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Feasibility and success rate of chatbots on Websites with reference to their customer association

Feasibility and success rate of chatbots on Websites


Komal Shete, Vaishnavi Pisipati


The ripening of AI and it abounds applications have unlocked gates to the phenomenon of inanimate objects being bestowed with the gift of speech, something extremely stirring about creating a non-living entity and then having a conversation with it. Chatbots as systems are set up to mimic the human conversations, providing the amusement value to the user interface platforms. Major brands deploy goal-based conversational agents on websites to assist consumers, answer questions and solve problems using machine learning analysis and artificial intelligence. This paper makes an effort to explore predominant drivers of its surge, establishing a paragon with the business rationale of the chatbots and the results that they are able to bring down with the connection established with the consumers. The principal requisite is, therefore, to examine whether privacy and hacking are a concern to this application of AI that would be scrutinized in the paper. Furthermore, the major architectures of chatbots are comprehended alongside their alignment with the psychology of human grades and increasing stride of digitization impact on them.


Chatbots at the basic level can be described as a piece of software that is a conversational interface which was designed to manifest the efficiency of customer care services. According to the predictions of the world economic forums, chatbots would be an inexorable part of the next industrial revolution. Some major attributes that chatbots are accounted for are their superior learning capability, faster responsiveness, simpler to build, which is the crest is aimed towards providing solutions to consumers. There are various factors yet to be discovered in the Chatbot territory which unifies to build automated customer service. Technology is in a phase of the continuous switch, few fades away with the advent of time, and the others stand ground and remain the dominant force in the market. Messaging is one such vogue that is now inclining towards chatbots as well. Timely and differentiable customer service is the need of the hour and demanded by consumers. These personal assistants generate human-like connections with the consumers with some examples being Microsoft’s Xiaoice, Amazon’s Alexa, Apple’s Siri etc. Modern consumers gaze for reliability, to gain confidence from these set of consumers is a prime task for the chatbots.

Rise of Chatbots:

The digitalization of all the industries has scattered its sweep establishing a rostrum where innovation has become the essence of development. Analogous to that is the rise of chatbots, which is becoming a vibrant option to deal with customer service and is in the process of elaborating its functions to increase efficiency. It is profoundly definite from the recent study done by Gartner that chatbots would be in charge of managing 85% of all the customer interactions by 2020. This evolution has happened about in various stages. The hatch of this technology initiated as early as 1950 with Alan Turing’s intelligent machine which was then succeeded by another intelligent machine that could establish a quality interface between a machine and a human, making it more tangible- ELIZA. The graph did not show a steep until now, attributing its presence to the increasing demand for customer-oriented processes and competition. The major drivers for the rise of the chatbot are:

  1. The upswing in the use of messaging applications by every generation:

The preferred channel of communication is what the messaging applications have transformed into. The number of people getting connected through these platforms is amplifying rapidly. Chatbots operate on an identical methodology which contains enormous prospective for market penetration.

  1. The augmenting prominence of conversational interfaces:

Facebook’s annual developer conference (F8) has bolstered the need for technologies that whirl to establish more human-like dialogues and discourse. The superior level of chatbots that is illustrated by ‘Siri’ and ‘Cortana’ are the versions that demonstrate the dialogue discourse in the voice form. These applications are predicted to shelter the increasingly connected world.

  1. Propelling growth of Artificial Intelligence:

The statistics of AI market that blankets all the major technologies such as Machine learning, Image recognition, and speech processing are predicted to hit a mark of $5.05 billion by 2020 as per the studies released by Statista.

  1. Customer oriented progression:

The call center approach of staying bounded with the consumers has been arched whilst a few years. The emphasis on customer experiences and rendering towards a differential hem when in strife to excel amongst the intense competition has led to the rise of chatbots. Cost-effective, and user-friendly as prime characteristics chatbots serve the end user as the first point of contact with the reduced hassle and a much-simplified process.

  1. Automation on the spree:

The systems and their according practices are being developed to curtail the human intervention and create an automated chain to increase efficiency and making certain of seamless assistance from the service providers end.

