What Is a Chatbot?

Picture this: You’re browsing a retailer’s website, and a small box pops up in the corner of your screen, asking, “How can I help?” You type a question about a product into the text box and the program promptly generates an answer. If this scenario sounds familiar, you’ve likely interacted with chatbots before. But what is a chatbot, and what is the purpose of this technology?

Chatbots are computer programs that use artificial intelligence (AI) to interpret human language and simulate conversations with users. Many businesses use these tools to provide customer service, perform specific tasks, and more.¹ This article explores the history of chatbots, common types of them, and their applications.

Get To Know Chatbots

A chatbot is an artificial intelligence-powered software application that holds spoken or written conversations with human users. This tool uses natural language processing to understand human language, interpret what the user wants, and generate a relevant response or action.¹

You might assume that chatbots are a very recent invention, but this technology was first developed in 1966. In that year, researchers created ELIZA, a rudimentary chatbot that mimicked a human psychotherapist by rephrasing the user’s input and asking questions. The program was so convincing that many users believed that they were having a conversation with a person; this phenomenon became known as the “ELIZA effect.”²

Since then, chatbots have become increasingly mainstream and sophisticated. In 2011, for example, IBM’s chatbot Watson drew national attention after it defeated “Jeopardy!” champion Ken Jennings (at his own game, so to speak).³ Likewise, in 2023, the social media platform Snapchat released a chatbot called My AI: users can give theirs a custom name, have conversations with it, and send pictures to it.⁴

Popular Types of Chatbots

There are numerous chatbots with different goals, purposes, and areas of knowledge. Most chatbots fall into one of two categories:

Declarative Chatbots

Declarative chatbots are the most popular variety. These applications have scripted responses that they apply in basic conversations with users. For example, a movie theater could use a declarative chatbot to answer questions about showtimes and ticket prices. Additionally, these programs can perform straightforward tasks, such as linking customers to a survey or selling them tickets.⁵

Predictive Chatbots

Predictive–or conversational–chatbots provide more advanced and customized responses. These interactive programs use natural language processing and machine learning to memorize a user’s preferences and offer increasingly personalized suggestions. Popular predictive chatbots include Apple’s Siri and Amazon’s Alexa, which can perform various sophisticated tasks.⁵

What Is a Chatbot Used For?

A chatbot can have many functions depending on the creator’s goals and needs. Consider these five applications that demonstrate the versatility of chatbots:

1. Medical Services

Medical chatbots allow users to ask questions about their health conditions and get recommendations for medical services. The Buoy Health chatbot, for instance, uses artificial intelligence to gather information about the user’s symptoms and suggest possible causes. The tool also provides personalized suggestions for healthcare providers based on the user’s health insurance benefits.⁶

2. Court System Education

Many court systems use chatbots to educate citizens about court processes and reduce the time administrative staff spends responding to inquiries. Case in point: The Superior Court of California in Los Angeles County has a chatbot that helps people resolve traffic tickets online. The county also has an informational chatbot that answers questions about hearings, jury duty, and other courtroom operations.⁷

3. Conversational Marketing

Online retailers often use chatbots to provide conversational marketing. These tools mimic human salespeople by conversing with consumers and identifying their unique needs. Based on this information, marketing chatbots recommend specific products or services. Additionally, these applications gather data that analysts use to learn more about customers’ behavior and preferences.⁸

According to a 2021 study, conversational marketing chatbots with anthropomorphic (human-like) features can influence how customers feel about products and brands. Consumers also perceive these chatbots as more credible and likable than non-anthropomorphized chatbots; this perception may sway their purchasing decisions.⁸

4. Companionship

Because chatbots simulate human interaction, they can provide social support for people who need companionship. For example, the companion chatbot Replika engages users in meaningful conversations and sends them uplifting messages. This mobile application also provides increasingly personalized advice and responses as it learns more about the user.⁹

Research shows that companion chatbots such as Replika reduce feelings of loneliness and isolation. Additionally, these applications help people build interpersonal skills such as communication.⁹

5. Tutoring

Educational chatbots provide personalized tutoring for students who need one-on-one learning support. The conversational chatbot Khanmigo, for instance, asks students strategic questions about their homework problems to guide them to the correct answers. Khanmigo can tutor students in math, chemistry, history, and many other subjects.¹⁰

The Benefits of Chatbots

Chatbots have many benefits for businesses and users, which contribute to their popularity and widespread appeal. Advantages include:⁵

• 24/7 availability: Unlike humans, chatbots don’t need time off; they’re always available to provide prompt customer service
• Automation: These applications automate repetitive tasks such as scheduling appointments, sending survey links, and streamlining employee workflows
• Cost-effectiveness: Chatbots reduce the amount of money companies spend on customer support staff
• Data-driven insights: Chatbots gather information about clients/customers and their preferences, which businesses can use to make informed decisions
• Faster customer service: Chatbots provide immediate support so that customers don’t have to wait on hold to speak with live service representatives
• Personalized recommendations: Predictive chatbots provide custom product recommendations Online Master of Science in Business Analytics based on user input

Leverage AI as a Business Analytics Leader

Chatbots and other AI-powered tools allow business analysts and other leaders to understand their customers better. Learn how to get the most from this technology by enrolling in Santa Clara University’s Online Master of Science in Business Analytics program. Under the guidance of our world-class faculty, you’ll study the latest software and develop an extensive professional network in Silicon Valley.

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