How Conversational AI can Automate Customer Service


Businesses are under constant pressure to deliver exceptional customer service. As customer expectations evolve, businesses are turning to innovative solutions to meet these demands efficiently. Conversational AI is one such innovative solution that has emerged as a game-changer.

Using the power of advanced Natural Language Processing (NLP) and Machine Learning (ML) algorithms, Conversational AI is transforming customer service by offering instant responses, cost-efficiency, scalability, and personalized experiences.

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The conversational AI market size is expected to grow at a compound annual growth rate of 22.6% to increase from USD 10.7 billion in 2023 to USD 29.8 billion by 2028. In the past few years, Conversational AI has disrupted the contact center industry. This has given brands an opportunity to rethink their customer service strategy.

What Is Conversational AI?

It is a set of technologies and tools that enable machines to engage in human-like conversations with users. ChatGPT, for example, is a type of Conversational AI, combining various branches of AI, including NLP, ML, and speech recognition. These technologies work together to understand and respond to user queries and commands in a way that mimics natural human conversation. Chatbots, virtual assistants, and voice-activated systems are all classified as Conversational AI.

The technology is rapidly reshaping customer service.

Understand User Input: Decipher the intent, context, and sentiment behind user messages, allowing for meaningful interactions.

Generate Contextual Responses: Generate responses that are contextually relevant to ensure conversations flow naturally.

Learn and Improve: Through ML, continuously learn from interactions, improving their accuracy and ability to handle complex queries over time.

How Generative AI Is Revolutionizing the Field of Conversational AI

Generative AI is at the forefront of transforming how we interact with AI systems, making them more versatile, context-aware, and capable of providing tailored solutions across a multitude of domains. 

Unlike traditional rule-based chatbots, these AI models can understand context, produce contextually-relevant responses, and adapt to the nuances of human language. This breakthrough has paved the way for more empathetic, engaging, and human-like conversations in applications ranging from customer support and virtual assistants to content generation and language translation.

How Conversational AI Helps Automate Customer Service

The value of Conversational AI in customer service becomes more evident with the various use cases it serves and the metrics that reflect its impact. Moreover, 74% of consumers prefer AI-powered support when they need instant answers to their queries.  

Ticket Resolution

Many customer queries involve common issues that can be resolved without human intervention. Conversational AI helps automate ticket resolution by providing quick and accurate answers to these routine inquiries.

With the technology, businesses can drastically reduce average ticket resolution time. This allows human agents to focus on resolving more complex issues and achieve faster resolution times. 

Self-Service Support

Customers prefer self-service options when seeking information or performing simple tasks. Conversational AI can guide users through processes such as account balance inquiries, password resets, or product information retrieval. 

This increases the percentage of issues resolved through self-service while improving efficiency and driving higher customer satisfaction (CSAT).

ALSO READ: 5 Ways Generative AI Is Transforming the Customer Service Game

Reduce Call Center Loads

Conversational AI can deflect incoming calls and emails by resolving issues through chat. This not only reduces the workload on call center agents but also improves response times for customers.

Less workload on call center agents helps in not only reducing costs and achieving scalability but also in delivering better customer experience and driving retention.

Product Information & Recommendations

While Conversational AI is often associated with customer support and post-sales service, its capabilities extend into pre-sales too.

It can serve as a knowledgeable sales assistant, helping potential customers gather information about products or services. Through interactive conversations, AI can provide detailed product specifications, pricing, and recommendations based on customer preferences. 

Proactive Engagement

Conversational AI can initiate proactive conversations with customers, such as sending order updates or collecting feedback. This approach strengthens customer relationships and drives engagement.

Proactive communication helps boost customer engagement and increases the likelihood of conversion.

Best Practices for Implementing Conversational AI

Whether it's in the pre-sales or post-sales phase, here are some best practices to maximize the benefits of AI-powered conversations.

Personalize Interactions

Leverage the data collected by chatbots to personalize interactions. Recommend products or solutions based on user preferences, and provide relevant content to improve the user experience and increase conversion rates.

Maintain a Human Touch

While AI can handle routine tasks and queries, there are situations where human intervention is essential. Implement a seamless handoff from AI to human agents when needed. Ensure that human agents are readily available to provide assistance, especially in complex scenarios.

Multi-Channel Support

Seventy-five percent of customers use multiple channels while engaging with businesses. Therefore, it’s essential to make Conversational AI support available on multiple channels, including web, mobile apps, messaging platforms, and voice interfaces. Customers appreciate consistency across channels and the flexibility to engage with AI wherever they are.

RELATED: What Is Omnichannel Messaging & How Does It Work


By automating routine inquiries and providing customers with instant assistance using conversational AI, businesses can enhance efficiency, reduce costs, and deliver exceptional experiences.

In today's competitive landscape, where customers expect fast and personalized support around the clock, Conversational AI allows businesses to meet these expectations, scale support, and gain valuable insights from customer interactions.