Business leaders unanimously agree that in today’s cut-throat competitive business environment, where most of the companies have the equally attractive products or services, it’s that little personalized customer service or personalized marketing campaign that’s going to make a difference and lure in the customer to your business rather than (s)he going to your competitors. You may be wondering what it has to do with Chatbot Development? Sure, let me explain a little bit more.
When your business is small, it’s easy to do this personalization manually, but as your customer base or target market segment expands, doing it in scale is a big challenge for companies. Though you still need real human interaction once a conversation go deep into a topic, but a lot of the initial conversations can still be handled in a very personalized way through a chatbot and can be seamlessly transferred to a human as it matures.
As you can see the enormous value addition a chatbot can do in your customer acquisition and customer retention process, let’s discuss in detail what is a Chatbot, their types, associated technologies and how to select a company for your chatbot development project.
What is a chatbot ?
A chatbot is basically a conversation technology built on the foundation of Artificial Intelligence (AI) for the purpose of having a conversation with human beings. It is as simple as its name suggests it is a technology that interacts with the human for multiple purposes like business promotions, automated customer support, handling of internal queries in a company etc. and the list only goes on. In short, Chatbot is a huge communication technology in the business world these days. Now, if you are getting a quick yet professional reply from a service provider on your query or request, then you shall know it’s a Chatbot talking to you. No wonder, Chatbot is an innovative concept of AI, created to provide a scalable and cost effective way for businesses to interact with customers in a more personalized fashion, which was not earlier possible without spending a fortune.
How do chatbots work ?
Now, as it is understood what Chatbot is, then it is time to understand how exactly it works. Chatbot basically works on the Natural Language Processing (NLP) mechanism, detailed as follows:
Step 1: Natural Language Understanding (NLU)
Natural Language Understanding (NLU) is the first step of Chatbot functioning. This is all about understanding a human message by the machine. Here, the Chatbot takes human text message as input and converts it into structured data that a machine understands. This is how Chatbot understands what a user is asking for.
Step 2: Natural Language Generation (NLG)
Natural Language Generation (NLG) is the second step of Chatbot functioning. This step is about converting the structured data into a humanly understandable text. In this step, Chatbot converts the reply message from structured data to a text message so that the user gets his/her answer.
Stat : Learn G2
The process does end at NLG but there is plenty to understand between NLU and NLG, as Chatbot performs tasks like searching for an answer in between these two steps. There are, 5 steps in between NLU and NLG, detailed as follows:
1. Tokenization: In this step, Chatbot splits the sentence typed by the user into words called tokens.
2. Tagging: In this step, the words are tagged as per figures of speech such as nouns, adverbs, verbs, adjectives, etc.
3. Stemming: Then Chatbot shortens the word to structured data.
4. Entity recognition: Here Chatbot searches for the entity in data, that a user has typed.
5. Sentiment recognition: User’s sentiments are analyzed by Chatbot and the structured data is converted to a reply text on the user’s screen.
Importance of Chatbot in Enterprise Business:
If you have come across Chatbot communications for quite a time and now you have a notion of Chatbot development for your business, then your thought is correct. Chatbots are the game changers in today’s business. The most important reason for Chatbot development is that it can be used for customer service. In this modern business era, customer assistance is a new business promotion. No matter what business you own, it is true that satisfied customers bring business to you. Therefore, Chatbots are now being used for customer services, customer assistance, supply chain management (SCM), customer relationship management (CRM), etc.
Customers prefer quick-service assistance on their fingertips, at the comfort of their cosy couches. Therefore, Chatbot can be used to assist customers just on messengers that too with the ability to respond in a fraction of second which is beyond human abilities. Quick, effective and precise customer assistance has the potential to grow business, therefore; Chatbots have the potential to grow your enterprise business. To demonstrate the importance of Chatbot in your enterprise business, consider the following example.
For Example, when KLM Royal Dutch Airlines used traditional, human powered customer service method, it handled 384000 customer responses in 6 months whereas with Chatbot, it handled 2 billion customer support messages for over 500000 customers.
Source : Learn G2
This shows how drastically Chatbot can affect your business. It can potentially take your business on heights of success with the speed of a jet, indeed.
Types of Chatbot:
Chatbots can be differentiated based on vast criteria but the main factor of differentiation is always by function. Therefore, the two main types of Chatbots are detailed as follows:
Stand Alone Chatbot:
Stand-alone Chatbot is a basic and less popular form of Chatbot development. This type of Chatbot is only limited to a specific business website. In this type of Chatbot, a customer has to be live on the website to communicate via bots. Stand-alone Chatbots are usually custom developed. These Chatbots are customized and designed according to the business type, purpose and targeted audiences.
Built Into Messenger Chatbot:
Built into messenger Chatbots are as the name suggests, they are Chatbots built in the form of popular messengers such as Whatsapp, Facebook messenger, etc. These type Chatbots are more popular as compared to others because customers these days are on social media and social media is a strong, quick and interactive medium of business growth. This type of Chatbot is created for 24x7 customer support on messengers. If in case your business needs real-time interaction with a customer for effective assistance then a Chatbot app development company can develop it for you anytime.
Source : Learn G2
The technology behind Chatbots:
As we know by now, Chatbots are processed codes or software programs; they are definitely children of technology. There are two types of technologies that can be implemented behind a successful Chatbot which is detailed as follows:
1. Rule-Based Chatbots:
As the name suggests, rule-base Chatbots are functioned via a set of software rules. These are also referred to as decision-tree bots. They only have authority over answering questions under the set of rules. For example: For a shopping website, bots can answer only payment, product, and service-related questions. These bots cannot learn from the process.
2. ML/AI Chatbots:
ML/AI Chatbots means machine-learning and artificial intelligence based Chatbots. These Chatbots are not restricted by a set of rules rather they are built to learn from the process. These are intelligent bots that work on the NLP framework; they understand the context of the user’s message before creating a response.
How to select a Chatbot Development Company and how much does it cost to develop a chatbot ?
When it comes to implementing the latest technology like Chatbot to your business, it is important to go with a provider who has significant expertise in this field and don’t just fall prey to the cheapest option. As Chatbot development effort can widely vary based on the scope of queries, sophistication of analysis and response synthesis, the cost can also vary widely starting from USD 5000 to all the way up to USD 30,000.
Well, the criteria for choosing the right Chatbot Development Company for your specific business case varies depending on your requirement, industry trends and economic considerations. But here are some essential points you must consider before selecting your development partner :
Artificial intelligence (AI) use evidence: While looking for a Chatbot service provider you shall look for the company that has a history of successfully developing AI Chatbots followed by field testing.
Multilingual and Omni-Channel: Look for the company that creates Chatbots with multi-language support and can be run on multiple platforms. Build once deploy multi-times at multi-channels is the formula you should look for.
Continuous support: Chatbot development is not always an one time affair. In many cases you will need intermittent help from the company to fine tune the system as well as to expand it services further. So look for a company who has an excellent support feedback from it’s existing customers.
Security Support: The Company you hire for Chatbot development should put security as one of the top criteria. Chatbots should not just perform well but they should be programmed for the security of admin as well as users.
Machine Learning Expertise: You shall look for the company which has expertise over Machine Learning so that your Chatbot is professionally developed.
I guess, by now you have enough data points to take informed decision if your business can benefit from developing a chatbot specific to your business processes. And if you decide to go ahead in that route, you also have the set of criteria and tools to properly evaluate and select a provider who is best suited for your chatbot development project. Binaryfolks have developed very sophisticated chatbots for a wide variety of industries and use cases and if you need any help on that, feel free to contact us for a free, no-obligation consultation.