All About Chatbots – The Ultimate Guide

Have you ever used customer support LiveChat service? If yes then may you have an experience that vague, creeping suspicion that maybe the other side person with you chatting with, might be a robot.

Unlike as many of us have seen endearingly stiff robots in movies, Chatbots often sound like a human through their speech can sound awkward to you. It has become extraordinarily popular in recent years and is going to stay here. Chatbots are smarter, more responsive, and more useful and its advancements in machine learning and other underlying technologies, including natural language processing, have made them a preferable choice among developers.

So, make yourself comfortable, today you are going to learn everything you want to know about chatbots.

Let’s begin with basics- so, what is a chatbot?


Chatbots are also known as “conversational agents” are software applications that use artificial intelligence & natural language processing to perform a series of tasks on its own and without any help of a human being. It works as a virtual assistant for your customer experience touchpoints. A chatbot task can vary a lot, such as it can make a reservation for a restaurant, book a ticket or can collect information for users. Chatbots are capable of simulating a conversation with the customer, and their versatility enables them to adapt and help solve different business pains.

A well designed & built chatbot can:

  • Use existing conversation data for understanding the question people generally ask
  • Analyze answers for those asked questions
  • Use machine learning & NLP (Natural language processing) to get the correct and most relevant solutions for the future prospect as well.

Chatbots comes with two different prototypes:

  • Virtual assistance: It helps to find information, buy things. Apple’s Siri’s, Amazon’s Alexa, Google’s Assistant and Microsoft’s Cortana are an example of it. Incorporated with machine learning, they rely on artificial intelligence for learning and figuring out the solution, based on the query.
  • Messaging apps: Messaging apps allow the business to provide 24*7 assistance to the customers. Facebook Messenger, WeChat, Kik and Slack are a few examples of messaging apps. It follows pre-programmed rules to interact with users.

In less than 10 years, the Chatbot has become a million-dollar industry, and many big names such as Uber, Sephora, and CNN have already adopted it.

Different types of chatbots

To understand what Chatbot is, it’s important to know about the types.

There are three major types of chatbots

  • Scripted Chatbots
  • Intelligent Chatbot
  • Application chatbot

Scripted Chatbots:

Followed by predetermined paths, scripted Chatbot determine the next step in the conversation, and the user has to choose between specifically provided options. Depending on the design and features, these options can be in different forms such as text, voice, touch response etc.

Intelligent Chatbot:

Using Artificial Intelligence (AI), intelligent chatbots accept more input and allow more flexibility. It is capable of receiving free form input in the form of voice statements or text. The more they get used, the more they get improved- all thanks to the AI; however, their intelligence is limited.

Application chatbot:

Acknowledging that both intelligent and scripted chatbots, application Chabot have graphical user interfaces. The graphical interface has now become an important Chatbot concept and allows users to perform the actions efficiently.

Still, wondering what Chatbot is?

Here, we are sharing facts to help you understand how Chatbot is changing the digital world’s technology.

  • People are ready to talk with Chatbots: According to media and marketing services company Mindshare report, 63% of people find Chatbot convenient for communicating with the brand. They consider it as a quick emergency service provider for the emergency answers.
  • Almost 1.4 billion people use messaging apps: According to the eMarketer, 1.4 billion people have used messaging apps in the year 2016. By the end of 2024, more than 27 per cent of the world’s population has predicted to use messaging apps.
  • 30,000 Facebook Chatbots: As of September 2024, Facebook has 30,000 chatbots, which is being used by 200 countries and by millions of people.
  • People find it convenient to contact retailers via chat: According to eMarketer 29 per cent of people prefer online chat and messaging, over the other methods of communication, to contact with retailers for making buying decisions.
  • Chatbots are becoming preferable for buying: As per DigitasLBi-30% of people say that they are willing to purchase through chatbots.
  • The consumers won’t be ready to put up with poor chatbots: One bad chatbot experience can cost a lot. DigitasLBi says 73% of Americans left browsing a particular website because of a lousy chatbot experience where MindShare’s report says that 61% of people find it frustrating if Chatbot does not respond effectively.
  • Chatbots are all set to be Indistinguishable from Humans by 2029: Ray Kurzweil, the developer in Google, has predicted that Chatbots will have the human-level language ability to make a meaningful and interactive conversation.
  • Chatbot for online tutorial services: Chatbot is advantageous in the education sector as it is generating student’s engagement towards an institute or their studies. It leverages teachers to collect student’s data, which can be used for storing assessments and solutions with excessive information.

