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What should you look for in conversational AI for customer service?

Conversational AI for customer service is the perfect fit for every party invested in the customer service experience. It means less manual work and repetitive tasks for teams, reduced costs for companies, and always-on support around the clock for customers. So, what’s holding you back?

Recent AI advances are already making a big impact on customer service. Our recent report, State of AI in Customer Service 2023 Report, sheds light on how leaders can seize the opportunity to set themselves apart from their peers and gain a competitive edge.

Our findings reveal that 69% of support leaders have strategic plans to increase their investments in AI technology similar to ChatGPT over the next 12 months. 

After support leaders have seen what tools like ChatGPT are capable of, it’s no wonder they grow excited about the possibilities of AI for customer service – including faster, more consistent responses and reduced training costs. 

To help you understand the implications of conversational AI for customer service, we’ve prepared a comprehensive guide. Here, you’ll learn:

  • What conversational AI is.

  • How conversational AI works.

  • Use cases of conversational AI for customer service.

  • Benefits of conversational AI for customer service.

  • How conversational AI improves the support experience.

  • What you should be looking for in a conversational AI solution.

What is conversational AI?

Conversational AI is a type of artificial intelligence that is capable of participating in natural-language conversations with users. The technology is designed to interact with individuals through text-based or speech-based inputs as naturally as possible, with the ability to learn and improve performance over time.

What is conversational AI for customer service?

In customer service, conversational AI is the use of AI-based tools to automate and enhance interactions with customers. The goal is to provide faster, smoother, and more efficient support experiences, from answering common queries to engaging in free-flowing conversations through natural dialogue.

How conversational AI works

Conversational AI combines natural language processing (NLP) and machine learning to operate. The AI system is trained on massive data sets that include both text and speech to understand and process human language.

Conversational AI involves the following stages:

  1. Input generation: The user starts the interaction through a written or spoken query.

  2. Input analysis: The system interprets the message, deploying natural language understanding (NLU) to comprehend the query.

  3. Dialogue management: The conversational AI applies a different component of NLP technology, natural language generation (NLG), to create a quick and coherent answer.

Examples of conversational AI

Chatbots 

Chatbots powered by artificial intelligence are the most known example of conversational AI, especially for applications in customer service. 

An AI chatbot works on an input-output model: the user provides an input command, the system processes it, and then the chatbot responds with the appropriate output. Simply put, AI uses the context of the conversation to generate a relevant response. 

For that reason, many companies are using conversational AI chatbots for customer service tasks, such as:

  • Welcoming website visitors.

  • Initiating conversations.

  • Asking follow-up questions.

  • Providing product guidance.

  • Routing customers to the right support channels.

Virtual assistants

Virtual assistants like Amazon Alexa, Apple's Siri, and Google Assistant allow users to interact through voice-based conversations. These assistants are often voice-activated and can be accessed on mobile devices, smart speakers, and other connected devices.

Use cases of conversational AI for customer service

Resolve common queries

Conversational AI can identify common queries and provide proactive solutions for customers. For example, imagine a customer needs an answer to a specific question about a product or service. 

In cases like these, they expect a fast reply, which can be done by setting up an AI chatbot to automatically search and use information from a comprehensive knowledge base.

Here’s an example of what that looks like:

Troubleshooting

What if the customer needs assistance with more technical issues, such as feature bugs or user errors? An AI chatbot can provide step-by-step guides for troubleshooting matters as well.

The AI can engage the customer in a back-and-forth conversation to gather all the relevant details about their problem. Armed with this investigative context, it either immediately provides a solution or escalates the chat to a support rep when additional expertise is required.

In escalated cases, the human agent benefits from the preliminary information the chatbot has already gathered. Rather than starting the troubleshooting process from scratch, agents can build directly on everything the chatbot has learned.

Benefits of conversational AI for customer service

Doesn't require training

A conversational AI chatbot doesn’t need training, configurations, or new bot paths. You just need to route the bot to your content and it will absorb all the information necessary to be able to offer conversational and automated customer service.

A knowledge base acts like the ultimate cheat sheet, allowing the conversational AI to pull answers directly from the company’s help center. Because of this, the chatbot can respond to a wide range of customer queries without requiring any additional training.

