What is conversational AI, and what is its role in customer service?

Make messaging and chatbots a bigger part of your customer experience strategy.

By Patrick Grieve, Contributing Writer

Published March 2, 2021
Last updated November 9, 2021

In 2020, the COVID-19 pandemic led to a spike in call volumes at pharmacies, airlines, and many other businesses. At the same time, sickness and social distancing reduced call-center capacity, so many companies turned to conversational AI to pick up the slack.

Customer interactions with automated bots increased by a whopping 81 percent last year. Though the shift to automation may have been born out of necessity, customers quickly grew to like automated messaging. In December 2020, only 18 percent of customers had a negative view of conversational chatbots, and a majority actually preferred bots for simple tasks like changing an address.

As messaging becomes increasingly popular, businesses should learn how to best leverage conversational AI for customer service. That means understanding how conversational AI benefits customers and agents, when (and when not) to use it, and how to best optimize it for CX.

What is conversational AI?

Conversational AI definition: Conversational artificial intelligence refers to technologies that can recognize and respond to speech and text inputs.

In customer service, conversational AI describes the use of tools—such as chatbots or voice-based assistants—to interact with customers.

“Conversational AI is basically a machine talking with a human,” explains Giovanna Chethuan, a customer success executive at Zendesk. “It can be through a chatbot in a messaging channel or through a voice assistant on the phone.”

Over the past year, messaging has emerged as the primary use case for conversational AI. According to the Zendesk Customer Experience Trends Report, messaging saw the biggest surge in first-time users among all support channels in 2020. Social messaging apps like Facebook Messenger and WhatsApp saw huge spikes in support requests. And even more customers say they prefer embedded messaging on a company’s website or app.

With the use of chatbots, messaging channels can become quick and convenient 24/7 customer service channels. A tool like Answer Bot can respond to customers’ simple, low-priority questions and lead them to a speedy resolution via self-service. Each support ticket that’s resolved by conversational AI is one more ticket that your agents don’t need to worry about.

Why is conversational AI important?

“Conversational AI is primarily used to drive customer satisfaction, but it ends up improving agent satisfaction as well,” explains Paul Lalonde, a Zendesk product expert. “One of the major reasons for call center turnover is that agents find tasks boring and repetitive. But when you have bots working towards solving customer problems, agents don’t have to worry about doing the more mind-numbing, repetitive tasks. They can just get involved when more critical thinking is needed.”

When an automated messaging conversation does require a more human touch, a chatbot can transfer the customer to a live agent. The bot will also pass along the information that the customer has already provided, such as their name and issue type.

“Agents get all that context right away, so they never have to ask customers to repeat themselves,” Lalonde adds. “Everybody hates having to repeat themselves, but that goes away in a world where you have conversational AI embedded into the customer experience.”

How do customers feel about conversational AI?

As one might expect, there’s a generational divide when it comes to consumer sentiment towards conversational AI.

“In our Zendesk CX Trends Report, we found that many people are willing to interact with AI,” Chethuan says. “But mostly the younger generations (Gen Z and Millennials) are more open to using it if it works correctly because they’ve grown up using more sophisticated technologies.”

One reason for this generational divide? Older customers sometimes aren’t aware that they’re interacting with a bot and can feel tricked once they realize they’re not talking to a human agent. Younger generations tend to be more AI-savvy. These digital natives have more experience with bots and are more enthusiastic about using them if it means getting a faster or more accurate response.

In general, though, customers seem to agree that AI is helpful when it comes to accomplishing basic tasks. Many even favor automated interactions over human ones for simple issues. More than 40 percent of customers prefer using automation to track their orders, while around 20 percent like using it to change an order or exchange an item.

On the flip side, about 40 percent of customers would rather talk to a human when filing a complaint or asking for tech support. And roughly 30 percent prefer to speak to a live agent about billing or payment questions.

In sum: Customers tend to think conversational AI is great for solving the simple stuff, but they’re more resistant to bots if they’re dealing with a more complex or sensitive issue.

When a customer does need or want to interact with a human instead, no biggie. Set up your system to seamlessly transfer that customer to an agent. “Chatbots are a way to bridge the gap between self-service and live agents,” explains Sam Chandler, senior manager of customer success at Zendesk.

When’s the right time to switch from a conversational chatbot to a human agent?

Conversational AI is designed to provide speedy resolutions. You never want your chatbots to feel like a waste of time for your customers.

