The Business Case for Custom Chatbots 

When it comes to AI-based chatbots, you can choose from two solutions: custom and generic chatbots.

Custom chatbots are tailored to meet the specific needs of a business. They can integrate seamlessly with existing systems, handle complex queries, provide a personalized experience to users, increase customer loyalty, minimize response time, get valuable insights on user preferences, and more.

In contrast, generic chatbots are pre-built solutions with standard functionalities that are not specific to any single company's requirements.

So, why are businesses, especially those on the eCommerce landscape, increasingly turning to custom solutions?

Well, customization allows for a more refined user experience that aligns with brand voice and customer expectations. As a result, you can contribute to better customer satisfaction and therefore retention, which even a 5% increase in can boost profits by 25%-95%.

Custom chatbots can also handle transactions and support queries more effectively by integrating deeply with a company’s product catalog and customer data, offering solutions that are not just responsive but also proactive.

That said, let's see the case in more detail.

Limitations of Generic Chatbots

Generic chatbots, while beneficial in many scenarios, do come with their own set of weaknesses that can impede their efficacy in certain business contexts.

• Pre-built constraints. One of the main drawbacks of generic chatbots is their limited options. More than 64% of companies believe that chatbots will pave the way for more personalized customer service. With generic solutions, however, this won't be so easy, since they often come with predefined functionalities and are not tailored to specific business needs or industries. The result is that such chatbots produce a less-than-optimal UX that can’t fully address unique requirements.

• Integration issues. Another significant limitation is the difficulty in integrating generic chatbots with existing systems, databases, and workflows. Many off-the-shelf chatbots operate as standalone applications that don’t seamlessly interact with other critical business systems and hence cause operational inefficiencies.

• One-size-fits-all approach. Generic chatbots often adopt a one-size-fits-all approach that lacks the personalization necessary for engaging customer interactions. Moreover, 53% of consumers indicate that the experience offered by a company is as important as the offerings it provides. So if the experience is not tailored to your customers, they may turn away from your brand.

What’s more, 86% of consumers want brands to use AI in their customer service. So, while you can use generic chatbots, it’s rather AI-powered ones that can attract many more customers for your eCommerce business.

Advantages of Custom Chatbots

But let's go to the other side of the coin and see what benefits can be gained from using custom chatbots.

• Tailored Experiences

  Unlike generic chatbots with pre-programmed responses, customized solutions offer a world of personalization. 46% of customers will buy more if they receive a personalized experience, so custom chatbots may be the answer here. Imagine a chatbot that greets you by name, remembers your purchase history, and recommends products based on your past interactions. Furthermore, they can be programmed to reflect your brand's specific language and tone. This ensures a consistent experience that aligns across various channels. Additionally, these chatbots can leverage user data to deliver targeted content and promotions, support multiple languages, and expand your reach to a global audience.

• Enhanced Integration

  Such chatbots can also seamlessly integrate with existing backend systems. Imagine that: a customer interacts with your chatbot, and the conversation triggers automated workflows within your CRM or ERP system. Custom chatbots can achieve this by establishing a smooth data flow between the platform itself and these backend systems. For instance, a chatbot can automatically generate a support ticket to your CRM system based on user interactions. Moreover, custom chatbots can function across multiple channels such as your website, social media platforms, and messaging apps to provide a consistent and unified customer experience, regardless of how a customer chooses to interact with your brand. Given the ease of integration and the fact that about 47% of customers make purchases using chatbots in business interactions, you can expect much better results.

• Scalability and Flexibility

  The beauty of custom chatbots lies in their ability to adapt and grow alongside your business. As your business expands, your chatbot can easily scale up or down to handle increased traffic volumes. Further, custom solutions allow for continuous improvement and integration of new AI features. This future-proofs your chatbot investment and keeps you at the forefront of customer service innovation. Finally, as your brand messaging or offerings evolve, your custom chatbot can be adapted to reflect these changes.

• Advanced Features

  Custom chatbots go beyond basic scripted responses. Think of a chatbot that can understand the emotional tone of your conversation and adjust its responses accordingly. This is possible with sentiment analysis, which allows the chatbot to provide more empathetic and helpful interactions. ML can really help here, as it can refine response accuracy and efficiency over time. Further, predictive analytics empowers chatbots to anticipate customer needs and proactively offer assistance or suggest relevant products, which can enhance customer experience and foster a sense of anticipation. Finally, custom chatbots leverage advanced features to act quickly. As many as 85% of consumers say that short waiting times should be provided as part of the service. Maybe in the past this would have been impossible to achieve, but nowadays it is already achievable with chatbots.

