The rise of chatbots in recent years has been astounding. According to a study by Precedence Research the global chatbot market is projected to be worth around 4.9 Billion USD by 2032. From being able to facilitate the user’s journey to being able to hold a conversation and solve customer queries, sure, chatbots have become integral tools for businesses. 

This can be credited to the rise in digital technologies like artificial intelligence and machine learning and the migration of customers from conventional methods to digital methods. These developments have supported the growth of chatbots and made them a necessary addition to many business sectors.

With a variety of chatbots available on the market, the need for different types of chatbots depending on their purpose and scope has also widened.

In this article, let us discuss the different types of chatbots and their applications.

Why Do Businesses Need Different Types of Chatbots?

Chatbots are computer programs with the sole purpose of simulating conversation with the user, just like a regular human being. Some chatbots can only function with simple prompts whereas others can learn and iterate themselves based on the data collected. 

Businesses and firms adopt chatbots to facilitate the customer journey and elevate the user experience. This has resulted in cost reduction and increased efficiency of the customer service processes. Research by Gartner shows a whopping 160% increase in client interaction after implementing chatbots.

Different Types of Chatbots

With the benefits and advantages chatbots offer, a number of companies deploy different types of chatbots to aid in customer service and increase sales and conversions. Furthermore, depending on their features, functionalities, and use cases, chatbots are classified into:

Button-Based Chatbots

Button-Based Chatbot

Button-based/menu-based chatbots are one of the basic and simplest chatbots, featuring simple functionality. These chatbots predominantly work based on a decision tree hierarchy where clicking on a button or choosing an option guides the user through multiple stages of the tree so as to deliver the corresponding solution.

When deploying this chatbot, the developer usually predicts common problems faced by the user by formulating questions and answers based on the FAQs, as they form more redundant support queries. The user can click on the button to navigate through the customer queries via buttons or a menu. 


The button-based chatbot is predominantly used to solve customer queries and aid support in the banking and insurance sectors. For example: when you call any banking support service to get a solution to your questions, you would have to press the buttons on the dial pad to drill through an audio menu to the proper questions and get the right support answer. 


Button/Menu-based chatbots can easily guide visitors to the correct information. They are basic, simple, quick, easy to implement, and pretty adept at answering FAQs based on user input.


The button-based chatbots fall short to answer advanced user-specific questions. When a question outside the set queries is posed, the chatbot connects the user to live support. These bots are slow because of the hierarchical and linear nature of the menu system.

Rule-Based Chatbots

Rule-Based Chatbots

Rule-based chatbots or Linguistic chatbots were one of the most popular chatbots when chatbots became mainstream. These chatbots are able to provide solutions to the user based on the rules defined by the developer. 

They work on the principle that when the customer poses a question, the chatbot answers based on the set of questions or chat flows that are connected by a decision tree using an IF/THEN logic. Basically, if the set of rules or conditions is satisfied by the user, the chatbot provides appropriate answers in no time. The rules can be simple or complex based on the purpose and use cases of the chatbot. 


Rules based chatbots form the basis of customer support chatbots in a variety of sectors. Consider an example of an eCommerce store. You can view the product, check the availability of the product, and track the order and shipping status. In case the customer wants to know the availability of the product, the chatbot can answer the question based on the rule defined. 


The rule based bots are easy to set up and less expensive to deploy and maintain. In case the chatbot cannot answer a question, it can easily transfer the support to a live agent for in-depth additional support. They are also easy to troubleshoot and the rules which define the chatbot can be easily altered. 


Designing this chatbot consumes a lot of time and effort, as the developer has to come up with permutations and combinations of the rules based on the use cases. And, if the user poses a question that does not adhere to the rules, the chatbot cannot provide an answer.

Related Reads:
Rule-Based Chatbots vs Conversational AI: Which is Best for Ecommerce?

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Keyword Recognition Based Chatbots

Keyword Recognition Based Chatbots

As its name suggests, keyword recognition-based chatbots provide solutions to the user based on the keywords in their questions. These chatbots can actually understand the user intent to a level based on the placement of keywords and use customizable keywords and AI and ML technologies like NLP to an extent.

In terms of fallbacks, most keyword recognition chatbots are coupled with button-based bots, such that even if it cannot detect the keyword, it can offer buttons to guide the user to a  support professional. 


These chatbots find their usage in a variety of places. When a user poses a question asking: “How do I troubleshoot my device?”, the chatbot understands the keywords “how”, “troubleshoot” and “device” and provides the relevant answer to the user.


This chatbot is easy to develop and is created to simulate understanding through keyword recognition, a more powerful solution than chatbots that don’t respond to keywords. These chatbots can also simulate some understanding of the user’s intent. 


This type of chatbot might not be able to provide solutions to the user when too many inputs or similar questions are posed. Also, they fail to provide answers when the keywords are redundant.


AI Chatbots

AI Chatbots

AI chatbots are one of the most influential chatbots in recent times. Over the past decade, they have become more and more sophisticated and advanced. These chatbots leverage the utmost principles of machine learning and artificial intelligence techniques like Natural Language Processing and Natural Language Understanding to understand and mimic human speech in a contextual way. 

