What is a chatbot?

A beginner’s guide to chatbots

As you grow your small business, you have the opportunity to expand your footprint and develop your customer base. Yet the more clients you attract, the more you need a strong customer service system.

Maybe you don’t have the time to train a contact center team. Perhaps you don’t have the budget to hire an in-house support team.

So what’s the solution? A chatbot

What is a chatbot? it’s a digital application that communicates with clients. It can handle your company’s customer service problems without forcing you to onboard a new team or sign with a contact center. With a chatbot, you can automate customer service and boost your team’s productivity. That means you can improve your company’s revenue and free up valuable time to grow your business. 

Concerned that you can’t manage a high-tech project in-house? Hiring a freelance chatbot developer couldn’t be easier.

Within this guide, we’ll be answering some important questions such as what exactly is a chatbot? How do they work? and many more.

Chatbot Definition & Overview

  • 1. What is a chatbot?
  • 2. How do chatbots work?
  • 3. The benefits of chatbots for businesses and customers
  • 4. What are chatbots used for?

1. What is a chatbot?

A chatbot is an artificial intelligence (AI) software that mimics human conversation either via text chat or voice communication with customers on behalf of your business.

Simpler chatbots can conduct basic automated conversations and offer general replies. Complex chatbots can offer highly personalized help and may become smarter over time. No matter how advanced they are, chatbots can handle customer service tasks like:

  • Answering questions
  • Providing product information
  • Offering personal shopping help
  • Processing orders and refunds

Since they can easily automate customer service, chatbots have quickly become popular with business owners. In fact, Salesforce predicts that between early 2019 and late 2020, chatbot use will grow 136%. Customers have already embraced this technology, as over 75% think that chatbots will change their customer service expectations by 2024.

2. How do chatbots work?

For customers, conversing with a chatbot looks and feels just like communicating with a live support agent. That’s because chatbots rely on artificial intelligence (AI) and user-friendly setups to communicate with customers.

Most chatbots fall into one of these two categories:

  • Rule-based chatbots: These simple programs can handle basic questions and requests, known as intents. They rely on natural language processing (NLP) and natural language understanding (NLU) to translate customer requests into data. Then they use their preprogrammed rules to match questions with answers and solutions.
  • Machine learning (ML) chatbots: These programs do complex tasks and work more like virtual assistants. They use ML and NLP to understand the context, personalize communication, and learn as they go. They can also predict the types of issues customers might have and offer proactive solutions.

Understanding the conversational chatbot architecture

Chatbot architecture is the heart of the chatbot and based on a business’s usability it can change substantially however, the basic communication flow always remains the same. Here are the key components of a conversational chatbot architecture:

  • Environment: You can host your chatbot in the cloud or with an in-house setup. Cloud-based environments usually come with standard natural learning process (NLP) engines from Amazon, Google, or Microsoft. They also tend to have lower price points. In-house chatbot environments are unique to your business and offer more security. They have higher price points, but they’re ideal for chatbots that process private information that you can’t share with third parties.
  • Question and answer system: Chatbots can rely on automated or manual training. If you opt for an automated system, you’ll need to provide FAQs, policies, or other documents for your chatbot to learn from. If you train it manually, you’ll need to create a list of questions and answers that your chatbot can draw from.
  • Plugins: If you plan to connect your chatbot to internal systems, you’ll need a program with the right plugins. For example, you might want to link your chatbot to your customer service platform so it can create support tickets.
  • Node/traffic server: To do their jobs, chatbots have to connect to both a node server and a traffic server. The node server processes customer requests and lets the chatbot access the right information. The traffic server sends the chatbot’s responses back to the user and any front-end systems.
  • Front-end systems: Finally, think about how customers will access your chatbot. It may need a slightly different structure if you plan to deploy it in channels like Facebook Messenger or Skype, for example.

