How Much Does it Cost to Develop a Chatbot in 2020

436 Views
|
14 May 2020
|
15 min
author avatar
Oleksandr Sh.
Technical writer
author avatar
Evgeny M.
Business analyst

A rising trend for business automation and lead generation demand is what chatbots are helping to solve. According to Juniper Research, chatbots can automate up to 90% of banking interactions by 2022. But banking is only one of many fields where chatbots can be used.

Table of contents

Entrepreneurs want to get such benefits of chatbots as additional distribution channels and improved user experience. However, the price may be a stumbling block for companies. A lot of them don’t know the chatbot development cost and quit that idea thinking it’s too expensive.

This article reveals the cost to build a chatbot, factors affecting the price, and also sheds light on how to create a cost-efficient chatbot.

Factors Affecting the Cost of Chatbot Development

Chatbot development is a diversified process. Due to some aspects, the final price of the product often varies. So, before we get straight to the price, you have to know more about these aspects.

Business Goals

The first factor and most tangible affecting the price is your requirements. As you may understand, a chatbot is not a common type of software. Chatbots are a kind of software container. Whenever you're building a CRM system or a fitness app, you have a vision of it even without the feature list. The reason is, these types of apps are somehow similar to their analogs. They may differ in some advanced features, but the basic concept is always the same.

However, when it comes to chatbots, things turn upside down. For example, a distributing chatbot, like H&M’s, and a simple FAQ chatbot are two different development scopes. When building a distributing chatbot you’ll need to take care of payment gateway and security issues, while FAQ chatbot needs only a conversation pattern.

So, chatbot features depend on your requirements. And the price, in its turn, depends on its complexity. To calculate the approximate price, you have to know what features will be developed. You can contact us to get help with the feature list and project estimate.

Types of Chatbots

Before the development, you have to decide what kind of chatbot you want to have. One of the most common ones is a messenger chatbot. The most well-known messengers for chatbots are Facebook Messenger and WhatsApp. The number of supported platforms is the primary factor that influences the cost of building a chatbot. The more platforms you will cover the bigger will be the final paycheck.

Another type is a chatbot integrated into a company's app or website. The best use cases for this chatbot are customer support and giving answers to frequently asked questions. For example, Booking.com chatbot can answer 30% of clients’ requests about hotels and helps to contact the owner. It’s available on the mobile app, Facebook Messenger, and directly on the website. These chatbots help to improve client experience thanks to quick feedback. In this case, factors that influence the price are the complexity of bot's features and the number of integrations to websites and apps.

The last but not the least is chatbots made for internal use within the company. These solutions can automate routine processes, like taking sick days, changing shifts, tracking project state, and more. The cost to build a chatbot like this varies depending on internal processes the chatbot will be dealing with.

Companies that use chatbots

Main types of chatbots applied by companies

Data Analysis

When talking to a chatbot, it sometimes acts like a human being. So, you might have a question, "How chatbots know what to answer?". Apart from predefined answers, chatbots can learn from past conversations. With the help of data analysis and machine learning algorithms, chatbots single out speech structures from received messages and use them in conversations.

However, machine learning is a time-consuming process. Firstly, developers need to feed the chatbot with lots of data to bring basic skills for answering questions. Later on, the chatbot will handle more complex queries as the number of processed data raises.

Mind that data analysis algorithms, predictive analytics, and work with knowledge discovery tools are time-consuming processes and so will affect the price.

How to Reduce the Cost of Chatbot Development

As it comes clear, many aspects can increase the price. But what can you do to lower the financial pressure? In this section, I'll cover some tools that will help you to fit in your budget.

Third-Party Platforms

Instead of building a chatbot from scratch, you can use third-party platforms. They allow creating a chatbot in the shortest terms. All you need to do is create a conversation structure and links between the messages. However, these platforms grant you the speed, but in return, they take the flexibility away. Most platforms don't support payment gateways and machine AI integration.

The most well-known platform is Chatfuel. It lets you build conversational structures and key features of a chatbot in a drag-and-drop way. This software is free unless your chatbot gains 50 subscribers. Then, the price starts from 15$/month, but it depends on the number of subscribers. The main Chatfuel's drawback is that it supports only Facebook Messenger. According to Statista, Facebook Messenger is the second-largest messenger with 1.3 billion users. Still, the more messengers you target, the more audience you attract. That's why it's better to aim at a few messengers at a time.

Botsify is Chatfuel's tough rival. It also makes chatbots for Facebook Messenger and uses a drag and drop system. However, the prices are more affordable. With Botsify, you'll have to pay $50/month for 30,000 unique users, while Chatfuel will charge you more than $200/month for the same number of clients. Nevertheless, Botsify provides free chatbot features for only two weeks, and it doesn't have pricing plans for a small number of users, like Chatfuel.

Top 5 chatbot development platforms

The most well-known chatbot development platforms

Development Tools

What if you need advanced features of a chatbot rather than a quickly built product? In this case, frameworks for chatbot development will solve your problem. They leave you enough space for customization and code managing but, at the same time, let you deploy some routine code in a few moments. Still, these frameworks require a strong programming expertise or an experienced software development company.

