A robot/chatbot with an arm around a dollar sign
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Chatbots are gaining popularity in the enterprise space. According to a survey conducted by Oracle, 80 percent of respondents (consisting of chief strategy officers, senior marketers and sales executives) said they either already use chatbots or plan to utilize them by 2020. 

So with this in mind, we thought about those who are considering building a chabot for their organization, be it for their workers or their customers, what are the associated costs when it comes to building an enterprise chatbot. In this article, we speak to industry experts who share the true cost of building an enterprise solution.

What are Chatbots, And Why Are Enterprises Building Them?

According to ChatBots Magazine, a chatbot is a, “service powered by rules and sometimes artificial intelligence, that you interact with via a chat interface.” That service can come in a few different forms hosted via different platforms, from website widgets to Facebook Messenger to Slack.

Enterprises are deploying chatbots to deliver helpful, personalized messaging to customers at scale, limiting the need to expand employ more customer support workers.

Related Article: Top 14 Chatbot Building Platforms of 2017

What are the Factors and Variables Which Affect the Cost of Chatbot Development?

Just you might expect the answer to how much does it cost to build a chatbot is, it depends. It's specifically dependent on your business requirements. Gam Dias, Co-Founder at San Francisco, Calif.-based 1080Bot explains that the overall cost of chatbot development essentially boils down to 3 variables.

The Industry Vertical

Developing chatbots for heavily regulated sectors like healthcare and financial services will require security protocols to be implemented, and this adds up to the overall cost. B2C industries that have a lot of customer engagement, like the travel and retail sector, will need to incorporate a more diverse range of dialogs and will require a robust design, which further adds to the overall cost.

Related Article: 8 Ways to Measure Chatbot Program Success

The Required Level of Interaction

If the chatbot is going to deliver a menu driven approach that has a simple set of rules and uses pre-defined options for the user to select, the cost would be low. But if the chatbot incorporates a natural language processor (NLP) which recognizes the underlying tone and emotions underneath the sounds, gestures and words provided by the user will lead to higher costs due to further development time required. And the more you try to accommodate the different tones, the more complex and costly it becomes.

The Required Capabilities?

For simple action steps, such as retrieving weather updates, flight status and FAQs, then development costs will be low. If you create a chatbot that books a flight or place an order, these chatbots require a deeper integration with the back-end system and will lead to higher costs.

Related Article: 8 Changes Chatbots Will Bring to the Workplace

So, How Much Does it Cost to Build a Chatbot?

Two options are available to you when it comes to building a chatbot.

  1. Build Your Own - If you have the programming capabilities or have developers on your team, then you have the option of building a bespoke chatbot based on your needs and preferences. The obvious drawbacks here is cost and the time needed to build. Plus, ongoing maintenance will be entirely your responsibility.
  2. Use a Chatbot Builder - This option often involves paying a monthly subscription for a platform where you can build your chatbot. In return for paying the monthly subscription, you get a framework to build upon, as well as support and maintenance from the vendor.

Which Way is More Cost-Effective? 

We spoke Jonathan Duarte, Co-founder of San Francisco, Calif.-based GoHire, who developed GOBe, a job search Facebook Messenger chatbot that helps job seekers find employment, his firm used a third party solution. "There are lots of third-party bot building frameworks. We took several days to review at least 10 of them. Some work only on Facebook Messenger, which is fine if that's your only future channel,” he said.

Duarte added that he wanted to use a bot platform that works with a variety of messaging applications to expand the outreach and usability of his chatbot. The chatbot took GoHire 8 weeks to build with the help of two senior developers, totaling the building costs to $41,000. "The cost of the platform and volume of messaging is the biggest non-labor monthly expense. Most chatbots with 1,000+ interactions with contacts will range at the low-end of $500 per month, depending on the integrations, levels of script, reporting, debugging, AI and NLP requirements, and future enhancements,” said Duarte.

Christian Rennella, CTO and Co-founder of Argentina-based elMejorTrato, went down the build-your-own-route to develop a chatbot to assist their sales and marketing team. He revealed that, “after 9 years of [working hard] with an internal marketing and sales team to answer our client's questions through live chat, it was not until 8 months ago that we started developing our own AI chatbot. It cost us $340,000 where the greater part was invested in the salaries of [our] employees.”

Kelly Garrett, Creative Director at Minneapolis, MN.-based Ekcetera, also chimed in on the price of building an enterprise chatbot. “At the low end of the spectrum, someone can build their own chatbot for only as much as their time costs. On the high end, I see that an average Facebook Messenger chatbot for small business marketing purposes costs from $3,000 to $5,000. I have also seen companies spend upwards of $50,000 for a chatbot. It all depends on the industry, company size [and] requirements of the bot.” said Garrett.

What is the ROI for Building a ChatBot?

Garrett also shared her views on the subject of chatbot ROI. In her view, it’s not all about numbers. “[How you define ROI depends completely on the reason you're creating a chatbot. Chatbots can be used for lead generation, customer service, or you can even sell directly through a bot. [Each time the ROI will be calculated differently]. Alternatively, some brands use bots to elevate the customer experience,” she said.

Rennella on the other hand, developed the ElMejurTrato chatbot for their sales and marketing team, which allowed them to more easily measure ROI. "Our sales increased by 24.4 percent. This [equates] to $3.7 million in additional revenue a year,” he revealed.

Are you planning to build a chatbot? Let us know how you’ll make it happen in the comments below.