• Data Ownership and Security

  Rest assured that your company retains full ownership and control over customer data collected through chatbot interactions, which is crucial for compliance with data privacy regulations like GDPR and CCPA. Further, custom solutions let you implement robust security measures specific to your needs. This extra layer of protection safeguards sensitive customer information and minimizes the risk of data breaches. And by controlling your data, you can guarantee that your chatbot practices comply with evolving data privacy regulations.

• Competitive Advantage

  Now visualize offering your customers a unique and engaging way to interact with your brand. This would set you apart from competitors who rely on generic solutions, right? That’s because custom chatbots can significantly boost customer satisfaction and the user experience through personalized and efficient interactions. And if a company provides excellent customer service, 78% of consumers are likely to do business with them again, even if there are some other issues. Finally, custom chatbots can automate repetitive tasks and free up human agents so they can work smarter instead of harder to deliver exceptional services.

• Increased Customer Loyalty and Trust

  Custom chatbots foster a deeper connection with customers by providing personalized interactions that reflect individual preferences and needs. Such personalization builds trust and loyalty, as customers feel valued and understood. Over time, this increased loyalty can lead to repeat business and higher lifetime customer value.

• Customer Service Optimization

  By handling routine queries and transactions, custom chatbots free up human agents to focus on more complex issues. As a result, you can enjoy improved efficiency of customer service operations and enhanced the overall customer experience. Customers receive quick and accurate responses to their inquiries, which boosts satisfaction and reduces frustration.

• Minimizing Response Time

  Custom chatbots are capable of providing immediate responses to customer inquiries, significantly reducing waiting times. This speed is crucial since customers expect quick solutions. Faster response times can lead to higher conversion rates, as potential buyers are more likely to complete a purchase when their questions are answered promptly.

• Valuable Insights on User Preferences

  In addition, custom chatbots collect and analyze data from customer interactions and provide valuable insights into user preferences and behaviors. This data can be used to refine marketing strategies, improve product offerings, and enhance the overall customer experience. Consequently, you can stay ahead of trends and make informed decisions that drive growth.

Economic Rationale

The move to custom chatbots is a strategic shift, and we will now see why from an economic perspective.

Custom systems are designed to perfectly match specific business requirements and deliver superior performance compared to generic chatbots. Below is a brief but specific analysis that illustrates the transformation of business performance metrics before and after implementing custom chatbots.

The upfront investment in a custom chatbot is therefore justified by the long-term gains in many areas. If you consider such custom solutions and implement them as part of your broader digital strategy, you will be on your way to better business results.

What about costs?

Before you invest in custom chatbot development vs. subscribing to generic chatbots, you need to consider initial costs, ongoing expenses, and long-term consequences.

While custom chatbots require a substantial initial investment, they are tailored to the company's exact needs, save costs through seamless integration, and don't strain resources.

• For example, the development of a custom chatbot might cost around $20,000, but the annual savings and increased revenue from improved customer engagement and retention will likely surpass this initial expense.

In contrast, subscription costs for generic chatbots might appear lower. However, over time, the lack of personalization and inefficiencies in handling complex customer interactions could result in lower satisfaction and potential revenue losses, which can negate the initial savings.

• For example, generic chatbots can cost around $300 to $500 per month ($3,600 to $6,000 annually), but they don’t offer the same level of service customization, integration, or resource utilization, etc. They may not cost much at first, but as time passes and vendor prices rise, the costs add up.

The conclusion is that custom chatbots have a higher upfront cost, but the return on investment (ROI) tends to be more favorable when considering the long-term economic benefits, enhancements in service quality, and customer engagement capabilities.

💡 Polcode's custom solutions for eCommerce, built with years of development expertise, can transform your online store for the better. Imagine a chatbot that understands your unique product catalog, answers complex questions with natural language processing, and personalizes recommendations based on past purchases. Polcode's team has a proven track record of success in crafting custom, on-demand solutions for many companies and stores to boost customer satisfaction.