Chatbots and the art of holding a conversation

With excellent customer experience being a hallmark of a successful business, effective customer interaction is a focus area for organizations across industries. Intelligent conversations, prompt responses and immediate resolutions are hallmarks of a great customer experience. However, even a simple and intuitive conversation is a complex affair that needs effort to get it right, especially for businesses dealing with higher volumes and tech-savvy customers. A successful organization needs to deliver consistent and quality responses across multiple touchpoints, devices and platforms.

Conversational AI is an emerging technology that is changing this game. Conversational AI solutions, such as chatbots, virtual agents, and voice assistants, have become exponentially popular in recent years, especially after COVID-19 pushed the world inside. According to a recent report published by Markets and Markets, the conversational AI market size worldwide will expand from 4.2 billion in 2019 to $15.7 billion by 2025. Chatbots currently represent the top use of AI in enterprises, and their adoption rates are expected to almost double over the next two to five years.

Conversational AI is exactly what it sounds like: technology that can converse with its users, giving them the impression that they are talking to a human being. This technology is set up to identify human speech and text, decipher meaning, and respond in a conversational manner. Automatic speech recognition, Natural Language Processing (NLP), advanced dialogue management, Machine Learning (ML), and noise-canceling AI are among the advanced dialogue management technologies used. Trained to pick up fluctuations in speech and identify the underlying emotion, this technology offers multiple benefits to businesses implementing it.

1. Enables hyper-personalization

Conversational AI platforms use powerful ML technology, NLP capabilities, historical data and a plethora of features to design highly personalized and effective customer conversations. This helps brands provide automated resolution, deliver targeted messages and reduce customer churn. Since conversations occur throughout the customer journey, customer input from previous stages can be used to build a smoother experience, reducing dependence on third-party data apps or tracking. 

2. Reduces cost to serve

Automating customer service helps brands optimally utilize their agents’ time. Chatbots, voice assistants or a conversational platform can handle FAQs, process inquiries, sales and after-sales service and support. This helps keep acquisition and retention costs under check and reduce customer wait time, without compromising the overall experience. No wonder research has found that conversational AI can save companies nearly $8 billion per year in customer support costs.

3. Enhances scope of engagement

The beauty of a well-designed conversational AI platform is that it can enhance the quality of your engagement methods across channels. It makes it possible for inbound or outbound support channels to offer instant and tailor-made support, redirecting to human operators as required. An advanced conversational AI will understand the tone and analyze sentiment accurately, bucketing it as positive, negative or neutral. For example, Affectiva’s neural network SoundNet identifies anger from audio data within a span of 1.2 seconds.

4. Improves employee experience

Employee experience is crucial to the success of customer experience. Customer support and service representatives are often overworked or unsatisfied because of the repetitive and tedious nature of their tasks. Conversational AI helps reduce the workload considerably, freeing customer service agents to take on more challenging or complex tasks and improving their overall job satisfaction.

5. Allows easier scalability

One of the biggest advantages of using conversational AI is that it scales easily. With your company’s evolving service needs, you can add more digital assistants to implement various processes as necessary. The usefulness of this feature became evident during the peak of the pandemic in 2020. Many businesses saw an increase in inbound customer chats or calls, sometimes as much as 250%, as concerned customers turned to brands for information and query resolution. With customer care centers forced to shut due to lockdowns, businesses leveraged digital self-service and AI-powered automation solutions to scale quickly. AI was instrumental in handling 75% of routine traffic and alleviating pressure on agents. 

6. Increases NPS and sales conversion rates

Some of the tangible benefits of conversational AI can already be witnessed across industries. From an increase in Net Promoter Scores (NPS) to enhanced sales conversion rates, there are significant improvements when companies use conversational AI. Experts say that conversational AI can improve website conversion rates and enable marketing and sales teams to engage with leads in real-time. The 24/7 availability of conversational AI means that your customer service is never off-duty, and you can serve customers across geographies and time zones with ease. 

7. Boosts revenue and bottom-line

Conversational AI platforms help reduce the overall cost of customer service by taking over a host of tasks that require human intelligence. This not only translates into lower HR overheads but also augments agent capabilities to do more intelligent work and serve customers better. When customer service improves, it leads to brand loyalty and better publicity through referrals. Ultimately, this translates into increased revenue and profits for the brand.

8. Enables innovation

Today’s competitive landscape demands organizations to be innovative. A truly robust conversational AI solution solves complex challenges, creates new channels for commerce and offers individualized, contextual content by integrating with legacy apps, voice response systems and accessing data silos. In short, it is a far cry from traditional chatbots and can change the game for those organizations that implement it well. Take, for instance, Cognizant’s conversational AI that improved customer experience at a drive-through by recognizing repeat customers and pulling up personalized favorites and a much smaller, discreet set of choices. 

What’s next?

Conversational AI is an extremely cost-efficient option for many business processes and use cases. The confluence of conversational AI and smart automation offers an exceptional omnichannel user experience that facilitates faster, more personalized and prompt customer service. In the future, conversational AI will be able to handle much more complex requests, take lesser time to understand and anticipate user needs. Its strength will be in engaging in natural, almost human discussions and providing unmatched customer experiences.

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