People always want to know what the price and total investment in a product or service will be that they want to buy for their business or personal use such as a new technology, a service, or others. Total investment usually means not only the money, but the time and effort they will need for its implementation, maintenance, development, or usage.
Why invest in an AI chatbot project? It’s not only to be considered as an image of a cool company by using advanced technology! In both B2C and B2B, chatbots are reshaping the technological landscape along with the way of doing marketing, sales, customer support, and overall business operations. Chatbots help to save money and make money, so having one is a strategic investment if you want your business to grow and stay competitive as many companies are already doing it. According to Gartner, Inc by 2027, chatbots will become the primary customer service channel. According to the current analysis, the global chatbot market was valued at USD 3.49 Billion in 2021 and is expected to reach USD 22.9 billion by the year 2030, at a CAGR of 25.4%, according to Research and Markets. – the market is continuously growing.
That’s why we want to shed some light on the expenses related to using an AI chatbot for the business site to be fully informed before choosing one for your business. Let’s share it all in detail with you to not have any concerns from now on for the cost of chatbot technology so keep reading! We’ll outline the different types of AI chatbots and the associated costs so that you can make an informed decision about whether or not a chatbot is right for your business, and also what kind of a chatbot.
There are no secrets in the investment in an AI chatbot
The investment for an AI chatbot can vary depending on the features and functionality that you want your chatbot to have. Generally, the more complex the chatbot, the more expensive it will be and the more value it will give to your business. Expensive doesn’t mean unaffordable, even if the chatbot comes with conversational AI. There are many affordable platforms available, so it is possible to create a chatbot that meets your needs fast and easily without any technical knowledge or skills. Chatbots are not as expensive now as the technology was a few years ago due to the technology advancement and adoption rates. Chatbot technology is a mass technology spread worldwide and every business can afford it regardless of the business needs, budget, and time. Keep in mind that the benefits are much more than the total investment as chatbots save business time and resources and assist with customer support, sales, and marketing. They can save businesses as much as 30% on customer support costs, according to IBM, and save you many more working days than the time needed for implementation and maintenance. According to Gartner, Inc. chatbots and virtual customer assistants (VCAs) have evolved over the past decade to become a critical technology component of a service organization’s strategy – when designed correctly, chatbots can improve customer experience and drive positive customer emotion at a lower cost than live interactions.
For example, the chatbot of the international travel company TEZTour, made on the Umni platform, saved over 850 working hours to the staff in just 10 months! Another example is the digital librarian Ellie of Varna Regional library, made also on the Umni platform that saves at least 2 librarian jobs, and the employees who have performed routine library activities can be redirected to other tasks that correspond to their qualifications. Amazing results, right?
You may be wondering, what is the total investment for an AI chatbot? Well, the answer is a complex of choices to do – when deciding how much to invest in an AI chatbot, you should first consider what you want your chatbot to do. Do you want it to be a simple chatbot that can answer basic questions, or do you want it to be a more complex chatbot that can handle more complicated conversations by having conversational AI? Do you want it to be a customer service agent? A sales representative? A leads generator and marketing assistant? Or something else entirely? Once you know what function your chatbot will perform, you will have an idea about the functionalities it will need to perform its duties. Then you can start to research the different service providers, pricing, and functionalities, and build the chatbot using the tools and resources available on your chosen platform.
There are a few different ways to have an AI chatbot. You can subscribe to a platform that provides monthly or annual payments for a chatbot with different functionalities. You can also find some free versions of chatbots, but these are usually demo versions with limited functionalities that would lead you at some point to upgrade to the paid options. Or, you can hire someone to build it for you. There are pros and cons to each option and we have discussed them in another blog post. Do it yourself or outsourcing the work would affect the investment in your chatbot
See the benefits
Another approach is to start with your budget. If you want to start on a small budget, then your choice would be a basic chatbot without artificial intelligence. However, if you need a chatbot that can handle more complicated conversations, you will need to invest more – time, money, and team efforts, but know that you will be more satisfied with its success than the basic ones.
There are two main types of chatbots: basic chatbots and AI chatbots. Basic chatbots are created using pre-determined information, while AI chatbots use conversational artificial intelligence to learn from customer interactions and improve over time and the return on investment is higher. Nowadays, AI chatbots are more widely used in various industries globally such as customer service, healthcare, beauty industry, e-commerce, financial industry, education, and many more. Many businesses have started to adopt AI chatbots more than basic chatbots to improve their efficiency and bottom line.
