Chatbot: History, Technology, Evolution, and Applications

Neeraj Shukla
By Neeraj Shukla | Last Updated on February 28th, 2023 12:28 pm

Chatbots have gained a lot of traction in recent years. They’re on websites, mobile apps, messenger apps, social media, virtual assistants, and so on. But how did they come to be like this? This piece of writing will give you a run through the history of chatbots, some thoughts about the future, and an examination of how chatbots are changing activity in all sorts of spheres.

What are Chatbots?

A chatbot is a computer program that simulates human conversation. Chatbots are designed to automatically engage in conversations with human users to answer questions, provide support, or promote a product or service. Nowadays, chatbots are among the most visible applications of AI technology.

At its most basic level, chatbots are designed to mimic human conversation. This means that they are programmed to understand and respond to human language. To do this, chatbots rely on a number of techniques, including natural language processing (NLP) and machine learning (ML).

The History Of Chatbots – From ELIZA to ChatGPT

The first chatbot was created by MIT professor Joseph Weizenbaum in 1966. It was known as ELIZA. The chatbot was named after Eliza Doolittle, a character from the George Bernard Shaw play Pygmalion. The play is about a lower-class woman who is taught how to speak and act like a lady by a wealthy man.

Weizenbaum designed ELIZA to simulate a therapist-patient conversation. The chatbot would ask questions and give responses based on the user’s input. ELIZA was one of the first chatbots ever created and is considered to be the ancestor of modern artificial intelligence (AI) chatbots.

The next chatbot was Parry, built by American psychiatrist Kenneth Colby in 1972. The program imitated a patient with schizophrenia. It attempts to simulate the disease. Then came the Jabberwacky, Dr. Sbaitso, A.L.I.C.E. SmarterChild, Siri, Google Now/Google Assistant, Cortana, Alexa, and the newly introduced ChatGPT.

One of the most advanced chatbots today is ChatGPT, a chatbot that uses the GPT-3 language model developed by OpenAI. ChatGPT can generate human-like responses to user input, making it one of the most advanced chatbots currently available.

ChatGPT is just one example of how chatbots have come a long way since their inception in the 1960s. Today, chatbots are being used in a wide variety of industries and applications, and they are becoming increasingly sophisticated and able to carry on more natural and engaging conversations with users.

There are many chatbots available today that help businesses and people with their day-to-day tasks. Some of the Popular chatbots include Appy Pie Chatbot, Salesforce chatbot, Zendesk chatbot, Azure chatbot, Intercom chatbot, Slack chatbot, Twilio chatbot, Zoho chatbot, and IBM Watson chatbot.

How have Chatbots Evolved?

Chatbots have evolved significantly over the years. As technology has advanced, so too have chatbots. They now boast more sophisticated natural language processing capabilities, allowing them to understand and respond to users in more natural ways. Furthermore, chatbots are now able to hold more complex conversations around topics such as customer service, sales, marketing, and even healthcare.

Additionally, Artificial intelligence and its technologies have aided developers in advancing chatbots and their functionality. The AI-powered chatbots are able to understand and respond to customer queries quickly and accurately. They can also anticipate customer needs and provide relevant information in real-time. By leveraging natural language processing (NLP) and machine learning (ML) technologies, chatbots are able to understand customer requests quickly and accurately and provide useful answers.

The AI-powered chatbots can be used to automate customer service processes, such as routing customers to the correct departments and providing personalized customer support. they now perform financial transactions, order processing, customer service, and much more. Finally, chatbots are now being deployed across a wide range of platforms and devices, from websites to messaging apps to voice assistants.

How Chatbot Works?

Chatbots were traditionally text-based and programmed to respond to a limited set of simple queries with answers pre-written by the chatbot’s developers. They functioned similarly to an interactive FAQ, and while they performed admirably for the specific questions and answers on which they had been trained, they failed when confronted with a complex or unexpected question.

Chatbots have evolved to include more rules and natural language processing so that end users can interact with them in a conversational manner. Indeed, the most advanced chatbots are contextually aware and capable of learning as they are exposed to more and more human language.

Today’s AI chatbots use natural language understanding (NLU) to determine the user’s needs. Then they use advanced AI tools to figure out what the user is trying to accomplish. These technologies rely on machine learning and deep learning—AI elements with subtle differences—to build an increasingly granular knowledge base of questions and responses based on user interactions. This improves their ability to accurately predict user needs and respond correctly over time.

In general, chatbots work by using artificial intelligence (AI) to simulate a conversation or interaction with a user. A chatbot can understand the context of the conversation, recognize keywords and phrases, and respond in a natural way. The response can be in the form of text, audio, or visual media. In some cases, a chatbot may use pre-programmed responses to answer questions, while in other cases, it may use machine learning (ML) algorithms to generate responses based on its interactions with users.

