How Much Will It Cost To Build Customized Chatbot For Your Business

By Harikrishna Kundariya Chatbot August 8, 2019 17 min read 847 Views

Previously, the primary communication medium was Email. Sometimes, we were using the Phone.

In recent times, that has shifted to WhatsApp & Facebook Messenger. Shortly, we will see a lot of people using Chatbots for communication.

Chatbot Services have transformed customer service & sales process. Nowadays companies want to Build a Chatbot as per their needs.

According to a survey by Oracle, 80% of top-level executives are planning to use Chatbot For Business by 2020. So, you should also think about developing a Chatbot.

Before going into details of that, you need to Explore The Latest Chatbot Trends. The reason for that, it will give you an idea of the current market.

In any business proposal, cost matters the most. The same applies to the case of Chatbot Technology.

In this blog, we’re going to provide you with all the details related to it.

So, let’s start the show, right now.!

1. The Initial Phase

For knowing the exact cost of AI-powered Chatbot Development, analyzing Custom Chatbot creation process is vital. Chatbot Maker can give you proper guidance on this subject.

First of all, you should define the purpose of Customized Chatbot. By purpose we mean, what tasks it will handle. There are two ways through which Chatbot can work:

  • Rule-Based Methodology
  • Custom AI Chatbots

In rule-based methodology, Chatbot can provide answers based on pre-defined rules. Creating such bot can be very easy.

On another hand, to Build Custom Chatbot based on AI, you need to do a lot of hard work. But, it will work as per your specific business needs.

Besides that, you also need to think about Chatbot Platform that you will use.

Here’s a list of top Chatbot platforms:

You can use any one of them as per your requirements.

For solving all your doubts, you can refer to the table shown below:

Build a Chatbot

2. Reason For Crafting Chatbot

After clearing the initial phase, you need to know the reasons to Build An AI Chatbot. Without knowing the exact reasons, you can’t move ahead.

The Chatbots must align with your business plan. It should answer all your queries. For that purpose, understanding the context is vital. So, you can make use of NLP-Based Chatbot.

why chatbot-reason for creating chatbot

While devising a plan for Chatbot, you should think from two perspectives:

  • End-User
  • Enterprise

For End-User, Chatbot can provide:

  • Quick Solution
  • Security
  • Accessibility
  • Accuracy

For Enterprises, Chatbot can offer:

  • Low Operational Cost
  • Scalability
  • Productivity
  • Versatility

3. Chatbot Market

To Build A Chatbot For Your Website, you should have an idea of the Chatbot market. Without knowing the present market scenario, you can’t get the desired success.

In the last ten years, the demand for Custom Chatbot Development has gone to a new level. Earlier, people were using bots for the E-Commerce sector.

Now, that scenario has changed with Chatbots becoming part of mobile apps. According to Global Market Insights, Chatbot market will reach $13.34 billion by 2024.

Experts believe that Machine Learning & AI will play a massive role in this number. Right from the rule-driven bots to self-learning bots, Chatbots have come a long way.

Chatbot Market

           U.S. Chatbot Market by Vertical, 2014 - 2025 (USD Million)

Due to the usefulness of Chatbots, people are looking to invest in this technology. By 2025, the capital of Chatbot will reach $1.2 billion at CAGR of 34.2%.

From the above statistics, you can understand the importance of Chatbot. So, every firm should find the Best Way To Build a Chatbot.

4. Business Benefits Of Chatbots

In the previous section, we have concluded that businesses should look forward to Chatbots.

But, the question is, What are the business benefits of that❓

So, let’s analyze that in detail.?

Before knowing How To Build Chatbot From Scratch, you should know the advantages of it.

Chatbot Benefits

Here’s a list of various benefits that Chatbot offers.

Reduces Operational Price

As per the research by Juniper Research, Chatbots will cut down the $8billion by 2022. For any business, the most significant source of cost is incoming calls. That’s where Chatbots can play a vital role.

It can solve the query of the customer and also provide the necessary assistance. In this manner, Chatbots can lower down the overall cost.

Lower Down Employee Expense

According to the McKinsey report, you can automate 29% of the customer service in the USA. Chatbots can manage multiple people at the same time. So, no need for dedicated staff.

As you know, Chatbot Integration cost is low compared to the employee expense. Therefore, implementing a chatbot for business is a good move.

