Conversational AI: How customer experiences are changing

In November 2023, ChatGPT celebrated its first birthday. With the launch of the chatbot, a new era of AI has begun: before ChatGPT, AI was an explainable technology, today everyone can have an opinion! Technological advances are happening quickly and over shorter timescales than ever before. The same applies to the acceptance of technology in society: according to one Study by KPMG Trust and acceptance of AI is already higher among Generation Z and Millennials than among older generations.

I currently see the key to earning that trust in conversational AI. It includes speech recognition and understanding, dialogue management, as well as natural language processing and generation. AI understands the customer's intentions and then provides targeted assistance via chat, chatbot, or phone. With this in mind, the question for brands is not whether they want to invest in conversational AI, but whether they can really afford not to.

It's all about customer experience

The challenge remained the same: How do I convince my customers about my product and create long-term emotional loyalty? Again, it's important to stay ahead of customer experience trends to personalize experiences at scale and create authentic connections with customers.

No matter the type of product or service, customers today have many options to choose from. Many are willing to do research, compare products and prices carefully, and often have no problem switching brands. To stand out and earn loyalty from these customers, brands can benefit from building a genuine emotional connection with customers throughout the purchasing decision process – something that is becoming increasingly better with today's intelligent conversational customer experience technology.

Conversational AI is changing the customer experience

More than ever, AI chatbots, virtual assistants and voice controls are becoming an essential part of the digital shopping experience. Old ways of talking to customers are no longer enough. the “Meow! Vocal Study 2023 Germany“, for example, found that 73 percent of Germans believe in the important role that voice will play in the future – for example in interacting with brands and companies.

Additionally, in online retail, one bad experience can cause customers to abandon a brand – even brands they love. This means that there is no room for error when adopting new technologies. Creating a great customer experience is challenging but rewarding. Brands must understand their customers' needs well and then invest in the right technology solutions to achieve the goals. For example, many customers expect relevant, personalized communications and recommendations from brands and don't want to waste their time on irrelevant information. In this example, a conversational AI solution with access to individual insights (e.g., the entire customer journey) helps brands deliver relevant and personalized experiences at scale.

Benefits of conversational artificial intelligence technology

It's important for marketers to find a smart way to improve customer experience while increasing impact and improving KPIs. Fortunately, the latest technology solutions such as AI-powered chatbots and virtual assistants perform many tasks that are difficult to accomplish with human employees alone. Customers don't like to wait, they want to be guided through the purchasing process with personalized recommendations and get direct answers to their questions when searching for a product. Of course, the answer must be in the researcher's local language and at any time of the day or night. Using intelligent, AI-powered conversational technology, they can streamline their buying process and get instant access to virtual sales assistants who understand their needs instead of waiting for the next live agent. This helps improve customer experience metrics such as response time, customer satisfaction (CSAT) and net promoter score (NPS).

Conversational AI can also access massive amounts of individual customer data and make personalized recommendations to anyone who responds. It can perform this mass customization for all customers at any time of the day and also for thousands of customers at the same time – something impossible for human agents. The ability to create a highly personalized shopping experience on such a large scale will help more consumers feel a personal connection to a brand than ever before, especially among younger, digitally savvy Generation Z. Fashion retailer H&M, for example, is betting; On using AI powered chatbots to recommend fashions and introduce customers to new fashion trends based on personal data (of logged in users).

DAK-Gesundheit also introduced Conversational User Interfaces (CUI), changing the way users interact with the health insurance company's website: 65 new CUI processes and more than 1,000 questions and answers have been integrated. The impact was astonishing: site engagement metrics rose dramatically, with the number of clicks tripling. Additionally, 97.8% of customers have provided positive feedback in over 1 million reviews. When users search for information, the website now understands their needs and designs answers accordingly.

Conversational AI across channels

Another important trend in customer engagement is that customers are now using many more channels than ever before to communicate with brands. They can access support on their computers or phones and connect with brands through the company website, social media sites, mobile apps, messaging apps, email, video calls, chats, and more. Because consumers are spread across these channels, it can be difficult to track personalization to each potential channel individually.

To improve engagement, brands should integrate cross-channel and headless conversational interfaces. “Unattended” means that all interfaces access the same content in a single, independently managed backend. Not only does this lead to the core benefits associated with conversational AI, such as faster answers to customer questions and higher customer satisfaction, but users will also experience consistency in the value of the experience across all channels, which in turn will make their purchasing decision easier.

And it gets even better: After the AI ​​captures intent, relevant product recommendations should be displayed in real-time. The AI ​​must then identify additional customer needs and provide assistance via chat, phone, video calls or co-browsing. At this point, it is useful in many cases to incorporate the human touch, i.e. a human service option for every click. Especially in order to prevent abandonment of the purchase and sell higher quality products instead, it can pay off if customers can talk to customer advisors from the service department. This usually also increases satisfaction.

The ideal path is taken by those who approach the customer again to obtain further information and offers and thus “follow up” in a personal way. Of course, this is only useful for regular customers or those with large shopping carts – but these customers certainly won't forget the experience so quickly.

Conclusion

Conversational experiences have the power to strengthen relationships and bridge the gap between customers and brands. As the use of artificial intelligence increases, chatbot technology is getting better at creating authentic shopping experiences. I am convinced that brands will only be able to dominate and achieve significant sales growth in the future if they continue to invest in the latest conversational AI technologies – ideally with the human touch as a differentiating feature.