How Do Chatbots Work?


The newest buzzword in the tech industry seems to revolve around chatbots. With Artificial Intelligence (AI) blending into almost all realms of life and work, one cannot but ignore the emergence and popularity of chatbots. But, how do chatbots work? Let us understand more.

All chatbots work on AI and machine learning technologies. There are many benefits offered by chatbots and they are used in various industries in today’s times. Some of the areas where they are employed include recruitment, human resources, e-commerce, apps, among others.

Firstly, what is a chatbot?

  • In simple terms, a chatbot is basically a programmed robot or a bot that performs a set list of tasks
  • It is a sort of computerised program that is designed to interact with human beings in a ‘human-like manner’
  • Chatbots are available on mobile apps or websites

So what does a chatbot essentially do?

  1. ‘Chat’ with users who visit a web portal
  2. Solve queries and offer suggestions
  3. Answer questions
  4. Provide information

Benefits of chatbots:

  • Bots offer customer service round-the-clock
  • Immediate resolution of customer queries
  • Effective utilization of resources
  • Better digital marketing reach
  • Integration on various social media platforms
  • Personal touch with customers

And how does it work?

Training: Bots are trained at a much quicker fashion and this is done by feeding it with a large database of information. This database contains information about previous human conversation logs and call records.

  1.  Classification: Bots tend to categorize or classify data and respond accordingly. Let us see how this can be done. There are 3 methods that are used:
  • Pattern matchers
  • Algorithms
  • Neural networks

  Pattern matchers

Data is segregated using a method known as ‘matching of patterns’. This is done through the use of AI technology markup language.

For example:

Human: Who is Barack Obama?

Bot:  Barack Obama was the President of the United States of America

Here, the bot will only recognise the name if it is written in a particular order or what we call ‘Standard Pattern’. It is important to note here that if the title is not written in the same order, the chatbot will not be able to offer the output.


For each query, there are different patterns that are stored in the database. In order to be able to offer an output, the bot will have to search in a data pool that has a combination of algorithms.

Neural networks

In this type of method, the output is generated by using data collected from past interactions.

Some important terms to note

  1. Natural Language Understanding (NLU): NLU is one among the branches of AI that allows software to intercept human language and provide relevant outputs.

 Features of NLU:

  • The employment of computer software to comprehend speech, text and language input
  • Allows humans to interact with computers
  • Enables natural language processing
  1. Entities: This refers to the category or the type of bot that may be in use. Different industries tend to use different types of bots. For example, in the e-commerce industry, there are bots for payments.
  2. Intents: This refers to the function that the chatbot needs to perform when a user makes a type of query. For example, there may be three different types of queries.
  • Do you sell blue ties
  • I would like to order a blue tie
  • Show me some blue ties

For all the above questions, there is one command that will be used and that will give out the output of blue ties.

  1. Context: Typically, the algorithm will be able to offer better responses once context falls into place.
  2. Natural Language Processing (NLP): NLP is nothing but the capacity of a computer software application to be able to comprehend and respond to human language in spoken terms.

There are many steps involved in NLP, let us take a look at them:

Step 1:  Analysis  of sentiment

Here, the system first makes an attempt to comprehend if the person interacting is getting relevant responses or not. In the first stage, the tool will also try to understand through AI if there is a need to transfer the call to the customer service centre.

Step 2: Token system

The processing software will split up a sentence or combination of words into what is referred to as ‘tokens’. These specific tokens will be divided in such a manner that it is relevant or goes together linguistically.

Step 3: Recognition of named entities

The AI tool will search for clubbed words such as the title of a product and use that data whenever it is necessary.

 Step 4: Detection of errors

Data inputs will be processed in such a manner that any error is detected. Essentially these errors will also be recorded and repeated instances of this will also be recorded in the data pool for future reference to better understand how humans interact.

Step 5: Related information

The bot will be programmed in such a manner that related words will be pulled out to understand that the user is actually trying to say or type.

The above examples and steps give us a general outline of how do chatbots work.

How chatbots are shaping the e-commerce industry?

The e-commerce industry and growing and market trends are only looking positive. In an era where customers shop online and seek 24/7 customer support, bots can be the perfect solution. On the whole, there is no doubt that a bot can give the customer a better user experience, which means a better overall shopping experience.


On the whole, businesses will be able to better cater to customers by using chatbots as they come with several benefits such as offering customized services and a better understanding of users needs and preferences in the long run. Understanding the basics of how chatbots work is important because it will help you build on a good foundation, whether you are a student, entrepreneur or belong to other realms of life.

A chatbot may not necessarily be an answer to all business problems but if you know how to use it right, it can definitely solve more than 70% of business problems in today’s digitized world.

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