As technology advances, it changes how you interact with your customers. In the past, customer service was often time-consuming and frustrating. However, Artificial intelligence (AI) applications are powering through customer service operations to initiate higher customer satisfaction and improve operational efficiency. Chatbots, also popularly known as virtual assistants, are taking the customer service world by storm.
Conversational AI is revolutionizing the use of AI algorithms by introducing faceless agents generating natural communication with customers. It develops accurate responses to their queries using a sequence of Machine Learning (ML), larger data volumes, and Natural Language Processing (NLP); providing them with personalized experience, real-time assistance, and calls for greater customer engagement.
So, it is unsurprising that the Conversational AI market is projected to grow substantially during the forecast period. The market, valued at USD 10.7 billion in 2023, is anticipated to reach USD 29.8 billion by 2028, exhibiting a remarkable compound annual growth rate (CAGR) of 22.6%.
How Conversational AI is Improving Customer Experiences
Conversational AI can improve customer experiences in many ways. It offers customers an immediate response to their inquiries without waiting on hold or for an agent to become available. It makes a significant difference to customers who tend to get frustrated with long wait times and poor communication. Also, you can program Conversational AI to provide personalized responses, helping make the customers feel heard and valued. Additionally, conversational AI can assist with routine tasks such as account inquiries, password resets, and order tracking, freeing human agents to focus on more complex issues.
Conversational AI can provide customers with a consistent experience. Unlike human agents with varying levels of knowledge, conversational AIs are usually programmed to provide accurate responses every time. Thus, it creates a sense of customer reliability and trust, which is essential for building long-term relationships. 65% of respondents to a survey claimed that if brands can consistently deliver positive experiences throughout the customer journey, it is more likely to develop a long-term relationship with the brand.
Conversational AI – Key differentiators
Conversational AI process, understand, and generate natural responses to customer queries due to the combination of its crucial principle components – ML (recognizes data patterns and generates predictions) and NLP (enables a computer to comprehend and analyze human language). It thus creates a conversation-driven experience for customers as they interact with you.
Such experiences are based on the following crucial elements:
- Listening – Text/speech inputs from customers converted into a machine-readable format.
- Comprehending – decipher text intends using Natural Language Understanding
- Forming response – Text/Speech synthesis used to deliver responses
- Offering response – Machine/reinforced learning to present accurate responses
The key motive is to identify and route customer queries to relevant information, generating cost-efficient customer service solutions for businesses.
Cutting-edge Technologies Empowering Conversational AI
Understanding the critical components of Conversational AI, its technology, and workability will help you select the most effective option to apply for your business. Here are the technologies that are transforming customer service and experience:
Chatbots
These are computer programs implemented through social media messengers or chat applications built into a website or mobile application, helping customers to identify answers around the clock. Following are the three classifications for chatbots:
- Rule-based chatbots – lack AI presence but help map human conversations on predefined rules.
- Deep learning conversational AI chatbots – AI bots analyze the conversation, understand customer intents, and generate relevant answers through NLP usage
- Hybrid chatbots – a combination of rule-based and AI-equipped bots
Voice assistants
Voice assistants are programmed to understand voice commands and complete tasks on the user’s behalf. Usually present in search engines, smart speakers, and operating systems; customers can be hands-free to use them. For instance, the two popularly used examples of this technology are Alexa and Siri.
Interactive voice response (IVR)
IVR generates automated call responses by presenting options for customers to select. Then, they guide the caller and route them to the concerned department or agent while offering FAQ answers and self-service options. Typically, it is considered the hybrid of chatbots and voice assistants.
You can use these lucrative technologies to incorporate conversational AI into your CX operations and attain the best customer engagement, yielding higher productivity and multiple other benefits.
Let’s dig into the benefits of using conversational AI in customer service.
Benefits of Conversational AI Unlocked
The benefits of Conversational AI in customer service are vast. It increases customer service efficiency by assisting with customer service inquiries 24/7, can provide valuable insights into customer behavior and preferences, and reduce costs by simplifying and automating routine tasks. Here are some examples:
Satisfactory self-service experience
Customers today are more inclined to fix their problems without speaking to any agent. Conversational AI provides Chatbots that use data training to understand questions, grasp conversation intents, and respond accordingly, boosting client retention scopes during customer service encounters.
