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8 Types of Chatbots: A Complete Guide

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Priya Naha

Senior Writer:

green tickReading Time: 8 Minutes
green tickPublished : September 9, 2024

Did you know that 88% of online users interacted with chatbots last year? It is becoming increasingly clear that companies must include chatbots in their business operations, given their quick responses and 24/7 support. 

A chatbot does everything from handling complex customer queries to automating basic tasks like replying to FAQs! However, with different types of chatbots available, picking the best one can be challenging.

We’ll explore the various chatbot types to help you make an informed choice that aligns with your business objectives.

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Pro-Tip

Choose a chatbot with a specific goal in mind first. Whether you need to handle complex inquiries or automate basic duties, matching the chatbot's skills to your business objectives will guarantee that it delivers genuine value and raises customer satisfaction.

What is a Chatbot?

A chatbot is a robust software program that uses natural language processing (NLP) and artificial intelligence (AI) to engage consumers in conversation. Chatbots, which are made to sound like real people, can converse by text or voice on a variety of different platforms, like websites, smartphone apps, messaging services, and smart home appliances.

What is a Chatbot

Businesses have started using these digital assistants at an increasing rate. A quarter of businesses are expected to use chatbots as their main customer support channel by 2027.  Chatbots improve customer service, automate repetitive operations, and offer immediate, round-the-clock support for businesses.

What Are the Different Types of Chatbots?

The broad range of chatbots available in the market is a reflection of the complexity of user interactions and the varying requirements of businesses. Each type of chatbot has a specific task. 

These roles range from basic task automation to advanced, context-aware conversations. Let’s take a look at the different types of chatbots.

Different Types of Chatbots

1. Menu Or Button-Based Chatbots

One of the basic kinds of chatbots is menu- or button-based, where it guides users through a set of preset options. When interacting with these chatbots, users are presented with a menu of options that they can select from by clicking buttons to execute tasks or receive information. 

For example, on an airline’s website, a menu-based chatbot may offer choices like “Check Flight Status,” “Book a Flight,” or “Contact Support.”

These chatbots’ simplicity is both a benefit and a drawback. They are an excellent choice for companies looking to quickly integrate a chatbot solution as they are simple to set up and require little training. However, given its inflexible structure, it can’t handle more complex inquiries or offer customized responses.

2. Rule-Based Chatbots

The performance of rule-based chatbots is higher than that of menu-based chatbots as they act according to a predetermined set of rules or decision trees. These AI-powered chatbots adhere to a predetermined script based on specific terms or phrases that the user enters.

For example, a rule-based chatbot would identify the term “hours” and reply with the company’s operation hours if a user typed in “What are your business hours?”

Without human assistance, they cannot manage unusual inquiries or adjust to unfamiliar circumstances. Rule-based chatbots offer a reliable and affordable way to handle standard inquiries for companies like banks and retail establishments that have regular consumer contacts.

3. Keyword Recognition-Based Chatbots

By identifying and reacting to specific keywords in user input, keyword recognition-based chatbots enhance the capabilities of rules-based chatbots. These types of AI chatbots can respond to a wider variety of queries since they are built to identify a wider range of keywords and phrases.

 For example, if a user asks, “Can I return a product I bought last week?” When responding, the customer support chatbots may recognize terms like “return” and “product” and offer relevant details.

Compared to their rules-based counterparts, these chatbots are more versatile and can handle a greater range of inquiries.  These chatbots still have challenges when it comes to unclear language or tricky inquiries that call for background knowledge.

4. Machine Learning Chatbots

Machine learning chatbots represent a significant development in chatbot technology. Machine learning chatbots can learn from past encounters and continuously increase their capacity to understand and react to human inputs, in contrast to rules-based or keyword recognition bots. 

Through the process of scrutinizing huge quantities of data, these chatbots gain a more profound comprehension of language, context, and user purpose, which allows for more natural and significant exchanges.

Machine Learning Chatbots

For example, an online retailer’s machine learning chatbot can be able to recognize trends in FAQs about return guidelines or shipping schedules by analyzing consumer interactions. It can improve its responses over time to better satisfy client needs by giving more precise and tailored information.

However, implementing a machine learning chatbot costs a significant investment in terms of computing power and data collection. Furthermore, they need to be updated and monitored frequently to ensure they stay accurate and applicable when consumer wants and habits change.

 
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5. Contextual Chatbots

Maintaining context during a discussion allows contextual chatbots to improve upon the features of machine-learning chatbots. It means that they can recall past exchanges and use that knowledge to deliver more tailored and relevant responses. 

For example, suppose a user had previously enquired about a product’s availability. In that case, the contextual chatbot may have followed up with details about a relevant promotion or recent update to that particular product category.

 As contextual chatbots can personalize their responses based on the user’s past interactions, preferences, and present needs, they can offer a more human conversation-like experience. Contextual chatbots are very beneficial in terms of client satisfaction and personalization. 

But they also need advanced AI and machine learning capabilities. Contextual chatbot development and maintenance need advanced data management and privacy issues as the bot must safely store and analyze sensitive user data.

6. Hybrid Chatbots

The best aspects of AI-driven and rules-based chatbots are combined in hybrid chatbots to provide a flexible solution that can manage a variety of interactions. Hybrid chatbots can handle basic tasks efficiently and respond to unclear or complex queries by combining machine learning capabilities with established guidelines.

Hybrid Chatbots

For example, in a customer service scenario, a hybrid chatbot might employ rules-based responses for standard questions about account balances or store hours and transition to AI-driven responses for more complex queries regarding recent transactions or product warranties. 

