Shabnam Katoch • 22 Mar 2024

Text Chatbots - Everything You Need to Know

Guide on Text Chatbots, why and how companies are using it. Learn about text chatbot uses and applications.

Text Chatbots - Everything You Need to Know

Text Chatbots - Everything You Need to Know Some marketers believe that SMS marketing is dead. It is considered to be a traditional way of promoting a business. However, they fail to realize its potential and the benefits it can bring to their overall marketing strategy.

According to, the average open rate for a text message is found to be around 99% with a click-through rate of 10.66%. In fact, 97% of text messages are read within 15 minutes of their delivery. Thus, SMSes have the highest open rates as compared to other marketing channels.

Imagine leveraging this marketing medium and pairing it up with AI to engage customers! You can indeed build text chatbots or SMS chatbots to connect with your customers over SMS and build strong relationships.

In this post, we will learn more about what a text chatbot is, the benefits it offers, and its applications in real business scenarios.

What Is a Text Chatbot?

A text chatbot or an SMS chatbot is a chatbot that is designed to simulate human-like conversations via SMS. It can automatically reply to text messages by understanding customer queries using its natural language processing (NLP) and machine learning (ML) algorithms.

You can use an SMS chatbot to answer customers' questions, send notifications, and promote your offerings. Instead of leveraging SMS campaigns to send one-off messages, you can deploy this chatbot to respond with a new message. It works similarly to an AI-based website chatbot and aims to improve user experiences while decreasing customer service costs for your company.

Here is an example of a text chatbot used by Best Buy, a consumer electronics retailer.



Why Should Companies Use an SMS Chatbot?

Companies should start using SMS chatbots in their marketing strategies for the following reasons.

  • Simple offline touchpoint
    SMS chatbots help you to reach out to all your customers irrespective of what type of mobile phones they use. As SMS works on almost all models of phones and locations, you can connect with your customers regardless of their digital literacy level, age, or financial status. SMS chatbots work offline allowing you to get in touch with customers even without an internet connection.
  • Extensive reach
    The number of mobile phone users worldwide is forecasted to reach 7.49 billion by 2025. This means that SMS can be received by at least 7 billion people, which is more than the users on any social media platform. As text messages are delivered by the regular cellular network, it allows you to reach out to customers who use traditional mobile phones without 'smart' capabilities.
  • High open rates
    As said earlier, text messages have an open rate of 99% which is higher than any other messaging channel. Further, the response rate for SMS is found to be 45%. This means that your text messages are well-received by your customers.
  • No additional app installation required
    By default, all mobile phones are equipped to receive text messages. Your customers do not have to download a separate app to receive your messages. Now that you know how useful SMS chatbots are, let us understand how they work.

How Does a Text Chatbot Work?

An SMS chatbot works similarly to other chatbots, such as website chatbots or social media chatbots. The only difference is the communication channels that it uses. SMS chatbots interact with customers using text messages.

Here is a short explanation about the working of text chatbots.

  • Your customer sends a text message to the designated phone number or responds to a message you sent to your customer.
  • The chatbot recognizes certain keywords or commands in the message using its NLP and ML capabilities.
  • Meanwhile, the chatbot also checks the database to fetch information about this customer and their respective activity.
  • Once that is done, the chatbot determines an appropriate response and responds to the message with simple text or dynamic content depending on the customers' queries. SMS chatbots offer instant responses to your customer's questions and facilitate human-like conversations to make them feel like they are texting a real person.

Key Text Chatbot Features

The features your SMS chatbot must have might vary according to your business requirements. Here are a few must-have features your text chatbot must possess.

  • Ability to recognize keywords from incoming text messages from customers. This will help it respond to customer queries or perform specific actions better.
  • Ability to understand and interpret customer queries to facilitate more human-like interactions.
  • Must be able to retrieve information from databases and generate accurate responses to customers' questions.
  • Must be able to integrate with other third-party applications like CRM, inventory management software, email marketing tools, and more to access customer data.
  • Ability to transfer conversations to human customer support agents in the case of complex queries that require manual intervention.

Text Chatbots - Use Cases and Applications

Text chatbots can be leveraged by businesses across all industries to streamline various tasks, such as customer service, sales, lead generation, and so on. Let us explore each of these use cases in detail.

1 - For Instant Customer Support

Text chatbots can be efficient in providing 24*7 customer support. They can provide instant answers to commonly-asked customer queries without any human intervention. You can also train the chatbot to help customers troubleshoot their issues or escalate to a human customer support agent when required.

2 - For Confirming Orders and Tracking Shipments

Text chatbots can help customers track and manage their orders. When a customer places an order, you can immediately use a text chatbot to send an order confirmation message. Configure your chatbot to recognize keywords like 'Track' in customers' messages and share the order status by looking up order details in your orders database. In the case, if the order shipment is running late, your text chatbot can automatically send status updates about the shipment with convincing reasons for the delay.

3 - For Processing Product Returns and Exchange Requests

Product returns and exchanges are some of the most common requests from customers. Configure your text chatbot to identify keywords like 'Return' or 'Exchange' and respond to those customer queries accordingly. Train it to capture relevant details for product returns or exchanges, such as order number, reason for return, preferred resolution, and more. Forward this information to your support team for further processing. Once the request is approved, your text chatbot can notify the customers and guide them with the next steps.