What are the types of chatbots?

The growth in chatbot technology has been a matter of discussion and debate for a long time. With the advent of artificial intelligence and natural language processing, there has been a huge increase in chatbot technology. As chatbots become more advanced, they are also becoming more personalized. Chatbots can now remember things about users, such as their preferences and history, which allows them to provide a more personalized experience. Based on its technology and application, the chabtot is classified into three types.

  1. Rule-based chatbots
  2. Simple Chatbots

    The rule-based chatbots work by tracking keywords within the input, then providing pre-prepared or algorithm-driven responses to a question. They are usually called rule-based bots. These bots are often limited to a specific range of topics and questions since they rely on pre-programmed responses, but they are fairly straightforward to build.

    In rule-based bots, the rules are written by developers and are based on the keywords that users input. These bots can understand natural language to some extent, but they are not as sophisticated as artificial intelligence (AI) chatbots.

  3. AI chatbots
  4. Smart Chatbots

    AI chatbots rely on artificial intelligence when they communicate with users. They leverage natural language processing (NLP) and automatic machine learning algorithms to understand what a user is asking. From there, they provide the appropriate response with the most useful information. Savvy companies are already using AI chatbots like hubspot chatbot and salesorce chatbot to gain business insights from their customers.

    The primary aim of smart chatbots like IBM chatbot is to automate the entire customer service process, thereby reducing the load on human agents. In other words, smart chatbots are designed to provide a better, more efficient customer service experience by automating as much of the process as possible. This includes tasks such as answering common questions, resolving simple issues, and even handling more complex customer service inquiries.

  5. Hybrid chatbots
  6. Hybrid Chatbots

    A hybrid chatbot is a chatbot that uses a combination of artificial intelligence (AI) and human input to generate responses to user queries. Hybrid chatbots are designed to provide a more natural, humanlike conversational experience than AI-only chatbots, while still being able to handle a large volume of queries.

    Hybrid chatbots are becoming increasingly popular as businesses look for ways to improve the customer experience while still reducing costs. Many companies are now using hybrid chatbots to handle customer service inquiries, sales calls, and even to provide technical support.

    The advantages of hybrid chatbots are that they can provide a more personalized experience for customers, as well as offer more flexibility in terms of the types of questions that can be answered. They also have the ability to escalate issues to a human customer service representative when necessary. Additionally, hybrid chatbots can often be more accurate than either rule-based or pure AI chatbots, as they can learn from past interactions and make use of a wider range of data.

Chatbot use cases for business

Chatbots are being used in a variety of business applications. We’ve highlighted some of the key areas of chatbot use cases that have a significant impact on business productivity.

  1. Chatbot for Customer Service
  2. Chatbots can be an effective tool for providing customer service, as they can handle a high volume of inquiries and provide quick responses to common questions. Here are a few ways chatbots can be used for customer service:

    • Answering frequently asked questions: Chatbots can be programmed to provide quick and accurate responses to common questions, such as questions about a company’s products or services, shipping and returns policies, or account management.
    • Resolving issues: Chatbots can be used to help customers resolve issues, such as troubleshooting technical problems or processing returns or refunds.
    • Providing personalized recommendations: Chatbots can be used to provide personalized recommendations to customers based on their preferences and past purchases.
    • Directing customers to the appropriate resources: Chatbots can be used to help customers find the information or support they need by directing them to relevant resources or connecting them with a human customer service representative if necessary.

    Chatbots are one of the most useful ways to provide customer service, as they can handle a high volume of inquiries and provide quick responses, freeing up human customer service representatives to handle more complex issues.

  3. Chatbot for Sales
  4. If you manage a sales team, you know that keeping track of leads and opportunities can be a full-time job. A chatbot can help by providing a single place for your team to manage their sales pipeline. The chatbot can keep track of who is working on what, and provide updates and alerts when things change. This can help your team stay organized and on top of their sales goals.

    There are several ways in which chatbots can help increase sales:

    • 24/7 availability: Chatbots can provide instant assistance to customers at any time of day, which can lead to increased sales by making it easier for customers to make purchases.
    • Personalization: Chatbots can use customer data to personalize recommendations and offers, which can increase the likelihood of a sale.
    • Streamlined purchasing process: Chatbots can make it easier for customers to browse and purchase products by providing a seamless, interactive shopping experience.
    • Improved customer service: Chatbots can help resolve customer queries and issues quickly, leading to improved customer satisfaction and potentially increased sales.
    • Upselling and cross-selling: Chatbots can use data on customer preferences and past purchases to suggest related or complementary products, which can increase sales.

