If you have ever had a human-like conversation with a chatbot, chances are that you have already interacted with a conversational AI technology. Conversational AI has been around for a while now, and one of the main reasons for its success is that it creates more natural ‘human-like’ conversations with users.
The global conversational AI market, including chatbots and intelligent virtual assistants, is expected to grow at a CAGR of 22% between 2020–25, and chatbots currently represent the most common use of AI in enterprises. Their adoption rates are expected to almost double over the next two to five years. [1]
As the conversational AI trend is rising and has become vital for business growth, let’s understand what conversational AI is, what the future holds for this technology, and how your business can benefit from this technology.
What is conversational AI?
Conversational AI is the technology that enables chatbots or virtual agents to have human-like conversations with users by recognizing user inputs and interpreting their meaning and intent. It is a subset of artificial intelligence that leverages concepts like neural networks, machine learning, and NLP to build conversational AI chatbots.
Why it matters: Future trends of Conversational AI
Conversational AI is transforming markets across different industries, so it’s vital to understand its importance and why you should be adopting these technologies to gain a business advantage and beat your competition. Here are some statistics that highlight the trends that conversational AI is likely to follow in the near future.
- By 2030, the global conversational AI market size is projected to reach $32.62 billion.
- Over 70% of chatbot conversations are expected to be with retail conversational AI systems by 2023.
- By 2026, conversational artificial intelligence (AI) deployments within contact centers will reduce agent labor costs by $80 billion, according to Gartner. Inc. [4]
- According to Juniper Research, by 2023, chatbots will save retailers $439 million annually [5]
- Retail sales resulting from chatbot-based interactions will reach $112 billion by 2023. representing an annual growth rate of 98% [6]
- The volume of interactions handled by conversational AI has increased by as much as 250% in multiple industries since the pandemic. [7]
- Five billion hours are expected to be saved by using chatbots by 2023.[8]
What is the difference between conversational AI and chatbot?
Wouldn’t it be great if you could simply instruct your chatbot to book a meeting for a specific time or even get notified by it when your favorite shoes are back in stock? Most chatbots cannot fulfill such a request because they are designed to handle only basic queries and can only respond based on pre-defined rules. As a result, they fail to understand user intent making the user experience inefficient and frustrating.
Let’s look at what makes conversational AI chatbots better than traditional ones.
| Traditional Chatbot | Conversational AI chatbots |
| Traditional chatbots are basic rule-based chatbots that answer FAQs and common queries. | Conversational AI chatbots are advanced bots that mimic human conversations to resolve and offer a better customer experience. |
| These basic chatbots have pre-defined conversational flows, are keyword-based, and perform only limited tasks. | On the contrary, these do not follow any predefined rules but leverage AI to understand the intent and offer solutions. |
| These chatbots offer button/keyword-focused navigation | They have Intent-focused navigation |
| Scalability is limited as having rules of every variation of interaction is difficult | Easily scalable and use ML to learn from different interactions to improve with time. |
| These bots only understand text inputs and commands. | They can understand text and voice inputs and commands. |
| Does not support omnichannel capabilities and can only be integrated with the chat interface. | Can be integrated with multiple channels, including websites and voice assistants. |
| The resolution rate will vary depending on the keyword input by customers. | Delivers consistent high-resolution rate. |
What benefits can businesses expect from conversational AI?
1. Enhanced customer support experience
69% of consumers already prefer to use chatbots because they deliver quick answers to simple questions. Combined with conversational AI, these chatbots can resolve queries quickly and improve your customer experience by engaging with customers. They do not follow robotic scripts. Instead, they engage in small talk with customers. Implementing these chatbots in your conversational interfaces like mobile apps, websites, and messaging channels can improve conversational engagement.
2. Round the clock and across all channels
Conversational AI chatbots can be made available on all your channels 24/7 to assist your customers. No matter which part of the world your customers are reaching out from, these AI bots are there to engage with them. If it’s a simple query, conversational AI chatbots can not only handle them, they can follow up with further information to delight customers.
For instance, if a customer wants to return a product, a conversational AI chatbot can extend the conversation to ask the customer what the problem with the item was. This delivers a superior experience to customers and offers instant feedback to your team as well. These conversational bots can also be integrated into your messaging channels like WhatsApp, Facebook Messenger, etc., making it easier for customers to reach out on channels of their choice.
3. Opens up opportunities for upselling
It is a well-known capability that chatbots can resolve customer tickets/issues. But conversational bots are also capable of upselling to customers. These bots understand customer preferences and customer context and offer the best recommendations to customers for upselling and cross-selling. They leverage cart information, purchase history, and prior inquiries to recommend the right products or services to customers.
