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How much does it cost to build a chatbot?

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‘A computer would deserve to be called
intelligent if it could deceive a human
into believing that it was human’
Alan M. Turing

There has been so much talk about Chatbots, Artificial Intelligence lately, as it has become obvious – they are dramatically changing the business world. Think for a second, how the methods of communication between business and customer have changed in recent years. Five years ago you mostly communicated by e-mail and – from time to time – by phone. Now you are more likely to use Facebook Messenger or WhatsApp. Now this need disappears with the creation of chatbots. It’s enough to be open to instant messengers and you will get a completely new channel of communication with your customers.

Chatbots, artificial intelligence, and cognitive computing open the door to offer a higher level of customer experience and connect with customers in a new way. According to Gartner’s report, 85% of user communications will be managed without human involvement by 2020. More and more companies are interested in building their own chatbots to boost the performance, accelerate customer service and make customers’ experience smoother. The main questions here are:

  • What needs to be done prior to choosing a solution?
  • Who will build the chatbot, and how long will it take?
  • Which processes this chatbot will cover?
  • How much will it cost?

Let’s shed the light on the variables that influence the pricing, and certainly must be taken into account.

Before building a chatbot

Gartner says smart machine technologies including chatbots:

  • adapt their behavior based on experience;
  • are not dependent on instructions from people (eg, they can learn on their own);
  • are able to come up with unanticipated results.

It’s essential to do a research and analysis the business you run, so that you understand what’s right for you, and also it helps to define which technology suits your business most.

These questions are a good starting point:

  • What size of business are you running (small, medium, enterprise)?
  • What are your business goals? Is it an entertainment, or providing a full customer support with reduced human involvement? Which repeatable processes might be covered by this chatbot (pre-sale customer communications, customer support, etc)?
  • How much messaging platforms are you going to support and communicate through?
  • How much users do you expect your chatbot to have? How much conversational flows?

The questions are fairly simple and help to understand the business needs. It also should be mentioned that all these questions require thinking and thorough analysis since the chatbots technology is new, and a lot of experiments are made in this field. But still, you have somewhere to start.

Who will build your chatbot?

The most essential step is behind, all business goals, objectives are defined, draft requirements are written, and one more important step influencing the price is met. How to choose someone who will develop a bot? Who and how will be able to make it? How much will it cost? Besides choosing a platform or provider, there are two major choices in front of you:

  • Building custom solution
    It’s a good idea to get your fully custom chatbot, built according to your needs and your plans to scale. In the same time you are fully responsible for support and maintenance of this bot, but not limited with any platform abilities.
  • Building on top of platform
    The most cost-efficient way to create a chatbot is to use existing platforms that allow you building a chatbot and defining a set of required features. These services work on a subscription basis, charging monthly payments (and often providing basic functionality without charging any fee). However customization fees are still applicable and typically equals to building custom solution. So you get support and maintenance, save some time on basic algorithms, but still get customized chatbot.

    There is no right choice here. Depending on complexity of the bot you need any of the options above might be suitable for your case.

Project Phases

The main factor influencing the project price is the work being done to develop it. Development work is usually split into several phases. Having a general idea of the project phases may help you make a rough estimation of cost. The following roadmap has been found suitable for developing chatbots, and is adopted by Azati.

  1. Discovery Phase
    The Discovery Phase is the first step on the road to a success. We define out the purpose, goals, value proposition, expectations of a project, metrics to figure out whether all goals are achieved in the end.

    Discovery is about learning what business has, what business wants and what business needs. Effort here goes a long way to having everyone happy in the end. The purpose of a discovery phase it to manage time, energy, and budget wisely, and reflect all that in the corresponding documentation. At the end, parties find out define the scope of work needed for the next move, namely prototype development.

    Usually, during the discovery phase requirements are being identified to cover the functional units of a chatbot such as:

    • Conversational flow
    • Control Panel
    • Interaction channels
    • Integration
    • Natural Language Processing
    • Back end

    If all required data, processes and metrics are available, the phase normally takes 5-7 working days in average. Typically we do it for free.

  2. Prototype Implementation and Evaluation Phase
    A prototype helps to test feasibility and proof of concept. It can be a mockup, or a code-based prototype, depending on the chatbot complexity and tools it was created with. Everything what was prototyped is a point of discussion with the client. The client along with software professionals will be able to  validate requirements and design choices, and make adjustments if needed. The risks and costs associated with software implementations are dramatically reduced, as the requirements are well-discussed early on, prior to development.

    We are striving to make this step as inexpensive as possible, typically prototype costs are about $3,000 – $5,000 including estimation for the MVP or another next stage required.
  3. Minimum Viable Product
    At this stage you receive a set of basic and functional features developed with bearing the findings from the prototype in mind. An MVP works with the actual data and is exposed to a small group of real customers as the minimal first version of the ultimate product solution. The feedback here is vital, as it is way less expensive to modify the system at this stage, than when it is fully implemented.

    Average MVP costs vary between $10,000 – $20,000 depending on the total project size and complexity.
  4. Chatbot Release
    The product with complete set of predefined features is developed and then launched to the market. The preceding steps put lot of emphasis on the requirements elicitation and validation, so at this step the end product is made with minimal risks.

    The cost of this phase is usually estimated during previous stages.
  5. Chatbot Continuous Training
    An employee’s job effectiveness depends on his/her knowledge of the job. Similarly, the effectiveness of a chatbot solution is dependent on its knowledge base and ability to learn on the job. The process of training the bot never ends. Considerable effort should be invested in ongoing training.

So, how much in numbers?

It’s a common misconception that leveraging chatbots must cost a fortune, but it’s not true nowadays. A wide number of companies can do this. Thanks to the emergence of various tools, libraries, frameworks for building chatbots, a completely new way of communication is becoming more available for businesses and their customers.

Prices are calculated for each case in particular. Usually development companies charge from $15,000 to $30,000 for a custom bot.
Companies located in a Silicon Valley set a minimum price of $30,000 for a pretty simple bot which will be able to understand different users’ questions and even provide them with the relevant answer.
AI customer support and very sophisticated chatbots for customer support are starting from $40,000 – $100,000. These bots are built on NLP and ML. They are based on the human capability of learning and absorbing information, but imbued with more efficiency. Marketing campaigns, lead generation and conversions, personalized media and news content distribution can be personalized and delivered to targeted customers. AI based chatbots can provide a quick interface to resolve your customers’ queries. When combined with payment services, chatbots serve as a complete business-enabling solution. They are based on the human capability of learning and absorbing information, but imbued with more efficiency. This type of chatbot always just a part of a bigger system, with custom dashboards, webviews, etc.

Good news here – you may start with a simple chatbot automating most frequent flows in your company and add AI-based bot later on as soon as the first one shows it’s efficiency.

Finally…

Every single company has unique requirements, issues and tasks it is trying to resolve, everyone should agree to disagree that chatbots still provide a great support and help in communication and identification of user’s need. Gone are the days where your customers have to call in during office hours for some assistance. Chatbots can now answer questions, serve as a self-serving tool, and even provide specific information about your products and services on demand.

Would you like to get our guidance to your chatbot?
Call us at +1 (973) 597-1000 or fill out the form below for a free consultation.

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