An Ultimate Guide For Chatbot Development: AI Chatbot, Uses, Benefits, & More

Chatbot Development is the new cool.

From eCommerce to healthcare, chatbots are changing the world. Every modern business sector is based on customer interaction. And that’s where the chatbot comes in.

This Industry 4.0 Trend has been the point of interaction for more than 80% of people.  Today, some of the largest platforms like Amazon, Google, Meta, and so on have their own versions of Chatbots.

AI Chatbot’s success has inspired a lot of businesses and potential start-ups to look into this concept. And if you are one of them, this blog is for you.

Here, you will find everything related to Chatbot development including statistics, working, types, and so on.

Therefore, with this being said, let’s get right into it, starting with market statistics.

A Peek into Chatbot Statistics

The chatbot industry is huge. Well, technically chatbots aren’t an industry on their own. Rather its true potential comes out with it is integrated into PHP web development.

In fact, this concept is so popular that it is being used by more than 23% of customer service companies. While the number of companies using it isn’t all that much, what makes it impressive is the fact that 68.9% of chats are handled from start to finish by chatbots.

With more than 300,000 chatbots on Facebook Messenger Alone, there are over 1.4 billion who use these things. While there are various (almost every) niches that can use chatbots, some benefit more from it than others.

For instance, online retail stores have the highest rates of chatbot acceptance.

What makes chatbots successful is the fact that people love them. As per a survey, 60% of customers prefer interacting with chatbots rather than human agents.  Reasons why more than 70% approve of chatbots are instant replies.

Moreover, the millennial population more than 60% rely on chatbots for inquiries handling. This clearly shows the widespread use of the app and the base for its strong future.

With this out of the way, let’s look at chatbot development in the next section of the blog.

Chatbot Development 101

Chatbots are computer and web programs that are written to simulate a human-like conversation. Short for chat ro’bot’, the program interacts with humans via instant messaging. It uses various technologies like AI and Machine Learning Technology to learn and replicate human interaction.

You can build chatbot app for various purposes. We shall be discussing the use case of chatbot development later down the line. But first, let’s look at a brief history of the platform.

A brief history of chatbots

The very first chatbot named ELIZA was developed at MIT in 1964.

Considered to be Joseph Weizenbaum’s brainchild, one of the greatest computer scientists, it is a great example of natural language processing designed to act and interact like humans.

From then onwards, there have been different forms of artificial chatbots like IBM’s Watson.  And today, we have more than a million chatbots active in the market.

So, this makes one wonder, how do chatbots work? Well, let’s answer that question in the next section of the blog.

How Chatbots Work: Components of AI chatbot

So, how does an AI chatbot works?

Well, chatbots are complex systems. There are various components that work together for a Chatbot to function.

Let’s look at these different components below:

• Bot Middleware

This is the infrastructure for the program. It is part of chatbot backend development. It takes cares of various things including allowing messages, communication with the NLP engine, communicating with the company database, and dialogue logging.

• Channel Connector

As the name suggests, the channel connector works as a communication channel at the back end. It connects with messaging apps like Telegram or WhatsApp to allow the exchange of messages.

• NLP Engine

NLP engine stands for natural language processing. This is a form of Artificial Intelligence Solution.

As the name suggests, the main work behind this is that it interprets human speech, messages in this case. And it allows the chatbot to reply.

Moreover, it is also responsible for converting text into something that machines can understand.

• Context Storage

To answer or reply to a human message, the chatbot needs to understand it.

Therefore, all the data that NLP processes are stored in context storage which gives the chatbot a firm understanding of human language and provides an appropriate reply.

• Enterprise Background

This is an essential part of AI bot development.

However, this is not something that you will find in every Ai chatbot.

With the working out of the way, it’s time to

What Are The 4 Types Of Chatbots? Chatbot AI and More

There are various different types of Chatbot Development services. Therefore, if you want to understand AI chatbots, it’s important to understand different types.

Let’s look at each one of them in detail below:

• Rule-Based Chatbot Development

Rule Based Chatbot is also known as Linguistic Based Bots.

