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AI Chatbot Development Services: Custom Chatbot Development Company

Updated September 2026 · Written and maintained by the Progression Agency strategy team

Progression Agency is a chatbot development company that builds custom AI chatbots grounded in your own content and connected to your systems — for websites, apps, support desks and internal teams. Our AI chatbot development services cover conversation design, retrieval over your documents, integrations, guardrails, analytics and handoff to people.

On this page · 12 sections
  1. What is AI chatbot development?
  2. Custom chatbots we develop
  3. What features should a custom chatbot have?
  4. Systems chatbots integrate with
  5. Accuracy, safety and privacy
  6. Our chatbot development process
  7. How much does AI chatbot development cost?
  8. Technology for AI chatbots
  9. Chatbot mistakes to avoid
  10. Why choose Progression Agency for chatbot development?
  11. Related AI services
  12. Video: how grounded chatbots work

The short answerAI chatbot development is building a conversational assistant, powered by a large language model, that answers questions and completes simple tasks using your approved content and data. A custom chatbot differs from an off-the-shelf widget in that it is grounded in your sources, integrated with your systems, branded, measured and under your control. A production chatbot commonly costs $20,000-$80,000 to build. For quick no-code setups, see our AI automation agency page; this page covers custom-built chatbots.

Cost ranges are planning figures. Model details reflect vendor documentation as of September 2026.

Chatbot development searches
Businesses want chatbots that answer from their own content and hand off cleanly to people.

What is AI chatbot development?

AI chatbot development is designing and building a conversational interface powered by a language model that answers questions and performs simple tasks from approved sources, integrated into a website, app or internal tool.

Modern chatbots use retrieval-augmented generation: they search your documents for relevant passages and answer from them, citing sources, which keeps them accurate about your business. Our AI automation agency page covers packaged chatbot setups for small businesses; custom development suits larger content sets, integrations and brand requirements.

Web — Website chatbots. Answer and capture leads..
Support — Support chatbots. Deflect common tickets..
Staff — Internal assistants. Policies and SOPs..
Commerce — Shopping assistants. Product questions and orders..
Voice — Voice bots. Phone and IVR..
App — In-app assistants. Help inside your product..

Custom chatbots we develop

Our custom chatbot development services cover customer-facing and internal assistants.

Website chatbots

Answer visitor questions from your site and documents, qualify leads and book appointments.

Customer support chatbots

Resolve order, account and policy questions with order-system lookups and handoff to agents with context.

Internal knowledge assistants

Help staff find answers in HR policies, SOPs and product documentation.

Ecommerce shopping assistants

Recommend products, answer specification questions and check order status.

Voice and phone bots

Handle calls, answer common questions and route callers.

In-product assistants

Help users inside your SaaS or app with contextual guidance.

Resolve order, account and policy questions with order-system lookups and handoff to agents with context.

What features should a custom chatbot have?

These features separate a useful chatbot from a frustrating one.

Core chatbot features
FeatureWhy it matters
Grounded answers with sourcesAccurate, verifiable responses
Human handoffEscalates with full context
IntegrationsOrder status, bookings, CRM updates
Conversation analyticsShows unanswered questions
GuardrailsStays on topic and on brand
Multilingual supportServes more customers
Lead captureTurns conversations into leads
AccessibilityKeyboard and screen-reader friendly

Systems chatbots integrate with

Integrations turn a chatbot from an FAQ into a service channel.

Common integrations
SystemWhat we connect
Help deskZendesk, Intercom, Freshdesk handoff
CRMLead and contact creation
EcommerceShopify and order lookups
SchedulingCalendar booking
Knowledge sourcesWebsite, PDFs, help center, drives
AnalyticsGA4 and product analytics

Accuracy, safety and privacy

Chatbots speak for your brand, so safeguards are essential.

  • Answers restricted to approved sources, with citations.
  • Refusals and handoff for out-of-scope or sensitive requests.
  • Protection against prompt injection (OWASP LLM Top 10).
  • Privacy notices and data-retention settings appropriate to your industry.
  • Enterprise model endpoints that do not train on your data.
How we build an AI chatbot
Auditing content first matters: a chatbot can only be as accurate as the sources it is allowed to use.