24*7 Availability

In today’s day & age, customers can come from any corner of the world. In the world of online business, you have to present 24*7. It is not possible with the dedicated staff.

But, if you use a Chatbot solution, then you can achieve this thing. There is no downtime associated with Chatbot. So, that can be a distinct advantage.

Better Resource Management

If you can integrate Chatbot on your site, then resource management becomes more comfortable. Chatbots can handle all customer requests. So, the staff can focus on other business operations.

Chatbots free you up from repetitive tasks. Therefore, businesses will be able to concentrate on other essential tasks.

Higher Revenue

Many businesses are using Chatbots for generating leads. By using Chatbots, you can send discount offers to the customers. In this manner, you can create an opportunity for engagements.

You can also utilize Chatbots for creating brand awareness. All these activities contribute to the revenue generation.

5. Structural Components Of Chatbot

So far, we have analyzed the Chatbot Market. We have also gone through the business benefits of Chatbot. The next step is to define the structural components for the bot.

Here’s a list of all the structural components:


Buttons are one of the most critical components for Chatbot structure.

When the user clicks on the button, you can get details of activities.

You can create a smart button which guides the user. It also helps users to take a specific action.

Get Started Button

The ‘Get Started Button’ prompts users to perform an activity.

Chatbot that works for FB Messenger has this component in the live environment.


The main aim of Cards is to provide various data.

The data can be pictures, content, connections, etc.

Customers can choose any card that suits their strategy.

Fast Answer

The user can make use of this component to send his/her reaction.

He/She can send a reply to bots with the help of this interface.

Industrious Menu

The user can use this component for controlling access of another bot segment.

These are some of the most utilized components for Chatbots. But, you can add others to this list as per your business needs. Once you clear this task, it will hold you in a good state.

For knowing more on this subject, you can contact any Chatbot Builder. He/She can provide you with all the necessary details.

6. Best Practices To Develop Chatbot

Are you interested to know How To Create Chatbot in JAVA?

Then, you’re at the right place. Before going to the details of development, knowing some norms is vital.

So, we’re going to provide you with a list of best practices for Chatbot development. It will help you immensely when you’re dealing with any Chatbot project.

Things To Consider Before Developing Chatbot

Here’s a list of best practices for developing a Chatbot:

Knowing Your Audience

It is the first & most important thing for creating a successful bot. Knowing your audience will help you to understand their pain points. Based on that survey, you can create good Chatbot.

Traditionally, you can classify the bot into one of the following categories:

  • Entertainment Bot
  • News Bot
  • Utility Bot
  • Commerce Bot
  • Customer Service Bot

You should collaborate with your audience. Try to understand their queries. Take their feedback into account while developing a bot. It will help you in the long run.

Clear & Crips Goals

Having a clear goal in front of you is vital for successful bot creation.

Some of the most common targets for developing Chatbots can be:

  • Lead Generation
  • Increase In Sales
  • Better Engagement
  • Purifying Business Process

If you have defined your objectives, then it will help the developers & testers. They can work according to the pre-defined plan. This type of policy has a better chance of success.

Recognizing User Scenario

Identifying the various use cases is vital for Chatbot creation. As your user base increase, the Chatbots has to deal with multiple people. So, recognizing different user scenarios is essential.

You can classify the use cases as automation & augmentation. Automating tedious & repetitive tasks increase business productivity. Augmentation involves AI and NLP.

Picking The Right Chatbot Framework

Opting for the right Chatbot Framework is essential. Many tech giants are providing Chatbots Solutions in the market. You can choose any of the following frameworks:

You can also opt for Custom Bot Development option. Nowadays, there’s a lot of demand for this methodology in the market.

Collaborating Related Systems

The Chatbot should align with your business process. It should have an understanding of your business logic. For that purpose, it’s necessary that you collaborate bot with the internal system.

Connecting the related systems with the Chatbots can help you in the business decisions. There’s a chance that you will get success with this approach. So, make sure you don’t forget it.

User Friendliness

Chatbot can’t replace human to human conversation. But, the solutions should have user-friendliness. If the conversational logic doesn’t reflect it, then you won’t get desired results.

Tone Of Conversation

The conversation tone is exceptionally vital for the success of any enterprise Chatbot. For business, Chatbots can create an opportunity to attract customers. But, if the tone is not right, it can backfire badly.

