What Is Conversational AI And What Is Its Impact On Businesses

Even though the century is still very young, it is already possible to forecast the most prominent trends of societal development for a future couple of decades. As of now, we are rapidly shifting into the virtual plane, merging the two worlds — the reality and the virtuality. Technology is taking over our lives, with its infallible presence in our routine increasing by the day. Hence, it will not be taking a wild guess to suggest that one of the hottest defining trends of the twenty-first century is Artificial Intelligence.

Indeed, such a mysterious and unfamiliar concept just a couple of years ago, today, Artificial Intelligence is the new normal. No matter how little or much you interact with technology, and how tech-savvy you are, there is almost a hundred percent possibility that you deal with Artificial Intelligence daily. An explanation for that would be the fact that there are so many applications for AI. They range from a super-human to a super-machine, with millions of variations in between the two extremes.

Some applications of AI are more popular within the business world than others. Indeed, the first direction in which a business professional’s mind wanders to when it comes to employing AI for business purposes is usually big data, analytics, and automation optimization. Those have proven to be the ‘traditional’ ways of boosting productivity and profitability of businesses through technological advancement. However, the truth about AI is that it is much more diverse than that. Thanks to the vast range of capabilities of Artificial Intelligence, it can be enjoyed by a greater group of businesspeople than just marketers and business analytics. It turns out, with the latest branch of AI, the customer success team is in for a treat, too.

Conversational AI has existed for quite some time now but has only recently seen rapid progress. More and more techniques have been introduced within the framework of Conversational AI that has changed the game completely! With the newly acquired set of capabilities on offer, businesses can improve their game and top their competitors if they act smart.

This article is going to talk about what conversational AI is, which forms it can take, explore the ways in which businesses can employ it, and how they could benefit from doing so. Strap in because you are in for an exciting ride! Let’s go!

What Is Conversational AI?

Before we go any further down into the rabbit hole of conversational AI and its importance for businesses, it is essential to settle down what conversational Artificial Intelligence is in its essence.

The concept itself is rather straightforward. Conversational AI, also known as Conversational Artificial Intelligence, is a technological phenomenon represented in a specific set of technologies that make it possible for computers to emulate human conversations.

The interest in conversational AI for business purposes is neither new nor sudden. The history of incremental development of conversational AI dates back to the end of the previous century when computers started gaining popularity among the general public. Back then, conversational AI employed to improve customer engagement rates was primitive, albeit matching customer demand in its complexity. It was not until 2008 when the so-called smartphone wave started binding people to their portable mobile devices. Since then, the bar was raised immensely – people became more and more aware of their needs. In the past, customers were okay waiting for a rather long period for a specialist to attend to their problem. However, with the popularisation of mobile internet and smartphones, they became more demanding. Being in touch with your customers at all times to is a must for modern-day businesses. Indeed, it is no longer a competitive advantage but rather a strict imperative to remain relevant in the market. Conversation AI is a solution to the problem in question. Delegating conversation-making to a trained computer seems to be the answer to the customer engagement issue a lot of businesses face. After all, in a number of cases, it is more efficient to teach a machine to mimic a human conversation.

The quality of this imitation ranges from robot-like responses to natural speech that can barely be differentiated from the one a real human could produce. The key differentiating factor that determines the quality of the conversational AI in the question is the amount of effort put into its advancement.

Conversation AI Vs. Chatbots: What Is The Difference Between The Two?

One of the most popular questions when it comes to conversational AI is whether it is the same as chatbots or not. Essentially, both concepts are meant to help with the same thing – to automate conversations with real people and, therefore, improve customer experience. Hence, it is not a rookie mistake to struggle to see the difference between the two. They are, indeed, very similar. In fact, some chatbots are artificial intelligence-driven, which makes them a part of the conversational AI system. However, not all of them are. So, putting the equals sign between conversational AI and chatbots is a misconception that needs to be cleared up.

In order to do that, let’s take a closer look at all the different types of chatbots that are currently available on the market. In fact, it will be easier to differentiate between them all if they are presented in a line of succession. Based on the level of complexity of the aforementioned chatbots, a hierarchy can be built:

  • FAQ Bots
  • Virtual Personal Assistants
  • Virtual Customer/Employee Assistants

Let’s discuss each one of these in a little more detail now. FAQ bots are at the very bottom as they are the least sophisticated form of chatbots. While they, indeed, can be useful, their abilities are very limited. These bots are ruled by certain keywords and are designed to provide answers to frequently asked questions. These are majorly rule-based, which means a user that wants to get some help from the bot has to guide the bot by selecting a path for the conversation. In other words, FAQ bots are not supposed to come across as real people conversing with customers on the other end of the line. On the contrary, these are very automated and algorithm-led.