Basic chatbots are less expensive to create and do not require much ongoing maintenance, only when information shall be updated. They can be created in just a day or a few days by one person or a team but they still need to be planned to work properly. AI chatbots are a bit more expensive to create as in addition to the basic chatbot structure your team would need to invest time in training the conversational AI module and maintaining the answers. Therefore, the AI chatbots also require ongoing maintenance, as they need to be monitored and fine-tuned based on customer interactions. After launching, a chatbot with conversational AI needs every day or every week to check for customer interaction analysis and further development and improvement according to the trends in customer behavior. AI chatbots also need to be properly planned and trained to meet their full potential. Both projects need also proper promotion and guidance on how to use them so their users know about their existence, purpose, and what to do with such digital assistants. However, both are not so much expensive as they used to be because of the development of technology and its mass usage. According to the current analysis, the global Chatbot market was valued at USD 3.49 Billion in 2021 and is expected to reach USD 22.9 Billion by the year 2030, at a CAGR of 25.4%, according to Research and Markets. The chatbot industry is growing rapidly as it is benefiting businesses in various ways. The major factor driving the market growth is the increased demand for personalized customer service and 24/7/365 support. Still not sure of its importance? Keep reading!
In any case, the total investment in a chatbot comes to:
Hours for planning + hours of work for initial creation + hours of work for monthly maintenance and supervision + monthly chatbot platform fees + marketing expenses for promoting the chatbot + any additional integrations or development/upgrades (optional).
Let’s see it in more detail…
Hours of planning: Every project needs planning, and you shall estimate how much time you will need for planning your chatbot on your site. It is a long-term project so you shall plan it carefully. On average, you can plan a chatbot project in a couple of working days up to a week if it will be more complex with conversational AI, collect customer questions and arrange them in topics, decide the main purpose of the chatbot, when it will be launched and where, the target audience, plan the content and the logic between the different chatbot elements. If it will be a basic chatbot, the planning can take a couple of business hours.
Hours of work for initial creation, monthly maintenance, and supervision: A basic chatbot can take up from one day to a few days for creation, and only when information shall be updated, it will need improvement and development. However, a chatbot with conversational AI takes up more time for creation, training, implementation and always needs to be checked for retraining and adding more topics to work in favor of the business. It can take a couple of months to work to its full potential and be maintained and trained according to every customer interaction once a day from the beginning and then once a week for best results.
Monthly chatbot platform fees – It depends on the chatbot platform, but it starts usually from $20 to more, according to the features and business needs. There are also free services, but they are mostly limited in features and would lead to further upgrades to paid versions.
Marketing expenses for promoting the chatbot – Chatbots do not look for their customers themselves, so you shall think of a marketing campaign to promote and popularize it. You do not need a high budget for that, you can create organic posts for introducing it to the world or include it in your marketing campaign as a place customers can get their promo code, special offer, or other. There are plenty of ideas that do not require a lot of money but if you want to do it right go check our blog post on the topic for the good practices for promotion or choose gamification options.
Additional integrations or development/upgrades – Some businesses need integration of their chatbot with their reservation systems, CRM, or other software, which require additional work along with additional fees which may vary, but it is always custom and according to the business’s specific needs.
If you’re still not sure if a chatbot is right for your business, we recommend contacting a bot development company or consultants of a chatbot platform like us for a personal consultation to discuss your options.
Along with the annual or monthly platform fees, you must think of a planned time for implementation, training, and maintenance and who will be assigned to the chatbot project to supervise it in a long term. The person or team assigned to the chatbot creation and maintenance needs to know how to use the technology, understand it and know its benefits to create the chatbot at its best to meet all business goals and needs.
The return on investment for an AI chatbot
How to calculate it? There is no one method to know the total return on investment of your chatbot on your site. However, it is very important to consider the return on investment (ROI) when making any business decision, and implementing an AI chatbot is no different. With any business expenditure, you should always think about what you are hoping to get out of it and if it is worth the initial investment.
There are many factors to consider when thinking about the ROI of a chatbot with or without conversational AI. The cost of development, implementation, and maintenance may look high initially, but you need to consider how much time and money it will save your company in the long run. Think about it: your chatbot will be working 24/7, which means covering night shifts, weekends, and holidays when usually employees are paid 1.5 to 4 times more per hour for working! Is your chatbot used also for sales and marketing – how many inquiries it is expected to bring? You will also need to think about the intangible benefits that come with implementing an AI chatbot, such as improved customer satisfaction or increased brand awareness.
One awesome example is the hotel AI chatbot of the small family Hotel complex Izgreva, which was made on the Umni platform. For just 1 year of work, their chatbot successfully collected over 880 inquiries from customers from 17 countries, almost half of them collected outside of working hours. Just to mention, the hotel team is small and just a few people speak English. The hotel AI chatbot still continues to accomplish great results. Another awesome example is the hotel AI chatbot of Casa di Fiore Spa & Medical Hotel – Miss Fiore which for the first year of its work saved close to 7,000 working hours for the hotel employees (the work of 3 to 4 people on duty every month). AI chatbots save money and time for every business that implements one on its site, regardless of its industry and size. The AI chatbot is for every business, its benefits are many and its usage is growing worldwide according to many sources online, (32.30 billion dollars by 2028 – the predicted size of the conversational AI chatbot market according to Brand Essence.)