  1. Highly- remunerative and cost-effective:

The costs that are incurred while building a chatbot have come down significantly enabling enterprises and organizations at all levels to implement the AI based customer support for enhanced customer experiences. The conversational tools building architecture is simpler when compared to the apps, making them easier to deploy.


Chatbots in Marketing

Chatbots as tools are employed to respond to the basic queries of the consumers encompass fundamental product information, enterprise information, services the organization offers etc. But these dialogues and discoursed are advancing towards answering more complex queries that intend to give a humanized touch to the conversation. Chatbotsget smarter with every articulation; they learn from the previous interactions and become more and more effective over time. Customer engagement, enhanced customer service, and customer experience these are few of the drivers that persist in the existence of chatbots. These are being used by various power brands as a potent marketing tool.

The clothing company and mighty brand H & M have chatbots application on their website, and the consumers are queried about the style of clothing they opt for and accordingly recommends outfits that fit the customer requirements.

  • Chatbots aid to sell products and services producer offers to the consumer in an effective way.
  • Chatbots succor the financial transactions and help consumers to handle payments in fewer clicks.
  • Business Intelligence embedded helps chatbots understand and predict the customer behavior patterns, and congregates the customer insights to provide customers with the information of their choice. The customers are equipped then to take an informed decision.
  • Personalization is an effective marketing strategy that inspires customer loyalty. Chatbots help to endow the end user with a personalized impact. Building a relationship with the consumer even after the purchase of the product is important to achieve customer loyalty.

Chatbots in Customer Service:

“Your most unhappy customers are the greatest source of learning” as very truly put by Bill Gates, a customer always looks for the unmitigated combination of quality, efficiency, service, and reliability. Effective customer service is, therefore, to make our customers understand they are valued and appreciated by the organization. With the increasing accessibility of the social media, and advanced speeds internet made available, it is an effortless move for the customer to assert an opinion or an expression via the platforms that provide huge odds to get disseminated further to a larger audience. The compass of the chatbot expertise in the area of customer service accosts to circumstances where the customer concerns are realized. They are solved by troubleshooting or by evolving customer education cases where scripted answers are constructed.  And thereby a process of machine learning and artificial intelligence enable further enhanced solution giving the ability to conquer every consumer problems with higher accuracy rates. In comparison to the other service channels such as customer care or IVR, chatbot enables a very cost and time effective way to address customer concerns.

Humans depict emotions and empathy is a phenomenon that aids to deal the scenario of concern, and it is with no doubt hence that the chatbot designed systems can be installed to answer the basic queries; wherein a complex situation can be forwarded to human-aided services. Increasing consumer base and awareness, especially on the digital platforms, benefits the ease of the access on both the ends. The future positioning of chatbots would be instilled in the drive of technology advancements in digital customer. It has the ability to shift the boundaries of competition to future pinnacles.

Chatbots Market in India:

Chatbots which have implicitly have made their standpoint as a basic necessity for every flourishing enterprise. The messaging application has overthrown the social networking platforms as the times advanced paving way for increased opportunities to the chatbots. The chatbot ecosystem is briskly

Fig 1. Projected Chabot Growth vs Actual Website Growth.(Source: Chatbots Magazine)


Augmenting and its underlying technology and arenas encompass deployment channels, native bots, technology enablers, and third party coalitions. According to the report by the Grand View Research, the global market for chatbots is estimated to hit $1.23 billion by 2015, with a compounded annual growth rate of about 24.3%. Also, the estimates reinforce the fact that chatbots are expected to mitigate the operational expenses to the organizations. These yield services in various industrial sectors in the domains of marketing, payments, service. Within the potential market such as India, consumers that approximate to 45% of the end users prefer chatbots as the primary channel of conversational interface with the organization. As per the survey conducted by Oracle, 80% of the respondents had a prior experience with a chatbot or have an enthusiasm to encounter with one by 2020. 42% of the respondents of the survey have an optimistic outlook towards the usage of automation technologies. Companies of varied scale are now innovating and redefining themselves with technology as their support to make the mark. From the service provider’s perspective, reports estimate to see an overwhelming growth of investments chatbots that are being accounted to about $8 billion. The huge leaps made by the brands like Facebook, Google, Microsoft, Apple are blazing ahead with innovation as a gadget to success. The right technology accompanied with the suitable design with a pinch of innovation can build a chatbot that could do wonders for customer lifecycle. India is a country with varied languages, English being used by a minor percentage of the population; the challenge thus is to reach out to the consumer in their own language. According to a study conducted by KPMG and Google in 2017, the non-English internet users are estimated to grow by 18% by 2021. Chatbots are striving to provide solutions to linguistic concerns in parallel to the prime technology that is required at the heart of the chatbot.