What happens here is, the developer fills the chatbots with a set of questions. Then a customer interacts with it and answers the same.

It follows an automated conversation flow via if/then logic. These aren’t all that expensive to develop.

• Keyword Recognition-Based Chatbot Development

Menu-based chatbots which are often called keyword recognition-based chatbots are an interesting bunch.

The platform observes the user’s input and devises an appropriate reply. Here, with help of NLP and customizable keywords, provide replies that solve user queries.

• Menu/Button-Based Chatbot Development

These are the most basic type of chatbot development. And for that reason Menu/button-based chatbots most used ones.

This follows a decision tree hierarchy to provide users with choices.

• AI Chatbot Development

AI chatbot development is one of the most popular solutions. Now, the Chatbot AI cost can be higher than the usual one. But they are also known for boosting lead conversation as we will see later down the line.

It goes without saying that these platforms use AI and Ml technologies to learn and grow via user input.

These are the 4 types of chatbots. Now, we shall be discussing some examples of the same.

Can Chatbots Replace Humans? Chatbot Examples

This question has been a long time coming, will chatbots replace humans?

Well, the answer is YES and NO.

Let us explain, while there are a lot of jobs that only humans can do, there are some areas where AI is going to dominate everything.

It has been found that AI chatbot development solutions have better accuracy than human traders, leading to the firing of 99% of human traders at Goldman Sachs. In addition to this, McKinsey & Company claims that robots will take over 800 million jobs by 2030.

There are some professions that are more in danger from AI than others. These include:

• Journalists
• Customer Support Assistants
• Lawyers
• Pilots

To better understand the same, we can look at a few chatbot examples of replacing human functions below:

• Capital One

Named ENO this chatbot integrated into the investment app Capital one provides alerts about suspicious transactions, duplicate charges, unusually high spending, and more. In other words, this is a virtual bank teller. And till date, it has helped with more than almost $2 billion in tax-deductible charitable donations from customers’ accounts.

• Woebot

This is a self-care chatbot that helped many people with their mental health. Proving accessible services. Developed with experts from Stanford University, this bot is making its way to mindfulness apps like Calm and others.

• X.ai

This is an email chatbot that is known as Amy Ingram. It lives in the inbox as a virtual assistant and helps with meeting scheduling. With a human-like behavior, it has great scope ahead of it.

Why YOU Need Chatbots: 7 Reasons Why Businesses Love Them

AI chatbots are loved by every company that uses them. This is one of the reasons why everyone wants their own. Now, before you get into AI chatbot development, let’s look at a few of the benefits.

These are, as mentioned below:

1. Provide users with a personalized experience that drastically improves website engagement.
2. Chatbots are known for improving conversation via visitor intelligence.
3. Businesses can provide true 24/7 service with help of a chatbot that doesn’t need any human to back it.
4. With real-time notification, the chatbot prioritizes customer prospects and drives higher engagement.
5. Chatbot interactions are directly linked with more qualified leads.
6. This is one of the best ways to fight customer churn.
7. One of the best benefits it provides is pipeline conversion rates which go upwards to 100%.

These are some of the reasons for you to contact a AI chatbot development company right now. let’s look at some of the use cases of this platform firm.

Chatbot Use cases

There is a range of things that Bot Development can target. This means Chatbots have a range of use cases depending on the industries and niches.

But as always, it is suited in some places more than others. Therefore, we shall be going through just that in this section of the blog. Some chatbot use cases are, as mentioned below:

• Analytics
• Marketing & Brand Promotion
• Referral Links
• Sales Driven Chatbots
• Advertisement
• Website Automation
• Helpdesk support
• Handling user queries

Yes, we know, there might be a use case that will help you make millions. But before that let’s some of the top chatbot development platforms.

Chatbot Development Platforms

With the increasing popularity of enterprise AI chatbot development services, many platforms allow the developer to create chatbots of various forms.

In this section of the blog, we shall be discussing these chatbot development platforms.