    Overall, chatbots can help increase sales by providing convenient and personalized assistance to customers, streamlining the purchasing process, and improving the overall customer experience.

  5. Chatbot for Marketing
  6. Chatbots can be used for marketing purposes. Here are a few ways that chatbots can be used for marketing:

    • Lead generation: Chatbots can be used to collect information from potential customers, such as their names, email address, and interests. This information can be used to create targeted marketing campaigns.
    • Personalized communication: Chatbots can be used to send personalized messages to customers based on their interests and past interactions with the business. This can help to build customer loyalty and increase sales.
    • Promotions and discounts: Chatbots can be used to send promotional messages and discounts to customers, which can encourage them to make a purchase.
    • Customer service: Chatbots can be used to provide customer service and support, which can help to improve the customer experience and increase customer loyalty.
    • Social media marketing: Chatbots can be used on social media platforms to engage with customers and promote products or services.

    Overall, chatbots can be a useful tool for marketing by helping businesses to reach and engage with customers in a personalized and convenient way. When building a chatbot, you can use customer data from your CRM to provide a more personalized user experience.

  7. Chatbot for Social Media
  8. Chatbots can be used for social media in a number of ways. Here are a few examples:

    • Customer service: Chatbots can be used to provide customer support on social media platforms, answering common questions and helping users resolve issues.
    • Content distribution: Chatbots can be used to share updates and news with followers on social media platforms, including links to articles and other content.
    • Lead generation: Chatbots can be used to collect information from users on social media platforms, such as their email address or other contact details, in order to generate leads for a business.
    • Engagement: Chatbots can be used to engage with users on social media platforms, by asking questions, running polls, or hosting quizzes and games.
    • Personalization: Chatbots can be used to personalize the user experience on social media platforms, by offering personalized recommendations or tailored content based on a user’s interests and preferences.

    In general, chatbots can be an effective tool for businesses to communicate with and engage their audience on social media platforms, while also helping to streamline customer service and lead generation efforts.

  9. Chatbot for Messaging Apps
  10. Chatbots can be used in messaging apps to provide a variety of services and functionality. Here are a few examples of how chatbots can be used in messaging apps:

    • Personal assistants: Chatbots can be used as personal assistants within messaging apps, helping users to manage their schedules, make reservations, or find information.
    • E-commerce: Chatbots can be used to facilitate e-commerce transactions within messaging apps, allowing users to browse and purchase products without leaving the app.
    • Social media management: Chatbots can be used to manage social media accounts within messaging apps, allowing users to schedule posts, track analytics, and engage with followers.
    • Content distribution: Chatbots can be used to share updates and news with users within messaging apps, including links to articles and other content.

    In short, chatbots can be a useful tool for businesses to communicate with and engage their customers through messaging apps, while also assisting in the automation of customer service and e-commerce efforts.

  11. Chatbots for Human Resources
  12. Chatbots can be used in human resources (HR) to automate and streamline various HR processes. Here are a few examples of how chatbots can be used in HR:

    • Recruiting: Chatbots can be used to screen job applicants, by asking pre-set questions and evaluating responses. Chatbots can also be used to schedule interviews and provide information about the company and the role to candidates.
    • Onboarding: Chatbots can be used to guide new hires through the onboarding process, providing information about the company, its culture, and policies. Chatbots can also be used to collect and process necessary paperwork and documents.
    • Employee benefits: You can use a chatbot to provide information about employee benefits, such as health insurance, plans, and vacation policies.
    • Performance evaluations: Chatbots can be used to facilitate the performance evaluation process, by collecting feedback from employees and managers and generating reports.
    • Time and attendance: Chatbots can be used to track and manage employee attendance, including recording time off requests and tracking overtime.

    To sum up, chatbots can be an effective tool for HR departments to automate and streamline various HR processes, freeing up time and resources for more strategic tasks.

  13. Chatbot for User Retention
  14. A chatbot for user retention is designed to engage and communicate with users in order to keep them interested in a product or service and prevent them from churning. Chatbots can be used in a variety of ways to improve user retention, such as by answering questions, providing customer support, and offering personalized recommendations or incentives to encourage continued use of the product or service.

