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A chatbot or chatterbot is a software application used to conduct an on-line chat conversation via text or text-to-speech, in lieu of providing direct contact with a live human agent. Designed to convincingly simulate the way a human would behave as a conversational partner, chatbot systems typically require continuous tuning and testing, and many in production remain unable to adequately converse, while none of them can pass the standard Turing test. The term "ChatterBot" was originally coined by Michael Mauldin (creator of the first Verbot) in 1994 to describe these conversational programs. Chatbots are used in dialog systems for various purposes including customer service, request routing, or information gathering. While some chatbot applications use extensive word-classification processes, natural-language processors, and sophisticated AI, others simply scan for general keywords and generate responses using common phrases obtained from an associated library or database.

Chatbots are artificial intelligence (AI) systems that engage customers via test, messaging, or speech. The platforms such as Facebook, WhatsApp, Slack, WeChat, or text messages are using chatbots. Some grocery stores use chatbots in cash counters for self-checkout and ordering kiosks at restaurants. This saves not only time but also money. For Instance, Amazon recently opened a store without any cashiers. This will limit human interactions to only those that are necessary. Chatbots help companies reduce the average time to respond, bringing them closer to their customers’ expectations.

How do chatbots work?

Chatbots have varying levels of complexity, being either stateless or stateful. Stateless chatbots approach each conversation as if interacting with a new user. In contrast, stateful chatbots can review past interactions and frame new responses in context.

Adding a chatbot to a service or sales department requires low or no coding. Many chatbot service providers allow developers to build conversational user interfaces for third-party business applications.

Why are chatbots important?

Organizations looking to increase sales or service productivity may adopt chatbots for time savings and efficiency, as artificial intelligence (AI) chatbots can converse with users and answer recurring questions. As consumers move away from traditional forms of communication, many experts expect chat-based communication methods to rise. Organizations increasingly use chatbot-based virtual assistants to handle simple tasks, allowing human agents to focus on other responsibilities.