Anatomy of a Chatbot:

Building a chatbot with an extremely cost-effective way is important to ensure the optimum return on investment beyond the bells of the customer-centric approach. The major components that a chatbot consists of are:

  • Backend
  • Channel
  • Natural Language understanding
  • Conversational Intelligence
  • Integrations
  • Control Panel

Two major options chatbots present to an investor are either to go ahead with a custom solution based platform or building a chatbot on top of a platform. The later is a more cost-effective technique, and such tools work on a subscription basis and are also time effective.

Fig 2. Types of Chatbots. (Motion.ai subscription pricing)

Individual implementation of elements of chatbots costs approximately $35,000. But the leaps of progress in this field has been immense with the launch of several platforms and incubation projects that help build a chatbot at a twice cheaper price and 16 times more accelerating speeds depending upon the solution to be employed. Artificial Intelligence flight in the chatbots has been rapid and to build an AI supported chatbot starts from $40,000 and can go up to $100,000. These kinds of chatbots are built to enable customers with more of a personalized and customized experience along with a complete business-enabled solution.

Cost-Justifiable Bot:

The utility chatbot renders is supported by its cost-effective structure which is under the inspection of every investor. Costs incurred to maintain human service representatives are high when compared to that of fabricating a bot. All the brand titans favor out-sourcing of the call center workforce for customer service, but costs are substantial in this system as well. Installing a chatbot requires a single large investment genesis, and that balances through time, with negligible maintenance expenditure providing room for immense finance potential. There are many success stories of brands that have captured bouldering figures of ROI, one of them being “Much chats”. With re-directing the traffic from a Facebook page, this blog messenger has acquired an ROI of 400%.

Fig 3. Savongs created by Chatbots. (McKinsey estimation report 2016)


Fig.4. Key Statistics for Chatbots. (Juniper Research)

This is primarily because, chatbots are on service 24 hours a day, 7 days a week, 52 weeks in a year-round the clock under no pressured requirements for vacations, appraisals. As per studies, in 2016, there are more than 30,000 chatbots installed in facebook messenger. The chatbots’ ability to respond to the user commands in a minimalistic time frame is essential to magnify their functionality.

How Secure are Chatbots?

With tremendous potential in sales, marketing and customer service chatbots have quickly being embraced by business to improve service quality and automate certain processes to save money. With the advancement of artificial intelligence and machine learning, chatbots have been fuelled by an exponential growth over the year. More than 20 million people chat with xiaocia bot on the Chinese micro-blogging service Weibo. It is estimated that 80 percent of business wants chatbots by 2020. However, with increasing deployment of enterprise chatbots, it’s important to consider security implication of this promising technology.

While the technology is continuously improving over the year, still it is not entirely secure. Bots can create an easy way for cyber criminals to access the data flowing through chatbots interface which allows a cyber attacker to access network and database of the organization. Therefore security needs to play a large role in such platform where customer’s data is at stake and it becomes easier for the hacker to break through the security walls if your technology is not secure enough.

Encryption is one of the key parameters of any online function to ensure the maximum security of chatbots; communication should have encryption all the time whether it is on a public or private platform. It can be easier for a private platform to have its own encrypted channel but it becomes difficult for a public platform where security features are decided by third-party security branch i.e. organization do not have control over the security features. Till the time public channels do not offer encryption services organization should be aware of the type of chatbots they are employing, companies use bots to collect the information from the user and use that information to improve service quality. While extracting the information from the users there should be regulation on how this information is stored and it is going to access.

