How Much Does it Cost to Make a Chatbot that Actually Works?

By Paulo Barrett, Chief Operating Officer

Ask any seller of a highly complex and customizable chatbot or virtual agent system about cost and you’re likely to get an evasive answer. ‘There’s no one-size fits all.’ ‘I’d need to talk to you on the phone to give you an accurate quote.’ Increasingly, in this ever-saturating market, it’s easy to find elements of chatbot pricing (i.e., API request fees) or flat monthly subscription costs for low-end systems, but who is giving the educated bot buyer a clear, top to bottom view of what it costs to build a system that will really work?

By ‘really work,’ I mean one that will materially contribute to cost savings, improve customer satisfaction, and maybe even generate new revenue. In other words, how much is it realistically going to cost to build a bot your customers will actually want to use.

The truth is, building a successful chatbot is not purely a question of technology. Whether you are buying a platform to BYOB, getting something cheap and cheerful off the shelf, or looking for a bot consultancy to support your internal efforts, your work is really just beginning once you have the system configured and deployed. The ongoing work to improve the chatbot’s performance and to get the best out of self-service in your unique deployment is what makes the difference.

It can be difficult to predict exactly what actions your customers will want to take in the beginning. That means being able to take an informational system and swiftly evolve it as desired customer outcomes become clear is key for success. This is enhanced by using great technology, of course, but ultimately, you need the right experts (internal or external) to separate your deployment from the crowd of others (often failures) which are flooding the support world.

Think of it like buying an instrument. No matter how expensive or special it is, either you learn to play it, or you get someone else to play it for you (alternatively, it ends up gathering dust and doing absolutely nothing for anyone). One way or another, this expert training costs time and money. You have to weigh this investment against the return.

Now to the million-dollar question … pun intended. What will a chatbot that your customers actually want to use cost for a large enterprise? While it’s true that most deployments are unique to every client and require some customization, there are some standard pricing building blocks you can expect to see.

The first cost to nail down is the pilot fee. How much am I gonna spend to test this thing out and see if it works for me? The financial risk associated with a pilot should be shared by the customer and the vendor and typically runs around $50,000 (USD). While the client assumes some risk via the initial cost, you should expect this to be credited against the cost of the full production-level deployment if you choose to move forward. This fee will cover all hosting, software deployment, content development, technical consultancy, and transactional fees for the agreed period. Typical pilots run 30-60 days from go live to give you enough time to see material results and make a decision about the ongoing plan.

Once you convert from pilot to full system (we pride ourselves on a +90% conversion rate!), you have some choices to make about how you pay for the tools and ongoing consultancy. Some customers wish to be purely pay-for-performance. Often, they go with a tiered model based on volume with session costs starting at a dollar (i.e., a single interaction with a user, with unlimited question/integration calls in that session). This per session cost may fall based on meeting certain volume thresholds. With any variable pricing model there are pros and risks for both the customer and the vendor.

If you prefer not to have a variable rate in your forecasting, you can purchase a more traditional software/services package. A standard production system should include integration with a live chat platform as well as your CRM. This will ensure your customers get personalized answers to their questions and are able to complete transactions with the bot online, rather than just receiving flat, informational content. The cost to provide the software and ongoing consultancy, along with an adequate knowledgebase of 100-200 solutions, will generally cost somewhere between $150,000 and $250,000 (USD) per annum, depending on the number of sessions.

While this may seem like quite the investment, you have to ask yourself: What is the cost of deploying a support tool that my customers don’t want to use and delivers a negative, frustrating experience?

Ready to learn more? Our team is always on hand to arrange a personalized demo with you and answer any questions you may have about getting started with your pilot.