

Resolution is what the customer support teams are ultimately after, as the quicker they resolve, the happier the customers are. The FAQ chatbots' high resolution rate indicates happy and satisfied customers.

Engagement and fallback rate

Though artificial intelligence powers the FAQ chatbots, they can't be compared with the support customers could expect from human agents. Tracking the engagement and fallback rate would help businesses identify if their customers are happy with an FAQ chatbot resolving their queries.

A steady increase in engagement rate indicates that they're happy and there is nothing to worry about. But if the fallback rate increases, businesses should investigate why it's happening.  

CSAT score

Ultimately, customer satisfaction counts, and CSAT is a vital metric to measure as the FAQ chatbots directly impact it.

Answer Bot, Zoho SalesIQ's FAQ chatbot

In addition to all the benefits we discussed, SalesIQ's Answer Bot is the ideal solution for your FAQ chatbot needs as:

  • If your business has a presence on social media, you can deploy Answer Bot to all of them. SalesIQ now supports Facebook Messenger, WhatsApp, Instagram, Telegram, and Line.

  • If you're catering to a global audience that prefers to communicate in their own language, Answer Bot has multilingual support; you can add up to 30 languages.

  • Answer Bot can be integrated with OpenAI's ChatGPT. If you have an active ChatGPT account, you can configure ChatGPT to generate answers from your resources.

Have you heard enough? Want to set up our Answer Bot for your business?

How to create an FAQ chatbot for your business

To create an Answer Bot, you need to have our Enterprise plan. Check out SalesIQ's pricing

1) Sign up for Zoho SalesIQ. As a part of our free 15-day trial, you'll have access to our Enterprise plan.

2) Go to Settings from the product's home page and select Answer Bot under the Bot module.

3) Select the brand with which you'd like to associate your Answer Bot.

4) After selecting the bot, you'll need to configure your profile and other settings, such as Resources, Response, Behavior, and Fallbacks.

5) Under the profile settings, you can configure your primary language of communication and other languages if you're catering to global audiences.

6) Next, you can select the resources you want the bot to refer to answer queries. Before selecting the knowledge base, add the necessary articles, FAQs, and Small Talks to SalesIQ's resources. If you're using any other platform, you can also import those resources to SalesIQ.

7) You can configure the texts to display when the bot has the answer to the reply to the queries. Likewise, you configure the texts for situations without relevant articles, and the bot can't find the answers.

8) Under the Behavior settings, you can configure how the bot should behave, such as its availability during and after business hours, audience criteria, proactive interaction, idle chat handling, operator hand-off when the bot can't answer, and more.

9) The final step is to configure Fallback settings, where you tweak the message the bot displays when it's not able to hand off the chat to the operators or during system failure.


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