BotMan is a good example of a chatbot development framework written in PHP. It’s compatible with almost every well-known messenger on the market (WhatsApp got unlucky). Botman deals with Facebook Messenger, Telegram, Slack, WeChat, and even chats created with Twilio. This framework allows developers to build chatbots that understand commands and even browse through user attachments. Moreover, this framework supports Natural Language Processing, so the message like "Set an alarm for 8 o'clock tomorrow" will trigger the bot to set the alarm.

?

By the way, here’s our guide on a chatbot development. Here you can find out more about development steps and architecture behind a chatbot.

Microsoft Bot Framework has an open-source SDK and tools for building and testing chatbots. This framework mostly supports Microsoft’s services like Cortana, Microsoft Teams, Skype. However, Slack and Facebook Messenger are compatible with this framework too. With the help of Azure Cognitive Services, you can develop AI chatbot features. It’ll understand, speak, and learn from chats with users. C# and Node.js are the only languages that developers can use with this framework.

MVP Chatbot Features

Tools are becoming useless if you don’t know how to use them. If you feel like platforms meet all your needs, then just go with it. However, if you need custom features it’s time to think about a professional development team. To find a proper use for frameworks and platforms, you have to decide on features. The chatbot feature list depends on your business needs, so before the development you have to define the requirements.

Main features for any chatbot

Top five features for different types of chatbots

Conversation

Who can use it: Any business.

Needless to say that chatting is the primary feature of a chatbot. Whether you need a simple FAQ chatbot or an AI-powered NLP chatbot, a well-built conversation pattern is a must-have for both of them.

First and foremost, the message sequence should be logical and clear to users. For example, when the user asks: "What's the address of your company?" it should provide an address only. If the chatbot tells the user about the company’s history instead, that's unacceptable.

Besides, messages shouldn't contain grammar errors and follow the general tone of the conversation. If your chatbot is more unofficial and it's referring to a customer as a "buddy", don't call him "mister" in the next message. If you can't solve this issue on your own, it may be better to hire a freelance writer for creating texts for messages.

Conversation plan for a chatbot

The flowchart for a dialogue with a chatbot

Payment System

Who can use it: E-commerce, restaurants, retail, healthcare providers.

This chatbot functionality concerns commerce. If you're building a chatbot to boost your sales and expand distribution channels, you have to provide at least one payment method. Here you will face a dilemma: implementing third-parties or building a custom payment system?

As for the custom payment system development, there's a gigantic amount of work to be done, which will definitely raise the cost of building a chatbot. You have to take care of:

  • Encryption of each transaction.
  • Server issues. Where will they be located? How fast can they perform operations?
  • PCI DSS for the security of credit cards processing.
  • Architecture. Cloud vs. on-premise? Integration, benefits, and pitfalls of both.
  • Analytics. The ability to gather data about payments and overall performance of your system.

With a properly developed payment system, you don't have to worry about the safety of payments and get such bonuses as payment analytics and user behavior. But the sweetest piece of pie is that you don't have to pay a fee that third-parties charge. Still, the cost of building a chatbot with a custom payment system is so big that smaller companies prefer to go with payment gateways like Stripe, PayPal, Braintree, and others.

The best payment services

Three main payment services providers

If you're into third parties, your main concern will be choosing a reliable vendor. Braintree, Stripe, PayPal are verified companies that deliver the highest transaction speed and payment security. The only drawback of these third-parties is fees.

Popular payment gateways' fees
Service Stripe Briantree PayPal

Standard fee

2.9% + $0.30 per transaction

2.9% + $0.30 per transaction

2.9% + $0.30 per transaction

Supported countries

39, including UK, USA, Australia, Westen and Central European countries

46, including USA, Canada, Australia, UK

202, including USA, Canada, Australia, UK

Chargeback fee

15$/transaction

15$/transaction

20$/transaction

In most cases, the third-party payment system is the best option for small and mid-sized businesses. However, if you intend to build a custom payment system, you have to find a professional software development company.

Geolocation

Who can use it: Restaurants, gyms, delivery services.

Another point on chatbot features list is integration of online maps. Let's assume that you're a restaurant owner. You can attract new clients with the help of a chatbot. If they have never been to your place before, let them navigate via the chatbot. When the user types: "Show me the way", your chatbot marks the restaurant's location on the map.

This chatbot feature can be built with Google Maps Platform in no time, but it will enhance new customers to visit your place. Later on, you can add an ordering on-the-go feature. Thus, users will order the meal via the chatbot beforehand, pay for it, and get it as soon as they get to the restaurant.

Another use case for the geolocation is food delivery. Users can choose the preferred meal inside a chatbot, and share their geolocation with a courier. The convenience of this method lies in the fact that the client doesn't need to make phone calls or to install side apps.

How to add geolocation in chatbots

Geolocation for chatbots in delivery niche

Wondering what features to develop?
Our team will be glad to help you to decide on features and tech stack free of charge!

