Chatbots automate customer interactions, handling common questions and tasks 24/7 while freeing agents for complex issues. Chatbot types: - Rule-based: Predefined flows and responses - AI-powered: Natural language understanding - Hybrid: AI with human handoff Chatbot capabilities: - FAQ answers - Order status lookup - Account information - Product recommendations - Appointment scheduling - Lead qualification - Issue triage Chatbot best practices: - Clear bot identity - Easy human handoff - Fallback handling - Continuous improvement - Personality alignment - Testing and refinement Success metrics: - Containment rate (resolved without human) - CSAT for bot interactions - Handoff rate - Time to resolution