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What is a key differentiator of conversational AI

8 min read

Updated on July 15, 2024

Published on August 24, 2023

What is a key differentiator of conversational AI

You’ve probably noticed that your customers are impatient. When they search your website for answers or reach out for customer service or support, they want answers now. Chatbots help you meet this demand by allowing your customers to type or ask a question and get an answer immediately.

However, the relevance of that answer can vary depending on the type of technology that powers the solution. Conversational artificial intelligence (AI) enables a natural exchange — much like talking to a customer service rep — that helps time-strapped customers get the information they need quickly and with minimal frustration.

What is conversational AI?

Although some chatbots are rules-based and only enable users to click a button and choose from predefined options, other solutions are intelligent AI chatbots. Artificial intelligence gives these systems the ability to process information much like humans.

So, what is the key differentiator of conversational AI? It simulates human conversations using natural language processing (NLP) and natural language understanding (NLU).

Understanding natural language processing

NLP, short for Natural Language Processing, is a technology that allows machines to comprehend human language. It can interpret text or voice data by utilizing rules and advanced technologies such as ML (machine learning) and deep learning. NLP transforms unstructured text into a format that computers can understand and teaches them how to process language data.

Syntax and semantics

Chatbots equipped with NLP and NLU can comprehend language more effectively, enabling them to engage in more natural conversations with individuals. These chatbots can understand both the literal meaning of words and the context behind them, improving their intelligence with every interaction.

Context and ambiguity resolution

NLU is a technology that assists computers in comprehending the meaning behind people’s questions or statements. Machines often struggle to grasp that words can have varying meanings in different contexts or that the arrangement of words holds significance. NLU algorithms draw insights from diverse sources, allowing them to comprehend a speaker’s intended message.

Why conversational AI is a good fit for customer service

Although conversational AI has applications in various industries and use cases, this technology is a natural fit to enhance your customer support. Not only does it help solve the problem of needing to answer questions quickly and avoid increasing frustration the longer a customer is on hold or waiting for an email, but it also provides businesses with several advantages.

Works around the clock

Chatbots powered by conversational AI can work 24/7, so your customers can access information after hours and speak to a virtual agent when your customer service specialists aren’t available.

Covers the easy answers

Customer service and customer support specialists often have a heavy workload, whether taking calls or answering emails. Conversational AI can easily manage questions about accounts, payment history with knowledge base articles, and more, so your team can focus on more complex issues requiring a personal touch.

When a customer has an issue that needs special attention, a conversational AI platform can gather preliminary information before passing the customer to a customer support specialist. Then, when the customer connects, the rep already has the basic information necessary to access the right account and provide service quickly and efficiently.

And, since the customer doesn’t have to repeat the information they’ve already entered, they have a better experience.

Scales automatically

Conversational AI solutions are designed to manage a high volume of queries quickly. Even if your business receives an influx of inquiries at the same time, conversational AI can handle them and still provide quality responses that reduce ticket volume and increase customer happiness.

Communicates in multiple languages

Global or international companies can train conversational AI to understand and respond in their customers’ languages. This feature can help businesses control labor costs by not having to hire a large team of multilingual customer support specialists — their intelligent chatbot can address inquiries from many locations around the world.

Gives customers a self-service option

Some people simply prefer self-service. They’d rather avoid a phone call or an email chain and simply access information on their own without help from a customer service specialist. Statista found that 88% of customers expect an online self-service portal, and a Zoom study found that 80% of consumers report “very positive” customer experiences after using a chatbot.


When considering the benefits of chatbot AI for customer service teams, it’s also important to consider the return on investment (ROI). Retail Dive reports chatbots will represent $11 billion in cost savings  —  and save 2.5 billion hours  —  for the retail, banking, and healthcare sectors combined by 2023. Conversational AI enhances interactions with those organizations and their customers, benefiting the bottom line through retention and greater lifetime value.

(Check out how our own AI chatbot helps us save $13 million per month)


Benefits of conversational AI

Conversational AI delivers several benefits over traditional chatbots, which can lead to better customer experiences and greater customer retention. A platform with virtual agent capabilities can do the following:

Enhance customer experience

Customers looking for instant gratification will find it with conversational AI. There’s no waiting on hold—instead, they get an instant connection to the information or resources they need. Additionally, machine learning and NLP enable conversational AI applications to use customer questions or statements to personalize interactions, enhance customer engagement, and increase customer satisfaction.

Reduce operational costs

A conversational AI chatbot can efficiently handle FAQs and simple requests, enhancing experiences with human-like conversation. With the chatbot managing these issues, customer service agents can spend more time on complex queries.

Expand outreach and accessibility 

Features like automatic speech recognition and voice search make interacting with customer service more accessible for more customers. A multi-language application also helps to overcome language barriers, enhancing the customer journey for more customers.

Conversational AI examples

Businesses can utilize conversational AI in various ways to provide support. Its applications are not limited to answering basic questions like, “Where is my order?” or “How can I modify my subscription?” but instead, conversational AI applications can be used for multiple purposes due to their versatility.

Today, conversational AI works for businesses in use cases including:

E-commerce customer experiences

E-commerce has skyrocketed. Global retail e-commerce increased from $3.5 trillion in 2019 to $4.2 trillion in 2020, and analysts predict it will total more than $6.5 trillion by 2023. 

Conversational AI can help e-commerce enterprises ensure online shoppers can find the information they need. Additionally, conversational AI helps create personalized, convenient, and loyalty-building experiences.

Sales experience

The sales experience involves sharing information about products and services with potential customers. Of course, telephone sales are nothing new. 

Still, businesses can now use chatbots capable of automated speech recognition to engage people in effective dialogue via voice or text or even function to increase sales.

Subscription box customer experiences

For businesses that use subscription services to maintain customer loyalty and increase revenue, it’s crucial to keep customers satisfied. Using conversational AI to promptly address inquiries and resolve issues is an effective way to achieve this. When customers feel valued and appreciated, they are more inclined to remain loyal and spend more money in the long run.

Customer loyalty

One element of building customer loyalty is allowing people to engage in their chosen channels. Solutions powered by conversational AI can be valuable assets in a customer loyalty strategy, optimizing experiences on digital and self-service channels.

Customer feedback

To provide customers with the experiences they prefer, you first need to know what they want. Collecting customer feedback is a great way to gauge sentiment about your brand. Data from conversational AI solutions can help you better understand your customers and whether your products and services meet their expectations.

Knowledge base

Every business has a list of frequently asked questions (FAQs), but not every answer to an FAQ is simple. Conversational AI can help customers find information from a knowledge base in a conversational chat — and ask if the information answers the question, enabling the platform to learn and provide the most relevant information in the future.


Conversational AI also offers value beyond customer-facing processes. Businesses can leverage it to train new customer support specialists, familiarizing them with frequently asked questions and answers that customers consider during their buying decisions or while resolving issues.

How to pick the right conversational AI solution for your business

How to pick the right conversational AI solution for your business

Conversational AI is the way to go if you want to help improve your customer service. To find the right one for your business, consider the type of AI it uses. NLP is good for natural interactions and a good customer experience. 

The platform should handle basic queries without human help and forward more complex ones to agents. It should also integrate with your other business applications and be from a trusted provider. 

To see our conversational AI chatbot, Zoom Virtual Agent, for yourself, request a demo today. 

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