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The state of conversational AI

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Todd Kamp

Content writer

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15 Feb 2023
6 min read

In the midst of increasingly automated customer interactions, conversational AI has opened new doors for major industries looking to prioritize customer service while also reducing the number of resources required to do so. As a result, conversational AI is commonly found in the form of chatbots and virtual customer assistants (VCA), with the explicit goal of engaging customers without the need for a large call center or 24/7 staffing.

Yet, it’s nothing new. Chatbots have been around since 1966, albeit without any real application in the customer service space. But ever since the advent of the internet and a fast-shifting consumer base that expects instant gratification, online chatbots have taken root on most major websites. In fact, you may have encountered one here. Or, you may have experienced conversational AI in the form of automated SMS messages that are designed to react to textual prompts such as “Reply YES to confirm your appointment” or via an interactive voice response (IVR) system that’s been programmed to recognize common phrases and nomenclature over the phone in order to lead callers to the right rep or resource.

Talkbots, like WIZ.AI, take conversational AI one step further. These personalized, hyper-realistic voice calls are actually conducted by bots but are designed to sound like humans in order to have full conversations with customers regarding simple inquiries.


Conversational AI today

Without a digital assistant to offload run-of-the-mill inquiries, companies are finding that call center agents are spending most of their time helping customers resolve simple issues like password resets, answering product questions, locating a resource, and so on. When, in fact, customer service representatives need to be able to prioritize their time for more complex issues and take care of larger accounts/clients that expect a more white-glove conversation.



With its ease of execution and lack of manual intervention, it’s no wonder that the long-time answer to digital inquiries has been on-page forms and FAQ pages.

However, the frustration with old-school forms continues to grow by 27%, which has made a willingness to use chatbots for purchases rise from 17.1% to 41.3% from 2019 to 2020. And it’s no wonder that reliance on digital customer service is growing, considering the many benefits that lay in store.




One particular industry that has fully embraced the customer virtual assistant is healthcare. With the number of touchpoints typically required for a routine visit, as well as all the accompanying paperwork and changes in patient info, independent offices and major providers alike have embraced conversational AI in an effort to reduce friction and time.

For example, those seeking medical treatment or visiting their general practitioner, conversational AI is being used to schedule appointments, send reminders, as well as pre-screen patients for a myriad of reasons. Everything from health history to updated privacy and payment agreements is facilitated right from a patient’s phone, which is not only more convenient for patients, but also gives time back to healthcare providers and staff that no longer need to fill out information during the visit or waste money on physical resources like paper, ink, and other office supplies.

And when it comes to conversational marketing, AI has taken the weight off consumer interactions by directing visitors to common answers about products and services. In fact, of those who currently utilize AI-enabled technology, 82% find their solution to be a very valuable asset in their current sales and marketing strategy.




For lean marketing teams and companies that see thousands of visitors engage with their website on a daily basis, conversational AI can be a real lifesaver.


Do consumers care about conversational AI?

In 2017, 60% of consumers believed a human can better understand what they need as compared to a chatbot. And just two years later, 86% of consumers still preferred humans to chatbots. However, with machine learning continuing to shorten the gaps in AI understanding and the very recent adoption of AI for creative work on social media channels, these numbers are sure to dwindle as consumers automate more of their daily tasks – therefore increasing their trust in the platforms being leveraged.


And when it all comes down to it, both consumers and businesses are just looking for one thing: results.


48% of survey respondents said they preferred a chatbot that solved their issue over a chatbot that had a personality. (Business Insider) With that being said, 62% believe AI can reduce the time it takes to get answers while still being highly tailored to their preferences (PwC)

  • This means that consumers want answers, not a conversation. They’re not looking to be fooled, just fulfilled.


HubSpot reports that 40% of shoppers don't care if they're helped by an AI tool or a human, as long as their question gets answered. In fact, 27% of consumers weren’t sure if their last customer service interaction was with a human or a chatbot. (PwC)

  • The writing is on the wall. So long as it gets the job done, conversational AI is the present, and the future, of online customer service.


On the flip side, when it comes to business ROI, no matter which industry is being served, the outlook seems pretty good.


IBM reports that using chatbots can reduce customer service costs by as much as 30%. Meanwhile, chatbots are expected to save over $2.5 billion customer service hours by 2023. (Juniper Research)

  • If there’s one thing that all business leaders can agree on, it’s that time is money. With staff focused on their primary roles and not distracted by a backlog of inquiries, organizational goals can be geared toward more important, fiscally rewarding areas.


For one broadband company, bot chats successfully resolved 91% of customer support requests, fielding as many as 500 chats in 2019 alone. (Comm100)

  • This means that when it comes to meeting a large influx of customer requests, scaling is no longer an issue, providing consumers with a positive and timely solution that leaves the company's reputation (and ability to serve) intact.


The future of conversational AI

Juniper Research expects the chatbot market size to grow by 713% between 2022 and 2026, making the jump from $5.6 billion to a whopping $46.4 billion. And while global projections vary by outlet, no matter where you look, each prediction points to the same thing: major market growth.



According to Gartner, organizations report a reduction of up to 70% in call, chat, and/or email inquiries after implementing a VCA. And with the proliferation of AI assistants like ChatGPT in recent years, these numbers are only going to get higher as machine learning enables conversational AI to address more complex questions as its fed more and more scenarios. Making it no surprise that more and more industries from retail to insurance are finding their own solution in the form of AI conversations.

However, it is worth noting that in a 2022 Gartner poll, it was found that businesses are having a hard time seeing ROI after implementing a conversational AI system like chatbots or Talkbots. And while there are a number of factors that can account for this, from a lack of proper training and continual optimization, it goes to show that any online chatbot or Talkbot system must still be complemented by a live support team that is able to resolve more complex customer issues should the conversational AI come up short.

Yet, that’s easier said than done, especially for those with limited capacity to staff or spend time resolving customer inquiries. So, to combat this, Gartner outlines a few steps that businesses should take when leveraging chatbot AI:




Whispir enhances customer service with WIZ.AI

As a proud partner of WIZ.AI, Whispir has taken the omnichannel experience one step further in order to better serve our clients and their customers. With the power of the WIZ.AI integration, we can seamlessly (and quickly) add conversational AI to your communications strategy, adding a new layer of customer service to your wheelhouse.

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