    There are a few key strategies you can use to effectively incorporate a chatbot into your user retention efforts:

    • Offer personalized support: Chatbots can be programmed to provide personalized support to users based on their past interactions and behavior. This can help to build a more personal connection with users and make them feel valued.
    • Provide timely and accurate responses: Chatbots can be used to provide timely and accurate responses to user questions and concerns, which can help to improve the overall user experience and reduce the risk of churn.
    • Offer incentives and rewards: You can use the chatbot to offer incentives and rewards to users in order to encourage continued use of the product or service. This could include things like special discounts or exclusive access to certain features.
  15. Chatbot for Internal Help Desk Support
  16. Chatbots benefit not only your customers but also your agents.It can be used to provide internal help desk support through automated responses. This can save time and resources by providing employees with answers to their questions without requiring them to contact a human help desk agent. Chatbots can be very helpful for internal help desk support in a number of ways including:

    • 24/7 availability: Chatbots can be available to employees 24/7, which means that employees can get help with their questions and issues at any time. This can be especially useful for employees working in different time zones or for those who may need assistance outside of normal business hours.
    • Quick resolution of common issues: Chatbots can be programmed to handle common issues and provide quick resolution, freeing up human support staff to focus on more complex issues.
    • Consistent responses: Chatbots can provide consistent responses to employee questions, which can help improve the overall quality of support.
  17. Chatbot for Placing Online Orders
  18. A chatbot can help in placing online orders by providing a convenient and efficient way for customers to browse and purchase products or services through a messaging platform or website. Here are a few ways that chatbots can assist with online orders:

    • Customer service: Chatbots can provide assistance with placing orders, tracking orders, and addressing any questions or concerns that customers may have.
    • Product recommendations: Chatbots can recommend products based on a customer’s previous purchases or browsing history, helping them discover new products that they may be interested in.
    • Order placement: Chatbots can guide customers through the process of placing an order, including selecting products, entering payment and shipping information, and completing the purchase.
  19. Chatbot for Refund Processing
  20. Chatbots can help streamline the refund processing process by providing a convenient and automated way for customers to request refunds and for businesses to manage and track those requests. Here are a few ways that chatbots can assist with refund processing:

    • Automated refund requests: Customers can use a chatbot to initiate a refund request by providing their order number and the reason for the request. The chatbot can then automatically route the request to the appropriate team or individual for review and processing.
    • Quick resolution of issues: Chatbots can help resolve common issues that may arise during the refund process, such as providing information about the status of a refund or helping customers to identify the best course of action if their refund request is denied.
    • Improved efficiency: Chatbots can handle multiple refund requests at once, freeing up staff to focus on more complex issues and improving overall efficiency.
    • Enhanced customer experience: Chatbots can provide a fast and convenient way for customers to request refunds, helping to improve the overall customer experience.
  21. Chatbot for Balance Notifications and Bill Reminders
  22. A chatbot can be used to send balance notifications and bill reminders to customers. Here are a few ways that a chatbot could be used for this purpose:

    • Balance notifications: A chatbot can send notifications to customers when their account balance reaches a certain threshold or when a payment is due. This can help customers to stay on top of their finances and avoid late fees or other issues.
    • Bill reminders: A chatbot can send reminders to customers about upcoming bills or payments that are due. This can help customers to stay organized and avoid missing payments.
    • Automatic payment processing: A chatbot can also be programmed to automatically process payments when they are due, eliminating the need for customers to manually make payments each month.

What are the Benefits of Chatbot for your Business?

Chatbots are completely changing the way businesses communicate with their existing and prospective customers. In recent years, there has been a rapid increase in on-demand messaging, which has changed the way consumers communicate with brands. Chatbots are being integrated into more and more businesses’ processes in order to provide better customer service.

Chatbots are the next big thing in customer service with the ability to help customers 24/7. Chatbots are becoming increasingly popular among users in business-to-consumer (B2C) and business settings. These assistants are used to complete simple tasks. The implementation of chatbot assistants results in a decrease in overhead costs, more efficient use of the time of support staff, and the ability for businesses to provide customer service outside of regular business hours.

Here are some of the most important advantages of using a chatbot to improve business efficiency:

Benefits for Businesses

  1. Increase Customer Satisfaction
  2. Your customers are the ones who will determine the success or failure of your business, so it only makes sense to try and keep them happy. While it may seem obvious that you should do this, it is often overlooked. If a customer is not satisfied with your product, chances are that they will not buy from you again. This is especially true if your product does not meet their expectations. In order to keep your customers happy, you need to provide them with quality products and services.

    Chatbots can assist businesses in increasing customer satisfaction by providing personalized responses to customers in real-time. Customers no longer have to wait on hold or in line to speak to customer service representatives. Instead, they can simply send a message to a chatbot and receive a response back in a matter of seconds. They streamline customer service by helping businesses to take care of frequently asked questions, or FAQs. Chatbots can also provide human interactions that improve customer satisfaction.

  3. Improve Lead Generation
  4. Chatbots can be an effective tool for improving lead generation. They can be programmed to provide information, answer frequently asked questions, or guide users through a process, such as filling out a form or making a purchase.