Next up are visual personal assistants. These often exist thanks to machine learning. To put it simply, these bots learn from previous interactions with customers on the website and use the knowledge they have acquired in the process to provide the necessary information in the future. For instance, if you ask this type of chatbot ‘What are the best esports betting sites?’, the chatbot will understand separate words such as ‘best’, ‘esports’, ‘sites’, and provide you with a response that people with similar requests found useful.

At the very top of the hierarchy pyramid, there are virtual customer assistants. These chatbots use AI and are trained to think and reply like real people. They are a combination of rule-based and machine learning bots.

How Does Conversational AI Work?

Conversational AI does sound like a bit of magic, especially if you are not familiar with the concept in great detail. However, if you break it down into smaller components, it becomes apparent that Conversational AI is just a well-developed technology.

Let’s have a look at some theories. Conversational AI makes ‘natural’ contextual conversation between the chatbot and the customer’s possible thanks to the fact that it combines natural language processing (NLP) technology, machine learning (ML), speech recognition, natural language understanding (NLU), and other language technologies. By doing so, conversational AI pulls out the intents and entities. In fact, it is so advanced it can recognize user requests despite the use of incorrect grammar, slang or other language modifiers.

Top Benefits Of Using Conversational Artificial Intelligence In Businesses

Now that you know what conversational artificial intelligence is, it is time for this article to look into the reasons why a business owner would go through all the pain of selecting a conversational AI system from thousands of offers on the market and wrapping their head around how it works. Can it possibly be that useful for a business? The short answer is yes, it can. But here is a longer explanation of all the ways in which conversational AI can help a business to prosper.

#1 It Speeds Up The Response Time

One of the best things about conversational AI is that it makes the response time basically non-existent. If you are a business that values the quality of your service and takes pride in its timely support, employing a conversational AI system should be at the very top of your priority list.

While you surely can train a human to become an expert in responding to customers, there are several reasons why a machine that conversational AI is will always be better for your profitability.

Imagine the following situation: you run a large car mechanic business and accommodate a vast variety of different car brands. Naturally, as a professional, you know that car parts of different vehicles differ ever so slightly, hence, an individual approach is required when tackling each and every particular problem. You cannot possibly keep all that information in your head at all times. So, when a customer comes in and asks about a particular problem they have faced and would like to get some help with, you have to consult a manual first. It is alright if you know the manual well and has a clear understanding of what information can be found where. But what if you don’t? Finding the answer will take a lot of time, which will inevitably increase the wait time for the customer seeking assistance, and is likely to be frustrating for them.

Of course, this article is not trying to discredit you and your expertise. The aforementioned is just one of the many situations in which a business can find itself. Let’s look at the alternative. Say, you are the top expert in your field, have spent years and years fixing cars and know all the details off by heart. This is definitely an amazing competitive advantage to have since expertise is extremely valued and can propel any business to prosperity. If the problem your customer bumped into is difficult, you will be practically irreplaceable. However, if the question your customer needs to ask is rather mundane, yet again a conversational AI might be a better helper. The explanation for that is simple: no matter how fast a real person can type, a machine generates text much faster.

#2 It Enhances User Experience By Providing More Accurate Responses

Since we are still on the matter of responses, it will be fair to mention that not only conversational AI brings the response time down, it also increases the accuracy of the responses in question.

Yet again, you can easily hire a professional to your customer success team so that they would handle all the customer requests in regards to the product you sell. They could deal with complaints, provide assistance right to the step-by-step guidance in the case of customer confusion. However, if your customers need to discuss questions that lie outside on your customer success manager’s expertise. That way, your customer will have to bounce from one manager to another until they get ahold of someone who can help them. With conversational AI, on the other hand, all the knowledge you can possibly have about your company and the issues your customers may face is gathered in one place and ready to be shared in a matter of seconds.

Conversational AI bots have all the relevant information stored within their system and can pull all the data out to use it effectively.

#3 It Is More Efficient Than Alternatives Because of the Scalability of the Results

Last but not least on the subject of employees. Think of your business right now. How big is it? How many customers does it have? Would you like it to grow?

No matter what the answers to the first two questions are, the last one is always a definite ‘yes’. Every business owner starts a business with a dream that one day it will turn into an extremely successful multinational enterprise and make the owner the next Jeff Bezos. Even if it is not a part of the business mission, it is always there. So, it is absolutely natural that you will do everything possible for your business to become more profitable and scaled. In fact, chances are, you are reading this article learning about conversational AI and its impact on businesses to employ the technology for your business’ growth.

