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What is conversational AI?

Across the globe, businesses are rapidly adopting conversational AI solutions to better meet customer needs while increasing engagement, lowering costs, and boosting productivity.

Defining conversational AI

Think back to the last time you received excellent customer service. What made it special? How long did the interaction last? And one more question: who helped you—a person or a machine?

Thanks to rapid advancements in AI, your answer to the last question might be either. Computers now have the gift of gab—made possible by conversational AI—and they’re getting better at it every day.

The term conversational AI describes a set of technologies that enables devices and apps such as chatbots to converse with people using their natural languages.

Conversational AI employs machine learning and natural language processing to collect and analyse languages, comprehend them, and then generate human-like responses. Chatbots and devices that rely on conversational AI become smarter over time, using the data and insights from conversations to improve outcomes.

In addition to conversing with people, AI-driven technologies can also perform tasks by connecting with internal and external systems and services. In other words, a chatbot or device that uses conversational AI isn’t limited to its own data or knowledge; it can seek answers and solutions by connecting to other computers.

Introducing the conversational chatbot

A conversational chatbot is an application that engages with humans through a conversational user interface. Sometimes called virtual agents or personal digital assistants or even AI chatbots, these savvy bots rely on conversational AI to help users get answers or solve challenges.

Conversational chatbots are already in use across a wide variety of industries. Here are some ways that organisations are using them to help customers, patients, students, and employees.

Customer services

  • Answering questions
  • Giving personalised recommendations
  • Processing orders, payments, and returns
  • Providing account balances and statements
  • Opening and closing accounts
  • Booking travel reservations

Patient services

  • Assessing symptoms
  • Monitoring health conditions
  • Locating providers
  • Scheduling appointments
  • Prescribing medication
  • Providing patient and family support

Student services

  • Reviewing course information
  • Registering for courses
  • Connecting students with tutors
  • Assessing student progress
  • Providing faculty feedback
  • Assisting with financial aid forms

Employee services

  • Onboarding new employees
  • Sharing company policies
  • Enrolling for employee benefits
  • Managing IT requests
  • Delivering performance insights
  • Scheduling paid time off

Deciding if a conversational chatbot is right for your business

If you perform any of the previously mentioned services in your company, there’s a good chance you’d benefit from deploying a conversational chatbot. You’ll also find it helpful to examine your needs. Consider the following questions:

  • What types of questions or requests does your company receive? If you currently have human agents handling a large volume of questions or requests around common themes, you’ll more likely receive a large return on investment.
  • How long does it currently take your agents to answer questions or requests? Because they’re available 24 hours a day, 7 days a week, chatbots empower people to get support when they most need it, without long wait times. Moving support work to chatbots not only frees up more time for staff, but it also boosts customer satisfaction.
  • Who’s your target audience for your offering or service? People of all ages rely on technology every day, but millennials in particular use chat apps more than email to communicate. So, if millennials make up a large part of your target audience, consider adding a chatbot to meet their preferred method of communication.
  • How does your company collect leads? Chatbots do more than just assist with customer service. They can also help your sales and marketing teams qualify leads by engaging users in friendly conversations and asking them questions that reveal where they are in the buying process.

Making sure your chatbot meets customer expectations

Your customers hold some fundamental expectations when they use a chatbot, such as around-the-clock availability and data privacy. While these expectations might seem obvious, others are more subtle.

To help ensure your AI-driven chatbot will meet expectations, keep these best practices in mind.

Tell the truth

Be honest with customers that they’re talking to a chatbot and not a human agent. Most people will likely already know, but be transparent by having your chatbot introduce itself early in the conversation.

Likewise, your chatbot should tell your customers what it can and can’t do. By being up front about its capabilities, you’ll build trust with customers and avoid unnecessary frustrations when the chatbot can’t solve their problems or answer their questions.

Human support is an important component of conversational chatbots, and your customers expect to be able to escalate issues on their terms. Establish clear parameters for when your chatbot will involve a human agent, either because the questions or tasks have exceeded its abilities or because the customer wants to engage with a human.

Pick a suitable personality

If you want your customers to engage in natural conversations with your chatbot, then establishing your chatbot’s personality is a must. Consider what personality traits you’d like to give your chatbot and the words you’d use to describe it. Should it be professional or caring? How about enthusiastic or witty? Remember that your chatbot is an extension of your company, so while its tone might vary depending on topics or subject matter, its overall personality and voice should still reflect your company’s brand.

