What is conversational AI? Use Cases, examples, and benefits

Conversational AI is a technology that enables machines to understand, interpret, and respond to human language in a natural way. It often uses tools like natural language processing (NLP) and machine learning to mimic human-like conversations. Many businesses leverage conversational AI platforms to tailor engagement strategies based on customer needs and preferences.

In this article, we will examine what is conversational ai, conversational ai technology, plus conversational ai platforms, solutions, and services. Not every customer is going to have an issue that conversational AI can handle. Make sure you have agents on standby, example of conversational ai ready to jump in when a more complex inquiry comes in. In an ideal world, every one of your customers would get a thorough customer service experience. But the reality is that some customers are going to come to you with inquiries far simpler than others.

Natural Language Processing (NLP)

Based on user ratings or comments, adjustments can be made to the algorithms, enhancing the system’s accuracy and reliability for future interactions. App0 offers a flexible no-code/low-code platform to enable enterprises to launch AI agents faster & at scale with no upfront engineering investment. So, conversational AI is a must-have for your business, whether you’re looking to automate tasks or provide exceptional customer service. Apart from this, it has a big role in the administrative sector of education institutes. Examples of conversational AI in these institutions are chatbots that answer all students’ queries related to enrollment, course schedules, and campus facilities.

• Forethought is a leading provider of the conversational AI chat bot designed to support your customers through the entire customer journey.
• Chatbots with the backing of conversational ai can handle high volumes of inquiries simultaneously, minimizing the need for a large customer service workforce.
• As a customer types a request or a question, a conversational AI chat bot can siphon through keywords and phrases to provide nearly instant answers while storing new information for later use.
• Continuously evaluate and optimize your bot to achieve your long-term goals and provide your users with an exceptional conversational experience.

In the future, deep learning will help advance natural language understanding capabilities even further. Conversational assistants help human agents with online customer service and become virtual shopping assistants for shoppers. They answer FAQs, provide personalized recommendations, and upsell products across multiple channels including your website and Facebook Messenger. Multilingual conversational AI provides businesses with the benefit of engaging and serving customers across different languages and regions.

What Is Conversational AI & How It Works? [2024 Guide]

That too at scale, around the clock, and in the user’s preferred languages without having to spend countless hours in training and hiring additional workforce. That’s not all, most conversational AI solutions also enable self-service customer support capabilities which gives users the power to get resolution at their own pace from anywhere. Whether through chat bots, interactive agents, or voice menus, conversational AI is essential for customer support today, helping customers and agents alike. Conversational AI helps entire organizations understand their customers better and be able to do so faster than ever before.

Chatbots have various applications, but in customer support, they often act as virtual assistants to answer customer FAQs. Conversational AI is a game-changer for business leaders in regulated markets, enabling them to improve customer experience, operational efficiency, and scalability. Embracing conversational AI can help you stay ahead of the competition and unlock new opportunities for growth and innovation. Human conversations can also result in inconsistent responses to potential customers. Since most interactions with support are information-seeking and repetitive, businesses can program conversational AI to handle various use cases, ensuring comprehensiveness and consistency.

It has become more accessible and affordable, which expands possibilities and offers new business opportunities. The global conversational AI market size is projected to reach $32.62 billion by 2030 at the forecasted compound annual growth rate (CAGR) of 20.0% for this decade. You skip the search box mumbo jumbo and type right to the chatbot, describing the coat you need. As long as there is mobile and data service, users have a broad range of information and resources available to them.

And those who are in more mature stages of AI adoption are observing up to 10-12% gains. Alexa uses machine learning to better support customers, predict future requests and needs, and provide more relevant information. Customers can get greater personalized experiences through Alexa than they would through a regular chatbot. Plus, conversational AI, like Alexa, tends to be more engaging for customers. Interactive voice assistants help to keep employment costs down and free up the time of customer service agents for more challenging needs. This cost and time-effective technology enables your company to do more to grow and serve a greater number of customers faster.

Processes and components of conversational AI

Then, Natural Language Understanding, or NLU, (understanding phase) evaluates the conversation’s context to determine the likely intent behind the user’s choice of words. We are a Conversational Engagement Platform empowering businesses to engage meaningfully with customers across commerce, marketing and support use-cases on 30+ channels. Conversational AI has been increasingly used in the media and OTT industry to enhance user engagement while delivering personalized and engaging experiences to their viewers. Conversational AI technology with built-in scalability is unquestionably revolutionizing the ecommerce industry. As a leading search and discovery provider, Algolia is in the process of integrating the power of this technology by deploying a conversation option with a personalized interface.

