AI Chatbot Solutions: How to Choose the Right Provider

April 19, 2024
AI chatbot solutions

From customer support to marketing and ecommerce, more and more businesses are implementing chatbot technology to assist and digitally engage their customers.

In fact, the chatbot market is projected to increase by 23.3% annually, reaching $15.5 billion by 2028.

But with all the different types and providers out there, choosing the right chatbot solution for your business or contact centre can be challenging.

That’s why we’ve created this guide, aiming to demystify the selection process and help you find the best chatbot software for your specific needs.

We’ll cover:

  • Why invest in a chatbot at all? The benefits for businesses and customers
  • How to choose the right chatbot provider
  • Getting started with AI chatbot solutions


How to choose the right chatbot solution/provider...

  1. Types of Chatbots: Decide between rule-based, intent-based, AI chatbots, or hybrid models based on your need for simplicity, flexibility, or advanced capabilities.
  2. Capabilities: Prioritise AI technologies, knowledge base integration, channel flexibility, customisation, multilingual support, and smooth fallback/escalation processes.
  3. Integrations: For optimal functionality, ensure the chatbot can seamlessly integrate with your existing CRM, contact centre systems, and various digital platforms.
  4. Analytics & Reporting: Select a chatbot solution that offers detailed analytics/reporting to monitor metrics and improve performance, user experience and efficiency.
  5. Data Security: Opt for a chatbot provider with robust data security protocols, regular updates, and compliance with regulations like GDPR or CCPA.
  6. Cost & Scalability: Consider both the upfront cost and potential ROI of the chatbot. Ensure it’s within your budget and offers scalability to meet future business growth.
  7. Comparing Providers: Research, compare, and test different chatbot providers through product demos to find the one that best meets your business needs.
AI virtual assistant chatbot

Why invest in a chatbot solution?

Before we dive into how to choose a chatbot platform, it’s worth exploring why you should implement one in the first place.

When they’re deployed and used effectively, customer service chatbots can yield significant benefits for businesses and customers, including:

  • 24/7 availability: Unlike human agents, chatbots can be available 24/7, ready to assist customers at any time of day or night. This is particularly valuable for international brands serving customers across various countries and time zones.
  • Efficiency: Chatbots improve efficiency by automating customer service tasks and interactions, thereby lessening the demand on your agents and other contact channels. Case in point, virtual assistant bots have been found to reduce query volume by up to 70% across voice/video calls, live chat, and email.
  • Speed: We all know that consumers love fast and efficient service. Chatbots excel at providing this with accelerated response times, replying to users three times faster than human agents on average.
  • Customer self-service: Chatbots offer a convenient and easy way for customers to access self-service, enabling them to resolve many queries/issues independently. This boosts customer satisfaction by catering to the 81% of consumers who wish businesses would offer more self-service channels. It also decreases the number of cases requiring human intervention, effectively reducing workloads for your customer service team.
  • Sales & lead generation: The role of a chatbot isn’t just automated customer support - bots can also contribute to increased conversions and lead generation. Some business leaders have reported a 67% increase in sales through chatbots, and 55% of companies experience an increase in high-quality leads after deploying a virtual assistant.
  • Cost-effectiveness: By automating tasks and customer interactions, chatbots can slash operational costs for businesses. In fact, bots can fully automate up to 80% of routine queries, reducing support costs by around 30%. They’re also a far more cost-effective solution for scalability in comparison to hiring additional agents.

Overall, customer service chatbots help businesses save time, money, and resources by maximising efficiency, contributing to revenue, and providing customers with automated assistance/self-service.

chatbot benefits

How to choose the best chatbot solution & provider

Selecting a chatbot provider requires finding a solution that aligns with your business needs and customer service goals.

Below, we’ll cover 7 key factors to consider when choosing the right chatbot software for your brand.

1. Types of chatbots

Not all chatbots are made equal.

There are various approaches to chatbot design, each with its unique working mechanisms and capabilities.

Determining the best chatbot design for your specific needs is a crucial step in the decision-making process.

