What is a Chatbot?

When Siri was born a decade ago, the chatbot was a nuisance. Not only were use cases limited to well-worded queries, but users were unaccustomed to texting with an automated helper. However, chatbot builders and artificial intelligence have significantly improved, resulting in a variety of helpful and effective assistants across many industries and applications. At a high level, all chatbots are supposed to perform a similar function: provide a similar user experience that someone would have if engaging with a human. However, there is no single answer to the question “What is the best chatbot” as every company may need to build a chatbot that performs a specific function. Before creating a chatbot, the user needs to discover what type of chatbot technology will best fit their application:

Button-Based Chatbots

The most basic is the button-based bot. It’s really just a menu where FAQs can be remedied. Similar to how an automated phone menu is interacted with, the chatbot provides the user different options in real-time to choose from through a decision tree hierarchy. Eventually, a solution should be discovered after enough selections have been made.

Rules-Based Chatbots

The second is the rules-based chatbot. This variety uses if-then logic to pull topic areas from user queries. A programmer might code a rules-based bot to understand if the user mentions the word “size chart” or any synonyms, then offer the corresponding image. These bots can be slow to program and are not particularly human-like. Though users often expect clearly robotic responses to arbitrary questions.

Natural Language Processing (NLP) Chatbots

The third is the keyword recognition chatbot. Using Natural Language Processing (NLP)  — a shockingly realistic modeling technique– keyword recognition bots can infer meaning from relevant vocabulary and respond freely.

Machine Learning Chatbots

The fourth and final variation is the machine learning chatbot. Machine learning is more powerful than the others because of its uncanny ability to remember previous conversations with users. This memory permits tailored responses for repeat users. Not every business needs a bot that will pass the Turing Test. Still, considering the drastic innovations in computing recently, the brightest bots of today will pale in comparison to tomorrow’s tech.

State of Chatbots 2021

Different Types of Chatbots

Different types of chatbots can be used for a variety of consumer and business applications.

1. Customer Support Chatbots

This is the most commonly known type of chatbot. The role of a support chatbot is to perform similar tasks a customer support agent or a live agent would provide in-person or over the phone. The main benefits of using one include 24/7 availability, quick responses, and cost-efficiency. Not to mention, customer engagement is better. A company may want to deploy a customer service chatbot if they wanted to relieve their support department from incoming support requests or calls.

2. eCommerce Chatbots

eCommerce, retail, and booking chatbots help the user complete a transaction when a shopping assistant or support agent would normally assist a customer. A chatbot can be very helpful for customer transactions because it can help the user find what they are looking for instead of trying to navigate a large website or complicated ordering process. For example, if a customer wants to buy a new television but didn’t know which one would fit their family room they could interact with a chatbot to help them find the right product.

3. Skills Chatbots

These chatbots are also known as virtual assistants and work the same way Amazon’s Alexa and Apple’s Siri work. The user makes a command and the chatbot performs an action. “Siri, turn on my lights.” These chatbots are “single-turn-type” meaning they do not require contextual awareness.

4. Booking Chatbots

This type of chatbot helps customers either book appointments or travel arrangements and are commonly used by service businesses (e.g. spas, doctors, auto repairs, etc.) and airline companies.


different type of chatbots

Chatbot Trends

Improvements to AI technologies have driven this remarkable transition, but we can’t discount the parallel evolution of user preference. People from every generation are more familiar and comfortable with the chatbot format. We know their capabilities. Netizens have also learned these machines’ limitations, making communication more concise all the same.

These trends won’t let up. The conversational AI market expects a CAGR of 35%. The chatbot industry is projected to rocket from a $17 billion valuation in 2020 to $102 billion by 2026. Entrepreneurs must understand this enormous growth potential in context. On every front, from improved software and highly tuned processors to a general awareness of the new technology, competent chatbots, and other applications are leading to an efficient future.

Although most chatbots don’t pass as humans, they are still highly effective. Chatbots are nothing like employees. They function as a valuable search tool on a disjointed digital landscape. Bots provide answers to questions customers may not have asked if they had to contact a human. That friendly little text box is a dynamic interface in a highly impersonal digital landscape.

Conversational AI, once a novelty, is making headway in virtually every professional domain. In finance, where most users access information via mobile devices, one study projects savings of $7.6 billion by 2023 and over 2.5 billion customer service hours reclaimed for financial institutions.

One area in which AI reigns supreme is pattern recognition, which is invaluable to fraud prevention. Bots rapidly notify customers of odd account activity and promise to resolve issues like identity theft much quicker. I’ve been delighted by the graphic representations of my spending, investing, and saving provided by approachable bots at my bank.