After deciding what personality you’d like to give your chatbot, consider whether it’s the right fit for your audience, and be mindful of cultural norms. For instance, wittiness might not be appropriate for a chatbot that’s providing critical instructions about how to take a newly prescribed medication.

When creating content or personas for your chatbot, try to include diverse perspectives and be aware of stereotypes and social biases; for example, that all airplane pilots are male and all flight attendants are female. You can also help limit the possibility for norm violations by configuring your chatbot to avoid engaging in conversations about certain topics, such as race, gender, religion, and politics.

Make it accessible to all people

Whether you develop a custom chatbot in-house or by using no-code chatbot software, make sure that your chatbot respects the full range of human abilities so that as many people as possible can use it.

Examine whether your chatbot meets common accessibility standards, such as support for screen readers and keyboard-only navigation. Consider implementing features like speech support to help customers with visual impairments use your chatbot.

Additionally, be sure that your chatbot’s visual elements and fonts are clear and easy to read, with sufficient text size and a colour contrast between text, images of text, and backgrounds that’s a ratio of 4.5:1 or more.

Measuring your chatbot’s effectiveness with KPIs

Building a chatbot that meets your customers’ expectations is key to benefiting from conversational AI. But it’s not only your customers’ expectations that matter—yours do too. That’s why it’s important to identify and track strategic key performance indicators (KPIs) for your chatbot to measure how effectively you’re meeting your goals.

Popular chatbot KPIs include:

  • Total sessions to track the total number of sessions in a specified period.
  • Engagement rate to track the number of engaged sessions, which means that a user-created topic (as opposed to a system topic) is triggered or that the session ends in escalation to a human agent.
  • Resolution rate to track the percentage of engaged sessions that are resolved.
  • Escalation rate to track the percentage of engaged sessions that are escalated to a human agent.
  • Abandon rate to track the percentage of engaged sessions that are abandoned, which means they’re neither resolved nor escalated within one hour.
  • Customer satisfaction to track average customer satisfaction survey data in a score chart.

While these KPIs are a good place to start, you’ll also want to consider how you’re using the chatbot and your goals for deploying it to determine what additional KPIs to track. For example, if one of your goals is to turn more prospects into customers, you might set a KPI that tracks new qualified leads.

Identifying the right chatbot software

Before you can give your conversational chatbot a personality or track KPIs, you still have one important decision to make: how will you build it?

The popularity of low-code and no-code conversational AI software offerings means that business users no longer need to rely on developers or data scientists to build a chatbot. Today, you can find all the tools you need to build an AI-driven chatbot in a single, convenient solution.

But picking the right software to build your chatbot is itself a crucial step that will affect every other step in your chatbot’s development. When researching chatbot software, keep the following criteria in mind:

  • Installation and updates. Will you need to involve IT for installation and updates, or is the software offered as a service?
  • Ease of use. Does the software offer a graphical user interface that empowers business users to easily build and manage the chatbots?
  • Connections. Does the software support connections with internal and external systems and services, such as e-commerce and customer relationship management systems?
  • Channels. Does the software provide omnichannel capabilities, including websites, mobile apps, and messaging platforms like Facebook or Microsoft Teams?
  • Accessibility. What sort of accessibility features does the software include, and what settings can you control to meet accessibility standards?
  • Authoring. Can you use the software to easily author topics for the chatbot and manage how conversations flow?
  • Customisations. Can you use the software to customise the chatbot’s look and feel so that it matches your brand?
  • Monitoring. Does the software provide clear dashboards where you can monitor chatbot performance and quickly make adjustments?
  • Analytics. Does the software include analytics that show how the chatbot is performing against your KPIs?
  • Security. What sort of security does the software offer, and how does it handle authentication and roles?
  • Compliance. Does the software comply or help you comply with a wide range of industry-standard certification and compliance requirements?
  • Advanced scenarios. Does the software allow you to extend your chatbot with code, or is its functionality limited to the software’s capabilities?

Getting started with conversational AI

By choosing easy-to-use chatbot software with robust capabilities, you’ll get a head start on reducing the complexity of chatbot development and help ensure that your chatbot meets customer expectations. For more insights on how you can put conversational AI to work for your business, explore Microsoft Power Virtual Agents.

With Power Virtual Agents, it’s easy to build a conversational chatbot that will help you reap the maximum benefits of AI, so you can offer your customers around-the-clock resolutions to their questions and issues.

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