Instant messaging is the prominent buzzword that is being used widely both with web and mobile applications. This technical advancement has brought an immense change in the communication industry. Talking about today’s scenario, businesses can expand their customers’ reach by implementing various APIs like messenger, Whatsapp, telegram, etc. Now the questions that arise here are “What are chatbots?”, “How they are built?”, “What is their functioning?” and “How they can help businesses?”.

In this blog, you will get answers to all your queries.

What are Chatbots?


Chatbots are artificial intelligent software/system with which a conversation can be done either through text or voice interface. The interactions made with these systems are in natural language and examples can be like asking questions related to banking services, bill payments, facing issues with internet options, etc. Chatbots are considered as one of the most efficient and a great helping tool for establishing communication interference between humans and machines.

Some of the examples of chatbots that are mostly used are:
Customer service bots
Banking services bots
News and weather bots
Food bots
Healthcare bots

What is the Functioning of a Chabot?

The basic task of a chatbot is to understand the users’ input and responding to a relevant solution. Every business is not similar in nature and hence the Chabot is required as per nature and business processing. Hence talking about the types of chatbots that are prominently used are:

1. Rules-based chatbots: These types of bots work as per the programming is done. The scope of functionality is very limited and can share responses to specific commands only.

2. Machine learning chatbots: These bots are designed using artificial intelligence methodology where they understand the language and are not limited to commands. The bot is smart enough to understand the complete inputs shared by the users and revert back relevant responses.

How a Chatbot is Designed or Build?

As there are two types of chatbots, rule-based and machine learning. In order to design a chatbot with the rule-based approach, the developers need to write extensive coding rules and algorithms for the system. On the other hand, to design machine learning chatbot, developers need to define the machine learning parameters properly in the code. This type of chatbots have a wide scope and require a huge amount of streaming data and the designed system has to learn on its own. Chatbots can be designed easily on various platforms by using resources like Telegram, Facebook Messenger, Slack, etc.


There are different design approach and tools which can be used for designing an effective chatbot. Depending on the opportunity or the challenge that you want to address, the combination of different technologies like machine learning, artificial intelligence, natural language processing, and understanding can be the best option to select.

Why Chatbots are Important and How they Can Help Businesses?


Chatbots is a tool which is used to build interaction between human and machine thus improving the customer experience. Also, it provides various opportunities for companies for building customer engagement with the website or mobile applications. With chatbots, operational efficiency is increased and thus the cost of customer service is reduced.

Also Read: What is iBeacon Technology and How Are Businesses benefiting?

Chatbots have drastically changed the way businesses communicate with their respective customers. Few statistics that define how chatbots have affected the market are:

Grand view research states that the worldwide chatbots market is anticipated to reach $1.25 billion by 2025 at a growing CAGR of 24.3% (Grand View Research)

It is anticipated by Business Insider that nearly 80% of enterprises will implement chatbots by 2020. (Business Insider)

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Image Source:businessinsider

Juniper Research states that by implementing and using chatbots both business organizations and customers will save combined 2.5 billion hours by 2023. ( JuniperResearch)

Advantages of Chatbots

• Cost reduction: With chatbots implemented on the website or mobile application there is no requirement of any human resource while interacting with the customers online. They are of great advantage for the companies which receive numerous queries at one go. Also, these chatbots can be aligned with the company objectives and further help in customer conversion.

• All-time availability: Like humans, the chatbots do not have any specific working time durations. Once implemented on the web or mobile application platforms these can be accessed 24*7. Also, companies can check and analyze the traffic during non-working hours and further implement the marketing strategy.

• Learn and update: Unlike human’s artificial intelligence-based chatbots are well equipped to be trained and update as per the interactions being made with the customers.

• Client handling: Chatbots are designed extensively to handle multiple queries at the same time and they ensure that no customer is left unattended.

Disadvantages of Chatbots

• Tedious Process: The designing of the chatbots is done keeping in mind the objective of speeding the responses and hence improving customer interaction. But due to the limited availability of the data and time required for updating, the process could costly and slow on the other hand.

• Implementation cost: As chatbots need to be programmed differently and customized as per the business process, this increases its implementation cost. At times due to heavy traffic, certain changes might need to be done in the programming which may incur some additional costs. Hence it is a risky investment.

• Poor memory: Conversations had with chatbots are not stored in the server or database which requires the customers to repeat their query. Therefore a chatbot should be designed intensively to ensure that the system understands the user’s queries and may respond accordingly.

Also ReadHiring a Dedicated resource to boost your business

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Conclusion: Communication interface with customers has changed a lot with the introduction of chatbots. From being a marketing buzzword it has developed as an intensive functional tool being used by companies for enhancing customer engagement and increasing customer satisfaction. Now every entrepreneur is trying to understand the business scope with chatbots and wants to implement it for their clients.