The verdict in three sentences
An AI customer-service chatbot built on RAG (retrieval-augmented generation over your knowledge base) costs EUR 8,000 to 35,000 to build in London in 2026, plus EUR 100 to 800/month in API and hosting. It automates 30 to 60% of tier-1 requests (hours, tracking, returns, FAQ). ROI comes from an unclogged support desk, not from replacing humans: agents finally handle high-value cases.
Off-the-shelf vs custom: 2026 costs
A SaaS solution (Intercom Fin, Zendesk AI) is fast but billed by usage; a custom chatbot costs more to build but controls recurring costs and business integration.
| Approach | Build (EUR) | Recurring | Best for |
|---|---|---|---|
| SaaS off-the-shelf | 2,000 - 6,000 (setup) | 0.80-1.50 EUR/resolution or 500-2,000 EUR/month | Fast start |
| Custom standard RAG | 8,000 - 18,000 | 100-400 EUR/month (API + hosting) | Proprietary knowledge base |
| Custom advanced | 18,000 - 35,000 | 400-800 EUR/month | ERP/CRM integration, omnichannel |
At high volume, SaaS at EUR 1/resolution gets expensive: 5,000 resolutions/month = EUR 5,000/month, whereas custom often caps under EUR 800/month.
Automation rate and support impact
The gain depends on the share of repetitive requests. Here are orders of magnitude for a B2C/B2B SME.
| Request type | Share of volume | Automatable | Effect |
|---|---|---|---|
| FAQ / hours / info | 25-35% | 90%+ | Instant 24/7 answer |
| Order tracking | 15-25% | 80% | Fewer inbound calls |
| Simple returns / complaints | 10-15% | 50% | Pre-qualification |
| Complex cases / disputes | 20-30% | 10% | Escalation to agent |
| Sales / advice | 10-15% | 30% | Lead generation |
RAG, not hallucination
A serious chatbot answers only from your documents (FAQ, T&Cs, product sheets) via RAG, with source citation and guardrails. That's what separates a reliable tool from a gadget that invents answers.
Mini case study
Nadia, customer-service manager at a 30-employee e-commerce SME in London, receives 1,800 tickets/month. Two agents at EUR 32,000 loaded/year spend 60% of their time on them. A custom RAG chatbot at EUR 16,000 + EUR 350/month automates 45% of tickets (810/month). Time freed: the equivalent of ~0.8 FTE, about EUR 25,000/year. Annual tool cost: ~EUR 4,200. Net first-year saving (after build): ~EUR 5,000, then ~EUR 21,000/year. ROI in about 10 months.
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FAQ
What does an AI chatbot for an SME cost?
Between EUR 8,000 and 35,000 to build custom, plus EUR 100 to 800/month in API and hosting depending on volume.
What share of requests is automated?
30 to 60% of tier-1 requests on average: FAQ, order tracking, information. Complex cases are still escalated to an agent.
SaaS or custom?
SaaS to start fast at low volume; custom once volume exceeds a few thousand resolutions/month or you need ERP/CRM integration.
Can the chatbot invent answers?
With a well-designed RAG architecture, it answers only from your documents, cites sources and escalates when unsure. That's essential to avoid hallucinations.
How long to deploy it?
Allow 4 to 8 weeks for a custom chatbot, including knowledge-base preparation and testing.
Let's scope your project. Send us your monthly ticket volume and your 10 most frequent questions: we'll scope the build, recurring costs and support ROI. Detailed quote within 48 h. WhatsApp +221 77 596 93 33.
Mohamed Bah
Fondateur, Kolonell
Passionate about digital and entrepreneurship in Africa, Mohamed has been helping Sénégalese businesses with their digital transformation since 2020. Founder of Kolonell, he believes every SME deserves a professional and accessible online présence.
