Understanding customers is an essential step in effective customer service.
Some businesses find it challenging to easily create customer interactions in every aspect of their business and across multiple channels.
This is where conversational AI comes in handy. Conversational AI targets customers from every angle. It’s a comprehensive customer acquisition and retention tool that gives businesses a direct line to customers.
Conversational AI has become a popular digital solution for companies looking for a powerful alternative to modernized customer service.
This article will discuss conversational AI, how it works, and its benefits for businesses.
What is conversational AI?
Conversational AI is a technology that enables two-way interactions between humans and machines to happen seamlessly.
It helps developers build chatbots that can communicate with users in natural language, using voice and text channels.
A lot of companies are investing in this new technology because it can help them cut costs and make their services more accessible to their customers.
Recently, there has been a growth in leveraging AI chatbots that facilitate conversation through natural language.
In fact, in Allied Market Research’s latest report, the global conversational AI market size is projected to reach $32.62 billion, with a CAGR of 20.0% in 2030.
Conversational AI has opened doors to building sales portals, assistants, and customer service bots for companies aiming for efficient and effective services.
How does conversational AI work?
Conversational AI helps businesses to understand the meaning behind words and phrases. Before conversational AI, companies interpret meanings through different technologies.
This type of technology makes use of the following concepts:
Natural language processing (NLP)
Natural language processing (NLP) is the technology that powers conversational AI. It’s the technology that administers chatbots and voice assistants.
Simply put, conversational AI uses NLP to understand the intent of a user’s question and provide an appropriate response.
The more data companies have, the better their NLP system will perform. This is why companies have been collecting millions of hours of audio from their users, as this helps them train their systems to understand natural language.
Machine learning
Machine learning is at the core of conversational AI.
It works when computers learn from data and make predictions based on that data. This is what allows a chatbot to learn about users and offer services that are relevant to them.
The machine learning behind conversational AI is the same machine learning that propels other AI systems. It’s a way to make software learn from data and get better over time.
Dialog management
Another key aspect of conversational AI is dialog management. It is focused on enhancing the user experience.
Dialog management finds out what the user wants as it gives appropriate responses. It keeps a conversation going until it reaches an endpoint where it can respond with an answer or close the dialogue.
Businesses rely on this process to better manage the conversation, making sure it stays on track and making sure the system responds in a way that feels natural to the user.
Automatic speech recognition (ASR)
Primarily, automatic speech recognition (ASR) is a technology that converts speech to text.
ASR technology empowers conversational AI solutions that utilize chatbots and virtual assistants to interact with consumers.
For instance, an ASR engine could be used to allow a user to communicate with a chatbot through voice commands or by typing text into the chat interface.
Key benefits of conversational AI
Conversational AI offers numerous benefits over traditional customer engagement methods. The following are just some of its leading advantages:
Better customer experience
Customers want to interact with brands naturally without having to navigate complex menus or search for information online. These complexities make them feel like they’re having a transaction, not a conversation.
With conversational AI, businesses can offer customers human-like experiences that help them accomplish tasks quickly and easily.
Lower cost of customer care
Conversational AI can significantly reduce the cost of customer care by handling simple tasks such as FAQs and self-service requests.
It helps free up employees’ time from having to handle these tasks so they can focus on more complex issues.
Additionally, human agents are often required to deal with callers who are angry or upset and may need help understanding how to resolve issues.
This is where conversational AI can help by using natural language processing techniques to understand the caller’s intent and provide a solution.
Hold a personalized conversation at scale
Personal conversations typically make customers feel like they are engaging with human agents than automated bots. This is possible through conversational AI.
Conversational AI gives businesses the capability to create more personal interactions with customers. By using NLP, it can build personalized conversations based on previous interactions.
That said, conversational AI platforms help businesses provide personalized interactions that improve their overall experience and increase customer satisfaction.
Upsell opportunities
Chatbots allow enterprises to increase revenue by offering upsells during the purchasing process.
It helps businesses avoid having employees handling phonecalls all day long, answering basic questions about products and services.
Conversational AI enables businesses to provide better customer service, in turn, improve their bottom line through increased sales volume.
Increase your efficiency with conversational AI
The rise of social media and instant messaging has made it easier to reach out and connect with people, but it has also created barriers.
Conversational AI can potentially transform business, offering a new way to interact with consumers in real-time and automate many tasks.
It can also collect valuable data about the customers’ preferences, interests, and needs, which is a great way to improve customer service.
Ultimately, conversational AI can lead to better engagement, higher conversion rates, and increased sales.