Personal Approach

Who can use it: Any business

That's not exactly a chatbot feature, but more like a personal trait of your chatbot. We can't deny the fact that when someone refers to you by name, the conversation feels more personal. Combine it with an individual attitude, come up with a memorable name, and add some catchy phrases into chatbot's vocabulary. That's the recipe of a chatbot that will be remembered for long (it still requires useful chatbot functionality).

In the perfect world, you could hire a brand expert that would help you to build a chatbot's image. But if you're on a budget, it's high time to show your creativity.

Syncing With User Accounts

Who can use it: E-commerce, delivery services, healthcare providers.

Here's one of the most needed points on an e-commerce chatbot features list. The very first use case that comes to mind is redeeming bonuses. Let's say that the user has some bonuses for the previous purchases. They’re going to buy another product via a chatbot and pay a part of the price with bonuses. However, if the chatbot isn't connected to the user's account, it doesn't have the information about those savings. Thus, if you’re an e-commerce vendor, make sure that your distribution platforms are synched.

It won't only help customers, but also benefit you. With synchronized accounts, you can stimulate customers to buy products from their wishlists. When there's a discount for a specific product, the customer receives a message from a chatbot. That's much more effective than e-mailing. Also, customers can add the goods to the cart and proceed to payments on-the-go in the messenger.

Advanced Chatbot Features

These were the essential chatbot features for different niches. In theory, you're good to go with this feature list. But what can you do to make your chatbot even better? It's time to dive into Ai-based chatbot features.

AI Implementation

When we say Artificial Intelligence, we actually mean that the chatbot is powered with machine learning algorithms. Using them, the chatbot can learn from its experience without human presence. When the user makes a query, the software finds similar patterns in vast clusters of data and responds to the user according to this data. At first, the output may be confusing. But that's why it's called learning. The more data the chatbot gathers, the better it performs. With every correct response, the chatbot gets smarter, because it can form a base of answers based on a successful pattern.

?

Follow the link to know the actual difference between AI, Machine Learning, and Data Science!

The best tools for creating AI chatbot features are Wit.AI, Microsoft Bot Framework, and IBM Watson. Each of them has custom tools for building both basic features and advanced AI functionalities.

Natural Language Processing

NLP, or natural language processing, is one of AI scopes of activities, which is responsible for interactions between individuals and computers. In plain language, NLP provides an excellent communicating experience between the user and the chatbot. Examples of NLP technology are voice assistants like Alexa, Cortana, and Siri.

However, NLP is also one of the greatest challenges in computer science. The reason is that it's hard for the computer to understand the user's message right. Things like sarcasm, idioms, figures of speech confuse the machine. So, the conversation sometimes may face a dead-end.

There's a lot of algorithms and turn-key solutions for this, but they often can't deliver quality features for your chatbot. That's why it's better to develop custom NLP algorithms for the chatbot from scratch.

Best Examples of Chatbots in Business

Top-rated companies got their hands on chatbots a long time ago. These chatbots are automating tasks and simplifying interaction with customers. Let's go through the best chatbot examples from different niches.

Unilever

According to Forbes, Unilever recruits around 30,000 people a year and deals with 1.8 million job applications. That's a tremendous amount of work. To ease HRs' lives, Unilever created Una chatbot. The chatbot offers applicants to pass the test, which is further assessed by machine learning algorithms. This test estimates candidates' logic skills, risk tolerance, and more.

A remarkable chatbot’s feature is that it handles each application and sends feedback to every person. Commonly, HRs ignore a lot of inappropriate CVs. However, chatbot values every try, so the company saves its image. Una allowed Unilever to save more than 70,000 person-hour on interviewing and assessing candidates.

H&M

H&M's chatbot is an outstanding chatbot example in the fashion industry. When users enter the conversation for the first time, the chatbot studies their style offering to choose one of two pictures that represent different fashion trends. After a quick test, the user can ask the chatbot to create an outfit with a piece of clothes of the user's choice. Then, the user gets an image with a new outfit and its total price. Users can proceed to purchase right away or save the outfit for later. H&M's chatbot can be a participant in group chats so that friends can discuss clothes together.

Chatbots in business: H&M use case

H&M's chatbot

Lufthansa

Lufthansa developed one of the best examples of a chatbot for flight support. Passengers can access it on Facebook Messenger or directly on the Lufthansa web page. The main purpose of this chatbot is to provide users with information about their flights. Push notifications will remind users about checking in, flight boardings, inform about seat and gate changes. Also, passengers can check-in online via the bot. Users receive instant notifications about changes in flight status and schedule in Facebook Messengers.

Additional chatbot’s features allow users to rebook a missed flight instantly. Also, if there's a suitcase gone missing, the chatbot will inform terminal workers about it, and they will return it to a passenger. If there will be any questions that the chatbot can't handle, it will redirect the client to the online chat available 24/7.

Got an idea?
Our business analysts can make a free estimate and help you with a chatbot feature list!

Frequently Asked Questions

Rate this article!
An image
An image
An image
An image
An image
(20 ratings, average: 4.94 out of 5)
Comments
L
LuckyAstar
14.10.2020 at 01:30
Like
Leave a comment
An image
Your message is checked by the moderator and
will add to the site ASAP
Latest articles
typos
Report a typo
Back to top