4. Break language barriers
As your company grows, you’ll start receiving customers from different geographies but it’s expensive and inconvenient to hire agents from across the world to cater to different customers. Conversational AI chatbots have translation software that let you offer multilingual support to your customers. With most businesses having a digital presence today, global audiences are within easy reach no matter how big or small a company is.
5. Improve agent efficiency
Conversational bots can be great assistants to your support agents and are a great addition to your support teams. They are capable of solving simple issues with zero human contact. This frees up agents’ time and lets them focus on more complex issues. Since they are capable of resolving multiple issues simultaneously, it helps your support team stay on top of their metrics and SLAs.
The conversational AI superpowers of Freshchat
The key feature of conversational AI is to leverage ML and AI to build chatbots that can understand customer intent, can learn by themselves from different conversations over time and can be deployed on the channels of your choice easily.
As a business, you should look for vendors to help you deploy this technology quickly and without hiring an army of consultants and developers. While there are a lot of high claims in the market, there are only a very few vendors who can truly deliver on the promises of conversational AI.
Freshchat’s conversational AI chatbots can deliver a truly conversational AI experience and can be deployed on the most popular messaging channels, website and your app in no time. We also offer 30 hours of dedicated support to help you set up and get started with the product. It is powered by Freshworks flagship Neo Platform, that powers all of Freshchat’s AI and ML chatbots and also helps unify digital user experiences across all products of Freshworks.
Here are the major benefits you get when you partner with Freshchat
1. Conversational AI chatbots that learn – Freshchat’s support and sales bots are built on top of AI and ML that detect the intent of prospects and learn from the questions asked over time.
2. Intent detection and faster resolutions – Freshchat’s chatbots understand user intent and instantaneously deliver the right solution to your customers. As a result, customers no longer have to wait in chat queues to get their queries resolved.
3. Proactive customer engagement – Freshchat allows you to proactively interact with your website visitors based on the type of user (new vs returning vs customer), their location, and their action on your website. That way, you don’t have to wait for your customers to initiate a conversation, instead, you can let AI chatbots take the lead in proactive engagement.
4. Intelligent agent handoff – Our intelligent agent handoff route chats if there’s a query that bot is unable to resolve. These chatbots can either hand over the conversation to a live agent or collect information for agents to follow up on. This ensures that your customers aren’t left unattended and sets the right expectations for when the agent reverts.
5. Personalize customer conversations – Our conversational AI chatbots can pull out customer data from your CRM and offer personalized support and product recommendations.
6. Integration with messaging channels and other tools – You can easily integrate our smart chatbots with messaging channels like WhatsApp, Facebook Messenger, Apple Business Chat, and other tools for a unified support experience.
7. Real-time insights – With a real-time dashboard and custom reports, you can analyze your chatbot performance against various metrics and optimize it to perform better.
8. Transparent pricing and cost-effectiveness – Freshchat is a feature-rich business chat tool armed with AI-powered bots and powerful integrations, available in multiple pricing tiers, serving the needs of businesses of all sizes. We offer transparent and customized pricing plans with no hidden costs. So, no matter your budget, you have access to the most modern products available
9. Faster implementation and 24×7 support – Freshchat offer 30 hours of free consultation to help you implement Freshchat in a way that suits your needs. Freshchat offers 24×7 support. You can reach out to us with any issue, and someone from our support team will be with you right away.
10. Superior integration with the Freshworks suite of products and 3rd party apps – Freshchat offers native integration with help desk software, marketing and sales automation software and a host of other products within the Freshworks suite of business software. You will also have access to a marketplace with more than 1000 apps to help you integrate your existing tools or take your engagement to the next level.
Try Freshchat
Sources
1. https://www.forbes.com/sites/louiscolumbus/2020/10/04/whats-new-in-gartners-hype-cycle-for-ai-2020/?sh=2d328525335c
2. https://www.forbes.com/sites/louiscolumbus/2020/10/04/whats-new-in-gartners-hype-cycle-for-ai-2020/?sh=2d328525335c
3. https://www.forbes.com/sites/louiscolumbus/2020/10/04/whats-new-in-gartners-hype-cycle-for-ai-2020/?sh=2d328525335c
4. https://www.gartner.com/en/newsroom/press-releases/2022-08-31-gartner-predicts-conversational-ai-will-reduce-contac
5 and 6. https://www.forbes.com/sites/forbesfinancecouncil/2022/06/06/conversational-ai-trends-forecasts-application-options/?sh=798ad3c32f5a
7.https://blog.hootsuite.com/conversational-ai/
