Conversational AI for Customer Service: Your Ultimate Guide


Find out why conversational AI has revolutionized automated support and how your CX will benefit from it.

In post-pandemic times, the demand for automation in the customer support (CS) space continues to grow rapidly. As exceptional customer experiences become growth drivers in their own right, support automation keeps costs down while keeping CS teams in control of their brand. 

The need for automation is not the only thing that’s increased dramatically — the quality of automated support has undergone equally massive changes in the past five years. The game changer behind this seismic shift?

Conversational AI.

Conversational AI has entered the early mainstream phase, and 79% of contact center leaders plan to invest in greater AI capabilities in the next two years. 

And consumers have grown to trust conversational AI as well: In a recent survey, Zendesk found that 66% of them believe AI makes their lives easier, and 69% are willing to interact with a virtual agent — sophisticated chatbots that are powered by AI — for simple requests.

But what exactly is conversational AI and why has it changed the face of support (automation) as we know it?

What is conversational AI?

Conversational AI is a set of technologies that allows humans and machines to have human-like interactions.They include:

  • Automatic Speech Recognition (ASR), also known as voice recognition, which translates spoken words into text. It’s what allows voice assistants, like Siri and Alexa, to perform tasks based on our vocal input.
  • NLU technology: NLU is a type of artificial intelligence that processes language in the same way humans do — by adhering to grammatical rules, acknowledging sentence structure, and learning vocabulary and semantics. It’s what lets a new generation of intelligent virtual agents (IVAs) have dynamic conversations with customers across email, chat, or digital messaging.

In other words, conversational AI is what separates intelligent virtual agents (IVAs) from the clunky chatbots of yesteryear.
The former is able to understand messages despite typos, colloquial phrases, or grammatical errors. It  can ask open questions and take context into account when processing a request. The latter was based on a set of preprogrammed keywords, failing immediately as soon as customers misspelled a word or used a synonym that the bot’s programmer hadn’t thought of beforehand.

See the 15 most important AI terms every support team should know here.

How conversational AI will supercharge your CX

1. Conversational AI helps you understand customer pain points, needs, and preferences

Conversational AI will enable you to understand customer pain points, needs, and preferences in several ways:

First, it lets you zoom out and identify your customers’ most frequently experienced pain points by analyzing your past support data, also referred to as historical data. Let’s say you’re an airline. If 5,000 customers asked about adding carry-on luggage to their bookings last month, and expressed that question in a total of 5,000 different ways, your AI can understand and appropriately classify them all.

Second, it will help you track your customers’ responses to automatic email replies or chat and messaging conversations in real time, allowing for you to adjust and improve responses over time with what’s called AI, or bot “training.”

This helps build more accurate dialogues, which means that your customers’ issues will be solved more quickly, creating positive interactions with your brand, or customer experiences (CX).

“Conversational AI enables genuinely interactive conversations between your virtual agent and your customers. Thanks to conversational AI, your virtual agent can ask questions and give personalized and specific answers based on the input it receives.”

- Maeve Condell, Customer Success Lead at Ultimate

Third, it will let you gather success metrics over time that can be used as a basis for automation KPIs when you are building an initial automation strategy.

2. Conversational AI lets you build closer connections through personalization 

71% of consumers now expect personalized experiences when buying from brands, so it makes sense to choose an automation solution that integrates into your CRM system. This gives your virtual agent access to existing CRM-stored customer data, meaning bot conversations can be tailored to your customers’ location, language preferences, and even shopping behavior. Not only does this allow you to build personalized customer support experiences, but it is also a huge opportunity for providing proactive customer interactions using automation.

Some automation providers offer tools that use conversational AI to analyze your historical support data. This tells you the questions your customers are really asking — giving you a data-driven roadmap of which intents (like “order status”) to automate first. And, instead of simply reacting to requests, you can help customers to self-serve by pushing information to them. This might be through FAQ pages, how-to videos, and tutorials or guides.

Automation can also ease ongoing problems. By tweaking your bot’s dialogue flow, support teams can proactively provide solutions — such as linking to troubleshooting pages in the chat widget — and acknowledge customer concerns. When Covid-19 hit, our customer Finnair was able to mitigate the strain of this crisis on travelers by changing their virtual agent’s welcome message, so customers could instantly choose whether their issue was pandemic related.

Learn more about the pivot to proactivity in customer service and further CX trends to watch out for this year.

3. Conversational AI saves everyone time

Automation platforms powered by conversational AI can fully automate simple requests, and significantly reduce average handle times (AHT) and first response times (FRT) for more complex queries. 

A password reset, for example, is easily automated end-to-end, meaning that a virtual agent or automated messaging flow will be able to not only identify what the problem is, but also provide the solution to that problem immediately. 

Your human agents are no longer tied up with simple questions and spend much less time on more complex tasks. Even for actions that require a human touch, such as hypersensitive banking data, conversational AI can help reduce the manual work involved by pulling verification data from your CRM, such as order numbers, card member status, or contact information.

4. Conversational AI enables your business to scale intelligently — without scaling your team

Like humans, conversational AI learns languages by following grammar, semantics, and building a vocabulary. Unlike humans, conversational AI is able to learn any language at equal speed.  At Ultimate, our AI-powered virtual agents can be trained in any one language, will instantly understand incoming chat and email messages in 108 others. This saves valuable time and resources for businesses looking to grow internationally. It’s what:

  • Drove Romanian igaming operator Superbet’s growth in Central European markets
  • Helps fintech company TransferGo serve their international customer base in 7+ languages
  • Paved the way for London-based stationary start-up Papier to expand across the pond

Get started with conversational AI today