Understanding the pain point of customers is crucial. The Chatbot should provide them with assurance. It will create trust among the customers. That’s why tone plays a vital role.

Excepting Failure

The Chatbot Agency should also have a plan for failure. For that purpose, the bot design is essential.

It should have the following responses:

  • Visiting the previous state
  • Restarting a conversation
  • A polite inquiry to use on failure

If you can implement these responses, then you can manage the failure with ease. It would not affect your user-experience as well.

7. Type Of Chatbots

Before deciding How To Build A Chatbot, you should be aware of Chatbot types. In this section, we will explore various kinds of Chatbots. It will help you to make the right choice.

There are two things that you need to explore for knowing Chatbot types:

  • The Supersets
  • The Subsets
The Supersets

There are two major categories of Chatbots:

Bots Implemented In App: These Chatbots will work inside a mobile application. It helps you to automate the conversation between the app & the user.

Bots Functioning Within Messenger: These Chatbots work inside a messenger. It suits the business who don’t have their app or who want to focus on social media.

The Subsets

Within the categories listed above, you can create a variety of Chatbots.

They are as below:

FAQ Chatbot: It offers customers with automated responses to Frequently Asked Questions. The reactions can be natural or intuitive as per specific needs.

Conversational Chatbot: It tries to understand the language to have freeflow conversation with customers. Chatbots generally gather essential details about users. With the help of that, it creates better engagements.

Transactional Chatbot: It helps the customers to buy something through an app. For this purpose, there is no need for any human intervention.

Predictive Chatbot: These Chatbots are the buzzing thing in the market. It is developed & designed for a particular case. By bringing Machine Learning into the picture, these Chatbot provides accurate results.

8. Structure Needed To Build A Chatbot

Chatbot Development Process

For building a comprehensive Chatbot solution, you need a variety of components. In addition to that, you need a proper structure.

Mind you, all these components add to your overall cost. Therefore, having a piece of proper knowledge about that is vital. So, let’s analyze them one-by-one.


In any software, you need a robust backend. The same applies to the case of Chatbot. It requires a backend which can manage incoming messages.

The backend should also be able to process the messages with NLP solutions. It also comprises business logic & integration part. You can also develop conversation logic with the backend.


After setting up the backend, the next step is to construct endpoints for every channel. Every channel integration is unique. But, the method for endpoint setup in backend remains the same.

The method takes its basis on the Access Token Authorization. Besides that, you will require channel-specific UI for a quick reply.


Natural Language Processing

Whenever you receive any message from a specific channel, you will need NLP services. The NLP services extract the intent of the customer message.

Setting up the various NL services is easy, but training NLP entities is not everyone’s cup of coffee. For that purpose, you’ve to know every entity in detail.

In addition to all that, you also have to implement business logic validation.

Conversation Intelligence

It is the most challenging aspect of Chatbot development. For designing this element, you have to take the NLP entity & intent into consideration.

For building an intelligent bot, you have to devise an algorithm for every conversation. You can make use of decision trees, slot based algorithm, state workflow, etc.


Mostly the aim of Chatbot is the execution of a specific task. It can be booking an appointment, ordering an item or any other related assignment.

For that purpose, integrating Chatbot in the mobile app becomes mandatory. You’re doing it for business logic and validations. All these are part of a comprehensive business process.

9. The Chatbot Development Lifecycle

Chatbot Lifecycle
There are five important phases of Chatbot Development:

  • Discovery
  • Prototype Implementation & Evaluation
  • Minimal Viable Product Creation
  • Testing
  • Release

In the discovery phase, you need to define the purpose of the Chatbot. You also need to set up the goals & objectives. These things will help you in the later stages.

Here’s a questionnaire that will help you to define the proper objectives:

  • What is the size of the business? ?
  • Will your Chatbot entertain people or help in customer support?
  • Which process do you want to automate with Chatbot? ?
  • How many messaging platforms are required? ?
  • How many users your Chatbot needs to handle?

After solving this questionnaire, you need to identify the requirements & also the various structural components which we have discussed in the earlier section.

In addition to all these, you also need to decide the way to for Chatbot development.

There are two significant ways to build a Chatbot:

  • Building a Custom Solution
  • Building a Bot On Top Of a Bot Platform

You can opt for any one of these ways for creating a Chatbot.

