What is a Chatbot and How does it Work? The Ultimate Guide

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Current technological advances allow you to have conversations with smart robots (chatbots). This technology is able to respond to your conversations like talking to humans in general.

Chatbot capabilities are widely used in everyday life. For example, in businesses, chatbots help them to serve customers quickly. In this article we will discuss what a chatbot is, its functions, benefits and how it works in the following article!

What are ChatBots?

What is a Chatbot?

Chatbot is an artificial intelligence (AI) program that is capable of imitating human conversation in the form of text or voice messages via messaging applications, websites, or mobile applications.

Chatbot's capabilities make it possible to carry out conversations using natural language that is easy to understand.

Therefore, the use of virtual robots can provide a user experience that is made as if they were talking to humans or CS admins in general. So businesses can start conversations and manage customer complaints more quickly.

Apart from that, bots are also a means of providing customer support and responding to customer questions quickly.

Why are ChatBots Important for Business?

Chatbots play a very important role in business, especially as virtual assistants. This artificial intelligence system eases business tasks related to customer interactions.

Reporting from the State of Chatbots report, businesses gain many benefits from using chat bots, such as the following:

Around 64% of users said they felt the benefits of chatbots which helped them provide 24-hour service such as responding to customer questions. This can improve their customer experience, which is an important factor for business success.

As many as 89% of users prefer to use bots over other applications when interacting with businesses. Because, this virtual robot makes it easier for businesses to convey product or service information to a wider demographic.

What are the functions of ChatBot?

The following main functions of using chatbots are:

1. Customer Service

The main function of a chatbot is as a customer service that serves customers. Because this virtual robot has the ability to respond to customer questions, collect customer data and others.

These capabilities support customer service activities. The service that businesses provide is also faster with chatbots, thereby increasing customer satisfaction.

2. Help with Sales and Payments

Chatbots can simplify the shopping and payment process. You can use bots to send catalogs of products that customers need according to certain triggers. Including sending invoices that make it easier for customers to pay.

3. Send Important Notifications

Chatbots can also be used to send notifications regarding the latest information or news from the company to customers. You just set it on the bot system, then the bot will automatically send it to many customers at once.

4. Arrange an Appointment

The bot makes it easy for users to set appointments by displaying availability on a calendar and selecting a date. Then the bot will automatically send a reminder notification when the appointment time approaches.

5. Increase Trust

The interactions built by bots are very fast and personal. This encourages customers to respond to the interaction. This means that their engagement also increases, including customer experience and customer satisfaction.

What are the benefits of chatbots for a business?

Chatbotters are something that is very important for businesses because they can replace the role of customer service by completing simple customer requests.

Apart from that, messenger chatbots also have many other important benefits that are very profitable for business. Following are the benefits of chatbots for business:

1. Available 24/7

Unlike humans who have working hours and need breaks, bots can work around the clock. Your customers can ask questions or contact you whenever they want.

2. Save Customers Time

Since it is available around the clock, customers do not need much time to get a response. An appropriate and fast response can certainly provide a good experience for your customers. This can also achieve customer satisfaction.

3. Increase the Number of Sales

With all the improvements and efficiency in serving customers, you can gain increased sales. The more comfortable customers are shopping at your online store, the more loyal they will be to your business.

4. Save cost

Not only customers benefit from Bots, but also business people. Business people can reduce costs if they use this feature, one of which is that they don't need to recruit a lot of customer service to serve customers.

5. Supports Lead Generation

You can get conversions from every visitor who comes to your website. Bots can be used to collect important data regarding each website visitor, such as: email, telephone number, products searched for, products liked, and so on.

You can use this to design your next marketing strategy.

