Chatbot | A one-stop guide to what chatbots are

Engati Team
min read
Chatbot | A one-stop guide to what chatbots are

Here's all you need to know about chatbots

What is a chatbot?

A chatbot is a software program that can hold a conversation with a human user. They essentially automate one to one conversations. But don’t be fooled into thinking that all they do is talk to you. They can do everything from turning your lights on to advising you on what investments you should be making.

Also known as Artificial Conversational Entities (ACEs) or conversational agents, chatbots are quickly changing the way business is being conducted. The automation of basic, mechanical processes through conversational agents allows businesses to concentrate their valuable resources on tasks that actually matter.

With chatbots evolving and growing more powerful in their capabilities as time passes, they’re gradually becoming an integral part of our daily lives. And no, we’re not just talking about our virtual assistants like Siri and Alexa. We now have bots of various types, being utilized in almost every way imaginable. Here’s a quick tour of the marvelous world of chatbots. 

Importance of chatbots

The attention span of the entire human species has decreased all the way down to 8 seconds, 1 second less than even that of a goldfish. People don’t want to spend their time talking on a phone to a customer service representative. They want to get their work done as quickly as possible and get on with the rest of their day. Afterall, which rational-minded person would want to waste minutes on something that could get done in seconds?

But a chatbot doesn’t just improve the customer experience, it even saves the business a lot of time and money. By 2019, about 30% of US financial firms had employed bots to improve their user experience, and these firms do know quite a bit about financial impact.

Even in 2017, the number of customer service requests around the world was about 265 billion a year, which cost businesses $ 1.3 trillion to handle. We can expect the number of customer requests to rise even further in 2020, but the cost to service them does not need to remain this high. Infusing chatbots into the customer service process can actually reduce the cost of customer service by over 30% and simultaneously improve the customer experience by enabling the customers to get quicker responses to their requests.

The automated process will even improve the customers’ perception of the company by reducing the scope for human error. Imagine a local business that provides services like on an appointment basis. If the customers have to book the sessions by messaging a human executive, who then needs to update a database with regard to the booking, there is a lot of scope for error. If the executive has many other responsibilities, she/he may very simply forget to update the database, which would certainly result in a seriously dissatisfied customer. A local business may not really be able to afford another executive to be specifically responsible for this task, and that’s where a virtual assistant would come in. By automatically accessing and updating the database as and when the customer wants to schedule an appointment, it would reduce the scope for human error.

With chatbots being operational 24x7, all customers and website visitors can be attended to. Information can be gathered and service requests can be handled at any point in time, so those who visit your website or face an issue with your product or service at odd hours will not end up being left unattended and feeling frustrated.

History of chatbots

With all this talk about how wonderfully useful these virtual conversational agents are, you’re probably wondering who even came up with the idea for a chatbot in the first place. Allow us to take you on a quick flashback to learn a little bit about the history of chatbots.

We make our first stop in Britain in 1950. Computer scientist and war hero Alan Turing challenged computer scientists across the world to create a software program that could impersonate a human. The Turing Test essentially said that the true test of a computer’s intelligence lies in its ability to have a conversation with humans in a way that felt natural and not robotic. A panel of human judges would have a conversation anonymously, over text form, with a computer operating on its own and a human operating a computer. The goal is for the judges to not be able to distinguish between the computer and the human. For the decades to come, software developers of the world made it their mission to beat the Turing Test, beginning the ‘Era of Chatbots’.

A decade and a half later, in 1966, the world was introduced to ELIZA. Assuming the role of a psychotherapist, she passed words entered by users through a program and paired them with scripted responses.

After 6 years, a program known as PARRY was released at Stanford University. PARRY acted as a paranoid schizophrenic and was actually able to convince quite a few psychiatrists into thinking that he was a real schizophrenia patient.

Jabberwacky differentiated itself from all previous bots which had static databases by collecting phrases that human users utilized and adding them to its database. Created in1988 and released on the internet in 1997, Jabberwacky was created to be more of a conversational partner and companion than an assistant.

The 90s first gave us Dr. Sbaitso, a chatbot developed with the ability to generate a synthesized voice and later ALICE, which managed to have human-sounding conversations with the help of Artificial Intelligence Markup Language (AIML).

In 2001, we got Smarterchild, the predecessor to modern virtual assistant chatbots and in 2005, IBM made WATSON, which ended up winning the TV show ‘Jeopardy’.

The 2010s gave us virtual assistants like Siri, Google Now and Alexa and from 2016 onwards, many social messaging platforms like Facebook, WhatsApp and Kik enabled the integration of bots over these platforms.

For a more detailed take on the history of chatbots, check out our article here.

Types of chatbots

Chatbots can be classified either on the basis of the deployment platform or on the basis of capability.

Based on the deployment platform, we have 3 types of chatbots; those that are built into messengers, those that use standalone applications and those deployed over a website.

When it comes to capability, we have Menu/Button chatbots, Keyword Recognition chatbots, Contextual chatbots, and hybrid chatbots.

Menu/Button chatbots

These virtual assistants are the most basic. They present the user with a series of choices which they can click on to choose as their responses. The user does not need to type out responses of their own, they just need to select an option provided by the chatbot. As basic as they are, they can very often be all that is needed and actually save the user the effort of having to think out a response.

Keyword Recognition chatbots

They allow users to type out their own responses and then they recognize specific keywords used and send scripted responses based on these keywords. These bots appear to be smarter than menu/button chatbots and allow the users to express themselves in a better manner.

