How much does a chatbot cost?

According to a recent survey, users primarily expect from a chatbot:

• Information (69% of respondents)
• Counseling (63% of respondents)
• Advice on specific issues (58% of respondents) ¹

These results are a clear mandate for companies worldwide and at the same time an opportunity to differentiate themselves from competitors through technological progress. But of course, the first question is the cost of a chatbot in the room and whether it is profitable for your company. Read more about the cost-benefit ratio of chatbots in this article.

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Chatbot: cost-benefit analysis

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Every company needs contact with customers. The more individually you react to their needs, the more personal you can make the offer. Chatbots are an innovative way to support customers and help them select products or search. The dialog system can also provide advice, handle complaints or trigger orders. It is therefore a long-term investment in the customer journey. The costs of a chatbot and the benefits of the system depend primarily on the respective technology.

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Two types of chatbots for use in customer dialogue

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Basically, there are two different categories of chatbots. While some systems are based on guided dialogs that the developer has defined in advance, newer chatbots work with artificial intelligence (AI) and use natural language processing (NLP) methods. These two types are differentiated from a live chat, where users can ask their question directly via free text input in the chat. It is then processed and answered manually by an employee. A live chat therefore makes it possible to chat directly with a company, but does not automatically answer questions. It is therefore not discussed in more detail in this article.

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Rule-based chatbot

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A rule-based chatbot is a chat in which a predefined rule tree is queried based on coded questions. The system only reacts to previously programmed keywords or questions. This means that it stalls as soon as the customer uses other words, questions, or commands when communicating with the chatbot.

This is also known as a guided dialogue system that enables the user to navigate through the chatbot's guided dialogs based on a predefined multiple choice selection. Some problems can be covered by this. However, automation in support remains rather low due to limited selection options.

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AI chatbot with NLP

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If the user asks an AI chatbot with NLP a question, the chatbot uses artificial intelligence to assign a question intent to it and automatically answers the request. In this way, a high level of automation is achieved. The programmed system is able to use natural language and enter into a dialogue with the customer. Natural language processing realizes the processing of natural language. It is a program that makes it possible to understand words in their natural context and to respond to them in an appropriate way. The user can thus communicate with the chatbot via free text input.

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Cost of a chatbot

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The more complex and complex the programming and training of the chatbot is, of course, the higher the costs. The following cost drivers in particular play a role in this:

• Staffs
• Software (including chatbot training and interface connection)
• guidance

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Staffs

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Even the best and most intelligent technology cannot do without people. A high-quality and well-functioning chatbot naturally requires experienced developers and programmers who not only take care of the planning, but also the technical maintenance and optimization of the systems.

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Softwares

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In the area of software, the backend for analysis, the administration of the chatbot and the self-learning system play a role. The software is either based on a set of rules individually adapted to the customer, which is programmed accordingly in the chatbot, or has natural language processing and — based on artificial intelligence — can learn with every customer dialogue. In this context, you should keep in mind that the chatbot's intelligence results from continuous training of question intentions and is therefore also a cost factor. An AI chatbot improves its output quality with every use by recording which answers were particularly helpful to the customer and which were not. In addition to training, the total price for the software depends on how much effort is required to program the chatbot and what other customer requirements should be taken into account. The programmer knows the typical intentions of customers and programs the reference rates for NLP accordingly — the backbone of communication and thus of the customer experience, so to speak.

The effort required to connect an interface is significantly lower than the costs for the software itself. This means the connection of company-specific APIs such as CRMs (HubSpot, Salesforce, SAP). The chatbot can dynamically transfer collected data to interfaces such as customer relationship management systems (CRMs). Developers must adapt these to the chatbot and program them individually for each customer — this also increases the costs for a chatbot. When storing, care must also be taken to ensure that the requirements of the Data Protection Act are complied with. Optionally, analyses and evaluations of the data can also be carried out. Transparency for users is important, as handling sensitive data is an important issue, especially in Germany. The backend, i.e. the area that you can use for your own entries or analyses, must also be configured for your company and takes time. Depending on the case, there may be additional costs for using the chatbot backend and the corresponding software.

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Guidance

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Every chatbot — especially an AI chatbot — is only as good as preparing its capabilities and implementing them in individual customer advice. Communication robots are software or a service from a cloud. When consulting with the developer, you should definitely determine with what level of knowledge the customer enters the communication, which language they speak and whether or not your employees should support the chatbots. Through the consultation, you can clarify to what extent the ideas can be implemented in practice. If the concept is still more superficial, prototypes should be programmed in joint workshops that exemplify certain conversation processes.

