Over the past decade, there has been a paradigm shift from clicks to conversations in the way people interact online. As a result, businesses across verticals have increasingly started to use conversational interfaces to engage, serve and sell to their customers. One of the key conversational solutions that brands have started to implement for this purpose is the AI chatbot.

What is an AI Chatbot?



Chatbots have existed since the late 1960’s, but have evolved considerably over the decades, in terms of scope, complexity, and capabilities. 

The earliest chatbots were simply programmed with scripted responses based on a limited number of predefined user inputs (in the form of specific keywords and phrases). These chatbots lacked the ability to learn and were unable to retain context between sessions. They were typically used to automate very basic tasks, such as responding to FAQs.

The turning point in the evolution of chatbots was the advent of two key AI technologies – Natural Language Understanding (NLU) and Machine Learning (ML).

NLU enables a chatbot to understand user inputs in ‘natural language’, enabling the user to chat with the bot as they would with a human agent. ML, on the other hand, allows chatbots to train themselves on the basis of data to become better at interacting with customers and catering to their needs.

LEARN MORE: How Does a Chatbot Learn On its Own?

Owing to advancements in NLU & ML, we now live in the era of the AI chatbot or Intelligent Virtual Assistant – a sophisticated, interactive Conversational AI solution that can break free from the ‘company script’ to truly put your customers first.

An AI chatbot can understand precisely what your customer needs and take action to fulfill that requirement end-to-end – while getting smarter with each conversation.

Learn how the personality of an AI chatbot plays a key role in shaping customer

Why Use an AI Chatbot for business?

Customer experience is broken. Year after year, people face the same age-old problems while interacting with brands.


Long wait times

Getting help simply takes too long on conventional channels like phone or e-mail. This is often a frustrating experience for customers, particularly those who require instant support.


Inefficient customer service operations

Most contact centers are heavily dependent on human agents, who can only cater to a limited number of customers in a day. This makes it difficult to scale up customer support, without a significant increase in manpower. The quality of service that customers receive also varies based on the competence and knowledge of the agent.


Disconnect between online and offline buying

Brands with both an online and offline presence often lack consistency in customer experience, which can be jarring for customers. Moreover, while online shopping offers convenience, it lacks the personal touch of an in-store sales clerk.


Lack of personalized human attention

Due to the sheer volume of queries, human agents are often unable to offer dedicated and personalized attention to customers with complex issues, leading to a poor experience.

How AI Chatbots Can Help

The traditional approach to solving these customer experience problems would be to hire additional human resources. But that means incurring substantial hiring, training and retention costs. It also does not solve the issues that arise from an agent’s lack of knowledge or competence.

A better approach? Implementing an AI chatbot solution.

AI Chatbots enable brands to exponentially scale up their customer support. Around 80% of inbound support queries and requests are FAQs and routine tasks. An AI chatbot can resolve these end-to-end, with no need for human intervention. This allows human agents to focus their attention on solving more complex customer issues.

A single AI chatbot can handle the same volume of queries that 600 human agents would handle in a month. This helps contact centers significantly slash operating costs, by enabling them to scale up without having to invest heavily in recruitment, training and retention.

AI chatbots also lack the limitations of human agents. They are not constrained by ‘office hours’ and are available to resolve customer queries 24/7. They eliminate the scope for human error and/or incompetence in customer interactions. They enable brands to offer customers a consistent experience, that does not vary with the knowledge and capabilities of individual agents. AI chatbots also have the ability to learn over time from every customer interaction and become adept at dealing with a wider range of scenarios.

AI chatbots also facilitate conversational commerce – bringing the experience of interacting with a helpful and knowledgeable in-store sales clerk to online shopping. This significantly improves customer experience, helps maintain consistency in service across a brand’s offline and online stores, and ultimately boosts sales.

LEARN MORE: 5 Signs Your Business Most Definitely Needs A Chatbot

How Haptik’s AI Chatbot Solution Works

Haptik’s full-stack Conversational AI platform enables us to comprehensively solve business problems end-to-end, and at scale. 

Our AI chatbot solutions are powered and supported by the following key components:


Commerce NLU

Our NLU Engine built from the ground up to specifically handle Commerce use cases. The Commerce NLU is what gives our AI chatbots the ability to effectively simulate the behavior of a sales assistant, guiding customers with relevant recommendations and nudging them towards a purchase. Its key capabilities include Domain Knowledge, Information Extraction, Sentiment Analysis of Reviews, Context Manager and a Recommendations Engine.