These chatbots cannot just understand the keywords but can better understand the intent and context of the user query. This type of contextual chatbot can converse in different languages and gather information over a variety of platforms. With this data from the users, contextual chatbots learn over time and provide personalized solutions for a better customer experience as they are better adapted to understanding user query intent.


AI chatbots are a perfect choice when it comes to businesses, enterprises, and firms which deal with vast amounts of data from a number of users. Especially in the eCommerce industry, AI chatbots find great usage when it comes to queries based on the product description, the order and shipping status, and showing personalized product preferences based on user data.


There are a plethora of features AI chatbots encompass and they offer a variety of advantages for your eCommerce store. AI chatbots can offer a wider range of support through multiple channels and can respond appropriately to more sophisticated queries. They are easier to maintain and once they are deployed they can learn based on user data. As they learn, they need less human interaction.


Development of this type of chatbot takes a lot of time and can be a little expensive. It also takes a lot of time to train and iterate the chatbot to make it precise.

Hybrid Chatbots

Hybrid Chatbots

Hybrid chatbots are a recent upgrade to the existing chatbots that combine the functionalities and benefits of two or more chatbots. In some cases, they can be a combination of simple button-based chatbots with the complexities of AI chatbots. In other cases, they can be a combination of AI chatbots with a switch to live agents when necessary. This feature makes them an ideal tool for interacting with customers. 

There isn’t much need for a hybrid chatbot model when it comes to smaller businesses with a simple set of support services and smaller audiences. However, as your firm upscales, your data becomes more complex and the scope of customer queries also widens. Here, using hybrid bots is a great way to engage customers. 


One common application of hybrid chatbots is aiding in the remote medical diagnosis of patients. The hybrid chatbot combines a button-based or rules-based chatbot and poses questions fed by the developer so as to diagnose the patient and understand their ailments. After the user answers these questions, the chatbot then generates a report for the patient. From there, a live agent, commonly a doctor, can connect with them and provide support. 


Hybrid chatbots have a much greater scope to solve customer problems and provide support, similar to AI chatbots. They can also perform certain tasks like booking and scheduling appointments without the intervention of human agents. 


Setting up hybrid chatbots can be a bit pricey when compared to other chatbots. Even though they greatly help when dealing with complex data, the time and cost of setup, training, and deploying the chatbots can be considerably high.

Voice Chatbots

Voice Chatbots

Usually, chatbots converse with the user via text messages or button prompts. A further addition to the existing feature is by giving the chatbots a voice. 

Voice bots are technically the most advanced form of contextual chatbots in the market and are constantly evolving. These chatbots are capable of understanding the user’s words, intent, and tone and provide solutions based on their questions. This makes the conversations highly contextual and the user can easily converse with the bot. 

They employ the mechanism of text-to-speech and speech-to-text APIs fueled by AI-ML functionalities powered by a text-to-speech (TTS) engine.


Just like Amazon’s Alexa, Apple’s Siri, and Google Assistant, A voice chatbot can be activated and triggered ON with just a voice command. They find a variety of applications in various sectors from acting as virtual assistants, multi-purpose bots, and customer service tools that help in user engagement resulting in better customer experience. 


Voice chat bots cull the need for typing, as they are able to understand human speech. This reduces the wait time to pose a question and wait for a reply. These bots are very convenient, easy to use, and very user-friendly. 


Voice bots employ one of the most complex communication strategies. They will need a larger professional team to develop, train and maintain. 

How to Choose the Best Chatbot for Your eCommerce Store

First, gauge the scale of your business and identify why you’re deploying a chatbot. Are you a small-scale business trying to engage minimal customers by providing solutions to common problems? Or, are you an enterprise looking to seek insights into a vast customer base and provide personalized solutions? 

Additionally, understanding the preference of the audience is important when choosing the type of chatbot for your business.

Some users might prefer button-based chatbots to easily arrive at common problems and their solutions. Some might prefer advanced AI chatbots which remember the user details and provide personalized preferences to the users. 

If you are trying to gather information from the user, then rule-based chatbots or AI chatbots might be a great addition to your business. If the user wants their queries resolved over the phone, using voice bots might be an ideal option. 

Especially, if you are an eCommerce store owner dealing with multiple processes and trying to engage customers all around the clock, then AI chatbots are one of the perfect choices for your business. 

Finally, the deployed chatbots should be able to provide value to the user and solve their problems efficiently. 

Frequently Asked Questions

What are the different types of chatbots?

Button-based or menu-based chatbots, rule-based chatbots, keyword recognition chatbots, AI contextual chatbots, hybrid bots, and voice chatbots are some of the different types of chatbots.

What are some chatbot classifications based on their areas of application?

Chatbots find their usage in a variety of sectors. Some applications include e-commerce, sales and marketing, health, financial services, education, and entertainment.

What is an AI chatbot?

AI chatbots are one of the most advanced forms of chatbots that can mimic human language. These contextual chatbots work on the principles of artificial intelligence and machine learning. These chatbots can understand the user context and provide personalized solutions based on user behavior.

Closing Thoughts

With chatbot technology evolving day by day, the use of chatbots will only increase and the features they offer will get better with every iteration. Choosing and deploying chatbots might seem like a mighty task. But an investment once can automate and streamline your workflow and processes for years to come. With the variety of chatbots available on the market, choose the one that suits your business purposes the best, resulting in improved customer relationships and better customer satisfaction. 


Greg Ahern
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