Consumers’ online dialogs with brands often start with conversational artificial intelligence (AI), which is the technology behind automated messaging meant to mirror human interactions.

These tools offer human-like conversations by recognizing speech and text and understanding various questions and languages. This software is often used to further narrow down a customer’s inquiry before they speak to a real person. It’s a creative form of self-service.

However, it is a lot simpler than it sounds. If you’ve ever interacted with a live chatbot, odds are, it was powered by conversational AI. If you’ve ever used smart speakers like Siri, Google Home, or Alexa, you’ve used the technology first hand. 

In this article, we’ll discuss how implementing conversational AI will help your business succeed.

We will cover the following sections:



What is Conversational AI?

Conversational AI is the software that powers computer and human interactions. It’s a technology that enables computers to recognize multiple human languages, process the words being said and determine how to respond in the most human-like way possible.  


How Does Conversational AI Work?


conversational AI
Source: Bold360


Various backend algorithms and workflows are needed for conversational AI to happen. This starts at the beginning of the interaction when a human submits a request. The AI solution captures the meaning of the words sent by utilizing natural language processing (NLP). Once the platform processes the words sent, it uses natural language understanding (NLU) to understand the intent of that customer’s question. 

Once the platform has analyzed the customer’s question, it will use machine learning to determine the right way to respond. Machine learning is designed to help the AI application learn with each human interaction, meaning its responses to customers will improve over time. 

Finally, the platform leverages natural language generation to compute the data it gathered from the interaction into a written response that the customer can easily understand.


Conversational AI vs Chatbots


This software shouldn’t be confused with chatbots. AI chatbot software is a type of AI software that simulates human conversation by leveraging natural language processing (NLP) and natural language understanding (NLU). These tools can still initiate conversational experiences with humans, but their capabilities are far more limited. Chatbots are keyword-focused, cannot learn, and are typically designed to help customers navigate the company’s website.

Conversational AI generally operates the same way but takes it a step further since it can recognize speech and text, understand intent and even decipher different languages. 

The software can act as a voice assistant and use automated speech recognition to listen to interactions, natural language processing to fully comprehend it, and natural language generation (NLG) to offer a response that’s nearly indistinguishable from a human.

Here’s a breakdown of the different features you can expect in conversational AI vs chatbots:


Feature Conversational AI Chatbots
Natural Language Processing Yes Yes
Contextual Awareness Yes No
Intent Understanding Yes No
Integration, Scalability, and Consistency Yes No


Practical Benefits of Conversational AI for Businesses


conversational AI

Source: Majorel

The following is a list of reasons why your business should consider using Conversational AI: 


Use Conversational AI to Save Money, Regardless of Your Industry


One of the most prominent benefits of this software is that it can save money. More specifically, your company can scale its support department at a lower cost. Running an efficient support team costs money. 

Analysis firm Juniper Research reported that AI technology is expected to reduce business costs by over $8 billion annually by 2022. But with these tools taking on some of the team’s workload, you won’t need as many agents on your team.

Parsing out your support team in such a way can save you salaries, benefits, and seats on software platforms for a larger support team. McKinsey reports that up to 29% of customer service positions could be replaced by chatbots and similar technology, thanks to their advantage in reducing operational costs and labor expenses.

AI helps companies leverage the data of their customer base. That means you can immediately identify a consumer’s demographic, psychographic, and more. So by implementing this AI into your software stack, it can help save money on consultants and outsourcing analytics.


Improve your Customer Service with Conversational AI


When a customer reaches out to your support team, they want answers quickly. According to Forrester, 73% of customers say that valuing their time is the most important thing companies can do to provide them with good customer service — conversational AI can help with that. This software can easily help you to improve your customer service team.

Conversational interfaces, such as live chat, are now able to implement AI solutions because of the speed of deep learning allowing for real-time engagement. Customer support chats and IVR systems can quickly route calls using an intelligent virtual agent or chatbot. Integrating these systems with CRM can allow for a level of personalization never before imagined.

