Chatbots have revolutionized the way businesses offer customer support to their clients. Their scope and functionality, now, are not just limited to offering customer support but have gone beyond it. Now, most enterprises prefer to use these solutions for connecting with their users, as they help in improving user engagement. If you are looking to scale up your business, then chatbot development are the best option, as they can help with sales and marketing.

What are Chatbots?

Before getting into any detail, let us first understand what chatbots are. Chatbots are the solution developed to stay connected with your users. These solutions are developed using highly advanced technologies like Artificial Intelligence (AI), Machine Learning (MI), NLP (Natural Language Processing), and more. Chatbots are designed to make relevant conversations with users in the absence of a real human.


Most chatbots work using simple commands, however, if you want to add some special features, you may add them as per your business requirements. Most software development companies are now extending their customer support services via chatbots. Based on some advanced technologies, they can make real, interactive conversations, just like humans, and help solve problems in a personalized manner.

The global market for chatbots has drastically increased in the past few years and is expected to grow at a much higher pace. According to Statista, the chatbot market is projected to touch around 1.25 billion U.S. dollars in 2025, which is a tremendous increase from the market size in 2016, which was 190.8 million U.S. dollars.

Chatbots are helping almost every business, irrespective of their size and scale of operations. Based on your business requirements you can hire a chatbot development company that can develop a smart and fully functional chatbots for you. To emphasize the need and benefits of having a chatbot for your business we have compiled a few points.

What is the Importance of Chatbot for your Business?

Whether you are a small-scale business or a large-scale enterprise, chatbots will help you in many ways. Apart from user engagement, below mentioned are the few advantages that a chatbot solution offers to any kind of business:

  • Improved Customer Service
  • Reduced Operational Cost
  • Increased Customer Engagement
  • Automation of Redundant Tasks
  • Gaining Insights

Before switching to the factors determining the chatbot development cost, let us discuss these points in detail to have a better understanding of the importance of having a chatbot solution for your business:

1. Improved Customer Services

Since chatbots are available 24*7, they can offer customer service to your users anytime they want. Even in the absence of a real human, or during non-working hours of your business, users have the option of getting their queries resolved via these smart chatbots.

There may be chances that your user may require assistance while shopping for any product or service, in those cases, chatbots provide real-time assistance to them. This helps the user to trust your brand as they feel that your brand is always available to help them.

2. Reduced Operational Cost

Getting a chatbot solution developed for your business is way cheaper than hiring those many employees for your business. Businesses can hire chatbot developers to get customized solutions developed per their business needs. Most companies like Facebook, Microsoft, and Apple use highly advanced and intelligent chatbot solutions, to stay connected with their users.

As chatbot solutions help in the automation of the task, it allows you to handle too many users at a time, thereby reducing the requirement of too many employees. This in return reduces the operational cost of your business.

3. Increased Customer Engagement

Customer engagement is one of the major reasons why most businesses use chatbots. According to reports, chatbots help engage 20% to 40% more users in the same frame of time. To help a business grow, improving user engagement is very important.

Your users need to understand that you are available for them all the time and they can reach out to you with their problems whenever they want to. Also, chatbots offer a much higher rate of user satisfaction as they always answer politely, irrespective of the mood of the user chatting with them.

4. Automation of Redundant Task

Chatbots are a great way to automate redundant tasks. As they are developed using AI technology, they can mimic a real human. Chatbots help answer the same questions asked by different users, very easily. This makes it a lot easier for the business to eliminate the need for manpower and thus saves money.

5. Gaining Insights

Chatbots are a great option for mobile application development companies that are looking to improve their sales and marketing. Whenever there is any new product launched in the market, chatbots can easily send communication to multiple users at a time. It can help users to recommend items for sales, as they are developed using quite many advanced technologies like ML and AI.

They build great consumer relationships and hold the capacity to influence consumers to buy, by recommending favored items. Chatbots act as a great tool for improving your business operations. They can help you in collecting feedback from the consumers so that you can improve accordingly.

Factors Determining the Cost of Chatbot Development

Before jumping to know how much does it cost to develop a chatbot, we should first know about all the factors that help a software development company determine the cost to develop a chatbot. The scale of your chatbot, and the complexity and technologies involved in developing it, generally determine the cost, but there are various other factors too.

Here is the list of what we are going to discuss further in this section:

  • Based on Industry Verticals
  • Based on Business Goals
  • Based on Technology
  • Based on Customization

Now let us discuss these points in detail to have a clear understanding of how these factors affect the cost of chatbot development.

1. Based on Industry Verticals

The type of industry widely affects the cost of chatbot development. Developing solutions for heavily regulated sectors like healthcare and finance require a lot of safety and security protocols to be implemented. This adds up to the overall cost of development. For industries like fashion and food, there are not too many regulations that are to be implemented, this saves the time and cost for chatbot development.

