Tetiana Shataieva
Apr 21, 2022 | 10 min read

Most of us at this point in our lives have probably used chatbots. But have you ever wondered how they work? What types of chatbots are there? How do we interact with them? Before we dive in and answer these questions, let’s quickly cover the basics.

What is a chatbot? A chatbot is a computer program created to serve users alongside a knowledge base center and live support agents. It simulates human conversation and lets people feel like they are communicating with another person while in fact interacting with digital devices. 

Chatbots can be simple and answer elementary queries with a single-line response, or sophisticated and serve as full-fledged digital assistants that learn and evolve as they gather more data.

What are the benefits of chatbots? The main benefit of chatbots is quick 24/7 support available for users. Another benefit is that chatbots allow businesses to cut up to 30% of customer support costs. To sum up, this tool can help you save time and money while generating more leads every day (as much as 55% more!). 

The rise of technology and artificial intelligence is introducing many new developments, hence, types of chatbots. In this article, we will explore the main types with examples. This will give you a clear understanding of chatbot classification and what would be the ideal chatbot for your business!

Different types of chatbots

Can you imagine, the global chatbot market was valued at $3.2 billion in 2020 and is expected to reach $14.9 billion by 2027? A “big market pie” stimulates hundreds of companies worldwide to develop various types of chatbots that can improve customers’ experience across different fields. For this reason alone, some sources say there are 3 types of chatbots, others round up the number at 7. 

So, how many types of chatbots are there? It depends on the functionalities and the use cases of bots. Not to miss anything, let’s go through each of the two categories, starting with different types of chatbots based on how they work.

Types of chatbots based on how they work

Based on the operational process, I divided chatbots into 6 main types. You can find examples of every type to have a better understanding. I bet you came across almost all of those types before.

Button-based

A button-based chatbot is the most basic type on the market today. A user just has to select the topic from the predefined buttons to perform the desired action. Hence, there is no possibility for a customer to give free text input.

It’s quite possible, therefore, that the user’s query won’t be listed and the bot will be just useless in some cases. To put it another way, this is a “scripted chatbot”, constrained to certain question-answers. 

Can you then say that it’s a bad type of chatbot since it’s so basic? Definitely not. It’s an effective tool for answering repetitive questions, which, by the way, make up for 20% of support queries. 

For example, the Mobile Monkey bot provides buttons for users to choose a marketing topic of their interest. Next, the bot offers you to download a marketing guide. But before you can do this, it asks for some contact information. Bingo! You get a new lead to your potential customer base. Without any human contact. 

Button-based chatbot

Keyword recognition-based chatbots

A keyword recognition-based chatbot is a more advanced tool than a button-based chatbot.  This bot has the ability to spot relevant keywords in the users’ queries and provide appropriate answers. 

For instance,  when a lead asks “What is the price for the product X?”, the chatbot can recognize the keywords “price” and “product X”, and give detailed information about the pricing model.

Can this type of chatbot aid your business? Yes. Keyword recognition-based chatbots can be useful for websites as they allow users to type in their questions and then get a quick response within seconds to the most popular queries. It feels like a natural dialogue that has a positive effect on customer satisfaction.

Here is an example from Capital One’s “Eno” banking bot. The chatbot recognizes the keywords provided by a user, such as: “left”, “on card”, “awesome”, and “due date”.  

Rule-based chatbots

Rule-based bots are capable of answering queries based on a predefined set of rules that are embedded into them. The complexity of the rule can greatly vary from a simple set to an advanced one. Usually, it depends on the industry field, the tasks that the company wants to solve with the help of the bot, and the resources (money, human). 

These bots are built on a conditional if/then basis, which makes them really simple to train. Thus, you don’t have to dedicate a fortune to implement such a bot – just write a script. 

It’s worth noting that rule-based bots cannot learn from practice on their own. They will only provide the information that businesses want them to provide. 

Is it a worthwhile investment? It is if you want to offer users an advanced bot without spending much time and money on it. In case the bot can’t answer a certain query, it can efficiently hand over the conversation to a live support agent. It’s a fast and convenient way to serve clients online.