Advantages of Using Chatbots for Business

There are several other advantages of chatbots that can be obtained if used in a business, such as:

  • Providing service 24/7 (auto response)
  • Operational efficiency for more complex tasks
  • Can save expenses
  • Supports lead generation
  • Increase customer satisfaction (customer satisfaction)
  • Have data analysis skills
  • Increased sales
  • Chatbots can be integrated across various omnichat platforms
  • Improve brand image on social media
  • Does not require installation of additional applications
  • Can collect basic customer data for target segmentation
  • Chatbots can provide a more personalized and relevant experience

These advantages make chatbots a powerful tool for increasing business efficiency and improving customer experience.

How Do ChatBots Work?

How Chatbot Works?

The way chatbots work can be adapted to business needs. For example, you can set the bot to provide answers to customer questions via text or voice messages.

Not only that, this technology also has 3 types of operational systems or work patterns to reply to customer messages, namely:

1. Pattern Matching

This type of bot works by scanning keywords entered by the user, then responding with answers that best match the selected keywords (can be the most similar word patterns).

However, if there are questions outside the keyword pattern, the bot will not be able to provide appropriate answers.

2. Decision Tree-Based

Decision tree-based is a bot system that is often found in bots that provide question options at the start of the conversation. Where you can only choose questions that have been provided by the system.

If there are no keywords that match your wishes, you will be directed to contact the call center. This bot system has a low level of complexity and is faster, but the way this bot works is considered less user friendly. Remembering that users must follow the programmed answer sequence.

3. Contextual

This method uses a Machine Learning artificial intelligence system so that the Bot can respond using natural language.

In this case, developers need strategic and targeted planning, namely designing a database that is large enough to cover all forms of user questions and requests.

You can collect customer data and chat transcripts in the live chat application or WhatsApp chatbot. The more data collected, the more the Bot's capacity will develop in providing responses.

What are the Types of ChatBots?

After knowing how Bots work, you also need to know the types of Bots first before deciding to use them. Here are the types of Chatbots you need to know:

1. Linguistics Based Chatbot

These chatbots can provide well-designed controls and have a level of flexibility that is not found in AI Chatbots.

This type can think about and process the correct answer to a question and design automatic tests to check the quality and consistency of the system using the pattern matching method.

2. AI ChatBot (Machine Learning)

This type uses technology supported by Artificial Intelligence software. This bot technology is more complex because it is more communicative, data-based and predictive.

The type of technology used in this Bot is Natural Language Understanding (NLU) technology so that it can be adapted to the user. 

So it is more sophisticated, interactive and easy to personalize than linguistic-based Bots. Meanwhile, the working method used in this type of Bot is the contextual method.

3. Hybrid Model

This type of Bot combines two technologies, namely Linguistics and Artificial Intelligence, so that it is able to provide more detailed conversation solutions.

The conversation system in this hybrid bot can even be created without using data so it will be able to increase the company's strength, namely being more flexible and faster.

4. Voice Command Model

This type of bot allows users to carry out conversations via voice commands, which is felt to be more practical for customers who use it. This bot can capture and respond to conversations with voice.

What is the right way to use chatbot?

Chatbot capabilities are very useful for businesses, especially serving customers. However, this will be in vain if businesses cannot use it properly. The following is an example of proper use of a chatbot

a. Chatbot Personalization

Interactions will run more smoothly if the communication is more personal. Therefore, use chatbots to have personal conversations with customers, for example by saying their names. This can increase customer satisfaction.

b. Set Response Time

Long responses can frustrate customers who are trying to interact. It would be better if you set the bot to provide a fast response. Leave a little time between each message to give customers time to read the previous message.

c. Complete with Quicky Reply Option

Prepare several questions that contain answers to frequently asked questions by customers. These questions give customers the opportunity to choose the quick answers they need.

d. Use Polite Language

Use the right language for every reply your chatbot gives. Don't use responses that can leave a negative impression in the eyes of customers. Lastly, what should not be forgotten is providing options so that customers can end the conversation.


By using chatbots, you can improve customer service, streamline customer service tasks, and provide the best experience for your customers. Apart from that, you can also get many other benefits that can benefit your business.


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