2. Based on Business Goals

There are several ways by which chatbots can help your business grow. Based on your business goals and requirements the cost of chatbot development differs.

  • Customer Service Chatbots
  • Website Chatbots
  • Registration Chatbots
  • Transactions Chatbots
  • Lead Generation

a. Customer Service Chatbots

There are a lot of website development companies that instead of hiring actual humans use chatbot solutions to offer effective customer services. As we all know, chatbots are not bound by time, and can even help users after business working hours. Customer support chatbots can solve too many purposes, and businesses mostly use them for services like answering questions of the users or helping them out with any return or refund process.

b. Website chatbots

Most websites use smart and interactive chatbot solutions as a way of marketing and sales. They help users inform about their services, any new launches, or suggest the best services or products, based on their analysis. This way, chatbots make websites much more interesting and interactive.

Users instantly feel the connection as they can seek answers to all their problems. These types of chatbots are generally developed using NLP and conversational technology, but in some cases machine learning and AI are also used.

c. Registration Chatbots

If your business offers any sort of services that require prior appointments, like setting appointments for your beauty shop, coaching sessions, or a doctor’s appointment, then chatbot solutions could be a great option. Chatbots can handle all of this very easily and systematically. Now, when compared to human assistance, users do not have to wait in long queues to wait for their turn to come. It helps save your time and administrative cost, which would have been much more if you would have hired an actual human for this.

d. Transactions Chatbots

If you have an eCommerce store, then having a chatbot solution is a boon. Chatbots can support eCommerce transactions, including providing discounts and coupons, receipts, shipment, tracking information, etc. They help automate your tasks and offer better customer service.

e. Lead Generation

If you are looking for some lead generation for your business, chatbots can surely help. These chatbots are also known as marketing-focused chatbots that help in finding the right prospect for your business. Since chatbots always reply to only those users who have contacted them, the leads generated are genuine, which can help in business expansion and setting future goals.

3. Based on Technology

Chatbot uses a very simple set of rules and pre-defined options for the user to select, which would cost less than the one that uses advanced technologies like NLP and Machine Learning development. And the more complex features you try to incorporate, the more would be the cost incurred for Chatbot development.

Here are a few types of chatbot solutions which are widely popular:

  • Web-based
  • Conversational chatbots
  • AI-based chatbots

a. Web-based

These Chatbots are integrated within the system of a company’s online website and generally work using cloud systems. They help businesses to increase consumer engagement and help in automating sales while making consumer service task management easier. Web-based chatbots require less time to develop, thereby reducing the development cost, as compared to other much more complex chatbot solutions.

b. Conversational chatbots

These chatbots are used by large-scale organizations to facilitate effective and interactive communication. These chatbots are integrated with messaging apps like Facebook Messenger, Slack, Skype, etc. They allow businesses to connect to a large user base without developing a whole solution from scratch. This is another cost-effective way for businesses looking to have chatbots on a budget.

c. AI-based chatbots

These chatbot solutions usually cost a lot, as they use the most advanced technologies. The AI-based chatbots offer easy integration to help serve the customers on their desired platform. It also improves the internal communication with employees, suppliers, and vendors. These chatbots offer round-the-clock support i.e., they work 24*7 and provide the users with instant responses while maintaining a stable and reliable brand voice.

4. Based on Customization

Based on customization also, the cost varies. Here are two options as to how you can get your chatbot developed.

  • Custom Chatbots
  • Pre-built Chatbots

a. Custom Chatbots

If your business requires a whole new chatbot solution with some unique features, then you should hire software developers who can help you understand how to develop a chatbot and can create one from scratch. Building a bespoke chatbot based on your business needs and preferences is a smart move to scale up the business operations and increase user engagement.

But if you are planning for custom chatbot then the cost will be more. As the dedicated developers will be building everything from scratch, it will take time, which eventually increases the chatbot development cost. Also, ongoing maintenance will be entirely your responsibility.

b. Pre-built chatbots 

This is a great option for small-scale businesses or even start-ups that do not want to spend too much on the development cost. There are many chatbot builder sites available, which involve paying a monthly subscription for a platform where you can build your chatbot. In return for paying the monthly subscription, you get a framework to build upon, as well as support and maintenance from the vendor. This gives you limited customization options and features to use, but the cost is way less than the custom one.

Based on the above-mentioned factors, the approximate cost of chatbot development ranges from $5,000-$25,000. And further, it is decided based on the integration of features and functionalities in the chatbot application.


Developing a chatbot is an important investment for maximum businesses, irrespective of their size. While chatbots can help a company save money and time, there is a myriad of factors that must be considered when determining the cost of developing a chatbot. Based on your business requirements and budget, you should choose the one that fits your business the best.

However, if you are looking for a rough idea, custom chatbots with fewer features could cost you starting from $5000, going up to hundreds of thousands of dollars, depending upon the complexity and the features you want to be embedded.

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