8 reasons why conversational AI chatbots are the ultimate customer care problem-solvers

Manthan Jain

April 11, 202311 min read

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Artificial Intelligence (AI) has become increasingly ubiquitous in our daily lives, facilitating most of our interactions with brands, from entertainment to after-sales services.

As consumers become more accustomed to the convenience and immediacy of technology, they expect quick resolutions and greater control over the process. With so many businesses and services available at the click of a button, customers have more options than ever before. Additionally, social media, review sites and online forums make it easier for customers to share their opinions about a business. Therefore, integrating conversational AI into customer service is no longer an option but a necessity.

According to an online survey conducted by Gartner in January and February 2022 on customer service and support (CSS) with 50 participants, over half of the respondents (54%) reported using some type of conversational AI platform, such as chatbots or virtual customer assistants (VCAs), for customer-facing purposes. Furthermore, by 2027, chatbots are projected to become the primary customer service channel for approximately a quarter of organizations.

Conversational AI chatbots are computer programs that use artificial intelligence to converse with people. They can answer questions, provide information and help with customer service issues.

Through the use of natural language processing and machine learning, conversational AI technology enables companies to develop individualized and lifelike exchanges with their customers. This allows chatbots to quickly grasp and address customer inquiries and concerns. Chatbots can even provide 24/7 support, meaning that customers can get help whenever they need it without having to wait for business hours.

Additionally, the global chatbot market size was valued at USD 5132.8 million in 2022, according to Grand View Research. It is expected to expand at a compound annual growth rate (CAGR) of 25.7% from 2022 to 2030, fueled by the growing use of chatbots for customer service activities by businesses, with the aim of cutting down operating costs.

Therefore, it is crucial for your business to leverage this technology to stay competitive and deliver a better customer experience.

Table of Contents

8 compelling reasons why chatbots are the ultimate answer to customer care

Are you still hesitant about adopting chatbots for your business? If so, we've listed the primary benefits of chatbots in customer service that we believe will convince you of their exceptional value.

1. Instant support 24/7: Chatbots offer customers round-the-clock, instant support ensuring that help is always available without delays. This is particularly beneficial for customers who require assistance outside of normal business hours or those seeking prompt answers to their queries. Moreover, chatbots are designed to provide consistent service, regardless of the volume of inquiries or the time of day, thereby enhancing customer satisfaction and fostering loyalty.

A screenshot showing a chatbot's response to a customer's question.

2. Reduced customer service costs: Gartner predicts that by 2026, the adoption of conversational AI in contact centers will lead to a reduction in agent labor costs amounting to $80 billion.

Conversational AI chatbots provide a cost-effective alternative to human customer service representatives, as they require lower staffing costs. This allows you to optimize your resources and allocate funds to other crucial areas of your operations, resulting in enhanced profitability and a more streamlined business model.

Chatbots can also help reduce customer service costs by automating routine inquiries and providing quick, accurate answers to customers' frequently asked questions. This can significantly reduce the need for large customer service teams and free up human resources for more complex issues. Additionally, chatbots can reduce the time and costs associated with training and onboarding new customer service representatives.

Moreover, chatbots can help identify and resolve customer issues before they escalate, minimizing the need for costly refunds or returns.

3. Multilingual support: According to Unbabel's 2021 Global Multilingual CX Survey, 68% of consumers are willing to switch to a brand that provides customer support in their native language. Furthermore, 64% of respondents said they would be willing to pay a premium for products or services that offer a customer experience in their native language. These findings underscore the importance of providing multilingual support to enhance customer satisfaction and drive business growth.

Chatbots can be programmed to offer multilingual support, making them invaluable for global companies seeking to expand their reach and engage with customers in different regions of the world. With this capability, you can communicate with customers in their preferred language, increasing customer satisfaction and loyalty. Moreover, chatbots can provide real-time translation services, enabling seamless communication with customers who speak different languages. This not only enhances the customer experience but also promotes cross-cultural understanding and fosters a more inclusive business environment.

A screenshot showing a chatbot's response to a customer's question in the customer's native language.

4. Increased efficiency: The use of chatbots can significantly increase efficiency by allowing them to handle multiple customer inquiries simultaneously, eliminating the need for customers to wait in long queues for assistance. This not only improves the customer experience but also enables you to respond promptly to inquiries, leading to streamlined operations. By increasing efficiency, chatbots can help you save costs by reducing the need for large customer service teams. This, in turn, allows you to focus your resources on other critical areas, leading to overall business performance improvement.

5. Personalized customer experience: Chatbots have the ability to analyze customer data and interactions, enabling them to offer tailored responses and personalized recommendations that meet the specific needs and preferences of individual customers. This level of personalization can range from suggesting products based on purchase history to providing customized solutions for complex issues.

For instance, a retail business's chatbot can recommend products based on a customer's browsing history, while a healthcare provider's chatbot can offer personalized guidance on managing a particular medical condition. By providing personalized experiences, chatbots can help you build stronger relationships with your customers, which can lead to increased loyalty and customer retention.

6. Omnichannel customer support strategy: According to Juniper Research, chatbot messaging app usage is predicted to increase significantly from 3.5 billion in 2022 to 9.5 billion by 2026, representing an impressive growth rate of 169%. This growth is expected to be primarily driven by the increasing popularity of omnichannel retail strategies among e-commerce companies. Therefore, implementing an omnichannel customer support strategy is essential for providing contextual conversations to customers across all platforms.

