What Is Conversational AI? Benefits & Examples

Conversational artificial intelligence (AI) uses chatbots or virtual agents to have real-seeming, functional conversations with users. Through the clever use of machine learning, natural language processing, and vast amounts of data, these bots can imitate conversations by recognizing text input and using statistical algorithms to predict responses that users will find both acceptable and helpful.

Conversational AI technology can boost your team’s effectiveness in several ways, including improving customer engagement with 24/7 availability and ongoing customer support and assistance. You can also streamline customer communication by offering human-like interactions, freeing your team to work on other tasks.

In this article, you’ll gain a better understanding of what conversational AI is and learn how conversational AI tools can transform how you do business. It’s an exciting opportunity to unlock new possibilities and take your customer interactions to the next level.

What is conversational AI?

Conversational AI is an exciting technology that aims to simulate human conversation by recognizing and processing human language to provide appropriate responses with a natural conversational flow.

To achieve this level of sophistication, conversational AI systems undergo rigorous training. They are exposed to an extensive amount of human language and speech data, and then use statistical algorithms that enable them to predict a response that feels genuine and human-like. This training empowers them to engage with users in ways that feel more intuitive, meaningful, and conversational.

What’s even more fascinating is that these systems can improve over time through the power of machine learning. By analyzing patterns from previous interactions, conversational AI systems can become more capable and more adept at delivering high-quality responses. The more conversations used to train them, the better they become at addressing user needs.

Artificial intelligence is at the core of this technology, and it relies on two key components:

• Natural language processing (NLP)
• Machine learning (ML)

NLP—sometimes called natural language understanding—is a unique branch of computer science all about teaching computers to recognize, analyze, and give appropriate responses to text. NLP combines computational linguistics (which models human language) with machine learning and statistical programs to help computers identify the meaning, intent, and even sentiment of user input, questions, and prompts. This enables more sophisticated and nuanced interactions between users and AI.

Machine learning is also a critical part of conversational AI. This cutting-edge technology allows computers to perform tasks without being programmed for a specific function. Machine learning continuously learns from data to help conversational AI systems adapt, improve, and handle a wide range of user interactions.

The conversational AI field is constantly evolving; as it grows, computers will get even better at identifying our intentions and emotions when we chat with them, and giving responses that we find more meaningful.

What is the difference between chatbots and conversational AI?

While there’s some overlap between chatbots and conversational AI, they are different. Chatbots are a form of conversational AI—but not all conversational AI platforms are considered chatbots.

Rule-based bots respond to customer questions or queries based on a predetermined order of instructions, while chatbots use natural language generation and machine learning to handle customer interactions in a conversational manner. Like other conversational AI applications, these programs learn from previous conversations and improve their responses over time.

In other words, rule-based bots require users to choose from multiple preset keywords or questions to find information or answer questions. Chatbots that use conversational AI allow users to type their own prompts, and the AI responds in a conversational manner.

Benefits of conversational AI

Conversational AI can offer several benefits for your organization or team. For example, many hiring teams use AI to help write job descriptions and prepare for interviews. Creators and graphic designers also use AI for inspiration and to help produce unique images.

We cover a few benefits of integrating conversational AI into your processes or business.

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Enhanced customer experience and engagement

Conversational AI provides personalized interactions that can lead to improved customer satisfaction and engagement. Customers don’t have to wait to receive the help they need—such as waiting in queues for an operator or during certain business hours—and can respond to the message they receive from the conversational AI chatbot for a more interactive experience.

Marketing teams can use AI to analyze customer data and preferences and improve the user experience. This information allows them to create personalized web content and eliminate a number of engagement barriers. You may even find that AI can help you optimize your digital advertising, forecast future sales, and integrate dynamic pricing.

24/7 availability and scalability

Conversational AI systems can work 24/7 to deliver instant responses and support to users anytime. This is especially helpful when you have globally distributed customers and support teams. You no longer need staff available around the clock to respond to customers to offer real-time support at all times.

Conversational AI chatbots can also handle a high volume of concurrent interactions, ensuring scalability and sustainability. You don’t have to worry about your current team being at capacity or unable to respond promptly when customer questions come in.

AI-powered chatbots can efficiently manage and handle multiple conversations simultaneously, guaranteeing every customer receives the attention they deserve without compromising on response times. This scalability feature allows your business to grow and cater to an expanding customer base.

Personalization and tailored interactions

Conversational AI can adapt to individual preferences and provide customized recommendations or solutions. For example, they can remember previous messages or details so customers don’t have to repeat themselves or tailor new messages to their situation.

This aspect of conversational AI closely resembles the experience of engaging with a dedicated customer advocate or support representative who understands the customer’s unique needs. It adds a personalized touch to the conversation, making it feel more genuine and akin to a real-time interaction.

Efficient and streamlined communication

Conversational AI can both automate repetitive or routine tasks and also streamline communication between businesses and customers.

Conversational AI reduces the need for human intervention by handling frequently asked questions, providing basic information, and guiding users through standard processes. This frees up valuable time and resources for team members to focus on more complex and critical tasks. This optimized workflow can lead to faster response times, improved efficiency, and notable cost savings for businesses.