The price for the project also depends on whether the chatbot is to be integrated into the company's own homepage. The developers then adapt the interface to the company's corporate identity and provide suggestions for individual design. In a joint conversation, you can discuss which platforms are suitable for the chatbot. The more connection options are available, the more expensive it becomes to program the chatbot. If you still need to have the interfaces programmed for integration, this involves more effort and takes more time — which, of course, also increases costs.

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Cost estimation for live chats and rule-based chatbots

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For a simple live chat with autoresponder, you pay up to 100 euros per month — but only for the software. The costs for a rule-based chatbot with a guided dialogue (click chatbot) start at around 10 euros per month. Without an interface connection, the total price for a rule-based chatbot is in the four to five-digit range, depending on the effort involved. This includes text creation, user journeys and a few features. If other aspects are added that require additional programming, chatbot costs rise once again.

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Cost estimation for AI chatbots with NLP

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Chatbots that have an individual backend are more expensive because they involve complex programming tasks. If artificial intelligence is added, in which the framework (the free text for the customer) can answer a great many questions, the prices for an AI chatbot rise. The costs here arise primarily from training the question intentions — i.e. how many different questions the chatbot can recognize and answer correctly. Chatbot costs can rise once again for extensive projects or additional consulting services that have individual daily rates. The price for NLP chatbots is usually in the five-digit range. However, the effort must be determined individually.

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The benefits of a chatbot

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Customer service focuses on consistently answering customer inquiries quickly, consistently and correctly. This is also where the great savings potential of chatbots lies, because there are wage and non-wage costs wherever people do the work. There are also risks of absences and periods of illness. A chatbot cannot and should not completely replace employees, but it can support them in their work. Employees are relieved by eliminating simple recurring questions — employee satisfaction increases. Its benefits are therefore evident on both sides. Because especially when internal capacities are exhausted, chatbots prove to be effective assistants and help companies save resources and yet provide customers with the best possible service. Chatbot costs are therefore well invested due to their high benefits, as the following points will show.

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Automation

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The high level of automation of chatbots enables companies to pre-qualify customer concerns and automatically process them by the chat or an employee. Depending on the case, a combination of AI-based and rule-based chatbots is also possible. Processes can be digitally recorded and web inquiries answered. The intelligent and individually adapted interplay of technology creates a highly automated process for customer loyalty and customer satisfaction. You can regard the majority of chatbot costs as a one-time investment in improving automated processes when interacting with the customer. Of course, you also need to regularly optimize chatbots, add new question intentions or have answers adjusted in terms of content. However, the complex programming work is only necessary at the beginning — unless you want new features.

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Cost savings

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On the one hand, chatbots save direct online customer support costs, as inquiries that were previously made online can be answered directly by the chatbot. On the other hand, indirect support costs are reduced as the chatbot guides users into the chat. Customers no longer have to call because the dialogue system clarifies many concerns in advance.

Manually answering recurring customer inquiries costs employees valuable working time and causes high support costs every day. These costs can be significantly reduced on the day of implementation, as the AI chatbot answers customer inquiries directly. Based on user input, the chatbot learns something new after a short time and solves more and more customer inquiries. As a result of peak loads, work is also spread across other areas and employees have free capacity. The cost savings are therefore visible after just a few months.

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Customer Experience

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Mobile users spend 90% of their time using messenger or email programs. It is therefore also clear where the customer often begins their journey and in which context they experience the company or product. What used to be huge shopping centers and shopping passages are now primarily websites, Internet browsers and messenger services. Consumers use the Internet to browse and research. The personal approach to sellers has also shifted to the digital world, and as a result, a large part of the customer journey today often takes place online. This is exactly where the customer wants to be picked up. Chatbots therefore reach customers exactly where they spend most of the time and enable a quick response to inquiries. Speed is particularly important in the digital age. The user experience is improved primarily with the help of an adaptive chatbot. Well-designed AI chatbots sustainably increase customer satisfaction by offering quick and efficient solutions to problems and complaints. You shouldn't skimp on developing interactive communication between people and companies, as this area can have a direct impact on the customer relationship.

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Conclusion: Costs for a chatbot pay off after some time

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The costs of a chatbot depend on several factors. In principle, AI-led chatbots are more expensive than guided dialogue chatbots. However, artificial intelligence and NLP also make for greater usability. Intelligent and self-learning chatbots add more value to customers and the company, which has a direct effect on customer satisfaction. As a result of the enormous savings potential of resources, for example in customer service or complaint processing, your company has more capacity for other tasks. The dialogue system pays off after just a few months and the costs for a chatbot are amortized in the long term.

The benefits are obvious:

• Chatbots can be integrated with chat, email, or messaging services
• You answer questions immediately and comprehensively
• Chatbots are available 24/7
• Thanks to AI, you are learning more and more