Chatbots Vs Conversational AI: What’s The Difference?

Published on 11/08/2020 by Anna Hammond

Most businesses are aware of the limitations of chatbots when it comes to engaging with customers. But moving to the next stage of automation in customer service involves getting to grips with the world of conversational AI platforms. This article explains:

  • How conversational AI works
  • The key differences between chatbots vs conversational AI
  • How to decide on the best digital dialogue application for your business needs.

chatbots vs conversational ai

How conversational AI works

When AI is applied to understanding and using human speech, the resulting technology is known as  ‘natural language processing’. Years ago, the attempt to get computers to communicate with humans began with training systems to apply complex sets of rules. 

Today’s conversational AI systems start with an understanding of the complexities and deep structures of human language. How conversational AI works is to use algorithms to get the system to learn continually from its interactions with humans.

These lifelike conversations are also using and collecting data, either from a business or from a third party. There’s huge potential for personalising interactions between customers and systems, as the AI system learns from its conversations with each individual. 

Key differences: Chatbots VS conversational AI

At this stage, some people will point to chatbots. However, when it comes to chatbots vs conversational AI, there are some key differences to consider.

Typically, the customer types in a simple question and the chatbot responds from its limited repertoire of pre-programmed rules and responses. Where a chatbot needs to have an explicit example of every way a customer might phrase a question, the AI system uses natural language recognition and is aware that a question may take several different forms. That also means that an AI system can take glitches, such as spelling mistakes, in its stride—whereas a chatbot might fail to recognise the query. 

Many businesses are already using chatbots to run various aspects of customer service. The resulting customer experience can’t be called a dialogue—it’s more a set of simplified questions and standard responses. Once the customer closes the bot, that’s the end of the dialogue. The next time they come to interact the bot has no memory of who they are and is unable to refer back to previous conversations.

Chatbots have limited understanding of context, such as the customer’s profile, their purchasing history, or where they are located. While most chatbots are text-based, many switchboards and call centres use voice bots. At the simplest level, the voice asks for simple information, the customer responds, and this triggers an action. Again, this will be a rules-based system with limited responses. 

How conversational AI enriches customer service

Effective conversational AI systems are capable of mimicking emotions, such as empathy or friendliness, in their choice of language to build a relationship with the customer through more personal interaction. 

When the conversation includes the use of customer or third party databases, to simplify a transaction, or to bring together information, the customer can benefit from a seamless service that makes their life much easier. For the business, costs can be reduced and human employees shifted from repetitive enquiries to more complex support tasks. 

If a business changes its products or services, chatbots have to be retrained. This isn’t a practical proposition for those businesses that have a high level of change. So when it comes to a chatbot vs. conversational AI, although the initial investment in AI may be higher, maintenance costs should eventually be lower. 

 Where to begin on your AI journey

We’ve looked at some of the key benefits of conversational AI. That still leaves the task of seeing what’s in the market and matching the platforms available to the business case in a  specific business. 

GetApp lists over 60 conversational AI platforms and allows you to set multiple filters. For example, among settings in the features list, you can specify multi-language, or integration with third-party applications if those are key requirements. You can also filter by the type of organisation you have, and the various devices you need to support. 

When looking at platforms, keep in mind how quickly this technology is changing and go for a system that can scale up to fulfil your business needs in the future. 

Using data to build your conversational AI platform

Conversational AI enables businesses to capture data from calls and customer interactions. It allows a business to link a current transaction to a past interaction, or to prompt for further business during a current call. But this data use comes with responsibilities to keep customer data safe. And in building its conversational AI system, a business needs to include its IT security advisers at an early stage. This ensures that transactions are appropriately encrypted, and all existing IT governance rules are applied to the new system. 

As these systems become able to draw on multiple data sources, it’s also important to have a clear idea of who owns which data, who can use it, and for what purpose. 

Conversational AI can benefit customers and businesses

Conversational AI is a game-changing technology for the customer service industry. The field is developing rapidly, and businesses need to choose a platform and system that will allow them to scale up quickly and to take advantage of the latest developments. Voice will be increasingly important, and natural language interactions between people and IT systems will include elements of human conversation, such as appropriate tone and emotion. A growing power of conversational AI will lie in its ability to collect and use data for the benefit of both customer and business. 

Looking for conversational AI software? Check out our catalogue.

This article may refer to products, programs or services that are not available in your country, or that may be restricted under the laws or regulations of your country. We suggest that you consult the software provider directly for information regarding product availability and compliance with local laws.


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