    One way that chatbots can improve lead generation is by providing quick and convenient access to information. For example, a chatbot on a company’s website can help visitors learn more about the company’s products or services, or assist them in finding the information they need. This can help to build trust and credibility with potential leads, making them more likely to become customers.

    Another way that chatbots can improve lead generation is by automating the process of collecting and storing leads. Chatbots can be programmed to ask users for their contact information and other relevant details, such as their interests or needs, and then store this information in a database for future use. This can help businesses to more efficiently capture and follow up on leads, increasing the chances of converting them into paying customers.

    Overall, chatbots can be a useful addition to a company’s lead generation strategy by providing quick and convenient access to information, automating lead capture and follow-up, and helping to build trust and credibility with potential customers.

  5. Monitor Consumer Data to Gain Insights
  6. Chatbots can be used to monitor consumer data and gain insights into customer behavior, preferences, and needs. This can be done through the use of analytics and reporting tools that track and analyze the interactions between chatbots and users.

    For example, a chatbot on a company’s website or mobile app can track the questions that users ask, the information they request, and the actions they take. This data can be used to understand what consumers are interested in, what they need help with, and where they may be struggling. This information can then be used to improve the chatbot’s functionality and effectiveness, as well as to inform other aspects of the company’s marketing and customer service strategies.

    In addition to tracking user interactions with chatbots, companies can also use chatbots to gather information directly from consumers through surveys or other forms of feedback. This can help businesses to better understand their customers’ needs and preferences and to identify areas for improvement or opportunities for innovation.

  7. Help Businesses Build a Conversational Marketing Strategy
  8. Conversational marketing can be an effective way to engage with customers, as it allows businesses to provide personalized recommendations, support, and information in real-time, through channels such as messaging apps, social media platforms, or chatbots on websites or mobile apps.

    To devise a conversational marketing strategy using chatbots, businesses can start by identifying the goals and objectives of the strategy, such as increasing brand awareness, generating leads, or improving customer satisfaction. They can then design chatbot conversations and interactions with chatbot maker.

    For example, a chatbot could be used to provide personalized recommendations to customers based on their previous purchases or interests or to offer support and assistance with product questions or issues. A chatbot could also be used to gather customer feedback or to collect information about customer preferences and needs.

    By devising a conversational marketing strategy that leverages chatbots, businesses can build stronger relationships with their customers, improve customer satisfaction, and drive business results.

  9. Scale Customer Support Team
  10. Chatbots can achieve scalability of support by being able to handle a large volume of customer inquiries or requests simultaneously. This is particularly useful for businesses that receive a high volume of customer inquiries, as it allows them to provide prompt and efficient service without having to hire additional customer service representatives.

    Most chatbots are designed to handle a wide range of tasks, including answering common customer questions, assisting with account management and troubleshooting, and routing more complex inquiries to a human customer service representative. They can also be integrated with various communication channels, such as messaging apps, websites, and social media platforms, to make it easy for customers to reach out for support.

    Overall, chatbots can be an effective way to achieve scalability of support and improve the customer experience.

  11. Streamline Customer On-Boarding Process
  12. Chatbots can streamline your customer onboarding process by automating certain tasks and providing a convenient and efficient way for customers to get the information and support they need. For example, chatbots can provide personalized onboarding experiences by using information from customer profiles to tailor the onboarding process to individual needs and preferences. They can also answer common questions about the product or service, guide customers through the onboarding process, and connect customers with human support if needed.

    To sum up, chatbots can improve the customer onboarding experience by providing quick and convenient access to information and support, helping customers get up and running with the product or service more efficiently.

  13. Save A Great Deal Of Time
  14. Chatbots help businesses a great deal of time save time by managing basic customer interactions. Chatbots can assist in the automation of a wide range of business processes from a wide range of departments within your organization. Only the complex queries that need human input are directed to the executives on the support team.

    In customer service, chatbots can be used to handle simple inquiries and provide information to customers, freeing up staff to focus on more complex or urgent issues. In sales, chatbots can be used to provide personalized product recommendations, assist with the purchase process, and follow up with customers after a sale. In marketing, chatbots can be used to collect customer feedback, gather market research, or provide personalized content or recommendations to customers. This allows your staff to focus on more complex or urgent inquiries that require human intervention.

  15. Make Customer Journey Smoother
  16. Chatbots can be a useful tool for businesses to improve the customer experience and reduce customer effort. They can provide quick and convenient access to information, handle simple tasks and inquiries, and route customers to the appropriate resources or support channels.

    One of the main advantages of chatbots is that they can be available to customers 24/7, which can be especially helpful for businesses that have a global customer base or operate in multiple time zones. This allows customers to get the help they need at any time of day, without having to wait for a human representative to become available.