4 - For Collecting Customer Feedback

Text chatbots can be utilized for conducting surveys and gathering customer feedback. Create an interesting survey questionnaire containing a mix of multiple-choice questions, rating scales, and open-ended questions. Next, build a chatbot to send those questions to the customers in a step-by-step manner. Offer your customers the flexibility to opt-out or unsubscribe from the survey at any time. Once the survey period is over, the chatbot can send an automated message thanking customers for their participation.

5 - For Appointment Scheduling

SMS chatbots can offer round-the-clock assistance to customers for booking their appointments. Design your text chatbot to capture details about appointment booking such as preferred date, time, and service type when customers enter certain keywords like 'Schedule' or 'Book'. The chatbot engine can check the relevant calendars to validate the availability of the appointments and share a list of suitable time slots with the customers. Once the customer confirms the time slot, the chatbot can book the time on the calendar and send an appointment confirmation to them. Offer them the flexibility to reschedule or cancel the appointments as well.

6 - For Lead Generation

SMS chatbots can support your lead-generation efforts by engaging leads with personalized messages or offers based on their interests and preferences. Design your text chatbot to collect crucial information, such as contact details, company information, pain points, and more. It can also ask them qualifying questions for determining their budget, need, timing, and authority. Based on their responses, you can tailor your text chatbot to offer personalized solutions and nurture them.

7 - For Building Email Lists

Text chatbots can be an effective medium to build your subscriber base for email marketing. Encourage your customers to join your email list by offering incentives like discounts, free resources, free samples, etc. Ask your customers to simply text 'Subscribe' or 'Join' and let your chatbot do the rest. The chatbot can collect their email addresses and other relevant contact information. Use this chatbot to thank your customers for subscribing to your email list as well.

8 - For Simplifying Pricing

SMS chatbots can convey pricing information to your customers and answer any pricing-related queries. Train your SMS chatbot with your pricing structure and its components like base fees, discounts, additional fees, and more. Set up automated responses containing the pricing details, available coupons or discounts, modes of payments, and so on. If a customer requests pricing, your chatbot can send back these pre-written messages and resolve their queries. In the case if a customer is looking for customized quotes, you can build a chatbot to capture relevant information and forward the same to your team for further processing.

9 - For Sharing Product Recommendations

Text chatbots can help you personalize shopping experiences for your customers via product recommendations. Your chatbot can send personalized product suggestions to customers based on their recent purchases, website browsing history, wish lists, or any other specific interests. The chatbot can also recommend complementary products to customers and leverage techniques like upselling and cross-selling to boost sales.

10 - For Engaging Customers in Promotions and Contests

Leverage SMS chatbots to inform customers about upcoming sales, contests, special offers, and other promotions for better customer engagement. Implement interactive games like quizzes and polls to engage customers and offer them incentives as a reward for participation. Create a sense of urgency during these sales by promoting limited-time offers or lightning deals via SMS chatbots. Configure them to deliver coupons or promo codes to customers automatically when they check out the product deals on your website.

11 - For New Product Launches

SMS chatbots can play a pivotal role in generating excitement and driving engagement for your new product launches. Leverage the SMS chatbot to deliver teaser messages regarding upcoming product releases to your customers to kindle their curiosity. Send countdown reminders to create a sense of excitement and prepare them for the big reveal. Let your chatbot send messages showcasing the product features and benefits. You can also use a chatbot to share a new launch discount coupon to drive initial sales.

Best Practices for Text Chatbots

So, how do you design an efficient SMS chatbot to build amazing experiences for your customers? Here are a few tips to consider.

  • Determine the purpose of your SMS chatbot. This will help you build the right chatbot that correctly analyzes customer queries and offers them accurate responses.
  • Program your text chatbot to deliver relevant responses to customers irrespective of their inputs. For this, you will need to train it with all possible answers the customers might enter. Remember there should be no room for vagueness in the responses.
  • Be precise to make the conversations natural and engaging. Some customers might be skeptical about sharing their personal information in a text message. State the motive behind the data capture to make customers feel at ease.
  • Enable the auto-fill option to allow customers to input their details directly from their phone in one tap.
  • Send a few nudges time and again to keep your customers engaged with your brand.
  • Allow customers to opt out of receiving messages from your chatbot and respect their choices.

Build Your Text Messaging Bot with Bodt

If you wish to take your customer support to the next level, Bodt has an amazing chatbot solution for you.

Bodt offers an intuitive chatbot builder that helps you deploy AI-powered conversational chatbots without any hassles. These chatbots offer accurate responses to customers at all times. They can handle complex conversations as well without any human intervention. You can configure these chatbots to share -

  • Detailed product-related information
  • Personalized product recommendations
  • Policies and documentation
  • Answers to frequently asked questions and much more. Sign up for a Bodt account to start building innovative chatbots for your business.

Frequently Asked Questions

What is an SMS chatbot?

An SMS chatbot is a chatbot that communicates with customers via text messages. It assists customers with their queries.

Why are SMS chatbots important?

SMS chatbots offer a convenient way for businesses to engage their customers and deliver personalized experiences with the help of text messaging.

Are all text chatbots AI-based?

No, not all text chatbots are powered by artificial intelligence.

Yes, you will have to comply with various regulations like the GDPR, TCPA, and so on. Besides, you will have to obtain consent from your customers before sending them text messages.

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