Conversational AI is at the forefront of today’s digital-first economy. As customer demands become increasingly harder to meet with just humans onboard, businesses that are still on the fence with automated solutions are facing serious risks of failure.
In this guide, we explain what conversational AI is, how conversational AI works, and why conversational AI is crucial to your business’ success.
Conversational AI: What It Is and How It Works
Conversational AI is a set of technologies that power machines to comprehend and respond to human language. It leverages big data, machine learning, natural language processing, and automatic speech recognition to decipher text and speech input, identify user intent, and create human-like responses.
To better understand conversational AI, here are the four key steps that illustrate how it works:
Step 1: Input Generation
First, a user generates text-based or speech-based input through a website or application. If the input is speech-based, automatic speech recognition converts it into text so the conversational AI can read it.
Step 2: Input Analysis
Second, conversational AI uses natural language processing to make sense of the input provided. The basic tasks of natural language processing include fixing misspelled words, extracting synonyms, detecting user sentiment, and breaking down queries or requests into words and sentences comprehensible to conversational AI.
Step 3: Output Generation
Next, conversational AI formulates and delivers a human-like response using natural language generation, a component of natural language processing.
Step 4: Reinforcement Learning
Finally, machine learning algorithms work to improve responses over time. With more input, conversational AI will be able to better recognize patterns and more accurately respond to queries.
Benefits of Using Conversational AI for Customer Service
Conversational AI can be integrated with the business communication processes of companies from different industries and of different sizes. In this section, we break down the reasons why you must consider conversational AI for your business. Note that “conversational AI” here is used interchangeably with the term “AI chatbot.”
1. AI chatbots enable businesses to operate 24/7
Providing a 24/7 line of support is a way for businesses to demonstrate a positive commitment to existing and potential customers. However, high staffing costs often stand in the way of implementing such a service. The good news is that AI chatbots which can serve the same function as live agents are much more affordable and a better fit for small and medium-sized businesses.
With an AI chatbot, you no longer have to worry about missed sales and opportunities stemming from unavailability outside work hours. You can engage even international clients who may visit your website or social media accounts at a time different than when your local clients do. In essence, by acquiring this technology, you are not only boosting customer retention but also opening yourself to a whole new stream of online leads.
2. AI chatbots provide faster response than human agents
For 90% of customers, immediate response – meaning 10 minutes or less – is either “important” or “very important.” If you want to meet or exceed customer expectations, you need to pay attention to speed. Incorporating an AI chatbot into your business website and social media accounts is a good strategy to achieve this goal.
AI chatbots are designed to deliver instant and real-time responses. Unlike their human counterpart, AI chatbots do not have inherent downtimes such as lunch breaks, personal leaves, and holidays. This means they can engage with your customers round the clock without a stop. Because they provide customers with a queue-less experience, AI chatbots can also seem more attentive and responsive than their human counterparts.
3. AI chatbots return highly accurate responses
Customers expect that agents stay on top of their individual concerns. In fact, a report by Zendesk shows that 72% of consumers expect agents to have full access to all relevant information. In addition to this, 62% expect to continue conversations across channels seamlessly. The same report shows that the majority of companies today are still not equipped to deliver these conversational support services.
A big company can certainly invest in this endeavour – adopt a unified platform, conduct training sessions to improve conversational strategies among agents, and shift to following new processes, among others. However, in order for small and medium-sized businesses to keep up with this trend, they may need to follow a different approach and adopt an AI chatbot instead.
AI chatbots are able to accurately maintain the context of previous conversations so your customers can easily pick up where they left off, even when they started the conversation in a different channel. Surely, your customers would appreciate that they need not waste time restating their concerns.
Plus, there are AI chatbot providers like AskIris that offer their solution with a highly capable AI trainer team. AI trainers help design your conversations and ensure that your AI solution is becoming better at interacting with customers over time.
4. AI chatbots allow for an omnichannel presence
Technology is more and more integrated into our daily lives. Consumers nowadays are on social media platforms, messaging apps, SMS, live chat, websites, and more. As a business owner, you would want to have the opportunity to meet them where they are. In the same way, your customers would want to be able to reach you whenever and wherever they want.
Imagine how it is to be introduced to your product for the first time. A customer may come across your ad on Facebook, reach out to you to inquire about it thru direct message, visit your website to purchase, receive an email for order confirmation, and download and use your app for ongoing support. This is why you must integrate and create a cohesive experience across various devices and communication channels. In other words, you must deliver an omnichannel experience.
Omnichannel statistics show that several channels boost engagement, purchase frequency, average order value, and customer retention. You can make an omnichannel experience possible by leveraging automation technologies such as AI chatbots.
