There are two main types of chatbots that a business can use: transactional chatbots and conversational chatbots. They differ in their overall levels of complexity and the degrees to which they use artificial intelligence.
A transactional chatbot, also called a task-oriented or declarative chatbot, is a single-purpose chatbot that’s focused on performing or automating one function. It uses rules, natural language processing, and a very small amount of machine learning. A transactional chatbot is trained on structured data and designed to provide a fixed set of options for a user to choose from, depending on what the user wants to do or what problem they want to solve. After the user makes their choice, the chatbot guides them through the process by providing more options until the user’s question has been answered or the problem has been solved.
Transactional chatbots generate automated responses that are designed to be conversational. Interactions with transactional chatbots are very specific and structured, which makes them very helpful for businesses that know in advance what common actions or problems that customers may need help with. For example, restaurants, delivery companies, and banks use transactional chatbots to handle common questions, such as questions about business hours, or to help customers with simple transactions that don’t involve very many variables. There’s a wide range of transactional chatbot examples, because transactional chatbots are the most commonly used type.
A conversational chatbot is a more sophisticated and interactive type of AI chatbot for more personalised interactions. It’s designed to use conversational AI to understand meaning in the user’s messages and respond in a way that’s humanlike. Conversational chatbots use artificial intelligence, natural language processing, and access to knowledge databases and other information to detect nuances in a user’s questions and responses, and give relevant answers the way a human would. These AI chatbots are contextually aware and use natural language understanding, natural language processing, and machine learning to become progressively smarter.
Conversational chatbots, which are often called virtual assistants or digital assistants, also use predictive intelligence and analytics for personalisation based on each user’s profile and previous behaviour. Over time, this type of AI chatbot can learn a user’s preferences and use this learning to provide recommendations and anticipate needs. Conversational chatbots are used by ecommerce companies, online services, social platforms, businesses with advanced software as a service (SaaS) tools, and business-to-business (B2B) companies that provide enterprise solutions.