Natural routing and quicker response time
From a customer standpoint, providing instant responses establishes your credibility. Additionally, accurately trained chatbots with AI intend to deliver better first-call resolution through sentiment analysis and smooth routing to human agents generating shorter response times and avoiding communication barriers.
Deeper customer insights
Bots analyze data from past interactions by diving into your CRM to suggest solutions to customer queries, generating timely and personalized experiences.
Omnichannel support
Leveraging conversational AI enables customers to interact with you through multiple channels such as email, text-based messaging, or social media. Hence, ensuring the availability of customer queries 24/7 drives their loyalty and satisfaction.
Cost-effectiveness
Conversational AI processes simple requests and provides answers to FAQs, allowing human agents to focus on complex customer issues. Thus, it leads to fewer requirements of human engagement to handle first-call customer requests, eventually leading to cost-effective staffing within customer service operations.
Thus, investing in Conversational AI can lead to better customer satisfaction with less wait time and personalized interactions. Moreover, it can also run in-depth analysis and forecast customer needs to help you create more targeted and relevant CX across different verticals.
Transforming The CX Game Across Various Industries
Conversational AI has the potential to be seamlessly integrated into various industries, catering to their unique needs. Among these industries, including BFSI, Retail, Telecommunication, and Hospitality, the adoption of Conversational AI is particularly prominent due to the significant influx of repetitive customer queries they encounter.
Let’s take a look at how these industries utilize different forms of Conversational AI for an enhanced experience and elevated customer satisfaction:
BFSI
- Easy money transfer
- Intent capture and intelligent call routing
- Authenticating customers
- PIN resets
Retail
- Handling where is my order (WISMO) calls
- Inventory tracking
- Intelligent sales and upselling
Telecommunication
- Account services involving activating plans, paying bills, updating details, data usage checks
- Troubleshooting for technical issues
- Booking and managing engineer appointments
Hospitality
- Booking hotels, restaurants, and other services
- Taking orders over calls
- Recording full call transcripts
Customer-centric innovation with Conversational AI is driving Indian companies in reshaping CX
Indian companies are rapidly adopting Conversational AI through voice interactions, chatbots, AI-backed human concierges, and digital assistants. These solutions are swiftly gaining traction across various industries and sectors for sales and service requirements. Currently, companies such as hospitality and travel also embrace conversational AI to ensure customer engagement and satisfaction.
This is where Conneqt Business Solutions come in with our extensive experience in Conversational AI. We helped numerous organizations, enterprises, and startups improve CX significantly, implementing various elements of this incredible technology. Here are some ways how our clients benefitted from Conversational AI:
Proactive Outreach – It helped our client engage customers by sending proactive messages about new offers, discounts, offers, stock alerts, pending cart reminders, channel deflection, and more
Personalization – We helped some of our retail clients deliver personalized product recommendations by Virtual Assistants after accurately determining where buyers are in their journey and evaluating opportunities within the conversation to up-sell and cross-sell. These Virtual Assistants provide efficient buying guidance, product selection, and cart management, thus helping in up-selling.
Cart abandonment optimization – We helped various E-commerce/D2C brands adopt Conversational AI to reduce cart abandonment and improve customer satisfaction.
Customer Acquisition – Our Conversational AI solutions helped our clients across diverse sectors deliver hyper-personalized offers, customer retargeting, improved propensity-to-buy scoring, and channel mapping.
Besides all the above, Conversational AI helped our clients in pre-sales lead nurturing and omnichannel customer engagement from marketing campaigns, websites, mobile apps, and social channels.
To Summarize
Recently, an increasing number of businesses have integrated conversational AI into their customer service operations. For example, Amtrak, the US-based passenger railroad service, introduced Julie, a virtual assistant, in 2012. Julie can assist customers with booking tickets, answering FAQs, and providing travel information. Since her introduction, Julie has handled over five million customer interactions, resulting in a 25% reduction in customer service costs.
Another example is H&M, the Swedish fashion retailer, which introduced the chatbot Kik in 2018. It can assist customers with product recommendations, sizing, and styling advice. Since its introduction, Kik has handled over 2 million customer interactions, resulting in a 70% increase in customer satisfaction rates.
Thus, we also need to understand that Conversational AI can only replace human agents partially, no matter how efficient. Nevertheless, you can provide a seamless and optimum best Customer Experience only by integrating conversational AI with human agents that combine the efficiency of automation with the empathy and expertise of human agents. As technology advances, the future of customer service looks bright with the continued development of conversational AI.