5. AI chatbots create personalized customer experiences
According to a recent report on customer engagement, 61% of customers would stop using a brand if their experiences are not personalized. This is yet another reason for businesses to adopt AI chatbots – one of the most efficient and affordable solutions for mass personalization.
No matter how extensive your customer base is, you can still have one-on-one conversations with your customers if you have an AI chatbot. In these one-on-one conversations, your AI chatbot more than just addresses your customers by their name, but engages them with stored relevant information such as preferences and previous transactions. Using their interaction histories, your AI can also create customer profiles that you can then use to tailor your service offerings and sales messages.
If you’re looking for third-party solutions, industry-specific ones are a great option. Take AskIris, for example. AskIris focuses on the needs of childcare centres and provides digital spaces for meaningful conversations between parents and providers. This single-minded focus on childcare centres makes it the best option there is for its target users.
6. AI chatbots facilitate customer data collection
Gone are the days when you have to convince customers to complete tedious web forms to learn what they think of your products or services. Nowadays, businesses can use AI chatbots for customer data collection. AI chatbots can converse their way into getting essential information from your customers such as their name, age, location, contact details, and more. Your AI chatbot can also dig deeper and learn about your customers’ pain points, needs, expectations, complaints, thoughts about your company, and thoughts about your competitors, to name just a few. In essence, your AI chatbot can feed your business with rich data that you can then leverage for competitive advantage.
If you can get your hand on an AI chatbot like AskIris which gives you full access to all conversations, the possibilities are just endless.
7. AI chatbots increase sales, upsells, and cross-sells
AI chatbots serve as effective guides for your customers when going through the sales funnel. They can perform various sales tasks including assisting with pricing queries, recommending similar or complementary products, offering discounts or special deals, and answering product FAQs.
More than these, they can reduce abandoned cart rates by sending personalised notifications and encourage repeat customers with gifts, bonuses, and loyalty programmes, among others.
Much like a live agent, you can also train your AI chatbot to create upsell and cross-sell opportunities. As AI chatbots can identify purchase patterns, they can reach out to customers with perfect recommendations and thereby increase sales process efficiency.
Should customers need live agents to move forward with their purchase, AI chatbots can also facilitate booking meetings or product demos by integrating with applications like Calendly or Google Calendar.
Lastly, AI chatbots can help post-sales by tracking order status, providing ongoing support, and gathering feedback from buyers.
8. AI chatbots support branding initiatives
You can think of an AI chatbot like you would a digital brand ambassador – it reflects the identity, values, and goals of a business. At the same time, it creates conversations that resonate with its target audience.
A great AI chatbot has a persona and personality that mirror its brand in the best possible manner. Given this, a customer can build an emotional connection with the AI chatbot, and by extension, the brand it represents. The goal here is to customise the AI chatbot such as it can converse like a friend with its intended users. The friendlier the atmosphere it creates, the more likely the customer will have a great experience.
As a digital brand ambassador, your AI chatbot can also disseminate other materials that reflect your brand such as infographics, blog posts, e-books, testimonials, videos, and more.
9. AI chatbots improve the employee experience
Since the COVID-19 pandemic hit, support teams have seen an increase in the number of customer requests. As a result, agents today are handling 30% more tickets than they did pre-pandemic. One step businesses can take to ease the workload of agents is to adopt AI chatbot technology.
By bringing AI chatbots into the workspace, businesses can create healthier environments where humans thrive and are able to use their talents to contribute to the ideation, planning, and execution of complex processes. No longer do they need to handle menial and repetitive tasks as these are automatically delegated to the AI chatbot. Human agents can then focus on accomplishing higher-level tasks.
10. AI chatbots drive high ROI
As discussed above, the use cases of customer-facing AI chatbots are not limited to service but extend to sales and marketing as well. AI chatbots can generate and qualify leads, serve as brand ambassadors, and increase sales. They also provide value by decreasing average service time, increasing customer satisfaction, and enhancing the employee experience.
Other than driving revenue, AI chatbots also promote cost savings. In fact, this 2022, AI chatbots are expected to cut business costs by 8 billion. Integrating AI chatbots into your business entails a significant reduction in operation and labour costs. You can work with a leaner team and handle more customer service requests than ever.
Future-Proof Your Business with Conversational AI
When it comes to customer service, a good strategy beats a big budget. Conversational AI chatbots are one of the most inexpensive and effective technologies available today that can help ensure business continuity and success. It positively impacts many aspects of a business, from brand reputation to customer and employee experience to revenue.
If you’re looking to leverage conversational AI chatbots for the first time, it may be best to look first to third-party providers instead of trying to develop your own. Specialist AI chatbots, like AskIris, are particularly equipped to cater to industry-specific needs.
To get a chance to meet our conversational AI chatbot Iris and learn how she can transform your business, register your interest here.