For example, look at this quick scheme. This is a very simple rule-based chatbot that works by recognizing specific words in users’ inputs. Then the bot identifies the intent behind the keyword and provides a response.  

Rule-based chatbot
Rule-based chatbot scheme

AI chatbots 

AI bots are capable of self-learning. They are programmed with Natural Language Processing (NLP) and Machine Learning. Unlike rule-based bots, it takes much more time to build and train an AI bot. 

This type of bot works well with companies that have a lot of user data that allows chatbots to self-learn from it. AI bots can potentially understand and respond in different languages to provide more personalized communication.

Contextual bots do not just speak with customers, they can also analyze the users’ behavior and mood. The China-based startup Emotibot is working to develop bots capable of detecting the current emotions of the customer and responding accordingly. 

Should your business consider implementing an AI chatbot? Sure, it should. Thanks to constant learning, AI bots can help you provide more personalized customer service and enhance user engagement. Moreover, these types of bots can handle customer queries from beginning to end without a human touch required and stay available around the clock with no breaks. For example, have a look at the picture below and see the difference between a rule-based chatbot and an AI bot in practice. The latter is a bit more advanced and in some cases can better recognize user queries even if they don’t match specific keywords.

Hybrid model 

The hybrid model offers the best of three worlds: the simplicity of the rule-based chatbots, the advanced capabilities of the AI bots, and the empathy of human interaction. As a result, you receive a universal approach where repetitive questions can be answered by a simple chatbot, more complex ones can use the help of AI technology, and those that require human touch will get it from a live agent. 

While it might sound complicated, it won’t change basically anything in the agents’ job or customer replies process. The hybrid bot that embraces the rule-based and AI features will act as a new virtual agent. It will take care of the queries it can handle on its own and pass multilayered difficult questions to live support representatives. 

Do you need a hybrid chatbot model? You might if your company is a huge enterprise with numerous queries and a rich customer database. Due to the complexity involved in setting up a hybrid chatbot, this tool will best cater to the needs of large businesses. But for aspiring companies that receive a small number of simple questions, there is no need to spend so much time and money on the hybrid bot. 

For example, below you can see that a bot offers to select the proper answer or write a question. And when a visitor provides their own query that is not on the list, a chatbot can perfectly keep up with the dialogue and help the user.

Hybrid chatbot
An example provided by Virtual Spirits

Voice bots

A voice bot is a software program that allows a user to interact with a device by speaking to it. The tool can understand a spoken question, analyze it, and structure a fitting audio response. It’s not exactly the same as a chatbot but has many similarities. 

Voice and chat bots use similar underlying technology. They both can be basic, like those when you call a hospital and have to press 0-9 to choose a proper option, or advanced, like Siri, powered by artificial intelligence. In the core, chat and voice bots have the same task which is to understand a customer’s question and deliver the right answer.

Should your business have a closer look at voice bots? Of course, especially if you provide voice support to your customers and have a quickly growing number of requests. The main benefit of voice bots is that they are fast as voice is the quickest form of communication. So a user can get an immediate answer without typing or navigating drop-down menus. But keep in mind that designing a voice bot will definitely require a lot of effort

Speaking of the examples, you definitely know many from Apple’s Siri to Amazon’s Alexa. In this part of the article, I’d like to share another one, less obvious, Sophia the Robot. I had an opportunity to attend her performance in Cracow a few years ago. She communicates by using voice bot software powered by AI. I hope this video can put a smile on your face 🙂

Types of chatbots based on where they are used

Based on the usage case, chatbots can be divided into 4 main types. Basically, they all aim to help businesses grow and provide better service to leads and customers. Let’s dive in! 

Support chatbot

This type of chatbot is used in customer service to complete any tasks related to supporting users. Usually, they handle all the types of FAQs and walk a visitor through the whole process to the demo or buying stage. If a chatbot can’t provide a response, it passes customers to support agents. 

Support chatbots can be used in any industry – banking, retail, human resources, digital marketing, health care, and more. Over 67% of customers worldwide use a chatbot for customer support.