Our chatbot development process

We identify the questions and tasks that matter, audit and clean the content, design conversations and handoff, build retrieval and integrations, evaluate against real questions, then launch and improve weekly from analytics.

How much does AI chatbot development cost?

As a planning range, a grounded website chatbot commonly costs $10,000-$30,000, an integrated support chatbot $30,000-$80,000, and an enterprise assistant across several systems $80,000+. Model usage is billed separately by volume.

Chatbot cost ranges (planning figures)
ScopeTypical rangeTimeline
Grounded website chatbot$10,000-$30,0003-6 weeks
Integrated support chatbot$30,000-$80,0002-4 months
Enterprise multi-system assistant$80,000+4-6 months

Technology for AI chatbots

We choose models and retrieval per use case.

Technology we typically use
LayerChoice
ModelsClaude, GPT, Gemini
Retrievalpgvector or managed vector search
Front endAccessible web widget, in-app components
BackendNode.js or Python services
IntegrationsHelp desk, CRM, ecommerce APIs
AnalyticsConversation logs and dashboards

Chatbot mistakes to avoid

These are why many chatbots get switched off.

  • Letting the bot answer from general knowledge instead of your sources.
  • No path to a human.
  • Launching without testing real questions.
  • Stale content feeding the bot.
  • Hiding the bot’s limitations.
  • Not reviewing analytics after launch.
Sources cited — Quality. Verifiable answers..
Handoff — Quality. People when needed..
Evaluation — Quality. Real questions tested..
Fresh content — Quality. Synced sources..
Analytics — Quality. Weekly improvements..
Guardrails — Quality. On topic, on brand..

Why choose Progression Agency for chatbot development?

We build chatbots as part of your customer experience and marketing.

  • Content audit and grounding first.
  • Integrations with help desks, CRMs and ecommerce.
  • Evaluation before launch.
  • Lead capture tied to your marketing analytics.
  • Packaged options through our AI automation agency when custom is not needed.
  • Headquartered in New York City.

See AI agent development, AI integration services and AI customer service.

Want a chatbot that actually knows your business?

Tell us the questions it should answer and the systems involved. We will propose a build.

Get a chatbot proposal

Video: how grounded chatbots work

IBM Technology explainers on retrieval-augmented generation.

Getting found in search

AI, AEO and what is changing

Paid media and lead generation

Websites and design

Choosing and working with an agency

Software and app development

Social, content and brand

By industry and by situation

Frequently asked questions

What is AI chatbot development?
Building a conversational assistant powered by a language model that answers from approved sources and performs simple tasks.
How much does it cost to build an AI chatbot?
As a planning range, $10,000-$30,000 for a grounded website chatbot and $30,000-$80,000 for an integrated support chatbot.
How long does chatbot development take?
Commonly 3-6 weeks for a website chatbot and 2-4 months for integrated support bots.
What is the difference between a custom chatbot and a chatbot widget?
A custom chatbot is grounded in your content, integrated with your systems and fully under your control.
How do chatbots avoid wrong answers?
By answering only from retrieved sources, citing them and handing off when unsure.
Can a chatbot hand off to a human?
Yes, with the conversation context passed to your team.
Can a chatbot check order status?
Yes, through integrations with your ecommerce or order system.
Can a chatbot capture leads?
Yes, and send them to your CRM.
Which AI model is best for chatbots?
It depends on accuracy, speed and cost needs; we test several.
Is chatbot data private?
We use enterprise endpoints that do not train on your data and set retention appropriately.
Can chatbots speak multiple languages?
Yes, modern models support many languages.
Do you build voice chatbots?
Yes, for phone and voice interfaces.
What is retrieval-augmented generation?
A method that retrieves relevant passages from your content and gives them to the model to answer from.
What does a chatbot cost to run?
Usage-based model fees plus hosting; we estimate per conversation.
Should I use a no-code chatbot or custom development?
No-code suits simple FAQs; custom suits large content sets, integrations and brand control.
What should I look for in a chatbot development company?
Grounding, evaluation practice, integrations, handoff design and analytics.
Can a chatbot work inside our app?
Yes, as an in-app assistant.
How do you measure chatbot success?
Resolution rate, handoff rate, satisfaction and conversions.
Who owns the chatbot?
You do.
Where is Progression Agency located?
New York City, serving clients nationwide.

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  209. IMRO (Ireland)
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