Hardik Makadia
Hardik Makadia 16 August 2021
Categories Technology

Conversational AI - Why, How, What and Where

Conversational Artificial Intelligence (AI) is the process that utilizes Machine Learning to interact with customers in a way that feels organic and customized. The following sections inform you about conversational AI, its functionality, ways to implement it, and where to find it. In short, it discusses the four keys of Conversational AI - Why, How, What, and Where. Explore this article to seek answers to all your queries and gain a perspective about the fundamentals of Conversational AI.


Conversational AI (Artificial Intelligence) has revolutionized the customer service landscape. Chatbots and virtual agents are examples of conversational AI that has completely changed the customer service experience.

Conversational AI congregates three individual technologies - a voice recognition process, a messaging application, and artificial intelligence.

Voice recognition with AI has made an enormous impact on technology. A software feature that can carry out human-like discussion is called a “bot,” also commonly known as “chatbot.”

Products like Google Home and Amazon Alexa that provide a virtual assistant experience are examples of conversational AI.

Why do Businesses Need Conversational AI More Than Before?

Conversational AI can have extensive use in your business. Lead generation, demand generation, issue-resolving process, and customer care services all can be managed with the help of conversational AI. This technology can also facilitate your sales team to increase revenue, bringing in the power of conversational marketing.

Listed below are few examples of how conversational AI can fuel your business in the contemporary world:

Customer Care Service

Customers can interact with your company regarding any issue with the help of this technology. Chatbots and voice bots have become an integral part of the customer engagement drive. Machine learning (ML) and AI can understand and analyze human speech, emotions, and language. It will enhance your customer service experience. The technology can scale the customer requirement and bring in meaningful, matured, and seamless human interaction. 

Fueling Sales and Marketing Processes

With an increase in competition and customer demand, fulfilling the customer needs gets challenging. Here AI comes in handy, as it can help you manage customer demands, generate leads, convert those leads to potential clients, and boost the sales targets. AI will help you understand the customer profile and their preferences as it can gaze through the social media profiles of your clients. 

Enhancing the Decision-Making Procedure

The human mind is prone to fatigue with overloaded work pressure, and it can lead to errors. Machines, unlike humans, can do repetitive work with higher speed and accuracy. AI can make a better decision because they analyze a problem to its core. It can provide a better insight that may not be possible to the human brain, and therefore it enhances the decision-making process. 

Quick Response Time

Customers lack patience in today’s market, and managing grievances storming in from various profiles, social media platforms, websites, and phone calls can be tedious at times. Conversational AI-based tools like chatbots can manage all of them and ensure they get a quick and effective response. It can effectively handle a large number of issue tickets from customers.

Customized Customer Experience

Every customer is different in nature and expects personalized treatment. They can have unique problems, and not all customers can be dealt with in the same manner. Conversational AI can identify each individual based on their profiles, likes, dislikes, and preferences. They can be dealt with in a way best suited to them, and hence, it creates a personalized customer experience. 

Fuelling High Revenue Gain

The ultimate aim of any business is to gain revenue, and hence, conversational AI can be of great use. It eases human involvement in the customer service process, thereby reducing the overhead charges. It can also serve a great deal in advertising your product, so it reduces your marketing expenses as well. A happy and loyal customer will ensure your revenue growth graph is always towards the sky.

How are Businesses Implementing Conversational AI in Their Organizations? 

Here are few tips to understand how you can implement Conversational AI in your business entity.

Develop a Strategy

Develop a strategy that incorporates the following parameters:

  • Understanding customer profiles so that the AI can appeal to them

  • Map your customer journey from the lead generation process to the onboarding process

  • Initially, keep the scope of AI utilization limited and increase the scope gradually

  • Understand your goals and the things you want from conversational AI

  • Analyze how this implementation will impact your organization’s environment

  • Gather information and data about the system you want to implement

Choose the Optimum Technology

Before implementing the conversational AI process, understand which technology will gain you the most benefit. Choose a solution provider that uses the following tools:

  • Artificial Intelligence or AI

  • Machine Learning or ML

  • Natural Language Processing or NLP

  • Live chat feature

  • Sentiment analysis feature

  • Analytics dash-board feature

Conversation Web Design

A poorly designed conversational AI tool can lead to disappointment in the customer service arena. Keep in mind that your chatbot for small or big businesses should function without any failure. Some solution providers will only sell you the platform, and you will have to design the conversation process, while others will sell you a well-designed conversational AI tool. You need to ensure the following parameters:

  • The tool is in line with your business model, goal, and brand value

  • Your customers are happy with the tool

  • Seamless functioning of chatbots

  • Genuine use of pictures

  • Effective flow of conversation

  • Ensure you are comfortable and satisfied before you implement the AI tool

Seamless Integration Process

You must ensure that there is a frictionless and easy integration of conversational AI tools into your system. Here is a list of integrations you ought to have with your provider:

  • Your company website

  • CRM feature

  • Calendar

  • Payment systems

  • Email and messaging applications

In a nutshell, draft a strategy about what you intend to achieve through conversational AI. Understand what your customers will gain through this and how this will impact your business environment. After doing all of these, you will be in a position to implement conversational AI in your business.

Understanding the Fundamentals of Conversational AI

The following sections help you gain insight into the concept of conversational AI and how it works:

What is Conversational AI?

Conversational AI refers to a collection of technologies that facilitates computers to understand, process, and react to voice or text inputs in accepted and natural ways and is ideally used in combination with bots or Intelligent Virtual Agents (IVAs).

It helps people interact with complex systems in more straightforward and quicker ways if it is done correctly. It also helps business entities offer personalized customer engagement and support.