“Customers just want to get their answers and get on with their day,” Chandler says. “Everyone has a preferred channel, but studies show that 84 percent of people would rather use whichever channel gets them their answer as quickly as possible. It’s our responsibility as CX designers to make this journey as seamless as possible.”

Chatbots are perfect for quickly handling a lot of the low-hanging fruit, including frequently asked questions and simple requests. Ideally, your conversational AI should be able to deflect those easy tickets while passing the more nuanced ones on to your agents.

“Eighty-four percent of people would rather use whichever channel gets them their answer as quickly as possible. It’s our responsibility as CX designers to make this journey as seamless as possible.”Sam Chandler, senior manager of customer success at Zendesk

Analyze your support ticket data to determine the most common questions and issues your customers have. Then, you can use a tool like Zendesk’s Flow Builder to guide the interactions between your bots and customers. Program your bot to provide quick-reply options, pre-written answers to FAQs, and targeted article recommendations. If the query proves too complex, the bot can instead ask the customer to provide additional details before routing them to a human agent.

“If, for example, a customer contacts us for troubleshooting steps, then AI will be used to send them a step-by-step guide to solve their issues,” explains Chethuan. “But if the question is extremely niche, then AI will be used to gather more information before the agent jumps into the conversation.”

Chandler points to three telltale signs that a chatbot isn’t the right channel for a customer’s request:

  1. Customers repeating the same questions (customers say that having to repeat themselves is one of their biggest customer service frustrations)
  2. Repetition in the bot’s phrases
  3. Customers saying they aren’t getting the answer they need

If any of those frustrations occur, a human agent should certainly step in. Chandler also recommends building certain “fire escapes” into the AI journey. “When someone asks a question you already know should be handled by a rep, have the bot immediately route them to an agent,” she says. “Don’t make them meander to the best channel themselves. And if you’re unsure which topics are too complex for bots, just ask your team.”

Lalonde echoes that advice, recommending that businesses identify certain activities that should never be automated. “Avoid automating anything your business considers to be a critical activity,” he says. “What you should really be asking yourself is: What can I automate because it’s repetitive, and what should I not automate because it’s business-critical?”

How “human” does conversational AI need to appear?

Conversational AI isn’t meant to fool someone into thinking they’re talking to a real person. Your company should be upfront with customers about when they’re interacting with a bot versus a human. And if the customer wants to speak to a human agent at any point, your business should allow them to make that decision for themselves.

“Remember, the goal is always to reduce effort and increase satisfaction,” Chethuan says. “So, the ‘talk to an agent’ option shouldn’t be hidden!”

But conversational AI should still use language that customers are comfortable with. “Even if a person knows they’re talking to a bot, we should make it the most natural and friendly experience possible,” Chethuan adds. “The AI should be configured to speak in the same terminology as our customers.”

Beyond crafting a natural voice, use customer data to make the messaging experience feel more personalized for the user. If your AI is empowered with the right customer data, a chatbot can:

  • Address a customer by name
  • Refer to the customer’s status
  • Know what products and services the customer has purchased
  • See the path of the customer’s journey

With insight into a customer’s previous interactions, bots can provide relevant and helpful support. “If a customer just read an article from our help center, the bot should take that into account and suggest different content to resolve their issue,” Chethuan says.

“Even if a person knows they’re talking to a bot, we should make it the most natural and friendly experience possible.”Giovanna Chethuan, customer success executive at Zendesk

As long as a bot is genuinely helpful and provides great service, customers won’t begrudge it. In fact, Chandler encourages businesses to worry less about how “human” their conversational AI sounds and instead “embrace their inner bot” to create a more authentic experience.

“The companies I’ve seen with the best chatbot strategies are the ones that are transparent and authentic,” Chandler explains. “They incorporate their branding into the bot and create an opportunity to bring their customers further into the fold.”

She cites the example of BarkBox, an online pet-products retailer that set up a “dog bot” on Twitter for the holidays. The canine bot was able to “lend a paw” and help eliminate one-touch questions with simple answers during a busy season. As a bonus, it also doubled as an adorable marketing campaign that delighted BarkBox’s dog-loving customers.

Use conversational AI to enhance the customer experience

Companies often view bots as a cost-saving measure—and they certainly can be. But ideally, conversational AI will enhance the capabilities of your support staff, not replace them.

“Don’t think of chatbots as a substitute for humans,” Lalonde cautions. “One of the great things about using conversational AI for customer service is the beauty of having both bots and humans working together towards solving customer problems.”