1) IBM Watson

IBM is one of the world’s largest companies and its AI Watson is one of the most well-known technologies.

It is highly capable of verticals and manages complex interactions. This is what makes it a good choice for AI development.

2) Microsoft Azure Bot Service

Chatbot developers can get SDK, a portal, and a bot connector service that allows them to connect to social networking platforms like Instagram.

In addition to this, there are a lot of other benefits of using Azure bot service. This is a good option that you should definitely explore.

3) QnA Maker

Just like Azure, QnA maker chatbot development tools also come from Microsoft.

As the name suggests, it helps businesses create an AI bot based on frequently asked questions or FAQs. In other words, the developer can train the chatbot with these questions.

This is a good platform to make amazing chatbots that will help solve user queries.

4) Semantic Machines

If you want to take AI Development services for chatbot to next level, Semantic machine is for you.

The brand was recently acquired by Microsoft due to its amazing ability to create life-like chatbots. This is one of the best chatbot development frameworks on the list.

5) Contact A Chatbot Development Company

Well, if you want to make a custom chatbot for your business, one of the best picks is to contact a chatbot development company.

Speaking of which, let’s discuss the process to make custom chatbots in the next section of the blog.

Custom Chatbot Development Process

There is a lot that goes into the chatbot development life cycle. You have to hire dedicated developers, do all the preparations, and so on.

However, cutting to the chase, we shall be discussing the main chatbot development process in this section of the blog.

These are, as mentioned below:

1. Pick A Type
2. Choose Communication Channel
3. Finalize Tech Stack
4. Chatbot Development Process
5. Feed The AI Chatbot Data
6. Test It
7. Intergrade or Deploy it

Now, there are two things that you can do with a chatbot, or in other words, there are 2 different chatbot development methodologies for deployment.

First, integrate into the product with help of a web or SaaS development company.

Second, deploy it independently.

If you choose the latter one, there are some platforms that you should know about. We shall be going through them in the section below:

Chatbot Deployment Platforms

There are various platforms that allow chatbot companies to deploy their solutions online. This is something that comes in quite handy considering the fact that integration into web development can seriously limit its ability.

That’s a topic for a different blog. Moving on, let’s look at these platforms which are, as mentioned below:

• Facebook Messenger

Over 1 billion users are active on Facebook which is now known as the META. Nevertheless, this platform alone has more than 300,000 chatbots active today.

A larger audience base and support from the META company towards chatbots make it much easier to deploy one on the platform.

• Slack

Slack is a popular messaging platform used in professional spaces. However, if it fits your requirements, a business can also deploy its chatbots here.

Many have done it to gain quite successful results. Therefore, you should definitely try it.

• Skype for Business

Skype is an instant messaging platform much like Slack.

This platform allows chatbot development solutions to run on it. And Bots like Skyscanner are very popular. Making it one of the best platforms to deploy your chatbot on.

What Are The Best Practices For Chatbot Development?

There are something’s that every client and chatbot app development company should keep in mind. In other words, some best practices should be followed for chatbot development. These are, as mentioned below:

• Set a Clear Scope for Chatbot
• Work with a team familiar with AI concepts
• Use right KPIs
• Design the chatbot’s tone as per the business persona
• Create a balance between the robot and human nature of the chatbot.
• Use the right messaging format.

Whether you build a chatbot in python or any other language, these are some best practices that everyone must follow.

Build A Custom Chatbot For YOUR BUSINESS

Chatbot development is growing very popular.

It is beneficial for both businesses and clients as users love interacting with chatbots and the businesses can reduce their cost of operations while doubling profit.

So, needless to say, there are a lot of businesses that want to build their own AI chatbot. And now you can do it too.

All you need to do is reach out to a Custom Software Development Company.

Niketan Sharma

Niketan Sharma is the CTO of Nimble AppGenie, a prominent website and mobile app development company in the USA that is delivering excellence with a commitment to boosting business growth & maximizing customer satisfaction. He is a highly motivated individual who helps SMEs and startups grow in this dynamic market with the latest technology and innovation.