In order to make this choice, you need to understand how different chatbots work. Here’s a simplified breakdown of the types of chatbot on the market:

  1. Rule-based bots: The systems are the most basic type of bot design. They operate using a predefined set of rules and conditions, following a decision tree framework. These bots excel at automating structured and repetitive tasks (e.g. answering FAQs) because of their consistency and simplicity. However, their lack of flexibility and adaptability means they can’t handle unforeseen or novel inputs. Moreover, rule-based bots often struggle to understand and replicate natural human language, often leading to a frustrating or "bot-like" user experience. This also means that scaling a rule-based bot to do more than answer common customer queries is very challenging.
  2. Intent-based bots: Intent-based chatbots are the second generation of chatbot technology. These bots work by identifying the underlying purpose behind a customer’s message and responding accordingly. They achieve this through Natural Language Processing (NLP) and intent recognition techniques. Unlike rule-based bots, these systems offer some flexibility and can be scaled to handle queries/tasks beyond basic FAQs. This is because of NLP technology, allowing them to process human language and varied inputs. However, despite their advancements, intent-based bots often encounter challenges with linguistic nuances. Plus, the development of these bots requires high technical expertise and a considerable amount of time/effort.
  3. AI chatbots: Advancements in artificial intelligence have given rise to a new generation of chatbots. These sophisticated systems leverage advanced AI technologies like conversational AI, NLP, and Machine Learning. AI chatbots excel in processing vast datasets, understanding/generating language, and adapting to novel situations. These capabilities mean that AI-powered chatbots can be trained to automate a huge range of queries and tasks, effectively acting as virtual agents. They can also simulate human conversation far more closely than rule/intent-based systems. While they offer superior performance, AI chatbots do depend on high-quality training data - if their training dataset is limited, it can negatively impact their performance.
  4. Hybrid chatbots: Hybrid models work by integrating rule-based, intent-based, and AI-driven techniques to capitalise on the unique strengths of each approach. This approach offers a versatile solution capable of handling both routine tasks and complex interactions seamlessly. These bots use pre-established rules/intents for specific functions while also integrating AI to expand their functionality and language comprehension. For example, a hybrid system might answer FAQs using a decision tree framework but switch to AI when confronted with more intricate issues or queries. This flexible architecture means that you can pick and choose elements from all types of bot design.

All of the above chatbot solutions have individual strengths and limitations. Which one is right for you depends on what you want to get out of a chatbot platform.

Overall, if you want to offer a humanised customer experience, advanced automation, and AI-enhanced customer service - an AI-powered chatbot or hybrid model is probably the best choice.

However, if you just want to reduce some of the demand on your human agents by automating routine inquiries, a rule or intent-based bot can be a good option - so long as you choose the right provider.

Fortunately, Talkative’s chatbot solution supports rule/intent-based models, AI chatbots, and a combined hybrid approach.

It means you’ll have all bases covered with us - whatever your business needs.

Want a deep dive into the different types of chatbots and their strengths/limitations? Check out our other blog: How do chatbots work? A Complete Guide.

chatbots vs AI chatbots

2. Capabilities

When choosing the right type of chatbot, you also need to consider the capabilities your bot will need in order to meet your objectives/requirements.

The following are some key features to bear in mind when evaluating the capabilities of various chatbot solutions:

  • Artificial intelligence: As we covered above, chatbots that incorporate artificial intelligence are inherently more sophisticated and flexible in terms of their capabilities. If you decide an AI chatbot is right for you, you should prioritise providers who demonstrate a commitment to innovation and AI advancements. Look for a solution that incorporates conversational AI systems, generative AI, and/or Large Language Models (LLMs).
  • Knowledge base integration: To gain the best possible performance from AI chatbots, you’ll need a solution that can integrate with your knowledge base. For instance, with Talkative’s Generative AI-powered chatbot, you can create multiple AI knowledge bases using web pages or file-based resources. From there, the bot can learn from your knowledge base content and answer countless questions about your business, products, and services using the dataset provided, plus generative AI. By using a comprehensive and up-to-date knowledge base to train the bot, you’ll significantly improve its accuracy and performance.
  • Channel flexibility: Ideally, you’ll need a chatbot that can operate across various channels and digital touchpoints (e.g. website, mobile app, messaging platforms, social media). This flexibility will improve the customer experience by allowing them to engage with your chatbot using their preferred platform or communication channel.
  • Customisation: It’s important that you have the ability to customise your chatbot’s design, responses, dialogue flows, and behaviour. With Talkative, you can achieve this with the help of our chatbot builder, giving you a flexible and intuitive approach to designing your bot’s architecture.
  • Multilingual support: For businesses serving a diverse customer base, having a chatbot that can interact in multiple languages is essential. That’s why the Talkative platform supports real-time translation into over 100 languages, ensuring a seamless experience for multicultural users.
  • Fallback & escalation: When your chatbot fails to resolve a query, it must be able to initiate a smooth escalation to human agents. This includes the ability to transfer all relevant context to the agent so that customers don’t have to repeat themselves. Fail to provide this, and you’ll risk alienating your customers who may come to resent and avoid your chatbot entirely.

