How chatbots can improve efficiency in your small business

What is a chatbot?

In simple terms, a chatbot is a computer system designed to handle queries from customers, suppliers, partners and even employees. It allows you to provide answers without having to deploy a person to handle every single interaction. 

Samuel Easto-Lefebvre, BDC Senior Consultant, Advisory Services, notes that chatbots are for anyone who deals with a client in some respect. 

“Whether you’re a manufacturer or service provider, your customers probably have questions that a chatbot can answer—letting you and your team focus on higher-value tasks,” he says. 

How does a chatbot work?

Small businesses can use chatbots as personal assistants or customer service agents that work 24/7. Depending on your needs, you might choose between two main types:

• Rule-based chatbots: These are the classic versions you have likely seen. They follow a predefined “if-this-then-that” flow. For example, if you run a pet store and a customer asks for your hours, the bot can give a prewritten response. It is simple and effective for basic tasks but lacks the capacity to “think”.
• AI-fueled chatbots: These usually leverage Large Language Models (LLMs) to understand context. They don’t just retrieve a saved answer, they can explain complex concepts, learn from past conversations and provide a much more human-like experience. 

One advanced technique is Retrieval Augmented Generation (RAG). This allows the LLM to scour your specific company documents to answer questions accurately. Instead of just giving a general answer from the web, the bot uses your own data to give specific advice to your customers. 

Why use a chatbot?

According to BDC research, the key benefits of chatbots include:

• Cost savings: 35% of businesses that have implemented a chatbot say it helped to reduce their costs.
• Affordability: 58% of businesses that adopted a chatbot spent less than $5,000 on implementation.
• Better data governance: Setting up a chatbot forces you to organize your documents, remove duplicates and have clarity in your records.
• Client satisfaction: A well-designed bot can pick up on frustration and escalate the issue to a human agent, ensuring your customers never feel ignored.

How does a business prepare for integrating a chatbot?

Before you launch a chatbot, you should pinpoint exactly where your business feels the most friction related to time-consuming inquiries. This is typically where your team is most bogged down. 

Look for tasks that are:

• High volume: You are getting the same questions over and over again.
• Repetitive: A team member is spending hours on low-value work that doesn't require their full expertise.
• Slow: Your team is resource-constrained and takes too long to get back to customers. 

The hidden benefits of better data

Integrating this technology is also the perfect excuse to get your digital house in order. The chatbot will draw its information from internal documents and processes, so it’s important to ensure these resources are accurate and up to date. However, you do not need to clean all your data right away—only what will be used by the chatbot.

“The exercise of getting ready for your first chatbot is organizing and cleansing your data,” says Easto-Lefebvre.

Getting started with a chatbot forces you to become a more organized, data-driven company. This involves organizing documents, removing duplicates and ensuring you have one official version of the truth. These good data practices will help you not only with customer service but also with accounting and other AI projects in the future. 

How to find the right chatbot platform

Every company’s needs are different, so you should start by pinpointing your specific pain points. Do you need to handle complex technical queries or just straightforward questions about your services? 

When looking for the right tool, consider these criteria:

1. Fit for your use case: Choose a solution that matches the type of interactions you want to automate—simple, repetitive questions or more nuanced, context‑based conversations.
2. Integration with your existing tools: Think about where the chatbot will live and how it connects to your current systems, such as your website, CRM or messaging platforms.
3. Ability to grow with your business: Look for a solution that can start small but expand in capability as your needs evolve, without requiring a complete rebuild.
4. Human handoff: A well‑designed chatbot should know its limits and seamlessly transfer the conversation to a human when needed.
5. Return on investment: Assess whether the solution delivers value through time savings, improved customer experience or increased sales—without adding unnecessary complexity.

If searching for and selecting the right tool for your business feels overwhelming, reach out to an expert advisor who can guide you to make the right decision. 

Pitfalls to watch out for

A common mistake is implementing a chatbot and then never thinking about it again. Your business changes, customer needs evolve and your data will need to be updated. Someone in your company should own the tool to ensure the underlying data remains accurate.

“It’s important to ensure the documentation the chatbot is pulling from is up to date and accurate,” says Easto-Lefebvre.

“And pay attention to users’ preferences and the way they interact with the chatbot. You may recognize opportunities to add additional information or answers that would be valuable for them.”

Preparing your business for the AI era

Ultimately, adopting a chatbot is a strategic first step in shifting your company culture toward an AI-ready future. By beginning with a manageable, low-risk tool today, you are effectively training your team to think differently about productivity and technology. 

Next step

Discover how to prepare your business for AI adoption by downloading BDC’s free guide, Get Your Business AI-Ready.