Chatbot vs Live Chat: The Right Choice for a Small Business

Abhinav Girdhar
By Abhinav Girdhar | Last Updated on February 27th, 2022 10:42 am | 5-min read
Chatbot vs Live Chat

Customer support is a crucial aspect of any business. No matter how competent or reliable a product is, a good customer support base defines its utility. Without good customer support, a product is destined to fail. There is a reason why most successful companies go to great lengths to provide good customer support. Some companies are infamous for their terrible customer service and support. Retail chains and banks are often ranked the lowest in this regard but even they mostly have a customer approval rate of over 60%. That should you give an idea of how important customer support is.

The greatest obstacle faced by a business trying to provide customer support are the relative costs involved. Customer support is not an aspect that provides profit to a business and the cost of maintaining a good customer support team often has a huge price tag that comes along with it. The concept of live chat reduced the costs involved with customer support and ushered in an era of immediate and efficient customer support for the users.

Chatbot vs Live Chat The Right Choice for a Small Business

Live chat was by itself a huge step in customer support. Live chat software is fairly commonplace now and a huge percentage of business uses live chat software for its operations. Live chat combines the advantages of call and email-based customer support and provides seamless customer support. While it co-exists with the two, many prefer live chat over the two, given by how few established companies use the phone and email-based support majorly. The business world no longer has a preference for email-based customer support for the most part.

However, customer support is continuously evolving and as live chat became prominent, its greatest competitor came to the fore. Chatbots, in theory, are the most cost-effective ways to provide customer support with a relatively high success rate. The question of which is better is the one that we’re going to answer in this blog. Let’s discuss both live chat and chatbots in detail.

What is Live Chat?

As an industry professional, you’ve probably used live chat for support or even provided it to a customer. The live chat became popular in the 2000s and has rapidly spread.


Live chat is generally provided on a company’s website as either a plugin, widget or even an embedded icon. Live chat is simply a business application of online messaging. Live chat works on the principle of chatting with customers in real-time.

Pros of Live Chat

  • Immediate Access for Customers: Before Live chat, customer support needed to have dedicated channels. Phone calls and emails required dedicated accounts for the same and customers needed to know about these channels to talk to customer support. While phone calls were immediate, emails often took days to solve even the simplest of problems. This is eliminated by Live chat. For availing customer support, all a customer needs to do is visit the website and click the Live Chat icon and start chatting.

  • Improves Brand Image: Customers that are satisfied with Live chat often recommend the brand to others and live chat is a great way to improve brand image. A good Live chat team can bring in volumes for the business.

  • Quality of support can be reviewed easily: Recording calls is often discouraged and allowed only for quality training. Emails also have a tendency to be lost especially when bulk loads of them are involved. Unlike other channels, reviewing the work of live chat operators is easy as recording and keeping messages is easier.

  • Support is free for the user: Support for the users is completely free and the concept of a paid live chat doesn’t exist. It might, but if it does, I don’t think a sane person would use it.

Cons of Live Chat

  • Support Personnel may be absent: Live chat depends on the operators involved. The lack of support personnel may shut down the Live Chat service which can be an inconvenience.

  • Long wait times occasionally: Live Chat acts as the solution for both customer support and gaining product knowledge before purchase. However, all operators behind the live chat may get overwhelmed by the number of customers and this can lead to long wait times. This may turn customers away from a product.

  • Scripted Responses spoil the experience: Many operators involved with Live chat often use ‘canned responses’ or preset responses to certain user questions. This leads to scripted conversations that defeat the entire purpose of a ‘Live’ chat.

  • Misaligned Time Zones: Quite often, customers for a certain business or service may be international and their time zones may differ from yours. This is an inconvenient endeavor for both parties.

What is a Chatbot?

A chatbot is a computer application designed to simulate conversations with a human. Chatbots take the help of AI and accentuate their knowledge through machine learning.


A chatbot is the most affordable way to provide customer support amongst all other methods. It does everything a live chat application does with the only difference being the end operator.

Pros of Chatbots

  • Cost-Effective: Chatbots are cost-effective and are cheaper in the long run. They don’t require separate equipment and can work entirely through cloud databases. Since chatbots do not require operators, labor costs are diminished quite a bit.

  • Quick customer support: Customer support through chatbots is instantaneous and works round-the-clock. This makes chatbots desirable for many businesses.

  • Time-saving: Chatbots are instantaneous and do not take time to reply making customers support a breeze with lighting fast response time. They also have excellent first response time which is unbeatable by a human operator.

  • Data Recollection: Chatbots keeps a record of all conversations and the processes involved. They also save customer responses and learn from more interactions between different users. This helps them recall this data if faced with a similar problem.

Cons of Chatbots

  • Inflexible: Chatbots are exactly what they are described as. They are bots and they often run into a wall while dealing with inept clients. Chatbots do exactly according to what they already know and are inflexible to customer sentiment.