By prioritising these capabilities, you’ll ensure that your chosen chatbot is technically equipped to meet your functional needs and enhance the efficiency of your customer service operations.

3. Integrations

Effective integrations are essential for a chatbot to function seamlessly within your existing digital infrastructure.

A good AI chatbot provider should allow for easy integration with your current CRM software, contact centre systems, and other platforms.

If your chatbot solution falls short in this area, it may pose a roadblock to successful implementation and effective performance.

Fortunately, the Talkative platform has all bases covered when it comes to compatibility and integrations.

We offer deep integrations with a range of systems and platforms, including (but not limited to):

Our AI chatbot can also be seamlessly integrated with your iOS mobile app, making it easy for customers to access support on any device.

salesforce integration

4. Analytics & reporting

Chatbot analytics are vital for ongoing performance management and identifying areas for improvement.

They also offer valuable insights into customer perceptions of your chatbot, helping you ensure your chatbot consistently adds value to the digital customer experience.

This information can help you refine or expand the chatbot’s functionality, adjust its operational scope, and better integrate it into your customer service strategies.

With this in mind, it’s essential that your chatbot provider offers comprehensive analytics tools.

This means finding a solution that allows you to track and analyse all the performance metrics that align with your business needs and goals.

Generally, the most important metrics for chatbot performance are as follows:

  • Number of Interactions: This tracks the total number of chatbot customer interactions, helping you gauge the adoption rate and the level of customer engagement.
  • Containment Rate: This reflects the percentage of conversations fully handled by the chatbot without human intervention, showing its ability to resolve queries independently.
  • First Contact Resolution (FCR) Rate: This assesses the chatbot’s ability to resolve user issues during the first interaction, an important indicator of efficiency and user satisfaction.
  • Escalation Rate: This calculates the percentage of chat sessions that require human agent intervention. A lower rate generally indicates a more effective chatbot.
  • Error/Confusion Rate: This measures the frequency with which your chatbot fails to understand queries or provides irrelevant answers.
  • Average Handling Time: This is the average time taken by the chatbot to handle an entire interaction, impacting overall operational efficiency.
  • Customer Satisfaction (CSAT) Score: This comes from direct user feedback regarding their satisfaction with the chatbot experience, often gathered through post-interaction surveys or sentiment analysis.
  • Conversion Rate: For chatbots aimed at conversions or specific actions, this metric tracks how often conversations result in the desired outcome (e.g. sales, sign-ups).

In addition to tracking metrics/analytics, you should also seek a provider that offers deeper insights into chatbot performance through reporting.

For example, with Talkative, you can use our AI Knowledge Gap Report to generate a full list of all the questions customers have raised with your chatbot, plus whether or not the bot was able to answer them successfully.

Armed with this information, you can optimise and expand your AI’s training dataset, continuously improving your chatbot’s accuracy, performance, and functionality.

5. Data security

Ensuring data security and privacy for your customers is paramount.

Chatbot users may provide personal information during interactions, posing risks if this data is not properly secured.

Moreover, many providers of AI chatbot solutions integrate their software with other companies and models (e.g. OpenAI's Large Language Model) to provide more advanced AI chatbot tools.

This may be a drawback for businesses concerned about sharing their interaction data with third parties and how it may be stored/used.