How are Chatbots becoming the next big thing in the educational sector?

The foreseeable advantages of executing chatbots in the education sector are far-reaching. Now almost every administration and teachers appreciate Chatbot as a cost-effective and estimable way to keep their students engaged and to streamline processes more efficiently.

As now kids are growing with mobile in hand, teaching them by using the latest technologies can be much more beneficial than traditional teaching methods. Facebook, twitter, skype, and other social media apps are making learning interactive and interesting. You can find several platforms to make it interactional with the artificially intelligent learning content.

Chatbot Provides Better Support to Students

A good educational institute not only provides a high-class education and qualified teacher, but it also supports its students. By giving them timely and accurate information, an institute can guide their students; however, it is almost impossible to ensure that each student is being taken care of entirely without any optimization.

A chatbot helps students from their admission processes to class updates to the assignment submission deadline and provide them with all the necessary information which they are looking for.

Now integrating a chatbot with a classroom has become an essential part of education. Since time is running fast and the leap into the education system has been taken by technology years ago.

Misconceptions about the chatbots

  • One of the biggest misconceptions about Chatbots is that Chatbots are able to make conversation at the same time as humans do. As Chatbots are for human interaction, even though it has been predicted to have it in the same manner, the current technology doesn’t seem to make it possible yet. This often leads to unrealistic expectations and drives users away from the site.
  • And another misconception says that chatbots only communicate via text or voice. Chatbots can interact using graphical images as well, and we can take an example from the Facebook messenger, Kik and WeChat.

Here we are sharing some examples of chatbot applications:

  • Chatbot applications track customer satisfaction level using natural language processing.
  • It provides service to customers by answering their questions and helping with queries.
  • Chatbot application helps users in taking their e-commerce purchasing decision and in the process
  • Chatbots natural language processing capabilities are being used by retailers to do promotions.

In a nutshell, a Chatbot is an innovative bridge of communication between human and software.

So, now let’s have a look at How actually do Chatbots work and its technology?

This is the most engaging part of Chatbot as you can use several different techniques to build a Chatbot. However, the underlying technology can vary quite a bit when it comes to any specific goal. Three types of chatbots often get used by consumers, which are:

  • Rules-Based Chatbots: It follows pre-designed rules, and often gets developed by employing the graphical user interface, where a design route gets built by following a set method.

Key attribute:

It follows predetermined rules which makes it most applicable to customer support functions.

  • AI Chatbots: AI chatbots automatically learn about the programming after an initial training period by a bot developer.

Key attribute:

It can understand and perform intelligence and sentiment analysis and read the context and intent of complex conversations and try to provide the most relevant answers.

  • Live Chat: Primarily used for sales and sales development team, this Chatbot generally gets built by customer support organizations to use the simplistic chat option to answer questions in real-time.

Key attribute:

It helps users to get real-time answers and provide more personalized conversations.

Behind these learning, there is an analytics platform to enable Chatbots, that integrate with API and provide a resource to allow Chatbot to provide correct answers.

The technology used to develop Chatbot.

You do not need to become an AI expert for developing a chatbot. However, you have to make sure what you are about to make and what kind of problems are going to be solved using it. Once your concept is clear, the development process is no more complicated.

Nevertheless, if you have very high expectations from your Chatbot, it would be beneficial to leave it in the expert’s hand.

Technologies which evolve in developing Chatbots are:

  • AI and NLP: Chatbots, which are based on pre-set, Q&A where customers can get their answers by clicking a few buttons, is the easiest way to implement. They are simpler to build and will be consistent in interacting with users. AI and NLP have become more popular and are the future of Chatbots.

Natural Language Processing (NLP) includes the below step.