Chatbots for support can help you:

  • Handle repetitive questions
  • Focus on more important user queries
  • Collect contact information
  • Provide proactive support 
  • Collect customer feedback
  • Save business resources

For example, a Swedish company H&M adopted a chatbot on their website to assist users in choosing the best product or answer FAQs.

Marketing and sales chatbots

Another popular use case of chatbots is sales and marketing. The main purpose of a bot here is to help customers explore and buy your product or service. By sending relevant or engaging information to users, bots pre-qualify leads and move them through a sales funnel. 

The software pays off better than you think. Reports show that chatbots increase sales by an average of 67%. How? Just like your business can use a chatbot for support, it can also use it for sales – start a conversation with a website visitor, qualify leads, or upsell customers.

A sales or marketing chatbot can help you: 

  • Gather information and pre-qualify leads
  • Move leads through a sales funnel automatically
  • Send promotional notifications
  • Upsell and cross-sell products
  • Personalize customer experience
  • Boost engagement

For example, a Danish toy production company LEGO relies a lot on their bot ‘Ralph’, who is assisting customers and making sure they complete their orders.

Sales chatbot_Lego
Lego sales chatbot

Skills chatbots

Those are chatbots that can execute commands such as “play the song”, “make a call”, “open the application”, “send an email”, etc. For this type of chatbot, voice functionality implies that the user doesn’t need to hold the device or press any buttons. This solution can be used in any industry – healthcare, hospitality, banking, or entertainment.

The software is capable of simply obeying instructions which allows users to multitask. In most cases, for a basic skill chatbot, there is no need to invest too much time and implement the AI technology. It would be just enough for individuals to learn how exactly to give commands so that the device knows what to do. 

Skills chatbots can help you:

  • Execute commands
  • Allow users to multitask
  • Increase visitors engagement on your website or platform
  • Improve customer satisfaction

For example, Domino’s chatbot is able to re-order members’ previous orders. All a user needs to do is to send an emoji via SMS. Customers can also make an order via a Google Assistant, Alexa bot, or Facebook chatbot. 

Domino's skills chatbot
Domino’s skills chatbot

Entertainment chatbots

The last type of chatbot I’d like to mention here is the entertaining chatbot. Usually, they are used for one and only purpose which is to improve engagement with your brand and provide a unique and fun experience for users. 

Even though used mostly for fun, entertainment bots tend to be complex to build. You won’t be able to do it without artificial intelligence that interprets what users are saying. The software needs to be able to field a wide range of individuals’ inputs, as there is no specific area of use here.

As a rule, all the fun lies in the fact that a person asks tricky questions, and the more original and funnier the bot can answer, the better.

Entertainment chatbots can help you: 

  • Entertain customers
  • Engage customers better
  • Build relationships with users outside of a business context 
  • Generate buzz around it

A weather bot, a gaming bot, and even the slack bots can be used as examples of chatbots in the entertainment industry. For example, Netflix uses bots to write stand-up concerts for digital characters! Watch the video below and tell me, how do you like it?

How to choose the best bot among all these types of chatbots?

There are many types of chatbots and the best one for you will simply cover your current business needs. If you have an aspiring startup with a few dozens or hundreds of active users, choose a rule-based bot. It will perfectly meet your expectations without demanding too much money or effort from you.

On the other hand, if you have a huge company counting thousands and thousands of users, then consider adopting some advanced solutions like AI or hybrid model chatbots.

I really liked the phrase, which perfectly describes this situation: “Don’t bring a bazooka to a water pistol fight”. Just choose a solution that suits your current needs.

Wrap up

There are many types of chatbots, starting from the most basic ones to hybrid models that embrace rule-based bots, AI, and human communication. The scope of chatbots can also be completely different, but as a rule, they are used to support customers and automate the sales processes.

What type of chatbot to choose depends entirely on your current business goals. I’d suggest starting with the most elementary one like a button-based chatbot and then slowly moving towards more feature-rich bots as your business grows. 

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Are you looking for the best chatbot templates in business? We are happy to assist you. In this post, you can find the top bot templates for customer support, sales, and marketing, plus some quick recommendations on how to use them. Enjoy!

Tetiana Shataieva

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