Appy Pie - Chatbot

What is a Chatbot and How Does it Work?

Abhinav Girdhar
By Abhinav Girdhar | Last Updated on February 14th, 2024 12:42 pm | 4-min read

Chatbots are exciting tools that businesses can use for various purposes. For the past five years, the chatbot industry has grown significantly with businesses adopting chatbots rapidly for cost-effectiveness and the utility they can provide your marketing and support teams.

However, chatbots are still a relatively new concept in the marketplace. The use cases for chatbots are still being explored and as it stands, chatbots can bring some exciting changes to business processes soon. As of now, the major application of chatbots is in the customer support industry. Chatbots created using no-code-development platforms are transforming the face of customer support everywhere. They have several advantages over traditional customer support and can be used as an alternative to existing forms. Here are a few statistics related to the applications of chatbots in various industries.Chatbot - Appy PieThe spike in the adoption rate of chatbots in almost every major industry brings a few important questions. Why are businesses adopting chatbots so rapidly? And how do chatbots work? That's exactly what we're going to answer today.

What are Chatbots?

Simply speaking, a bot is a program that is used to automate tasks on a website. A bot that interacts with a human user through a chat window and automates simple tasks assisting said user is termed as a chatbot. A chatbot is a program that can simulate a discussion/conversation with a human when integrated with any business website. Users can communicate with a chatbot with both text or voice. AI-based chatbots work in accordance with a preset conversational flow to interpret human entries and answer them.

Types of Chatbots

There are three distinct types of chatbots:

  1. Rule-Based Chatbots
  2. Rule-based chatbots are the simplest types of chatbots that you can create. They have a preset algorithm to follow under all circumstances. People interact with rule-based chatbots with the help of various buttons, CTAs, and options. They are selection-based chatbots so users have to select from pre-configured options. Rule-based chatbots take longer to resolve issues. They are the slowest chatbots in guiding users to their end result. Rule-based chatbots are perfect for businesses looking for lead-generation and basic customer support bots. As a lead-generation bot, rule-based chatbots help qualify your leads and take them either to landing pages of your website or connect to a sales executive. As a customer support bot, rule-based chatbots are great for creating an interactive help center. For example, a support chatbot for smartphone bugs will lead users to relevant help articles that can help solve their problems. Rule-based chatbots are very restrictive and have a limited use-case. They can be purpose-built but cannot be configured for more complex user problems. However, as the chatbot industry is advancing further, rule-based chatbots can be integrated with live chat to provide a hybrid customer support experience, so that in case of complex problems, it can be redirected to a human support executive.

  3. Intelligent Chatbots
  4. Intelligent or learning chatbots are bots that use machine learning. Machine Learning is the ability of a program to learn on its own by using data, recognize patterns, and decide for itself with minimum human intervention. Intelligent chatbots are created in a way that they understand specific keywords and phrases entered by the user. For example, if a user asks, “How to Open Documents”, the chatbot will ‘read’ the question, search its database and provide the answer based on the keyword search on its own. What sets ML chatbots apart is the fact that the more questions and queries they are asked the better they become at answering them. Intelligent chatbots learn new things and get better with time, thereby improving the user experience. The limitation of intelligent chatbots is that initially when you create them, they are rudimentary and ‘unskilled’. Intelligent chatbots get better with time.

  5. AI-Powered Chatbots
  6. AI chatbots are a blend of both rule-based and intelligent chatbots and provide the best of both worlds. On one hand, AI chatbots can understand and answer humans based on the keywords they enter while on other hand they also have a predefined bot flow to follow. AI Chatbots can remember the context of a conversation and user's preferences to improve customer experience. AI-powered chatbots can be humanized with the help of NLP or natural language processing. The goal of an NLP is to make the interaction with a chatbot less ‘robotic’ and more realistic.

How Do Chatbots Work

Different types of chatbots work differently. A chatbot involves four distinct parts:

  • Webpage
  • Chatbot can be embedded on the webpage of your business website.Given how easy it is to add a chatbot on a webpage, you can add different chatbots on different pages. This can help focus on your various business requirements be it marketing or customer support needs. For chatbot to work, you must embed it in the HTML of a webpage.

  • Chat Window
  • The visitor interacts with your chatbot through the chat window. It acts as the interface between your chatbot and the visitor where the user can put a query and chatbot can resolve it. The chat window is used for every chatbot activity such as asking for user information, clearing queries, generating and qualifying leads, requesting for feedback, etc.

  • Botflow
  • The bot flow is the heart and soul of your chatbot. The botflow determines how your chatbot functions and responds to users. It also helps your chatbot search, find, and display the answers to customer queries. It is the most crucial part of your entire chatbot. The difference between each type of chatbot is created by its botflow. A rule-based chatbot has the simplest botflow while an AI bot flow is usually the most complex.

  • Database
  • Every chatbot has a database it pulls from. For a machine learning and AI chatbot, this data consistently increases automatically as time goes along. A rule-based chatbot has a consistent knowledge store that it uses to answer customer queries.
For a chatbot, all distinct parts work together to bring a unified, consistent experience for all your customers.

How to Create a Chatbot

To start with your responsive chatbot , it’s best to practice creating your own chatbot. The simplest method to create a chatbot is Appy Pie Chatbot. Appy Pie Chatbot is a no-code rule-based chatbot builder that lets you create your own chatbot without any coding. You can make a chatbot with Appy Pie for free! Check it out today!


In the current digital era, chatbots can be a powerful addition to the customer experience strategy for any business or contact centre. However, just like any other transformative technology, companies have to make sure that they know how to use these bots effectively. Chatbot builders like Appy Pie Chatbot are making chatbots even easier to design, create, and deploy. Leave a comment if you have any questions. Subscribe to our newsletter for regular updates.. Have a nice day!

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Abhinav Girdhar

Founder and CEO of Appy Pie