If your company doesn't have a help center or any public knowledge base, conversational AI can also be fed by relevant external content that’s available to you. You can use public URLs or simply upload a PDF file, and it will be scanned and made available for the conversational AI.

Converses naturally

Interactions with conversational AI for customer service are designed to be natural, friendly, and highly realistic, mirroring a chat with a support rep. 

In other words, "natural language processing" essentially means that your customers can interact with AI without feeling like they’re talking to a stiff, repetitive, unhelpful robot.

Artificial intelligence doesn’t demand precise phrasing to comprehend your customers' inquiries, either. It’s actually capable of unraveling and comprehending complex questions, asking for clarification when it doesn’t fully understand the query, and explaining topics in a way that makes sense to each customer.

24/7 multilingual instant answers

With conversational AI, your customers can get instant responses in their native language anytime they need help. The technology allows you to scale support across multiple languages, ensuring comprehension and satisfaction. 

Whether your customers are early birds, night owls, or something in between, your chatbots will be ready to assist them around the clock and around the globe.

Accuracy

Let's keep chatbot conversations focused on the facts, shall we? 

Just like we previously mentioned, conversational AI pulls answers directly from your official support content instead of making wild (or wildly inaccurate) guesses.

As a result, the AI keeps the chatbot’s information gathering limited to whatever materials and answers your company has approved when resolving customer questions. 

This is an important point, as parameters are what minimize AI “hallucinations,” inappropriate responses, and other unwanted AI dialogue.

An AI hallucination is the popular term that refers to when chatbots and AI text generators fabricate answers out of thin air instead of sticking to facts. It is, mostly, the AI equivalent of “making things up.”

By sourcing responses exclusively from your own materials, though, support departments can ensure that their AI platforms stay firmly anchored to verifiable facts and information.

How does conversational AI for customer service improve the support experience?

Reduces support volume

Conversational AI chatbots for customer service, such as Intercom’s Fin, can resolve up to 50% of support queries instantly and with complete accuracy. 

By taking care of the more basic, easily answered queries, chatbots give your human support teams the bandwidth and breathing room to focus on the more complex, sensitive issues and concerns.

In other words, AI chatbots allow your customer service team to zero in on anything and everything that requires a human intellect and a human touch. 

Improves operational efficiency

It’s no secret that conversational AI chatbots are the hot new thing in customer service. According to our AI trends report, 67% of North American support leaders are planning to invest more in AI over the next year.

With customer service teams facing high pressure to do more with less, AI chatbots can fill in the gaps and improve operational efficiency. 

What does this look like in practice? Delivering fast response times, providing instant and accurate solutions, and seamlessly handing things over to support reps when needed.

Increases deflection rate

The chatbot deflection rate, which is the percentage of support requests that don’t require representative assistance, is boosted with conversational AI for customer service.

Most customer requests can be handled entirely by AI chatbots that reach out when a user needs help. In these situations, they initiate friendly contact and provide immediate solutions without ever pinging your reps.

Take a look at what Stuart Sykes, VP of Service Operations, says about Zilch’s experience with conversational AI and deflection rate:

Our bot deflection rate with our previous customer service solution was 5–10%. With Intercom, we achieved 65% bot deflection within just one week of going live.
Stuart Sykes

VP of Service Operations at Zilch

Improves customer satisfaction

We've talked about how conversational AI delivers faster and more accurate solutions. But what do these benefits mean for customer satisfaction?

When you can combine speed and accuracy with a reduction in effort required on the part of customers seeking resolution, satisfaction scores skyrocket. 

In our report, we asked support leaders which metrics they expected to change as a result of AI. Twenty-two percent felt that customer satisfaction (CSAT) would change, followed by time to resolution, cost of the support organization, and customer effort score.

Improves team satisfaction

It’s important to highlight the fact that the benefits of a conversational AI platform are not strictly limited to the customers. The Intercom Customer Service Trends Report 2023 shows that 81% of support leaders believe automated support tools, like an AI chatbot, also improve the employee experience and reduce attrition.