Contextual chatbots

These bots employ machine learning and conversational Artificial Intelligence (Conversational AI) to learn about the user and provide for the most human-like conversation experience. They tend to create personalized conversations for their users and have a better understanding of their users’ needs, based on past conversations.

Nowadays, bots tend to be hybrid. Rather than falling into just one category, they showcase features from two or more categories.

Uses of chatbots

Chatbots can be used to address customer service requests and resolve complaints. They’ve even been used for entertainment purposes as a companion to the user. But that’s not the only way they can be utilized.

They can be used for everything from ordering a quick snack to getting investing advice. They’ve held their own across spheres like healthcare, fashion, travel, etc. Here’s a list of a few interesting ways in whichbots have been used.

  1. Getting sports scores- Sometimes you just need to know how good your team is doing. But when you’re busy, you can’t watch the game live. No worries, just send a text over to your favorite sports chatbot and stay updated.
  2. Replacing Cupid- Why wait for Cupid to shoot his arrow when you can just shoot a text over to a chatbot like Foxsy, which could help you get some really good dates? Chatbots have found their way into the dating game too, giving apps like Bumble some serious competition.
  3. Buying flowers- You wouldn’t really want to show up to a date empty-handed. But don’t worry, chatbots have your back. We now have bots that give you personalized flower suggestions and help you order them, allowing you to win your date’s heart.
  4. Conducting Market research- With our ever-shrinking attention spans, its highly unlikely that we’d open our email just to take a survey. So, then how do you collect information and conduct your market research? Well, you catch your customers on a chatbot. Preferably built into a messenger platform, these bots allow you to conduct surveys which the audience would actually respond to.
  5. Talking to Einstein- National Geographic used a virtual assistant that assumed the role of Albert Einstein to promote their show, Genius. It allowed the users to interact with Einstein as if he were still alive. Even Disney and Marvel have created chatbots that acted as their characters to keep their fans engaged and build excitement for their movie releases.

Chatbots can be used by everyone from large companies to small companies, honestly, they can even be used by personal brands. In fact, one Engati user actually built his resume with a chatbot and got it to answer the interviewers’ questions.

Ikea Italy uses an Engati chatbot to assist shoppers on a variety of issues. It helps shoppers navigate the stores, get directions and timings for stores around them and even helps them with parking their vehicles.

Dubai Ports (DPWorld) employs an Engati chatbot built to work over Whatsapp, web and will be eventually integrated with VoIP solution. It supports multiple languages and was created to help truckers, haulers, and consignees to receive updates on their containers, yard locations as well as expected wait times and notification of delays.

The Federal Electricity and Water Authority (FEWA), UAE has an Engati chatbot that assists users for service utilization queries, registering complaints, getting the bill and other account details, bill payment as well as other account management operations.

Herman Miller Inc., one of the largest office furniture and equipment companies uses an Engati chatbot as an assistant to its employees. It provides answers to technical queries and also routes the chat to human agents if required.

Global Village, Dubai combines cultures of 90+ countries and is supposed to be the world’s largest tourism, leisure, shopping, and entertainment center. Their Engati chatbot assists visitors with loyalty card bookings, parking, venue details among other services.

Amadeus, the largest travel aggregator on the globe has leveraged Engati services to build bots for its partners to provide details about the different facilities, flight types, luggage and much more.

Qatar Insurance Company (QIC), the largest insurance company in the MENA region has skyrocketed its sales using an Engati chatbot. With integrations into its legacy systems and databases, Engati helped them generate insurance quotes directly from the chatbot. This significantly increased QIC's sales velocity.

The future of chatbots

In spite of constantly being connected to the internet, GenZ is considered to be the loneliest generation yet. Keeping this in mind, it is highly likely that we will soon be seeing chatbots that have Emotional Intelligence. These bots would be able to judge the users’ emotional state and respond in a way that is sensitive to users’ state of mind.

Conversational AI is what the future is going to be all about. It’s almost certain that we’re going to be seeing bots that sound more human as time passes. Someday, we may even get bots that are indistinguishable from humans.

With businesses noticing the benefits of bots, especially that of having their employees focus on more important tasks, it’s clear that organizations will be integrating chatbots into their business processes to a much greater extent. A trend that we expect to be seeing is the growth of on-premise chatbots. These are bots that exist on the physical premises of the organization, rather than on the cloud. These are usually located within the organizations’ servers and data centers. With the benefits of increased security and control, a large number of organizations are expected to opt for on-premise chatbots. We at Engati recognize this need and will soon begin to cater to it.

In addition to the mainstream customer service bots, we’ll start to see bots entering the retail arena, among many other spheres.

One thing’s for sure, bots are going to become an indispensable part of business processes. It’s going to be truly exciting to see all the innovative ways in which chatbots will be utilized.


Chatbots are becoming all-pervasive. These handy little bots are finding their way into all types of organizations and processes. Companies and customers alike are both starting to prefer using and interacting with chatbots rather than with actual human agents.

Whatever business you’re into, it’s a great time to integrate a chatbot into your process. Start your journey towards simplified and automated processes with an Engati chatbot here. 

If you’re interested in entering the chatbot business, but don’t want to start from scratch, consider our White Label solution. We build the platform, you get to sell it. Let’s get started! 

Become a part of the Chatbot revolution. Register with Engati today!

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