Businesses that wish to progressively integrate AI into their operations without totally redesigning their existing systems may find hybrid chatbots to be especially helpful. They provide a well-rounded solution that can evolve to meet the needs of the company by combining classic and new chatbot technology.

7. Voice Chatbots

Voice chatbots, sometimes referred to as voice assistants, allow users to communicate with them verbally instead of through text. These voice-activated virtual assistants are frequently found in gadgets like smart speakers, smartphones, and in-car entertainment systems. Apple Siri, Google Assistant, and Amazon Alexa are a few examples of well-known voice chatbots.

Voice bots provide users with a comfortable, hands-free method to access information, operate smart devices, and carry out actions like purchasing, traveling, or creating reminders. They come in especially handy when driving or cooking, for example, and in other situations where typing is not practicable.

Voice Chatbots

However, creating a voice chatbot has its challenges, like advanced speech recognition and natural language processing skills. To be accessible to all users, voice chatbots also need to be built to handle a broad variety of languages, speech styles, and accents.

8. Generative AI Chatbots

The finest in chatbot technology are generative AI chatbots, which can produce real-time responses based on deep learning models. Compared to conventional chatbots that depend on pre-written scripts or decision trees, generative artificial intelligence chatbots produce unique content based on user input. It allows them to have conversations that are more intricate and nuanced and closely resemble human interaction.

For example, a financial institution can use generative AI chatbots to offer specific, tailored advice on investment plans based on each user’s financial circumstances. In real-time, the chatbot could create customized recommendations by analyzing the user’s data and taking into account different market situations.

Generative AI chatbots are ideal for companies that want to provide a genuinely conversational experience as they understand and reply to a broad variety of inquiries with human-like fluency. 

However, creating and implementing these chatbots takes a lot of resources, such as advanced computer power, access to huge quantities of data, and strong security mechanisms to safeguard private information.

How To Choose the Best Chatbots For Your Business?

Selecting the ideal chatbot software for your company is an important choice that will have a big impact on operational efficacy and customer satisfaction. Let’s look at a few ways to choose the best chatbot for your business.

Best Chatbots For Business

1. Define Your Chatbot’s Purpose and Objectives

Start by identifying the chatbot’s main objective. Are you trying to improve user engagement, create leads, automate customer assistance, or offer tailored recommendations? Having a clear understanding of these goals will enable you to choose the chatbot type that best fits your requirements. 

For example, a basic rules-based or menu-driven chatbot can be suitable if your goal is to automate repetitive customer care duties. However, a more advanced AI-driven chatbot might be required if your goal is to provide a more customized and interesting user experience.

2. Evaluate The Complexity Of User Interactions

Think about how complicated the exchanges you want the chatbot to manage will be. A menu-based or rules-based chatbot could be sufficient for basic, repetitive activities like scheduling appointments or responding to FAQs. In addition to being simple to use, these chatbots may offer a reliable, consistent user experience. 

But if your company needs more customized or dynamic interactions—such as offering in-depth product recommendations or managing intricate client queries—an AI-driven solution like a contextual chatbot or machine learning would be more suitable. Your understanding of the complexity of user interactions will guide your decision on chatbot technology.

3. Assess Integration And Compatibility With Existing Systems

The efficiency of different AI chatbots depends on how effectively they perform on the several platforms that your clients use to interact with your business. Will it be made available on your social media accounts, mobile app, or website? 

 It is essential to ensure that the chatbot technology you select can seamlessly integrate with various channels and provide a uniform experience throughout all points of contact. 

Furthermore, it is necessary to select a chatbot that is multilingual and sensitive to cultural differences if your company has several locations. This will guarantee that irrespective of their location or language, every one of your clients receives the same excellent service.

4. Analyze Scalability For Potential Expansion

Scalability is a significant factor. Your chatbot should be able to manage higher numbers of interactions without sacrificing performance as your company expands. Seek chatbot solutions that are flexible and scalable to increase their capacity as your demands change.

A scalable chatbot helps you prevent potential bottlenecks and service interruptions by ensuring that your company can maintain high standards of customer support even as demand rises.

5. Determine Your ROI And Budget

Lastly, think about your spending plan and the overall cost of ownership. While advanced AI-driven chatbots have a lot to offer in terms of features and functionality, they also come with a hefty price tag in terms of development, data management, and continuous upkeep. 

If you want to know if investing in a more advanced chatbot solution is worth it for your company, compare the possible ROI with the upfront expenses. To ensure your chatbot provides value without overstretching your resources, it’s essential to strike a balance between the need for advanced capabilities and the realistic concerns of budget and desired ROI.

Conclusion

With the correct chatbot, you can improve customer satisfaction, simplify processes, and gain valuable insight into user behavior. But the secret to achieving these advantages is choosing the chatbot that best suits the objectives and requirements of your company.

Whether you choose a complex generative AI chatbot or a simple menu-based chatbot, you must take into account aspects like budget, scalability, integration with current systems, and interface complexity.

Frequently Asked Questions

Certain chatbots are available for free, with limited functionality and support. Paid subscriptions are typically necessary for advanced functionalities, higher volumes, and integrations. Choose which solution best suits your demands and budget by comparing your options.

Unlike other chatbots that stick to predefined scripts or keywords, conversational AI bots use advanced machine learning and natural language processing to learn about and join in dynamic, context-aware conversations.

There are plenty of chatbots available, all with different purposes. They meet the demands of diverse industries and business goals and range from simple menu-driven bots to complex AI-driven systems.

A Level 3 chatbot provides highly tailored and smart interactions that adjust based on user behavior and previous encounters. It does this by using powerful AI and machine learning to understand context and details in discussions.

Updated : September 11, 2024

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