    In addition to providing quick and convenient access to information and support, chatbots can also be programmed to provide personalized experiences to customers. For example, a chatbot could greet a returning customer by name, or provide personalized recommendations based on the customer’s past purchases or preferences.

  17. Reduce Customer Service Costs
  18. If you’re looking for a way to reduce customer service costs, chatbots may be the answer. Chatbots can provide quick and accurate answers to customer questions and they can be available 24/7. This means that businesses can reduce the number of customer service representatives they need to hire, which can lead to significant cost savings.

    According to a study published in Chatbots Magazine, bots can help reduce customer service expenses in companies by up to 30%. The study found that bots can help resolve customer inquiries faster and more efficiently than human customer service representatives.

    However, it’s important to consider the upfront costs of implementing chatbot or other automation technologies. While these tools can ultimately lead to cost savings, there may be initial investments in development and implementation that need to be taken into account. No-code bot builder like Appy Pie Chatbot can help you create a chatbot for free.

  19. Support Agents During Peak Volumes
  20. Introducing a chatbot can provide unlimited additional capacity when chat volumes increase. This is one of the key advantages of chatbots in customer service for any industry. Chatbots can handle an unlimited number of chats at the same time, so they can provide support to a large number of customers simultaneously. This can be especially helpful during times of high chat volume, as it allows human customer service agents to focus on more complex or urgent inquiries.

    Chatbots can be integrated into various channels, such as websites, social media, or messaging apps, and can handle a wide range of inquiries, from simple FAQs to more complex issues. By using chatbots, businesses can improve the efficiency of their customer service operations and provide a better overall experience for their customers.

What Are The Benefits Of Chatbots For Your Customers?

Benefits for Customers

  1. Available for customers 24/7
  2. According to a study, more than 50% of customers expect a business to be open 24 hours a day, seven days a week. Waiting for the next available operator for minutes is not a solved problem, but chatbots are the most likely candidates to solve it. Maintaining a 24-hour response system ensures that the seller and the customer are in constant communication, which is the key to any successful business relationship.

  3. Multilingual support
  4. Another advantage of chatbots for customers is that they are available in a variety of languages. So, regardless of which language your customer prefers, they can receive appropriate assistance.

    The bots can be programmed in as many languages as the vendor provides. Assume you have an international clientele. You can meet the expectations of customers from all over the world by assisting them in their native language. This allows the client to better explain their problems and receive useful assistance.

  5. Better personalization
  6. Chatbots offer better personalization than humans because they are able to quickly process and interpret large amounts of data in order to deliver personalized experiences. Bots can remember user preferences, such as language settings, location, and favorite products and services, which allows them to tailor experiences accordingly.

    In addition, chatbots can intelligently anticipate a user’s needs based on their past interactions and provide them with the most relevant information or offers. This type of personalization helps build trust with users and encourages them to keep coming back for more.

  7. Faster response time
  8. The response time taken by chatbots is almost instant, unlike humans who take some time to respond to customers. This makes it easier for you to interact with customers without losing their interest. It is simple for them to get back to work when they feel like their query has been answered instantly. The speed at which chatbots work also has another advantage – it saves your customer service team’s time, which can be invested elsewhere in providing better customer service.

  9. Delivers omnichannel support
  10. Omnichannel support refers to the ability to provide customer support across a variety of channels, including email, phone, chat, social media, and more. By integrating chatbots into multiple channels, businesses can use them to handle a high volume of inquiries and provide assistance to customers in real-time.

    Make sure you are thinking through all available channels before choosing which one(s) you want your chatbot to handle. Some channels may be better suited for certain tasks than others, depending on how often you expect customers to use them and how much control you want to maintain over them.

  11. Easy checkout
  12. Visitors to online stores frequently become lost in the maze of millions of products. Such customers can use chatbots to find the precise item they need in a sizable catalog, or find out about current sales. Chatbots can assist customers and enable them to make quick purchases by responding to specific customer questions with information or advice.

    In addition, chatbots can provide customers with information about current sales and promotions, helping them to make informed purchasing decisions. Overall, chatbots can be a useful tool for improving the customer experience on e-commerce websites and helping to drive sales.

  13. Know When to Refer a Customer Support Agent
  14. AI chatbots are designed to assist with tasks and provide information, but they are not always able to handle every customer inquiry or situation. In cases where a customer has a complex or nuanced question, or if they are dissatisfied and need assistance from a human, it is often best to transfer the customer to a human customer service agent who can better assist them. This can help improve the customer’s experience and ensure that their needs are met.