The following should be taken into account when you’re assessing chatbot security:

  • Data protection policies: Look for a provider that has clear policies and controls in place for user data, including how data is stored, who can access it, and how it’s used. Always review the provider’s and any third party’s privacy policy to ensure that your data is not being shared or used without your consent.
  • Regular software updates: Your chatbot provider should regularly update its software to address security vulnerabilities and ensure that its systems are up to date with the latest measures.
  • Compliance: Depending on your industry or location, you may need to choose a solution that complies with specific regulations, such as CCPA in the US and GDPR in the European Union.

Fortunately, Talkative has a range of robust data security protocols in place to keep you and your customers safe.

This includes card masking capabilities and PCI compliance for online sales, GDPR and CCPA compliance for data security, and data sovereignty procedures for global brands.

Moreover, the LLMs we integrate with do not store or use customer data, and all identifying metadata (e.g. company name, agent name, etc.) is stripped from the interactions before they’re sent to OpenAI.

It means you can rest easy knowing that your customer’s data and privacy are thoroughly protected during AI chatbot conversations.

chatbot data

6. Cost & scalability

Evaluating the cost of implementing new technology is always essential - and AI chatbot solutions are no exception.

The cost of a chatbot platform will vary based on factors like the complexity of your bot, the required features, the use of AI technologies, and the scale of deployment.

You should first determine your budget and then research the options that are affordable for you. It’s important to weigh the initial setup costs against the potential ROI the chatbot could deliver through increased efficiency and improved customer engagement.

Try to find a provider that offers tiered pricing plans and flexible payment options, such as monthly or annual subscriptions.

Scalability should also be a key consideration if you anticipate your business needs growing over time.

If that’s the case, you’ll need a chatbot solution that can handle increasing interaction volumes without compromising performance or user experience.

So, make sure that the provider you choose can accommodate this and easily scale your plan up or down to meet your needs.

Many chatbot providers (Talkative included!) offer a free trial period, allowing you to test out their platform before committing to a paid plan.

That way, you can verify that the chatbot software meets all your needs before investing.

customer service chatbot

7. Comparing providers

The final step to finding the right AI chatbot solution is researching and comparing various providers.

To help with this process, consider creating a comparison chart that includes all the factors discussed above, plus the pros and cons for each provider.

You should also look at reviews, customer case studies, and testimonials from other businesses similar to yours to gauge the effectiveness and reliability of each provider.

Once you’ve narrowed down your list of potential providers to your top 5 or so choices, be sure to contact each one to arrange a product demo.

A demo will allow you to see each chatbot system in action, providing a hands-on understanding of its functionality, ease of use, and how well it could integrate with your existing systems.

It’s also an opportunity to ask specific questions and address any concerns in real time, ensuring the chatbot’s features align with your business objectives.

Additionally, experiencing the chatbot first-hand will help you evaluate the provider’s customer support and technical expertise, crucial elements that will influence the long-term success of your deployment.

By meticulously evaluating each potential provider and attending demos, you’ll guarantee that your chosen chatbot is the best fit for your business, customers, and future aspirations.

human hand reaching to robot hand for assistance

The takeaway

AI chatbot solutions are here to stay, and they’ll play a pivotal role in the future of contact centres and customer service.

With this in mind, it’s crucial that businesses are prepared to embrace and leverage this technology - or they may get left behind.

That said, it’s important you choose the right AI chatbot software for your brand.

One that ticks all the boxes covered in this guide and is specifically tailored to your business needs.

That’s where Talkative comes in.

With our scalable and flexible chatbot solution, you can:

  • Choose between an intent/rule-based system, AI, or a combined approach (an AI chatbot with rule-based fall-back for maximum efficiency).
  • Integrate our GenAI chatbot with your own AI knowledge base to create virtual assistants that are experts in your brand, products, and services.
  • Meet and serve customers across your website, app, and messaging channels.
  • Seamlessly escalate to human agents when needed.
  • Leverage AI-driven analytics and reporting.
  • Build multiple chatbots in-house (if you prefer to take the wheel with bot design).
  • Automate customer-specific queries with chatbot fulfilment.

In addition to chatbots, we offer a suite of customer contact channels and capabilities - including live chat, web calling, video chat, cobrowse, messaging, AI assistive tools for agents, and more.

Want to learn more? Book a demo with Talkative today, and check out our interactive product tour.

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