This study investigates the integration of chatbot technology in customer service, emphasizing its impact on user experience and satisfaction. Leveraging both quantitative and qualitative research techniques, a survey was conducted with 120 respondents from Nagercoil City to evaluate the benefits, challenges, and overall effectiveness of chatbot systems. The analysis identified four key components, including the benefits of chatbot integration, enhancements in customer support services, user-friendliness, and customer satisfaction. Findings indicate that the primary purpose of chatbot usage is to resolve complaints, reflected in a Garrett mean score of 75.66. However, challenges such as inaccurate solutions, limited response ranges, and impersonal interactions vary significantly across different age groups. Younger users prioritize emotional understanding and personalization, while older users emphasize security and accuracy. The study reveals that satisfaction levels with chatbots differ significantly based on age and gender but not educational qualifications. These insights underscore the necessity for businesses to customize chatbot design and functionality to meet the diverse expectations of various demographic groups, thereby enhancing customer satisfaction. The study provides actionable recommendations for improving chatbot systems by addressing both technical limitations and user experience challenges, ultimately highlighting the transformative potential of chatbots in enhancing customer engagement and service quality.