Chatbot Market Size and Adoption Rate

A Fortune Business Insights report project that the chatbot market will reach $721 million in 2022. This number is currently growing at a compound annual growth rate (CAGR) of about 22%, and by the end of this decade, we can anticipate it to reach $3 billion. With this rapid growth, businesses become more competitive and customers become more demanding when it comes to customer service. Chatbots are more than just a customer service option; they are becoming an essential asset for any business.

Currently, chatbots are widely adopted by smaller and medium-sized businesses across the globe. That’s because they often have fewer resources and need to find more efficient ways to connect with their customers.. On the other hand, larger businesses tend to take a more strategic approach. This forces them to tailor their in-house chatbot that cater thier customer support needs more efficiently. There are many bot builders that offer pre-built templates to make chatbot development easier.

Geographical & demographic Adoption

USA, India, Germany, the UK, and Brazil are the top 5 chatbot-using countries.



Key chatbot statistics

Customer Perspective

  • 54% of customers report companies to need to transform how they engage with them. (Salesforce)
  • 40% of shoppers don’t care if they’re helped by an AI tool or a human, as long as their question gets answered. (HubSpot)
  • 35% of consumers want to see more companies using chatbots. (Opus Research)
  • Almost 9/10 customers had at least one conversation with a chatbot in 2021. (Tidio)
  • 60% of millennials say they have used chatbots. 70% of them say they had a positive experience. (Forbes)
  • 69% of consumers prefer to use chatbots because they provide instant responses. (Salesforce)
  • 55% of consumers are willing to interact with a business via messaging apps to solve a problem. (HubSpot)
  • 35% of people use chatbots to resolve a problem, or for getting detailed answers. (Drift)
  • 80% of consumers who have engaged with a chatbot report it as a positive customer experience. (Uberall)
  • 40% of millennials engage with bots on a daily basis. (Mobile Marketer)
  • 67% of US millennial internet users would purchase a product/service from brands using a chatbot. (eMarketer)
  • 70% of millennials report positive chatbot experiences. (Forbes)

Business Perspective

  • Virtual customer assistants help organizations reduce call, chat, and email inquiries by 70%. (Gartner)
  • 57% of executives said that chatbots bring significant ROI with minimal effort. (Accenture)
  • 58% of websites that use chatbot software are for B2B companies. (Boomtown)
  • 58% of businesses invested in conversational marketing tools to respond to Covid-19 customer support challenges. (Drift)
  • 625% of travel and hospitality companies worldwide use chatbots to enable users to make general inquiries or complete bookings. (Statista)
  • Business leaders claim chatbots have increased sales by 67% on average. (Forbes)
  • 64% of businesses believe that chatbots will allow them to deliver a more customized customer support experience. (Statista)
  • Chatbot automation can lead to $23 billion in savings from annual salaries. (Business Insider)
  • Chatbots are projected to save $0.70 per customer interaction. (CNBC)
  • 34% of retail customers would be comfortable speaking with customer service through an AI chatbot. (Statista)
  • Over 70% of chatbot conversations will be with retail chatbots by 2023. (Juniper Research)

The Future of Chatbots

The future of chatbots looks more promising, as they are increasingly being used in a variety of industries and applications. According to Statista, by 2025, the market for Conversational AI is estimated to reach USD$1.3 billion, with a CAGR of 24%.

Here are a few trends and developments to watch for:

  • Continued growth and adoption: Chatbots are expected to continue to grow in popularity and adoption, as more businesses discover the benefits they can offer.
  • Increased personalization: Chatbots will become more personalized, using machine learning and artificial intelligence to better understand and anticipate the needs of individual users.
  • Greater integration with other technologies: Chatbots will become more integrated with other technologies such as voice assistants, smart home devices, and wearable technology.
  • Expanded use in customer service: Chatbots will continue to be used extensively for customer service, handling routine inquiries and freeing up human agents to handle more complex issues.
  • Greater use in other industries: Chatbots will also be used in a wider variety of industries, such as healthcare, finance, and education, to streamline processes and improve efficiency.
  • Technology advancement: As artificial intelligence and machine learning continue to advance, chatbots are becoming more and more sophisticated and are able to handle a wider range of tasks. This means that they are able to provide a better user experience and can be used in more diverse contexts.

Overall, the future of Chatbots is very bright. With the advancement of artificial intelligence, Chatbots are getting smarter and more realistic. They are able to understand human emotions and respond accordingly. This makes them more efficient and effective in providing customer service. Additionally, Chatbots are becoming more widespread with the rise of messaging platforms such as Facebook Messenger, WhatsApp, and Slack.

Do you need chatbots?