3. The benefits of chatbots for businesses and customers

Since they can automate your customer service process, chatbots help your business in two key ways:

  1. Helping customers answer questions on their own. Why pay agents to copy and paste answers to the same frequently asked questions (FAQs) when you can rely on a computer program instead? Chatbots help customers find solutions on their own so they don’t have to contact live support agents, providing faster service for the customer.
  2. Reducing agent workload. When your team is short on time, you have two choices: reduce the workload or hire more agents. Chatbots are designed to do simple jobs so your employees don’t have to. That means your team can focus on tasks that require more skill while you avoid the expense of a larger team.

But that’s not all. Chatbots can also offer these benefits:

  • Avoiding mistakes: When you hire live agents to handle customer service, you can expect at least a few errors. After all, agents are only human. Chatbots may not be perfect, but they won’t answer questions incorrectly or provide wrong information. That means you can depend on a chatbot to provide accurate information and avoid costly or embarrassing mistakes.
  • Doing the job of a whole team: If your business gets a lot of customer service requests, you can’t depend on just one agent. Instead, you’d need to hire a whole team to process requests efficiently. When you design a chatbot, you only need one to handle all your customer service requests. That means one chatbot can stand-in for a whole team of frontline agents.
  • Offering around-the-clock support: When you hire an in-house team or work with a contact center, you have to plan around work hours and shifts. If you want to offer support for 12 hours a day, you might have to plan for two-agent shifts. Since a chatbot is a computer program, it doesn’t have shifts or take breaks. That means it can communicate with customers 24 hours a day, 365 days a year.
  • Reducing wait times: Long wait times can cause frustrated customers and lost leads. Because chatbots are always available for frontline customer service, they can reduce wait times drastically. Since would rather message a chatbot than call an agent, these programs can also lead to happier customers.
  • Decreasing customer service costs: Hiring live agents can get expensive quickly. After all, you have to consider the cost of training, the size of the team, and the number of shifts. Chatbots do require upfront and routine maintenance fees. Yet chatbots can so you can invest in growing your business instead.

4. What are chatbots used for?

Chatbots can offer a wide range of solutions, but businesses mainly use them to:

  • Offer complete answers to limited FAQs: If your team constantly answers the same list of questions, you can create a chatbot to field them for you. You might want a chatbot that can give complete answers to two dozen of your FAQs and common follow-up questions.
  • Answer a wide range of simple questions: If your customer service team spends a lot of time answering basic questions, you may need a chatbot that can handle a much wider range of simple issues. Many chatbots can manage large libraries of data, serving as a sort of encyclopedia for your brand.
  • Provide 24/7 customer service: Your team may not be able to work around the clock, but a chatbot can. If your customers have questions around the clock, you may need a chatbot that offers support at all hours. You might want a 24/7 chatbot that can offer end-to-end service or one that can answer easy questions before bringing in an expert.
  • Route questions to live support staff: Just because you’re thinking about hiring support agents doesn’t mean you want them to spend time on basic questions. You may need a chatbot that can ask customers what kind of help they need before routing them to the right person.
  • Process customer payments: Why hire support agents to handle payments when you can automate the process instead? If you want to let customers buy quickly and easily from your website or mobile app, you may need a chatbot that can process payments and provide receipts.
  • Respond in multiple languages: If you’re thinking about taking your business global or if you have a multilingual customer base, it’s important to communicate effectively. To make customers feel more comfortable, you may need a chatbot that can understand and respond in a wide range of languages.
  • Earn customer trust: It doesn’t matter if your company is brand new or if you’ve been in business for years. Converting new customers requires earning trust. To build credibility and win new customers, you may need a chatbot that engages proactively and offers help with common issues.
  • Give personalized assistance: If your customers often need customized help, you may be able to automate the process. You may need a chatbot that can identify customers, reference past orders and requests, and make personalized suggestions.


When you want to offer effective customer service while controlling your costs, chatbots offer a smart solution. These simple programs can help customers answer their own questions, make purchases, and even access personalized assistance — and you can easily set them up in-house. Since they’re designed to reduce agent workload while saving you money and offering 24/7 support, chatbots are also ideal for boosting your business’s bottom line.

To get your chatbot online quickly, connect with a developer who can design and deploy one for your business. Find an experienced chatbot developer or user interface pro to create your chatbot, and take the first step toward improving your company’s customer service.

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