  1. Tokenization: It filters a set of words in the form of token
  2. Normalization: It used to check typo error and alter the user queries
  3. Sentiment analyzing: The bot understands the user acknowledgements to align with their emotions.
  4. Entity Recognition: It used to look for different categories and requirement of information
  5. Dependency Parsing: It searches for common phrases for conveying in an enhanced manner


  • Tools of e-commerce: Chatbots are meant to be highly effective for increasing sales, as an example: a real estate agent can use it to gather and qualify the leads to get more potential buyers.
  • Linguistic Based Chatbots: Also referred to as a rule-based, it delivers control and flexibility and enables to work in advance in searching the correct answer. However, due to the high-intensive-work approach, chatbots based on a purely scientific model can be stiff and slow to develop.
  • Machine learning and AI Chatbots: Powered by AI software, Machine learning is more complex to build. It performs to be more conversations and data-driven. These chatbots are generally more sophisticated and have personalized task-oriented Chatbots. However, a machine learning chatbot functions as a black box, and to prevent from going anything wrong it needs a consistent improvement and optimization.

Let’s find out the important things to consider while developing a chatbot

However, there is no hard and set rule for developing Chatbots, but we are covering a few points which can enhance the chatbot performance.

  • Define the purpose: It is essential before moving ahead with the development procedure to understand the requirement of the Chatbot. List down the features which you want to add with desired result and budget.
  • Take landscape in control: It’s not uncommon for various proof of concept (PoCs) for the larger enterprises which sometimes leads to duplication and security risks. Hence, ensure to take care of the entire landscape to improve productivity and in making the business stronger.
  • Think and act: Most of the Enterprises are moving a way ahead then the short-term Chatbot approaches to use it as a conversational interface and a goal achiever. While developing a Chatbot, you can consider a wider strategy but start with a small scale project to recognize and measure the results. Be sure that the technology you have used is able to provide you with the desired result.
  • Going live is not the end: Launching chatbot is not the end; it is just a beginning; always look for better ways to improve customer interaction to increase their satisfaction.

Benefits of Chatbot

Today’s marketing and sales team are handling a massive pressure which is just not about the sales, but they have to focus on consistently improving the customer experience. Not to mention, increasing customer’s expectation is becoming a challenge for most of the companies to stay up-to-date and technically sound.

As every customer wants their queries to be resolved immediately in an accurate way, which can be done with human beings up to a certain tipping point, after then, technology has to be answerable.

This is the main reason why now companies are looking towards the AI Chatbots to help them.

  • Increase website conversion rate: Marketers put a lot of effort to drive traffic to the website, and a survey says that only 0.25-1 % traffic gets converted.
  • Generate more qualified leads: Which business do not want to interact with every lead and ensure that they are a good fit to schedule a meeting? By using advanced qualification, chatbots can help to do lead qualification and improve sales acceleration.
  • Conflict Customer Churn: Chatbots can be the best option for resolving high-volume customer’s inquiries, especially where the customer becomes frustrated with regular knowledge support.
  • Idea generation: Yoady, data empower the digital economy. That needs to have all the necessary resources to convert them into meaningful and valuable. Most of the companies already have cognitive solutions to gather user data automatically. Artificial intelligence is becoming more powerful because they learn and react accordingly. It adapts and changes as per market behaviours and improves its performance continuously.
  • Automate the manual process: By implementing the intelligent algorithms, Artificial intelligence is automating manual and mechanical cognitive processes. As an example, it has become more accessible by using it to collect large data and performing analysis to determine profitability.

Chatbot Connectors

A pre-built libraries chatbot connectors traverse a range of business and artificial intelligence assets including robotic process automation and Communications Platform as a Service. It harnesses the back office power to deliver more reliable and relevant information to the user.

As people use several platforms for connecting, it is important for organizations to stay relevant, compatible and accessible on all those platforms to provide a seamless user experience.

Connectors also include enterprise backend software and Knowledge Base such as Blue Prism, UiPath,

Chatbots are integrated within chat platforms, and each one has its own specific features. Features determine in which ways the Chatbot will interact with users by dictating by the bit.

We can text SMS and email as an example as it only displays text and attached multimedia widgets. On the other side, Facebook Messenger interacts with users by using a range of graphical widgets and allows users to access web views with unlimited flexibility.


Chatbots are leveraging organizations with great opportunities to deliver their services in a more personalized manner. It is combining human support and software for enhancing user experience.

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