And with conversational AI taking care of routine inquiries, customer support teams can allocate their expertise and attention to more specialized or intricate customer issues, ensuring a higher level of service.

Additionally, streamlined communication reduces the risk of human error and inconsistencies, providing consistent and accurate information to customers. So, businesses can enhance customer satisfaction, strengthen their brand reputation, and drive positive business outcomes.

Applications and examples of conversational AI

Conversational AI can unlock a new realm of possible applications. In this section, you’ll learn some common applications of AI technology and see real-world examples.

Virtual assistants for customer support and assistance

Conversational AI powers virtual assistants that provide customer support, answer questions, and assist with tasks in industries like e-commerce, banking, and health care. You can provide a link on your website or your customer dashboard to instantly submit questions and concerns.

For example, the car insurance company Geico uses a virtual chatbot to answer customers’ questions about policy coverage and billing information. Users can instantly find important documents (like insurance cards), and the system improves over time as they interact with the chatbot.

Geico’s virtual assistant allows customers to start a conversation with a preloaded prompt such as “make a payment,” “get proof of coverage,” or “manage drivers.” Users can also type a question and receive an immediate response.

Voice-activated smart speakers and virtual agents

Voice assistants like Amazon Echo, Apple’s Siri, and Google Home use conversational AI to understand voice commands, play music, provide weather updates, control smart home devices, and more. These systems interpret voice commands, allowing users to perform specific functions without making several swipes or pressing multiple buttons.

Take Amazon Echo, for example. Alexa instantly responds to commands like:

• “Wake me up at 7 am.”
• “Play my ‘favorites’ playlist.”
• “What’s the high temperature today in London?”
• “What events are on my calendar today?”
• “Turn on the lights in the living room.”
• “Request a ride from Uber.”

As voice-activated smart speakers continue to improve in their ability to sense tone and emotion through voice user interface (VUI), voice assistants and smart speakers may grow and expand in their ability to help people perform everyday tasks.

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Chatbots for automating routine tasks and inquiries

Conversational AI enables the development of chatbots for automating routine tasks, handling customer questions, and delivering personalized recommendations on websites, messaging apps, and social media platforms.

As a reminder, there are two types of chatbots: rule-based chatbots require customers to respond to a series of multiple-choice questions, and AI-powered chatbots interpret customer questions and prompts.

For example, in addition to letting customers order pizzas through Facebook Messenger, the pizza chain Domino’s has an AI-powered chatbot that offers both types of functionality. You can visit Domino’s website to chat with Dom and place a new order, reorder a previous order, or track an existing order. You can also type another question or concern in a message and receive an instant response.

Language translation and multilingual support

Conversational AI models can facilitate real-time language translation, allowing users to communicate with people who speak different languages. Businesses with a global presence use conversational AI to provide multilingual support, ensuring efficient communication and customer service across diverse language preferences.

A great example is the platform Moveworks, which uses generative AI to provide real-time translation in over 100 languages. Customers can translate news articles, employee communication, and service tickets from customers into their preferred language using NLU models and new developments in the world of AI. This platform is available around the clock.

Call centers and help desks

Conversational AI solutions allow call centers and help desks to handle a large volume of customer inquiries, provide information, and offer assistance.
Call centers can use AI functionality to achieve the following outcomes:

• Predictive call routing. AI tools can route customer calls to the correct recipient and improve customer satisfaction by as much as 50%.
• Interactive voice response (IVR). Many people are used to answering automatic prompts when placing a phone call. In the future, systems will continue to improve and develop in a way that decreases costs and increases customer satisfaction.
• AI with emotional intelligence. AI systems that can track emotion and tone in a customer’s voice improve the customer experience and help clients feel more heard and understood. Contact centers can use AI-powered technology to track customers’ feelings during phone calls.
• AI-powered recommendations. As AI systems process customer questions and concerns, they can provide specific recommendations to help the customer accomplish their goals. AI can also provide solutions to human agents before they connect with the customer.
• Call analysis. Contact centers can use AI to track average call times and analyze additional data to improve the customer experience.

If you want to see an AI-powered call center in action, look no further than companies powered by Oracle’s Digital Assistant. This comprehensive AI platform offers conversational experiences for customers through text, chat, and voice interfaces and is trusted by nationwide companies like Office Depot and ECHO.

By implementing various conversation interfaces that mirror human speech and language models, Oracle enables companies to better serve their customers and extract maximum value from various conversational interfaces.

Find AI experts on Upwork

Conversational AI is taking the world by storm. Whether this is the first time you’ve learned about conversational AI or if you’ve been dabbling for a while, you likely see the benefits and incentives conversational AI offers.

What makes conversational AI difficult to approach is that most people still don’t fully understand how it works or how to use it. Thankfully, this doesn’t have to hold you back. You can find and hire dedicated AI engineers on Upwork to use conversational AI to its fullest potential. They’ll oversee your AI operations and functionalities to ensure you reap the greatest benefit from your AI integration.

If you’re a talented AI engineer or developer looking for an opportunity to put your skills to use, take a look at the AI jobs available on Upwork. There’s a growing need for talented AI professionals like you, and Upwork can help you find your next opportunity.