In a similar process to instant messaging, the bot recognizes questions and prompts, looking out for certain keywords or phrases that a customer might use to report a problem (such as “damaged item” or “track package”). The bot begins to recognize familiar situations and provide a solution to the best of its ability. This functionality has now been implemented on social media tools like Facebook Messenger.

With the speed that this AI offers, customer wait times can be significantly reduced. Quick response times make customers feel important. That speed also lends itself to your support team being available 24/7. If your company doesn’t have the resources to outsource overnight support, you may miss out on reaching certain segments of your customers during their business hours. 


Conversational AI Can Increase Your Conversions


In addition to helping you elevate service for current customers, these AI systems can act as an asset to your sales team and help with lead conversion. The business process of bringing on brand new customers can be a long and complicated one, but the software’s automation capabilities can cut down on stalled lead conversion.

As this tool can respond to potential customers so quickly, it will provide your business with the ability to quickly weed out bad leads. It can also sort them by how relevant they are and their potential to become customers. These tools can provide this judgment since they have the ability to perform lead scoring. If your tool deems a lead to have valuable potential, it will hand that contact off to one of your sales team members.

In the event that your sales team is stretched to capacity, your platform can step in as an SDR. These platforms can act as virtual assistants to your team members, doing the often tedious work that tends to take up much of your SDRs time. 

These solutions offer effective interactions with customers that aren’t clouded by distractions and slow responses that might impact a human agent. Chatbot developers are able to accomplish this more refined user experience by utilizing content intelligence, OCR, and machine learning.

That way, they can artificially replicate human interaction patterns. These software solutions will propel your business into the future, giving you an edge over your competition.


Use Conversational AI to Gather Customer Data More Easily


Customer data is king in business, and this piece of AI can help you gather it more easily. Using traditional data mining tools can help you gather and track information that you need to assume what potential customers might like or need.

These AI tools learn from previous customer experiences. Since these tools can mimic deep and complex conversations that humans have with one another, those reaching out to your representatives will feel as if they are receiving personalized interactions.

One of the most common use cases of this would customer support chat. As previously stated, this AI can mimic human interactions on live chat. Customers often need to leave contact information to continue the conversation. Conversational AI-powered chats can ask the customer for information, collect and process it and then send it off to a member of your sales team.

Integrating your tool with something like an automatic semantic understanding solution (ASU) that informs your virtual agent on what to look out for in customer interactions will prove to be greatly beneficial to your business. Since your tool can be available 24/7, that means you’ll be able to quickly gather this useful customer data around the clock.


A Quick Look at Top Providers


Product Noteworthy Features Pricing
  • On-Screen Chats
  • Pre-configured Bot
  • Sentiment Analysis
  • Code-free development
  • Contextual Guidance
Reach out directly for a customized quote. 
  • Code-free development
  • Contextual Guidance
  • Intent Recognition
  • Multi-Language
  • Speech Recognition
  • Virtual Assistant
Reach out directly for a customized quote. 
  • Intent Recognition
  • Omni-Channel
Reach out directly for a customized quote. 
  • Multi-User Management
  • Multi-Bot Dashboard
  • Q&A Triggers
  • Chatbot Templates
  • Clone & Share Bots
  • Live Chat Takeover
  • Website Chat Widget
  • Pro plan — $21.75 per month billed annually or $29 month-to-month
  • Unicorn plan — $51 per month billed annually or $68 month-to-month
  • Team plan — $299 per month billed annually or $374 month-to-month


Conclusion: Conversational AI Will Help Your Business Succeed


Conversational AI will help you reach more customers and leads quickly and efficiently. Most businesses already use some kind of live chat feature for sales and support teams to easily interact with customers and leads — these AI platforms simply just allow you to take that customer engagement offering to the next step.

These tools are an easy way to streamline the process of keeping up with your customers’ and leads’ evolving needs. Follow our latest list of tips for implementing live website chat to ensure you get the interaction you’re looking for from your customers.

Chatbots are used for static interactions and virtual assistants are used for more complex ones.

The more you use the technology, the quicker it will learn.

According to IBM, businesses can reduce customer service costs up to 30% by implementing conversational AI.