As chatbots have become better at every stage to imitate humans, technology has already drawn the attention of hackers in phishing schemes. Therefore organization should start defense mechanism against the traditional phishing. Specific security protocols are being developed to deploy bots on a public platform. With the tremendous potential to transform online business, chatbots are quite destructive causing cybersecurity nightmare for the organization. At the early stage, it is important for the organization to be aware of the frenzy surrounding and deploy bots on a public platform.

Illustrations of Chatbot Realizations:

  1. Company: Rapid Miner

Chatbot System: Drift


Rapid Miner as the very first step renewed all the lead generation systems of the organization’s platforms to chatbots.  It became quite evident that automated customer care possesses the ability to qualify leads in minutes, compared to the other types of campaigns which significantly amount to more amount of time. Customers visit the website with various prospects, it could either be product inquiry, technical support or order tracking, chatbot implementation could enable a process that filters other queries with the ones from which leads are expected. The drift bot manages about a thousand chats a month with almost resolve two-thirds of the entire queries, the rest getting forward to the human agents. As far as the statistics are concerned, drift was successfully able to bring in 4,000 leads, influencing 25% of the open sales pipeline and has recorded 10% of the new sales.

  1. Company Name: Vodafone UK

Chatbot System: Tobi

Tobi offers immediate support to practically 70% of the customer queries, continuously enhancing it’s learning the process that endows heights of customer experience. Tobi is built on the latest AI technology that can provide customers with seamless problem-solving capability along with a swift switch to human systems in case of complicated queries. Customers have reacted positively with respect to the speed and simplicity. Impending in the future, Tobi is geared up to expand the range of support and also fully integrating with the systems of Vodafone to allow the service providers to focus on higher quality conversations.


The Evolution in The Future:

Since the time Facebook launched chatbots in 2016 for the first time, chatbots have been developed over a period of time.80 percent of companies have already implemented or have planned to implement it by 2020. Companies believe that automation will help improve ease of customer and reduce labor cost. Bots will replace 29 percent of employees which will result in $29 billion in savings annually and hence will attract many businesses.

Majority of the population between ages 18 to 55 spends time on messaging applications; therefore, it is easier for the company to appeal to younger and demographic generation. Bots are found to be a more effective channel for advertisement. It is easier to build rapport with the customer so that customer can understand brand more easily. This provides an innovative and convenient channel for advertising directly to the customer. Bots can offer a more personalized experience to the user by offering customized advertisements by remembering the personal choice of the user. With the continuous advancement of the mobile device and sense of companies efforts to deliver excellent customer experience as a competitive differentiator.  To differentiate itself from other, business has come up with video chat for customer interaction; this will provide a richer experience to the user. Also, the exploratory growth of IoT and use cases will bring transformational change.


Arriving into a chatbot market is effortless with very mild barriers. It is substantially undemanding for a business of any scale to build a chatbot enabled feature on to their platform. A thorough example is the Facebook Messenger, which provides a benevolent platform, enabling the deployment of a chatbot in an ingenious way. Chatbots are just the means that help deposit information, but they help in developing leads. Versatile conversations that keep evolving enable bot to become smarter. Possessing a unique functionality is might not be the prime focus, as the preliminary requirement is to solve customer’s troubles. Messaging interfaces are just a way to reach out to customers in an effective way, these could be further developed with advancing technologies to bring out a much superior service to embellish customer experience. The road ahead for Chatbots depends on the degree of flexibility and responsiveness it offers. Efforts are being made to equip individual chatbots with a fun personality and interact verbally to consummate perfect tailored responses.

Customers are looking for an option that integrates both flexibility and speed with near real-time data that contributes to their evolving needs. Enterprise AI is a new trend that has been looked upon to address the budding automation technologies. Smart technologies that transform the vision of the future and solve customer problems end to end are requisite.

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