ROI is not always easy to calculate, but there are some methods you can use to try and quantify the potential return on investment for the chatbot. One method is to calculate the cost per task that your chatbot can perform. For example, if your chatbot can handle customer service inquiries that would normally take an agent 5 minutes to resolve, you can calculate the cost savings by taking the number of customer service inquiries handled by your chatbot in a month multiplied by 5 minutes and dividing by 60 (minutes in an hour) for total serving time in hours multiplied again by the average salary of a customer service agent per hour. This calculation will give you an estimate of how much money your chatbot could save your company on customer service labor costs. A chatbot made on the Umni platform usually saves up to 12 minutes of an employee talking with one customer. You can calculate how much time per month it can save for your employees.
Another method for calculating ROI is to consider the lifetime value of a customer. If your chatbot is able to increase customer satisfaction or loyalty, it could lead to customers spending more money with your company over time. You can calculate this by taking the average amount a customer spends with your company over their lifetime and multiplying it by the percentage increase in loyalty or satisfaction that your chatbot achieves.
These are just two methods for calculating ROI, but there are many other ways to approach this calculation. The important thing is to think about what you want to get out of implementing an AI chatbot on your site and to calculate if it is worth the investment.
To sum up the profit gains from using an AI chatbot on your site:
- Earnings from better customer service and support – for sure your business will win with better 24/7 customer service and support. Your chatbot users would be assisted and be grateful for the opportunity to self-service themselves at their convenience.
- Earnings from better ratings and reviews – The ratings of your business could get higher if you provide better customer service and support with the help of your AI chatbot on your site. The chances are higher to get more 5-star ratings for your online assistance and self-service opportunities. Higher ratings and positive testimonials will support the interest of the potential customers in your business.
- Increasing of referrals – If there are more people that are satisfied with your brand, for sure the word of mouth would spread. People are naturally curious so providing an interactive innovative and well-designed customer support as an AI chatbot will boost the interest in users to this way of communication.
- Earnings from new opportunities – Customers won’t be missed as the AI chatbot will be always online to assist, especially when you and your employees are busy with more complex tasks or when they are on a break, during holidays, night shifts and the weekends.
- Earnings from new customers and conversions – when every process is optimized, you provide 24/7/365 assistance, improve the way you market and sell products and services, the sales could increase too, so start with your project now, to have a fully working AI digital assistant on your side.
To sum up the cost savings from an AI chatbot
- Customer service and support cost savings – the need for new customer service representatives is reduced if the chatbot can answer most of the asked questions. For example, if the cost per interaction with an employee is $5 (for instance, if your cost per call is $7, for email $4, and for web-based live chat is $4, your average cost per interaction across the support team/contact center will be $5), you can calculate the total cost for interactions with customers knowing how many interactions your company has on a monthly base. For every 100 interactions with customers, your company’s cost is $500. For sure your company has more than 100 customer interactions monthly. Statistically, close to 80% of the communication is routine questions and inquiries that can be automated by a chatbot. When you finish calculating you will find out: using a chatbot for customer service and support is much cheaper and add to overall time and resource savings.
- Employees’ turnover and training savings – The employees would be more motivated to work and handle the more complex tasks because the chatbot would take the routine and free them from it. The chatbot could also help with the onboarding of new employees and all this could help the employees of the company to stay longer. The chatbot can assist new employees with training by providing always updated information about the company services, products and policies discretely on their phone. Less employee turnover and assisted training would mean saving on HR expenses.
- Mistakes and bad service – Fewer mistakes in the communication with customers as a result of having a well-planned, designed, and maintained AI chatbot in addition to better trained and experienced employees due to the lower turnover and fewer human errors (the chatbot would help with the customer support) improve customer experience and decrease expenses related to compensations of customers due to mistakes. With an AI chatbot on your site, that is trained well and checked for mistakes and with the decreased need for human interactions, the company will witness soon savings, as well as higher revenue.
- Staff time savings – as we shared above, a chatbot made on the Umni platform may save up to 12 minutes per customer to the employees. If your team communicates with 30 customers on average on a normal workday (8 hours day shift), for one month, this comes to 132 hours monthly of your employee’s time. Let an AI chatbot take over this communication and employees – use these hours for more valuable tasks. In addition, the chatbot extends company working hours and increases the number of customers that could be served by being on duty 24/7/365 and covering the more expensive employee work hours – the night shifts, the holidays, and the weekends.
Contact us and ask for a personal consultation exactly for your type of business and its precise needs. We also publish weekly helpful blog post topics of the chatbot world to help chatbot enthusiasts be fully informed when choosing to have a digital assistant on their site. Do not miss to follow our LinkedIn account for more convincing stories and facts about AI chatbot technology to not miss any new opportunity to be more competitive and one step ahead of your direct competitors.