Prototype Implementation & Evaluation

The Prototype is an early model that doesn’t comprise features of the final product. It can be a mini code or just a mockup. With the help prototype, understanding of product becomes greater.

The main aim of Prototype is to verify some essential features design. In other words, you can call it a feasibility study. After creating the Proptype, you should contact the client.

If the client agrees on it, then the developers can move ahead. With this approach, you can reduce the risk factor in the development.

Minimum Viable Product

After the Prototype, the next step is to create a Minimum Viable Product (MVP). An MVP is a product with all the necessary features. It’s a light version of the original product.

Generally, you show MVP to a limited number of users. This exercise aims to get feedback about the product. Based on that survey, developers can make necessary changes.

Based on MVP, developers start to work on the final product.


After the development phase, it’s necessary that you test the product. Testing the product will give you an idea of its working in various condition.

You should carry out manual and automation testing. It will help you to know the bugs. Based on that analysis, you can make appropriate changes in the final release.


It is the last phase of Chatbot Development. Till now, you must have developed a final product with all the necessary features. Now, it’s time to release the product in the market.

If you follow this approach, then you will get the desired success.

10. Time Required To Develop Custom Chatbot

A very integral part of Chatbot development process is the time needed to seal the deal. The time generally varies from business to business.

Time Required To Build Chatbot

But, you can always calculate the approximate time for development. For that purpose, you need to count the total number of activities.

Now, there are significant activities that place for custom Chatbot development.

  • Integration With App
  • Business Logic
Integration With App

The hours for this task depends on the Chatbot complexity. Generally, it takes around 40-60 hours for developers to close this task.

For that integration purpose, you will have to develop an interface for communication. Now, if you opt for Command Langauge User Interpreter, it will require 40-60 hours.

But, if you choose Natural Language User Interface, it will take around 120-160 hours.

Business Logic

For adapting the existing business logic, you need to work for 120-160 hours. But, if you’re doing it from a basic level, then it will require 170-190 hours.

11. Cost To Build A Custom Chatbot

After all the principal analysis, it’s time to know the cost of building a custom chatbot. For that purpose, you should have an idea of the Chatbot Pricing Model.

There are three ways to build a great Chatbot:

  • Using Ready-Made Solution
  • Using Self-Service Platform
  • Creating Bot From Scratch

Now, if you think of the Custom Chatbot, then the third option will suit you the most. Using Ready-Made Solution, you can’t offer any customization.

If you opt for the second option, you have a chance of creating your bot. In a self-service approach, some platforms require technical skill. Others, don’t need this type of quality.

The cost here will depend on the number of messages and the number of bots. You can form the pricing on a daily basis. So, you can make the decision based on your requirements.

Now, let’s explore the third option – Creating Bot From Scratch. For this method, you will require technical knowledge. If that’s not possible, then you should Hire a Chatbot Developer.

There can’t be a fixed cost for developing a custom Chatbot. But, as per the market survey, the price ranges between $6000 to $13000.


Nowadays when there is a lot of demand for Chatbot, it becomes vital to be aware of the latest Chatbot development procedure.

The Chatbot Development Agency is moving towards the era of Custom Chatbots. The reason behind that is the demand for a tailor-made solution.

Taking this scenario into perspective, here we have tried to provide you with an in-depth guide. It will help you to know the cost of building a custom chatbot for business.

If you’ve any question or suggestion related to this blog, then feel free to ask them in the comment section.

Thank You.!

Disclaimer: We at eSparkBiz Technologies have created this blog with all the consideration and utmost care. We always strive for excellence in each of our blog posts and for that purpose, we ensure that all the information written in the blog is complete, correct, comprehensible, accurate and up-to-date. However, we can’t always guarantee that the information written in the blog correct, accurate or up-to-date. Therefore, we always advise our valuable readers not to take any kind of decisions based on the information as well as the views shared by our authors. The readers should always conduct an in-depth research before making the final decision. In addition to these, all the logos, 3rd part trademarks and screenshots of websites & mobile apps are the property of the individual owners. We’re not associated with any of them.

Harikrishna Kundariya

Harikrishna Kundariya

Harikrishna Kundariya, a marketer, developer, app lover, technology savvy, designer, co-founder, Director of eSparkBiz @Mobile App Development Company where you can Hire Mobile App Developer. His 8+ experience enables him to provide digital solutions to new start-ups based on app development.


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