In today’s world, every brand from various sectors is looking to develop conversational AI-driven solutions within their business organization. Conversational AI has a bright future in the field of home automation, automobile, advertising, and e-learning industries.

What are the Different Components of Conversational AI and Their Importance?

For a conversational AI to happen, it needs many backend algorithms and workflows. Machine Learning and Natural Language Processing are two significant components.

Machine Learning or ML 

Machine Learning is a collection of computer programs, algorithms, data sets, and coding features that perpetually improve themselves with everyday experience. As the input grows, the AI platform machine gets enhanced at identifying patterns and workflow to make better forecasts for the future.

Natural Language Processing or NLP

NLP is the technology that helps computers gauge the logic of human language and speech. NLP facilitates computers to perform repetitive tasks efficiently without any human interference. It combines the power of computer technology and human language to build an intelligent interactive platform to comprehend human inputs through texts and speeches. 

NLP works in four major steps:

1. Generating an input

2. Analysis of the input

3. Managing responses

4. Refining and fine-tuning responses over time

Where is Conversational AI Used? What are Some Popular Real Case Scenarios?

Conversational AI is used everywhere where information is needed at a faster rate. It can also be used in places where high volumes of repetitive tasks are managed.

AI-powered online chatbots are the most popular form of conversational AI, but there are also other use cases. Some of the examples are listed below:

Ecommerce Applications

Conversation AI has wide use in the field of ecommerce. It is kind of a virtual shopkeeper helping potential customers find their perfect product. The ecommerce platforms help the buyer by asking them questions like, what are you looking for, which brand of goods you prefer, your budget, preferable color, etc. These are examples of conversational AI, which takes the customer buying experience to the next level.

A classic example is Aveda, a popular botanical skincare brand that leveraged conversational AI to streamline its online booking system. Aveda created an AI chatbot for Facebook Messenger, the Aveda chatbot, with the advanced NLP (Natural Language Processing) engine. Within seven weeks of the launch of this chatbot for business, Aveda witnessed 6,918 additional bookings and a 33.2% enhancement in the booking conversion rate.

You can find voice-to-text features available with various online shopping platforms, and it is also a classic example of conversation AI. The overall buying experience involves searching, selecting, buying, and paying for the item. All of this can be AI-driven.

Online Customer Support

Online chatbots are now taking over human agents in the field of customer support systems. The features like Frequently Asked Questions (FAQs), How may I assist you?, Virtual chat boxes, and messengers, are examples of conversational AI. Customer feedback responses, ticket-raising process, and complaint registration are all AI-driven nowadays.

The entrepreneurial event organizing company Slush deployed a chatbot for business for handling customer queries. They observed that this new intervention has effectively handled over 60% of all customer inquiries. Since the AI chatbot was available 24x7, it solved customer queries in an instant. Consequently, Slush witnessed a 55% jump in the conversion rate.

An example of this use case is Slush, an event organizer that conducts entrepreneurial events worldwide. The chatbot for business on Slush's website handled a significant 64% of all consumer inquiries efficiently, owing to the 24/7 availability of the AI chatbot on Slush's website. Slush saw a sharp rise of 55% in conversations with the company than the past year.

Human Resources Activities

Many procedures like onboarding, candidate KYC verifications, and employee training can be done with the help of conversational AI-driven tools. Few companies screen candidates by taking an online test, which conversational AI can extensively manage. 

Conversational Marketing

AI chatbots on websites guide a potential customer in an enhanced way and in real-time. After they go to the website, these chatbots ask them a few questions and answer them as well to make their job easier. 

These chatbots can do all the following activities without any human intervention:

  • Answer in real-time

  • Answer a wide range of questions

  • Generate genuine leads and eliminate unnecessary leads

  • Schedule meetings for further sales processes.

Internet of Things (IoT) Devices

These are prevalent devices nowadays in every household. Devices like Google Home, Amazon Alexa, Siri, and Cortona, can recognize your voice commands and perform errands for you. Making a call, booking reservations, controlling your electrical gadgets, and managing your professional work can all be done with the help of these conversational AI devices.

Software Program Application

Mail assistance, auto-correct, auto-complete search on search bars are few examples of use cases in computer software. Many tasks in your personal life and professional life can be performed with these tools.

How are Chatbots and Conversational AI Different from Each Other?

Chatbots for business are mainly used to cater to simple queries, whereas conversational AI can perform more cumbersome functions. 

Chatbots can provide convenient and immediate responses, however not all chatbots use conversational AI. It generates responses that are previously scripted. However, with conversational AI, the responses may change depending upon the interaction. Conversation AI can be understood as the brainpower within the chatbot.

The below table will give you a comprehensive idea:


Conversational AI

It is keyword-driven.

It is powered by deep learning that facilitates easy measurement.

Responses are based on manually scripted rules.

Trained to accommodate different human behavior and respond accordingly.

Difficult to measure and does not read spelling mistakes.

Easy to measure and understands spelling mistakes and short-forms.

To enhance performance, companies will have to update rules from time to time.

Learns with experience and previous data.

Chatbots for small businesses will include common questions that can be manually scripted, but if your business involves a more customized conversation style, you have to choose conversation AI over chatbots.

Depending on your budget, team requirement, customer requirement, and level of business operations, you can make a selection between chatbots and conversational AI or both.


Conversational AI will help you get more customers and leads promptly and competently. Many organizations are adopting conversational AI processes for their sales and customer support divisions to have transparent, smooth, seamless, and efficient communication with their customers.

These AI-driven platforms will take customer engagement and customer management to the next level. The tools will streamline your process, understand your customer needs, lower your overhead costs, and generate business growth in more than one way. 

The proficient team of WotNot can easily integrate conversational AI into your system and offers you the best technical solutions.

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