What is Conversational AI?

Conversational AI is a form of artificial intelligence specifically designed to deliver more natural and engaging touchpoints between brands and their customers. The  space includes everything from speech-based assistants like Alexa that respond to human language, to AI chatbots and messaging apps.

It is driven by words, both in sentences, like when you ask Siri a question, and by themselves, like when you give an answer to an intelligent IVR. The power of this platform lies in how it can deliver more personalised and immersive interactions with countless customers.

As the customer journey evolves and extends into new environments like messaging, social media and mobile, today’s contact centres are changing. Businesses are being forced to re-think the way that they reach customers, engage them, and stay with them throughout the entire buying journey. This is the driving force behind an industry projected to reach a value of at least $11 billion by 2023

Conversational AI is the driving force behind an industry projected to reach a value of at least $11 billion by 2023. Click To Tweet

The question is, how can you implement conversational AI into your customer engagement strategy, and what kind of benefits can you expect to see from this upgrade?

The Growth of Conversational AI


Technology has made it easier than ever for customers to interact with businesses. People can order products on their phone, request services at the tap of a button, or even reach out to a brand through a voice-assisted machine-like Google Home.

The development of natural language processing has been one of the most critical milestones in the artificial intelligence roadmap, at least for contact centres and customer service groups. Now that robots can understand and respond to customers, businesses have a new way of serving their audience. Gartner suggests that 15% of all customer service interactions will be handled by artificial intelligence within the next 2 years.

Credit: Gartner

More importantly, conversational AI doesn’t just understand the voice of the customer, it captures and analyses it for organisations too, allowing them to achieve more profound insights into what their consumers think, feel, and need. This information could be the key to transforming the bottom line of any cloud contact centre.

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Why is it Important for Customer Engagement

By providing businesses with a better overview of their customers, and delivering a new method of day-to-day communication, conversational AI is on the first line of the battle for customer engagement. Today, engaged customers drive loyalty, which leads to better revenue. A 2% boost in customer retention can have the same impact on your bottom line as reducing operational costs by 10%.

This improves customer engagement by allowing customers to ask for exactly what they need from you using their own terminology and words. What’s more, with NLP, it’s not just a one-way conversation; your AI can book appointments, up-sell new products and make recommendations too.

  1.    Reliable 24/7 support


When your customers want assistance, they want it fast. One of the biggest advantages of this solution is its instantaneous response rate. According to some studies, answering customer queries within an hour or less can improve your chances of converting a lead by 7 times. What’s more, the quicker your customers get results, the happier they’ll be with your service.

  1.    Meets customers where they are


Your customers are already using AI platforms and messaging systems in their everyday lives. Younger generations are particularly fond of messaging compared to other communication methods. With conversational solutions, you can connect to your clients where they most want to interact with you. Currently, 30% of customers expect to be able to use a live chat option when they visit a business website.

  1.   Easy to scale


Conversational AI doesn’t just give you an excellent solution for customer engagement today; it also provides you with a future-proof strategy that can scale with your business. As your company evolves, you can add new bots and solutions to your network thanks to the flexibility of the cloud contact centre. You can even experiment with new and disruptive AI-based technology like sentiment analysis and predictive analysis as they emerge.

A survey conducted by LetsLinc found that around 87% of retailers believe that adding artificial intelligence to their customer service strategy will lead to higher satisfaction levels. 59.4% also said that this would help them to save money, while 47.8% believed the technology would increase customer lifetime value.

Why retailers are using conversational AI in contact centres?


Improving customer service


Saving money


Improving net promoter score


Increasing customer lifetime value


Enabling personal customer-to-brand interactions


Increasing revenue

Source: Retail customer service and AI survey | Brandgarage in partnership with Linc.

Messaging systems like this have the power to transform every aspect of how you connect with your customers. Currently, over 2.5 billion people are using messaging services regularly, which just goes to show how popular this communication strategy can be. What’s more, businesses are beginning to see the value of AI for themselves. A company called “Dream 11” managed to handle over 1 million queries using AI chatbots during IPL 2018 with only 30 people in their team.

With AI in your service strategy, you’ll always be prepared to deliver the service your customers need, at a time that suits them. Unlike humans, conversational appointments never get tired of answering messages or updating your CRM, and they work at 100% efficiency through all hours of the day.

Adding Conversational AI to Your Contact Centre

Conversational AI systems are smart enough to minimise most of the friction commonly found in customer service experiences, and the technology is getting better all the time. Studies show that some customers even prefer AI-powered self-service when it’s available.

What’s more, when used correctly, conversational AI doesn’t just lead to better experiences for customers; it can also mean that your employees spend less time dealing with tedious customer service tasks too. 

  • Gather and qualify leads that come to your website by answering their questions and directing them along the sales funnel.
  • Collect useful data about your customers from their conversations, which you can use to alter and improve your service and sales strategies.
  • Keep customers engaged by providing them with plenty of reliable ways to contact your brand and answering any questions they might have about your product or service.
  • Free your employees up to complete more important tasks by taking over and automating repetitive and monotonous jobs in the contact centre.


The most important thing to remember is that conversational AI is just one part of the customer engagement puzzle for contact centres. Forrester Research suggests that today’s consumers still need the option to interact with humans. A comprehensive cloud contact centre strategy will combine automation solutions with conversational AI, and an empowered human workforce, equipped with the tools they need for excellent productivity.

Learn more about how contact centre technology can create a better experience for customers and agentsLearn more

Originally published Feb 01, 2019, updated Jan 16, 2023

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