• Selecting the right enterprise conversational AI platform is crucial for success.
• Artificial Intelligence analyzes and “understands” a speaker’s language, intent, emotions, and conversational context to emulate natural human speech patterns and provide relevant responses.
• Studies indicate that businesses could save over $8 billion annually through reduced customer service costs and increased efficiency.
• Even one bad experience can turn someone off from doing business with your organisation.
• Our AI consulting services bring together our deep industry and domain expertise, along with AI technology and an experience led approach.
• A subset of artificial intelligence that empowers systems to learn and progressively improve by analyzing vast amounts of data, machine learning is a foundational element of conversational AI.

Using AI-powered virtual assistants, businesses are generating higher revenue by reducing customer acquisition costs, engaging users proactively and improving customer satisfaction. Virtual assistants, or chatbots as they are popularly known as, belong to a subset of artificial intelligence called conversational AI. Voice-activated systems do all of this well by utilizing conversational AI to understand voice commands, remember preferences, and provide personalized responses as if they’re participating in a human conversation. NLP and speech recognition (also known as automatic speech recognition, or ASR) allow for the accurate interpretation of customer intent.

Conversational AI – What’s Up Next?

Customers expect to get support wherever they look for and they expect it fast. Before joining Hootsuite in 2022, Alanna worked as a Content Marketing Manager at Vidyard, where she specialized in writing content about the SaaS industry, account-based-marketing and all things video. Previously, she worked as a strategic communications consultant and graphic designer for multiple municipalities and built social media strategies from the ground up. We might be biased, but Heyday by Hootsuite is an exceptional conversational AI chatbot for ecommerce platforms. With Heyday, you can even set your chatbot up to include “Add to cart” calls to action and seamlessly direct your customers to checkout.

They can also use it to automate sales processes, such as lead generation and follow-up. If you’re looking forward to integrating conversational AI into your business, we suggest you check out App0. We allow enterprises in various markets to launch conversational AI-agents in order to put all their customer interactions on autopilot. App0 is one such AI agent that goes beyond FAQS and can carry out complex tasks. Unlike traditional bots, AI-agents can understand the end goal and guide customers from start to finish to fully execute the tasks autonomously. As these chatbots depend on keywords, they often need help processing the answer if the customer makes any spelling mistake.

Starbucks uses a conversational AI tool, My Starbucks Barista, that allows customers to place, modify, and pay for their orders using voice commands. Customers can even reorder their favorite items with a feature named Starbucks Reorder Skill. Instead, AI can handle things at all hours of the day, ensuring your customers get assistance whenever needed. For complex or technical inquiries, AI makes sure customers get help fast by sorting and sending queries to the right specialists.

He has also led commercial growth of deep tech company Hypatos that reached a 7 digit annual recurring revenue and a 9 digit valuation from 0 within 2 years. Cem’s work in Hypatos was covered by leading technology publications like TechCrunch and Business Insider. He graduated from Bogazici University as a computer engineer and holds an MBA from Columbia Business School. Getting candid answers will help ensure the chatbot genuinely helps teams, rather than just altering the nature of their routines and workflows.

AI-powered chatbots assist customers with policy inquiries, claims processing, and policy renewals. These chatbots provide personalized recommendations, guide customers through complex insurance terms, and offer support during the claims process, improving customer satisfaction and operational efficiency. IBM watsonx Assistant automates repetitive tasks and uses machine learning (ML) to resolve customer support issues quickly and efficiently. By unlocking the power of conversational engagement, Gupshup makes it easy for businesses to engage, interact and transact with their customers over 30+ channels – anytime and anywhere. NLU algorithms analyze processed text, which could be generated from a query, request, or command, and identify the user intent. NLU allows computers to figure out whether people are saying the same things, for instance.

Experts consider conversational AI’s current applications weak AI, as they are focused on performing a very narrow field of tasks. Strong AI, which is still a theoretical concept, focuses on a human-like consciousness that can solve various tasks and solve a broad range of problems. Together, goals and nouns (or intents and entities as IBM likes to call them) work to build a logical conversation flow based on the user’s needs. If you’re ready to get started building your own conversational AI, you can try IBM’s watsonx Assistant Lite Version for free.

Now, we’ll examine five essential methods conversational AI reshapes in retail and healthcare. We’ll discuss its inner workings, benefits, and challenges to reveal why it’s a cornerstone of efficient business. The applications of conversational AI go beyond simple tokenization and grammatical analysis to infer the user’s intended action or query. This can include recognizing requests for information, making purchases, or any other user objectives.

OpenDialog enables businesses to access the most powerful NLU engines currently in the market, combine them and adapt their use based on the required context. An advanced virtual assistant is an artificial intelligence-powered software program designed to interact and assist users in a conversational manner. It can perform various tasks, such as answering questions, providing information, scheduling appointments, and executing commands, all through natural language conversations. With the adoption of mobile devices into consumers daily lives, businesses need to be prepared to provide real-time information to their end users. Since conversational AI tools can be accessed more readily than human workforces, customers can engage more quickly and frequently with brands. This immediate support allows customers to avoid long call center wait times, leading to improvements in the overall customer experience.