It’s hardly surprising that the percentage is as high as it is. Conversational AI lets your team step away from the exhausting, never-ending stream of repetitive queries by handling many or even most of them. 

Meanwhile, reps can focus on more fulfilling parts of their jobs, whether that’s building customer loyalty, contributing to team operations, or picking up new skills and growth opportunities.

What you should be looking for in conversational AI for customer service solution

Allows human support when necessary

Even the smartest, most knowledgeable bots need human backup sometimes. When conversational AI can't crack a complex case, it should be able to toss the tricky problems to your support reps without missing a beat.

With smooth, seamless handoffs, customers enjoy a frictionless experience as their issue is expertly escalated behind the scenes. When AI is built to accurately recognize its limits, customers get the best of both worlds – instant answers and human expertise. 

Trustworthy

Find a conversational AI platform for customer service that you can trust to represent your brand. The answers it provides should come straight from your approved content – thereby eliminating any risk of the AI chatbot hallucinating or providing otherwise false or inappropriate responses. 

By doing so, the chances of it slipping into off-topic conversations or otherwise misleading customers is reduced, leading it to work exclusively off of relevant, reliable facts.

By deciding what content gets fed into your conversational AI, you maintain full control over the conversation. A trustworthy AI platform gives you peace of mind that all chats stay professional, helpful, and focused on your business needs.

Scalability

As your business grows, your demands scale up, too. Your support must be able to handle an expanding customer base while maintaining fast, reliable, consistent service. 

A great conversational AI solution needs to keep up across the entire customer journey, meeting customers wherever they are. Further, it should have the flexibility and versatility to jump between Facebook Messenger, Instagram, WhatsApp, and other platforms with ease. 

The goal for all businesses should be to provide AI-powered support in your customers’ preferred channels, giving them a real omnichannel support experience.

Customizability

Your conversational AI should sound and look in a way that’s compatible with your brand, allowing customers to feel at home in conversations with the platform. Because this branding and uniformity is so crucial, being able to customize your chatbot with your company’s name, logo, and style is a must. 

With customization options, you control the finer details for an on-brand experience from start to finish. When customers need support, they'll be greeted by a familiar face tailored to your company’s identity.

Reporting

Last but not least, look for a conversational AI platform for customer service with robust reporting. After all, how can you improve what you don't measure? 

Monitoring usage metrics and reviewing performance scores allow you to keep improving your support over time. 

Plus, you can dive into the data to see which articles are resolving the most queries and identify any potential content gaps. By looking at article stats, you can continue optimizing your knowledge base.

When you choose a solution with strong analytics and tracking, you stay informed to level up your AI game over time.

🤖 How can you make sure you choose the right one for your support needs? Download AI Chatbot Buyer’s Checklist!

How can conversational AI for customer support and human support reps work together?

As we like to highlight, conversational AI for customer service and human support reps can – and should – work collaboratively. One doesn’t replace the other – the future is humans and technology cooperating to deliver great experiences for customers.

The research we carried out for the State of AI in Customer Service 2023 Report found that many support leaders believe AI will create new opportunities and roles for support reps, such as chatbot developers, conversation designers, and AI chatbot strategists.

There's no "either/or" with AI – instead, it’s going to look more like an efficient combination of human brains and conversational bots. 

While AI handles high volumes, humans can create value for customers by building connections, solving complex issues, and having an even greater positive impact on the queries they do take on. 

Take a look at what we believe is the best way to handle different tasks with conversational AI and support reps working side by side:

Conversational AI for customer service will change your support for the better – are you ready?

Breakthroughs in artificial intelligence are rapidly introducing a dramatic shift in the world of customer service. And contrary to the fears and anxieties of some, these changes are going to benefit everyone invested in the customer service experience. 

They promise to bring significant improvements for customer service, allowing the industry to become more efficient, more robust, and more impactful than ever before.

Support leaders who are ready to embrace the opportunities presented by this revolution in the industry will not only enhance the customer experience but also drive forward their businesses, expand their influence, and nurture the career growth of their team members.

Are you ready to leverage the benefits of conversational AI for customer service? Ask for a demo or start your free trial today.