Care NLU

Our NLU Engine built from the ground up to specifically handle Customer Care use cases. The Care NLU has been designed keeping in mind the pain-points that customers have while seeking support, their recent interactions with the business, and the task they are trying to complete. It allows flexibility to adjust with various processes businesses may implement to tackle different query types. The key components of this engine include Language Detection, ASR (Automatic Speech Recognition) Classification, Context Manager, Spell Correction and a Conversational Engine.


Our simple, but powerful, bot-builder tool enables us to swiftly develop new AI chatbots using pre-defined templates, in as little as 4 hours. It is a single interface to build, train and deploy chatbots. 

The tool operates on a node-based graph model and enables the creation of interconnected conversational flows.You can test your IVA and check for bugs and other issues in the conversational flow. Once the IVA is live, you can continue to use the tool to iterate and improve the solution on the basis of real data. The tool also allows the integration of dynamic API’s to enable your IVA to tackle complex use cases. 


An interface to facilitate intervention by human agents in conversations between the chatbot and customers, as well as to monitor conversations. It enables auto-routing of complex chats to human agents, and can be used to monitor agent productivity and efficiency (including metrics such as First response time and Resolution time.

Haptik’s Bot + Human hybrid approach to customer engagement is powered by this tool. Our proprietary chat assignment logic ensures that the conversation is seamlessly transferred from the AI chatbot in the following cases – a) if the bot doesn’t understand the user’s message, b) an integration function exists which specifies a case where the chat needs to be transferred, or c) if the chat is manually reassigned to an agent, either by themselves or their supervisor/team leader.


Real-time conversational analytics enables us to drive customer success, by measuring and improving the accuracy and effectiveness of our AI chatbots. Using the Dashboard, we can review and resolve issues in real-time, analyze conversation funnels and measure drop-offs, and receive alerts for trending customer issues.

The conversational data gathered by the dashboard is used by our customer success team to calculate the Intelligence Satisfaction Score (ISAT) for our AI chatbots. ISAT is our industry-first framework to measure the performance of AI chatbots. This is done by using the dashboard to take a deep-dive into conversations, and identify ‘positive’ and ‘negative’ chats (based on whether or not the AI chatbot was successful in resolving the user query).

At Haptik, our mantra is “Build Once Deploy Anywhere”. Our AI chatbot solutions are omnichannel and can be used by brands to engage customers on the platforms of their choice. Our solutions can also be integrated into any existing CRM platform, including Salesforce, Sprinklr, Oracle, Kapture and Freshdesk.

Haptik’s AI Chatbot Solutions

Haptik has successfully implemented AI chatbot solutions for enterprises across verticals such as Retail, Financial Services, Travel & Hospitality and Telecom. We offer the following four types of solutions:


80% of inbound customer support queries are routine queries or FAQs. Our customer support chatbot resolves these queries end-to-end, while our Agent Chat tool facilitates seamless smart-routing of complex queries to human agents.

We developed a customer care chatbot for Zurich Insurance, one of the world’s largest insurance companies to help them effectively tackle large volumes of inbound customer queries. The AI chatbot seamlessly resolved 70% of these queries end-to-end and significantly enhanced customer experience by offering swift and efficient 24/7 support.


Use WhatsApp chatbots to chat with customers instantly and offer 24/7 support on the world’s largest messaging platform. 

OYO Hotels & Homes, one of the world’s largest hotel chains, needed a solution to effectively engage their guests over WhatsApp. With Haptik’s WhatsApp solution, they were able to swiftly resolve customer issues and successfully achieve a 15% reduction in call center traffic.


Our Lead Generation chatbot serves as a 24/7 virtual sales assistant – answering FAQs and using intelligent prompts to convert passive website visitors into interested customers.

Using our lead generation chatbot, leading travel services provider House of Tours was able to significantly enhance customer experience, acquire high-quality leads from channels like Facebook and WhatsApp, and ultimately boost their lead conversion ratio from 37% to 146%.


Our voice-enabled recommendation engine brings the experience of interacting with a helpful in-store sales clerk to the virtual world, driving sales across digital touchpoints. 

Watch the video to see an AI-powered virtual shopping assistant in action, helping a customer at an online shoe store through their purchase journey.

You can read more about our AI Chatbot Success Stories