Guest Post: How Will Conversational AI Transform Customer Experience?

Laura Mogenytė explores how conversational AI is transforming the customer experience in 2023 and beyond.
01/09/2023

Written for the Thoughts by Andrei blog by Laura Mogenytė

It’s common knowledge that artificial intelligence has penetrated practically all spheres of our lives. Self-driving cars, search, navigation, and chatbots are just some of the numerous ways to apply artificial intelligence in practice.

Today we will focus on virtual assistants and conversational AI in general and how it is revolutionizing the customer experience as we speak.

Empowering the customer

Traditionally, customers contacted the company directly or a subcontractor who dealt with things like customer complaints or questions. Within this context, the company was the potential source of the solution to the problem, and in case any difficulty arose, the company was also the one to take the brunt of the criticism. 

On the other hand, conversational artificial intelligence (or “conversational AI”) revolutionizes customer experience by giving power to the customer. Instead of relying on the company staff for the solution of problems, the customer is given the opportunity to solve problems independently, with the help of well-designed AI. 

There is perhaps only one weak side of conversational AI. In some contexts, possibly when customers are finding it very important to talk to a real person to receive empathy and human-to-human understanding, in such situations it seems that customers are reacting negatively to chatbots, provided of course they are aware they are talking to a chatbot. It’s interesting that even in these situations (i.e. when customers are really finding it important to talk to a human being) if unaware they are talking to a chatbot, customer satisfaction remains high.

Thought by Andrei: Customers should always be informed that they are conversing with conversational AI and not a human. It sews distrust when the customer finds out later in the conversation that it’s only a virtual assistant. Furthermore, it’s really important to state that not all conversations should be automated. It’s really important for organizations to still have a customer-first plan for cases that virtual assistants can’t easily solve. 

Removing the frustration

Customers who experience problems with products/services they purchased from a company would often encounter frustrating difficulties in attempts to solve their issues. Typically, customer support teams are hard to reach, once you reach them you’re put in an endless queue, and even when you finally get the opportunity to talk to someone this isn’t a guarantee that your problem will actually be solved. 

The logical consequence of all this is frustration, which in turn shapes the whole customer experience and makes a customer less likely to repurchase or recommend a product or service. One frustrated customer is enough to start a big fuss; Jeff Jarvis, for instance, was able to make a big dent in Dell’s reputation by sharing his experience with Dell’s customer service. 

Sometimes it happens that customers have similar sorts of problems; the way their problems were traditionally handled was such that they had to go through the same, long, and frustrating process every time, even though the solution stays roughly the same. Conversational artificial intelligence can be incredibly helpful in this respect as, thanks to big data analysis, it can look into all sorts of problems and all sorts of solutions and uncover the underlying patterns to help automate it. 

Multimodal Conversational Artificial Intelligence

Multimodal conversational AI is an incredibly interesting avenue of research and real-world application of AI. Instead of focusing only on the exchange of utterances over a single channel or modality (for example, solely interacting via text chat), it integrates two or more synchronized channels or modalities of communication (e.g. text and audio messages), which makes communication between the customer and AI more natural, engaging, and comprehensive. 

Listed as #3 on LinkedIn’s list of 41 Big Ideas that will shape 2023, this technology is already being used to deliver better experiences in fields like healthcare, travel and hospitality, retail, and more. With so much potential, there’s no wonder companies and brands are highly interested in this technology to improve internal operational communications and customer service, regardless of the industry or use case. Having that said, we at NLX specialize in multimodal technology and firmly believe it’s the future of better, more engaging automated conversations. 

Thought by Andrei: Multimodal is more engaging, more lifelike, and more end-user-centric. We’re seeing more and more companies integrate multimodal conversations into their internal and external automated communications for a better all-around experience. 

Personalization

Simply put, Conversational AI is a technology that gathers data from customer interactions and offers answers based on users’ previous responses, personalizing the conversation. Personalization is already a standard in numerous spheres, such as online marketing or social media  – professionals use a variety of tools and even VPN services to change their browsing location to better understand the perspective of their customer. We know that personalization can improve customer experience and increase satisfaction, having the potential to influence customers’ emotions and cognitions related to the company. 

One way to provide personalized Conversational AI services is to analyze the existing responses of customers in order to classify customers into specific implicit user profiles. Based on these user profiles, Conversational AI can uncover implicit patterns of customers’ activity and offer relevant options in the dialog, immensely helping in the process of defining the needs and wants of customers. Companies like H&M and Lego deployed Conversational AI assistants on Kik and Facebook Messenger, respectively, which proved to be of immense help to customers. 

H&M Digital Stylist asks potential customers about their preferences and then recommends different products; it integrates the typical chatbot function with a large database of images of H&M products, sending relevant images to users who can simply communicate with H&M’s Digital Stylist, without the hassle of scrolling through hundreds and hundreds of products on the main website. 

Very recently, a group of researchers analyzed 41 studies that sought to examine the link between chatbots, personalization, and customer loyalty and trust. The main conclusion is that chatbots remain effective in increasing customer loyalty and trust, even when we look at different studies, contexts, and applications.

Thought by Andrei: Personalization is key to creating a more successful automated conversation. It shows the customer that the company recognizes them not just as a number or the general public, but actually for the person they are and their unique relationship to the company. 

Conclusion

In our digital age, where more and more people are tech-savvy, it’s only a matter of time before we begin talking to AI-powered machines as we talk to human beings (for example see the recent advancements by Chat GPT). Conversational AI is one important step in this direction, with numerous applications across very different industries and modalities.