  • Initial Costs are high: Establishing a good chatbot is a unique challenge in itself and many chatbots out there are clunky, and relatively useless from a support perspective. To add to that, the initial costs for making good chatbots are high.

  • Dependency on the database: Chatbots depend on their database of information. One problem with the database and chatbots crash entirely. A human operator might also depend on knowledge bases and databases but they can solve problems based on their previous memory.

  • Lack of Human Touch: Chatbots lack a human touch. The greatest USP about live chat is that when you talk to a human, you can make them understand the problem better and going “off-script” is required for some problems.

  • Complex user problems still require human contact: Chatbots are AI-based and despite the theoretical superiority of AI, even the most modern AI are still limited in their ability. “Unbeatable AI” is just theoretical and the most complex problems eventually require actual conversations with the client.

Chatbot vs Live Chat : Choosing the Right Path

Choosing the right path between the two is a modern challenge for a business. While small businesses are more likely geared to lap up chatbots as their preferred way, it often might not be the right path to go. There are many conflicting factors to take into consideration before a final decision is taken. Despite, what surveys and statistics tell you, the ground reality of the customer support environment is completely different.

Chatbot vs Live Chat Choosing the Right Path

Before adopting either, it’s recommended that you analyse your customer base. It’s essential you undertake this action since no business begins with live chat support or chatbot support. Initial customer support is always through email and phone with a later shift to either of these technologies. Despite their adoption, during the real application, both technologies are still substituted with the help of email and phone lines for further support. Both technologies are incomplete without this substitution.

This is what makes using the right one crucial. In an ideal world, the chatbot would win, that too only in the long run. Bigger businesses do prefer using chatbots and quite a few have adopted it to varying degrees of success. Even the biggest businesses have inefficient chatbots and many people who deal with these businesses still prefer talking to a human. The biggest businesses usually play a volumes game, meaning that they can sacrifice customer convenience to some degree. 

From a technological standpoint, chatbots are the technology of the future. And this is its greatest drawback. Online statistics done for the preference of technologies are usually done through surveys for trained professionals who have an idea of what these products are supposed to do. Ask a layman what chatbots are and you’ll deal with a dumbstruck face. 

Professionals who understand what a product does are easier to deal with from a support standpoint and can be helped through simple chatbot applications supported with a good knowledge database. 

Hence, if your product/service deals strictly with professionals who know what they’re doing, always choose a chatbot

Coming to the aspect of dealing with customers who are new to what your product offers and what it encompasses, a chatbot can be a proverbial bullet in the foot. For a business dealing with general consumers, a human touch is certainly essential. Speaking from personal experience, a chatbot is inconvenient when you don’t have sufficient knowledge about certain aspects of a product. Someone who can guide through the process is really satisfactory and it’s often rare to find businesses that still do that.

Choose Live Chat if your product is meant for beginners/consumers

Yes, Live Chat is expensive in the long run but once you have volumes, you can bring in a chatbot. It’s easy to jump on the Chatbot bandwagon, the first chance you get because it looks good and shows your business as future-oriented, but take a practical decision. The biggest businesses are big because they think practically and don’t rush into technology. In the world of Ferraris, be the Toyota. Chatbots sound flashy but might not be effective for your business.

The second precursor to choose between the two must be the complexity of the product. This aspect can be tricky to deal with because defining a product’s complexity is a fool’s errand. What’s complex to one may be easy for the other. Sure, most products in the market are geared for simplicity, but most are fairly complex in structure, design, and functionality. Choosing chatbots for complex products just increases the cost of maintaining and creating one. 

Chatbots can cost a fortune for complex products and the more aspects there are to a product the more worthless the chatbot becomes. There are businesses where chatbots act as digital white elephants being completely useless. If your product is a knowledge base, you could easily substitute with help of a chatbot since there are a limited number of functionalities to deal with. Similarly, if your product is a photo editing software like Adobe Photoshop, well, good luck designing a chatbot for that.

I have observed that most businesses have a chatbot that connects to a live individual if the problem is too complex. This might sound like a fair solution, but defeats the purpose of a chatbot. These businesses have ended up spending twice the amount for half the work. Some don’t bother and send the user to either an email or phone connection. In conclusion, analyze these two aspects carefully before choosing what suits your business. Both Live Chat and Chatbots are significant investments for a business and a direct experiment involving customers and clients. A wrong step can negatively impact both products and the brand as a whole. Analyze your customer base and product complexity carefully before choosing one of the two.

Did you know that Appy Pie provides both Live Chat and Chatbot? Choose the one that suits your preferences. Don’t forget to analyze properly before you choose one!

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Abhinav Girdhar

Founder and CEO of Appy Pie

App Builder

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