The medical field, long thought as incapable of automation, has found enormous use in chatbots as well. Doctor David Bates, professor of medicine at Harvard Medical School, said, “If [clinicians] had support to make better decisions, they could do a better job.” Some of medical professionals’ work is understanding patients’ conditions and how to apportion time and resources. Classification problems like this are part and parcel for AI systems. By gathering basic data before professional consultation, bots can streamline medical checks to benefit patients and experts alike.

In sensitive domains like medicine and finance, it is important to note the risks of such technology. Indeed, cybersecurity threats continue to haunt server rooms everywhere. Privacy concerns prevent many from confiding personal information in a machine interface. However, the chatbot itself is rarely the weak point in data theft. Hackers can steal any information tracked by bots and humans alike. The best course is to bolster security protocols within organizations, implement white-hat hackers to tease out weaknesses in infrastructure, and insist on complex passcodes and two-factor authentication.

Consumers and employees alike are far more receptive to using chatbots than ever before. 83% of consumers prefer messaging chatbots for their customer service queries if it means an instantaneous response. 53% are more likely to shop at a business with such a service. Moreover, three-quarters of consumers expect a chatbot service in their web search.

Chatbot Conversational AI

Popular Messenger Apps Voicify Can Integrate Your Chatbot With

Cisco Spark

Cisco Spark is a complete collaboration suite for business. Its API for chatbots provides several opportunities for efficient customer relations. Adding a bot to Cisco Spark lends to a holistic digital strategy.

Facebook Messenger

Developing a conversational bot for Facebook is a great investment on the most popular networking platform. Combine the bot with Facebook Ads and improve marketing alongside customer engagement.


Twilo replaces legacy networks with simpler software solutions. The platform allows businesses to reach customers in myriad ways. A chatbot for Twilio can connect with users through email, text, and more.


Direct messaging on Twitter is a portal to spectacular customer engagement. Implementing a chatbot on Twitter means connecting with followers on a platform already known for democratizing customer interaction.


The Skype platform offers a bot API for users to receive information and interact with businesses with clarity and efficiency. While Skype is predominantly a video platform, a well-placed chatbot on Skype can save businesses time and money.


Kik is an invaluable avenue to reach young audiences. Develop a chatbot for the Kik platform to send users immediate answers to queries, create or change appointments, or build your company’s brand.


Telegram is known for unparalleled security and can be used to reach cybersecurity-focused audiences. The encrypted messaging service allows for powerful chatbot tools that bridge the customer service experience with reliable responses and actionable links.


Add a chatbot to the social messaging app Line for the ultimate buyer-seller relationship. Building bots for smaller apps helps to round out a complete customer service strategy.


Create a chatbot for Viber, the global messaging service delivered by Rakuten. Viber boasts 200 million users in 193 countries. Chatbots on Viber offer a vast suite of possible applications. The bot can respond to inquiries and gather valuable knowledge of client needs.


Chatbots for Slack can handle many of the marketing functions which make the app a destination for business. Making appointments, searching sites, and solving user issues can remedy repetitive service tasks.

User Endpoint SMS text through Voicify CMS

Implementing Chatbots with Voicify

Implementing chatbots isn’t just a way to improve customer service; it’s a cost-cutting mechanism for any business with a customer service operation. AI assistants have saved businesses up to 30% of the budget set aside for servicing customer requests. That is a paradigm shift for a technology that has only been seriously implemented for half a decade.

For those employees who respond to customer questions, their jobs are becoming more dynamic. Instead of answering repetitive FAQs, they leave robotic responses to the robots while serving as their organizations’ authentic face. IBM found that chatbots could eliminate 80% of these tedious lines of inquiry. The chatbot market has many players eager to fill this crucial gap for businesses. Voicify offers a complete suite of tools for the chatbot process, from bot creation to user analysis. AI created with Voicify provides automated services for the major communication platforms. Facebook Messenger, Slack, Twitter, and Skype are just a few of the sites we can build bots around.

As we march toward the era when we are more shocked that a chatbot cannot answer our questions than when they respond flawlessly, we must admit these machines have room to improve. But that is no reason to put off implementing customer service AI until next year. Business Insider projects that consumer spending via chatbot will increase from just $2.8 billion in 2019 to an astounding $142 billion in 2024.  It will be much more fun to ride this roller coaster if you’ve already bought a ticket and taken your seat.

Device Type Implicit Personalization Voicify