Conversational AI can be crucial in ensuring consistent support by providing automated responses that engage customers in meaningful interactions. By leveraging multiple channels such as social media, messaging apps and email, you can reach your customers wherever they are and provide them with a seamless experience. For example, a chatbot integrated with social media can respond to customer inquiries on Facebook or X, formerly Twitter, while an email chatbot can assist customers with support tickets.

7. Collect feedback: Chatbots can be programmed to ask for feedback at the end of conversations, which not only helps companies improve their services but also shows customers that their opinions matter. After resolving a customer issue, the chatbot can ask the customer to rate the interaction on a scale of 1 to 5 or leave a written response. AI chatbots can then analyze this feedback to identify commonly negative or positive words.

To incentivize feedback, chatbots can offer rewards such as discount codes or special offers in exchange for survey participation. This can encourage more customers to leave feedback and provide valuable insights for companies.

Moreover, analyzing chatbot conversation logs can help you identify frequently asked questions, popular products and features and common problems customers face. This analysis can provide valuable insights into customer needs and preferences, enabling your product teams to make more informed decisions about your company’s product or service offerings.

8. A/B testing in customer messaging: Chatbots assist you in gathering engagement data and refining your messaging strategy by offering support throughout the customer journey. Some chatbot platforms even facilitate A/B testing, allowing you to experiment with different message styles, tones and word choices to identify the most effective means of connecting with customers. For instance, you can test varying greetings or calls to action to find those with the highest engagement rates.

Chatbots can also be employed to test various product or service offerings. A company may utilize a chatbot to present a product discount and monitor customer reactions, for example. If successful, the promotion can then be expanded on a larger scale.

Discover why AI is a must have for Care Agents

4 ways your business can benefit from conversational AI

Here's why you should consider it: Conversational AI not only enhances customer experiences but also offers numerous business benefits.

1. Customization: A key advantage of conversational AI is its ability to be tailored to your business's branding and tone of voice. This allows you to design chatbots that reflect your brand's language, tone and style, ensuring a consistent customer experience across all touchpoints. This consistency can boost brand recognition and customer comfort, ultimately leading to increased satisfaction and loyalty.

For instance, a bank could develop a chatbot with a friendly and conversational tone, incorporating elements such as its logo and color scheme. This would make the chatbot feel like an extension of the bank's brand while offering seamless customer service.

2. Valuable insights: Conversational AI has the ability to analyze and process large amounts of customer data, providing you with valuable insights. These insights can help you understand customer behavior, preferences and pain points. By identifying patterns in customer inquiries and interactions, you can gain a better understanding of what your customers need and your product teams can improve your company’s products and services to meet those needs.

For instance, if you notice that a large number of customers are contacting your customer service department with the same issue or question, you can use this insight to improve your website or product documentation. This would make it easier for customers to find the information they need without having to contact customer service. Alternatively, you can create targeted marketing campaigns that address the specific issue or question using the insight gained from conversational AI analysis.

3. Integration with other systems: Integrating conversational AI with other business systems and processes, such as CRM and inventory management, can help you streamline customer service operations and improve efficiency. For example, when a customer contacts customer service with an inquiry, the chatbot can automatically access relevant customer data from the CRM system. This provides a personalized and efficient service, as the chatbot can use the information to resolve the issue without the need for a human agent.

Moreover, conversational AI can automate repetitive tasks, such as order tracking and inventory management. This automation allows human agents to focus on more complex issues that require their expertise. As a result, you can provide faster and more accurate service while also reducing the workload for your agents.

4. Scalability: The growth of social commerce has been remarkable, with sales made through social media platforms estimated to be worth $992 billion in 2022. By 2026, this figure is projected to rise to $2.9 trillion.

As messaging platforms like WhatsApp and Facebook Messenger become increasingly popular for customer service and sales, conversational AI provides a scalable solution for managing customer inquiries on these channels. This means that you can handle a larger volume of inquiries without having to hire additional staff. As a result, conversational AI offers cost savings and increased efficiency, allowing you to focus on other important areas of growth.

The future of conversational AI in customer service

While many companies have attempted to replace human agents with AI-enabled mechanisms, customers still prefer to talk to human agents who can understand their problems and provide satisfactory solutions. To deliver personalized experiences while maximizing growth, brands now understand that a hybrid approach, combining chatbots with human agents, is the way forward.

One example of hybrid customer service that benefits both customers and businesses is self-service. Customers can resolve their issues on their own time, while agents can focus on problems that require direct intervention. It's essential to prioritize human needs and make customer service as agile and flexible as customers expect with the help of AI-powered technology. Humans and bots have different skill sets, with human agents being able to empathetically recognize when a customer is upset, while AI-powered virtual agents can quickly assemble data to provide immediate answers.

Ultimately, a hybrid approach that combines human expertise and AI-powered technology can lead to enhanced customer experiences and business growth. As conversational AI technology continues to improve, the future of customer service will likely involve more sophisticated chatbots capable of handling a broader range of inquiries, working alongside human agents to deliver optimal customer experiences.

Interesting read: How to Use Conversational AI for Customer Service

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