Now think about your customers. If you expand your business, you will get more customers and more sales. Great news isn’t it? Turns out, it can be more stressful than anything else. If you still rely on people to manage customer engagement and converse with customers, you will face a challenge. The expansion of a business like that is always limited by the number of people it can employ.

Employing new personnel can be extremely expensive as all of them need to be paid money to work. Moreover, each employee needs a working space even if they are working remotely. At the same time, however, there is no correlation between the size of your business and the complexity of the conversational AI you employ for it.

Of course, as your business grows you might want to invest more in improving the technology you use to engage with your customers. However, as soon as you reach the desired level of proficiency of the conversational AI, you may continue using it for your business regardless of how small or big it is.

#4 AI Makes Navigation Easier for Customers And the Staff

Another great advantage of conversational AI is that machines can easily adjust to the needs of your customers. The essence of conversational AI is in the fact that it learns from previous communicational experiences and knows how to communicate with customers. Hence, it can easily adapt to the individual it is engaging with.

Conversational AI makes the process of learning about the product much easier as it goes around all the complicated systems in place and leads the customer straight to the point.

Besides, conversational AI is a great analytical tool for the staff. Your analytics department will love you for implementing a conversational AI since they will receive a new batch of reliable data to examine and exploit. Subsequently, if processed correctly, it can bring amazing results in terms of increased sales.

The secret of this magical boost is not so secretive. Conversational AI works as an excellent data collection tool since it can monitor and memorize customer behavior. Which products are popular, which are troublesome? Statistics will be available to your straightaway.

#5 A More Positive User Experience

Conversational AI provides 24/7 support available to all customers regardless of who they are and where they are located. Consistency is often believed to be the key to success which is customer loyalty and customer satisfaction.

Besides, with modern people being more fond of texting rather than talking on the phone, it is pretty much essential you let them have an opportunity to contact your business through text.

To sum it all up, it can be said in this article that implementing conversational AI into your business can make up an overall more pleasant experience for your customers.

Things To Consider When Embracing the Conversation AI

If you are already convinced that conversational AI is the future of our heavily message-centered business world, you are absolutely correct. If you are already thinking about implementing a conversational AI for your business, I fully encourage you to do so! However, I also encourage you to read the following bit of the article to know exactly what to expect when expecting a conversational AI.

The Initial Set-Up

Before you start actively using a conversational AI, you need to consider all the details about your business to decide on which one would be the most beneficial for you personally. Individual approach is extremely important on the way to success!

Understand your business

First of all, it is important you know your business and you know your customers well. The reason for this is that this knowledge will help you decide which areas of your business are the most suitable to be enhanced with a conversational AI. Is it e-commerce, customer service or support that will benefit most within your business by being empowered by conversational AI?

Set goals for the area for improvement

Once you know exactly the scope of your business and what you should focus on when implementing conversational AI, you need to also define your goals so that you would have a better idea of what needs to be done. If you need to improve your customer retention rates, you would want to focus on ensuring customer satisfaction to foster loyalty. If you want to increase brand awareness, you will have to come up with a way to engage more people and broaden your target audience.

Decide which channels are the best fit for your business

Last but not least, based on the results of the previous two steps, you need to evaluate where the implementation of a conversational AI system would be most effective. In-build website chatbots, messengers, social media – it is up to you to decide!

The Cost

Depending on the information you have gathered in the process of the initial setup, you will have to decide on the budget you need to allocate to conversational AI.

Thankfully, with the market being saturated, there are currently a lot of businesses offering amazing and well-developed yet affordable conversational AI services. Do your research first!

Monitoring the System

Once you have implemented conversational AI in your business, you may sit back and observe. Wait, actually, no! This is a common misconception. Even though conversational AI is smart, it still requires some management. You need to be regularly attending to it to gather information and update the system.

The Bottom Line

Artificial Intelligence is one of the greatest technological achievements of the recent past. Despite still being relatively new, it has already managed to change the way things are done completely. Conversational AI is just one of the examples of how the world is shifting further down into the virtual plane.

It is essential that you hop on the trend while it is hot and implement conversational AI into your business for it to prosper. After all, this technology is absolutely amazing!

About the Author

Carola Richter is a professional esports journalist who reviews esports events and trends in the industry. Recently, she’s decided to create the blog csgo-bettingsites where she could share her passion with the readers interested in the topic.

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