Today, consumers want instant access to all the information they need to make a buying decision. And they want it all in one place. Unfortunately, not all companies have made the leap to a new, customer-centric way of doing business. Many still operate with an archaic model of customer support. Creating a chatbot can add more value to your customer support service and business process. Some examples of situations where a chatbot is highly valuable to a business are:

  • Providing customer support: A chatbot can handle frequently asked questions and other simple inquiries, freeing up human customer service representatives to handle more complex issues.
  • Processing orders: A chatbot can assist customers with placing orders, providing product recommendations, and tracking delivery status.
  • Employee onboarding: A chatbot can provide new employees with information and assistance during the onboarding process.
  • Gathering feedback: A chatbot can be used to survey customers or employees and gather valuable feedback.
  • Providing personalized content: A chatbot can recommend content or products based on a user’s interests or previous interactions.
  • Data collection: Chatbots can gather valuable data about customer preferences, behaviors, and needs.
  • Increased accessibility: Chatbots can be available 24/7, allowing customers to get assistance at any time.

If your business has a need for any of these types of tasks, a chatbot can be a useful addition to your operation. However, it’s important to carefully consider your goals and the capabilities of chatbot technology before deciding to implement one.

What makes a chatbot successful?

There is no one-size-fits-all answer to this question, as the success of a chatbot depends on a number of factors, including the chatbot’s purpose, the platform it is built on, the chatbot’s design, and the user’s needs and expectations. However, some common factors that contribute to chatbot success include:

  • Clearly defined goals: The chatbot should have specific goals that it is trying to achieve, such as answering customer questions or helping users complete a task.
  • Natural language processing (NLP) capabilities: The chatbot should be able to understand and respond to user input in a natural, conversational way.
  • Accurate responses: The chatbot should be able to provide accurate and helpful responses to user queries.
  • Efficient operation: The chatbot should be able to handle a high volume of requests and respond to users in a timely manner.
  • User-friendly interface: The chatbot should have a user-friendly interface that is easy for users to interact with.
  • Customization options: The chatbot should be customizable to suit the needs of different users and industries.
  • Continuous improvement: The chatbot should be continually updated and improved based on user feedback and usage data.

How Much Does It Cost to Build Chatbot?

The cost of building a chatbot can vary greatly depending on a number of factors, such as:

  • The intended use of the chatbot: Chatbots that are used for simple tasks such as answering FAQs or providing basic information may be relatively inexpensive to build, while chatbots that are used for more complex tasks such as booking appointments or making recommendations may be more expensive to build.
  • The complexity of the chatbot: Chatbots that are required to handle a wide range of tasks and respond to a wide range of user inputs will be more expensive to build than chatbots that are designed to handle a narrow range of tasks.
  • The resources required to build the chatbot: Building a chatbot may require a range of resources, including data, infrastructure, and development resources. The cost of these resources can vary significantly depending on the specific needs of the chatbot.
  • The development process: The cost of building a chatbot may also depend on the development process used to build it. For example, chatbots that are built using agile development methodologies may be more expensive to build than chatbots that are built using more traditional development approaches.

Overall, the cost of building a chatbot can range from a few hundred dollars to several hundred thousand dollars or more, depending on the complexity of the chatbot and the resources required to build it.

Create Your Own Chatbot For Free Without Coding

Thankfully, there are platforms like Appy Pie Chatbot, a no-code chatbot builder that allows you to create a chatbot for FREE. This chatbot builder can be used to create a chatbot for various purposes such as customer support, lead generation, data collection, order processing, shipping, etc. Appy Pie Chatbot has a wide range of templates for different industries and use cases. Many enterprise companies choose Appy Pie Chatbot to efficiently build conversational apps. Creating a chatbot with Appy Pie is easy and does not require any coding skills whatsoever. You can easily create a highly functional answer bot from scratch by following these simple steps:

  1. Log into your Appy Pie Chatbot account, or create one if you haven’t already
  2. Enter your chatbot name
  3. Give your chatbot a personality
  4. Train your chatbot by manually adding questions and answers
  5. Customize the flow of the answer chatbot
  6. Now your chatbot is Ready! Add the answer chatbot widget to your website

Summing up

Now, you understand what a chatbot is and how important bot technology is for your business. You will certainly agree that bots have drastically changed the way businesses interact with their customers. They can be used to handle a wide range of tasks, such as answering frequently asked questions, providing customer support, making recommendations, and much more. Chatbots are particularly useful for businesses because they can handle a large volume of interactions simultaneously, freeing up human customer service agents to handle more complex tasks. Overall, chatbot technology has the potential to significantly improve the customer experience and increase efficiency for businesses.

Neeraj Shukla

Senior Lead Content at Appy Pie

App Builder

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