What Are Chatbots and How They Can Help Businesses

Living in the twenty first century, there are so many daily things that are now done with the help of computers. A chatbot is one such invention in computing that is making our lives easier. Everyone reading this blog must have encountered a chatbot. In case you are wondering what are chatbots, this article is for you.

Here, we are going to talk about the chatbots in detail and we will also be discussing how this specific software works.

In earlier days, basic chatbots were used in the most popular messaging applications like Facebook Messenger, Skype, Slack, Wechat, etc. Now, most of the popular websites are featuring chatbots on their home pages.

Such popularity of chatbots has left many curious people wondering about their work. And we are here to explain that. 

Chatbots in brief

Chatbots are computer programs that process the user language (words and phrases) and answer those questions. The design of these tools are based on the rules of Artificial Intelligence. Most of the business processes can be automated using such pieces of software. Chatbots are used to imitate human speech.

That speech may be either in the written form or it can also be spoken. Such software can be applied in two ways; one way is to implement it via web-based applications or you can also do it by using standalone applications. 

With the advanced use of Artificial Intelligence (AI) and Natural Language Processing (NLP) techniques, these chatbots are getting more advanced now. There are several modern examples of such software like Alexa, Google Assistance, Alexa, and Cortana. Later sections of this blog will answer your question of what are chatbots in more detail. 

Types of Chatbots

Such pieces of software come in several varieties. In this section of the article, we are going to discuss some of the most popular types of chatbots. Speaking of the chatbots, they come in three types.

Knowing the right type may help you a lot in choosing the right one for you. Take a look at these types.

Keyword Recognition-based chatbots

These chatbots are developed with the help of Artificial Intelligence and customizable keywords. They analyze what the users are saying and after that appropriate answer is produced. Some of the relevant words in the users’ queries are called keywords.

Suppose if someone asks “How to log out from Gmail?” The chatbot will consider the words like “log out” and “gmail”. Then, it will choose the relevant one from all the available options. The appropriate answer will be presented to the users. 

Such chatbots often give irrelevant answers when they get similar questions. If the same sentence contains too many keywords, the chatbot often gets confused in giving the appropriate answer. 

Menu-based chatbots

The most basic type of chatbots is the menu-based chatbots. For every FAQ, there are several options that users may choose. Each option that the user chooses moves the user towards the ultimate answer.

Questions related to general technological supports can be very easily answered using these chatbots. But you can use such pieces of software for more advanced queries. 

Contextual chatbots

Now we are talking about the most advanced chatbots available today. These chatbots can remember their past conversation with the users. They are able to do so with the help of Artificial Intelligence (AI) and Machine Learning (ML). Such an ability helps these chatbots in improving over time. If you order a burger with the help of a contextual chatbot, the chatbot will remember the choice.

The chatbot can even make such recommendations in the future. Your answer to what are chatbots will be incomplete if you don’t know about the working of a chatbot. The next section of this blog will discuss the working of a chatbot. 

How do the chatbots work?

The working of a chatbot can be described in many ways. They can be beneficial as part of marketing software, general information sharing, customer support tasks and a wide variety of other business systems too.

Every chatbot does it by understanding and processing the natural language. The software does it by using the application layer, database, and APIs.

This is the usual way an application deals with natural language. Before any chatbot is employed to work, it is necessary that we train the chatbot. In the next subsection, we are going to talk about the chatbot’s training. 

Training a chatbot

Training a chatbot is very wide and fast as compared to training a human being. Trainers provide a set of instructions to the human being. But in the case of a chatbot, the training is given by incorporating the chatbots with a large number of chat/conversation logs. A chatbot becomes able to deal with the human with the help of those conversation logs.

Working of a chatbot

Chatbots work in three ways. Here, we are going to talk about all three types of chatbots one by one. 

Natural Language Understanding (NLU)

We can describe Natural Language Understanding (NLU) using these three concepts i.e. Entities, Context, and Expectations. If you are searching for an answer to what are chatbots, you should understand NLP to get a clear idea. 


The entity is the idea upon which your chatbot is built. You can take an entity as the defining factor of the chatbot. Chatbots are built for delivering specific services like customer service, payment systems, etc. 


NLU sets several parameters that are used by the chatbot to understand the intention of the user. Context helps the chatbot to store the different phases of the conversation. Phases of a conversation include things like banners.

If you order a burger from Burger King, then burger will be the banner in this sentence. Several other parameters are also considered like the name of the restaurant i.e. Burger King in this case. With the help of such functions, the chatbot tries to understand what the users want. 


You can precisely describe the expectation as a condition that the chatbot must fulfill while answering the questions. This is quite an essential part of the working because users can ask different questions meaning the same thing. E.g. “Where is the nearest Burger King restaurant?”, “I want a burger from the Burger King really quick”, and “Is there any burger king in this city?” In all these three questions, the user means to get the same answer.

Pattern matching

The chatbots that work using this model are developed with the help of Artificial Intelligence Markup Language. With the help of pattern matching the chatbots match the texts of users with the data stored in the data store. After proper matching, the relevant answer is produced.

If someone asks who is the co-founder of Apple? The chatbot will simply answer by saying Steve Jobs is the co-founder of Apple. But these chatbots can’t go further than the matched patterns. By answering a lot of questions, a hierarchy is formed. This way the process of answer making becomes easier in the future. 

Natural Language Processing

With the help of this technique, the chatbot tries to convert the speech of the user into data structures. And then, that data structures are used to produce the most relevant answers. Several stages are involved in this process. Take a look at them.


Tokenization is a process that breaks down linguistic sentences into a number of fragments. All those fragments are assigned specific values in the application. 

Analyzing the sentiment

Here, the experience of a user is studied. 


This program is used to check the users’ enquiries for spelling errors. Such an analysis is very necessary because spelling errors can alter the meaning of the query. 

Recognizing the named entities

This is a program model that picks the name of the product mentioned in the query. Then all the other words are found that are somehow similar to the name of that product. 

Dependency parsing

At this stage, the chatbot analyses the users’ queries further by searching the verbs, objects, nouns, common phrases, etc. With this information, the chatbot clearly understands the meaning of the query. Only after such a detailed study, precise answers can be produced. 

Final thoughts

We have tried our best to explain what are chatbots, and as a result, I hope that you now have enough information to have a better, more detailed idea about the inner workings and benefits of a chatbot. They are fantastic to help support your customer service team, marketing and sales, technical questions, support activities and more.

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