Chatbots vs Conversational AI: Which is Better for Your Business?
For businesses, staying ahead of the competition means finding ways to streamline operations, enhance customer experiences, and gather valuable data. Two powerful tools that can help businesses achieve these goals are chatbots and conversational AI.
Chatbot and conversational AI are often used as synonyms. While both technologies offer automation and customer service capabilities, there are key differences between them.
What’s the difference between chatbots and conversational AI? A simple rule of thumb, all chatbots are conversational AI but not all conversational AI are chatbots. Chatbot is a basic rule based automation platform whereas, Conversational AI, a more advanced technology, can handle complex tasks, offers better scalability, and provides enhanced security.
In this blog post, we will explore the distinct features of chatbots and conversational AI, highlight the advantages of conversational AI, and guide you through the process of selecting the ideal platform for your business.
What is a chatbot?
Chatbots are computer programs designed to simulate human conversation.Often based on predefined rules, chatbots are widely used to provide customer service and answer queries on websites and mobile applications. Equipped with natural language processing capabilities, chatbots can comprehend human language and respond in an informative and engaging manner.
Chatbots can handle a wide range of tasks, including answering frequently asked questions, providing product information, resolving technical issues, and scheduling appointments. By automating these tasks, businesses can free up valuable human resources to focus on more complex and strategic endeavors.
Related Read: Best Customer Service Chatbots
What is conversational AI?
Conversational AI is a branch of artificial intelligence that allows computers to understand, interpret, and respond to human language.
Conversational AI combines advanced natural language processing (NLP), machine learning algorithms, and intelligent dialogue management systems to create seamless and intuitive interactions between humans and machines.
Conversational AI platforms have numerous applications across various industries. One of its most prominent uses is in the creation of AI assistants for various tasks. Conversational AI is also used in customer service, where it automates customer interactions, resolves queries, and provides support to users.
Beyond AI chatbots and virtual assistants, conversational AI finds applications in voice-activated devices, language translation systems, and even in the development of self-driving cars.
Related Read: How to build your own conversational AI?
Chatbot vs Conversational AI: What's the difference?
Chatbots and conversational AI are often used interchangeably, but there are distinct differences between the two.
Chatbots are essentially rule-based systems that can only respond to predefined user inputs. They are limited in their functionality and can only perform tasks for which they have been explicitly programmed. On the other hand, conversational AI is more advanced. Conversational AI leverages machine learning and natural language processing (NLP) to intent behind user requests to make human-like communication. Conversational AI systems engage in more human-like conversations, adapt their responses based on the user's input, and even learn and improve over time.
In terms of capabilities, chatbots are best suited for simple and repetitive tasks, such as providing basic information or answering frequently-asked questions. Conversational AI has a broader range of capabilities and can handle more complex tasks such as customer service, personalized recommendations, and even negotiating deals. Additionally, conversational AI systems can continuously learn and improve their performance by analyzing large amounts of data and identifying patterns.
When it comes to scalability, chatbots can handle a large volume of simple tasks efficiently. However, they struggle when faced with more complex or nuanced requests. Conversational AI platforms like Alltius, can handle a wider range of tasks, even as the complexity increases. Examples would be like root cause analysis, understanding query & finding answers, taking actions like account summary on behalf of users, drafting sales pitches for every customer, debugging code and more. This is because conversational AI systems can leverage machine learning algorithms to continuously learn and adapt to new situations.
Security is a critical consideration when dealing with conversational AI systems, as they may process and store personal information. Robust encryption and data protection measures must be implemented to ensure the security of these systems. On the other hand, chatbots typically operate on predefined rules and do not have access to sensitive user data, making them less vulnerable to security breaches.
Finally, customization is an important factor to consider when choosing between chatbots and conversational AI. Chatbots can be customized to a certain extent by modifying their rules and responses. But conversational AI platforms like Alltius, offer a higher degree of customization. Conversational AI can be tailor to suit a business's brand tone and even its personality to align with their specific requirements and brand image. Learn more about Alltius:
The benefits of using conversational AI vs chatbot
Conversational AI offers numerous benefits to businesses, transforming the way they operate and interact with customers.
One key advantage is its ability to automate repetitive and time-consuming tasks, freeing up human counterparts to focus on more complex and strategic interactions. This can significantly enhance operational efficiency and reduce costs.
Conversational AI is always on, which is why it excels in providing exceptional customer service. With its ability to understand and respond naturally, conversational AI platforms like Alltius, can offer real-time assistance, answering customer queries promptly and efficiently. Its 24/7 availability makes sure that customers receive support whenever they need it, leading to improved customer satisfaction and loyalty.
Furthermore, conversational AI can gather valuable data and insights from customer conversations. This information can be leveraged to gain a deeper understanding of customer needs, preferences, and behaviors. Businesses can then use these insights to optimize their products, services, and marketing strategies, resulting in improved overall performance and competitiveness.
Another significant benefit of conversational AI is its ability to build stronger relationships with customers. By providing personalized and engaging experiences, conversational AI fosters trust and rapport, leading to increased customer loyalty. This can give businesses a competitive edge and drive long-term growth.
So, should you go for a chatbot or conversational AI platform?
So now that you have an idea, which platform should you go for? Should you use chatbot or conversational AI? This decision depends on your specific business needs and objectives. But here’s how you can start thinking about it.
Use Case and Complexity:
Determine the primary purpose of deploying a conversational solution. If your requirements are relatively simple, like answering FAQs or basic customer inquiries limited to your rules, a chatbot might suffice. It will require human intervention as if a customer asks anything outside the rules, it will not show any answer.
However, if you want your AI agent to handle everything from basic FAQs to complex queries without human intervention and with the ability to learn from your previous conversations, website, product and FAQ documentation, you should choose conversational AI.
Scalability
Consider the number of users that would use the platform. Chatbots are better suited for businesses with low volume of query because chatbots won’t handle all queries and would require human supervision.
If you anticipate a high volume of interactions or plan to expand your conversational AI platform is helpful. Conversational AI platforms offer more scalability in terms of number of queries handled simultaneously, platforms, languages and more.
Customization
Chatbots are often rule-based or workflow based. They offer limited customization in terms of the number of actions you can take with your chatbot. Every type of answer should be pre-defined within the rules or workflow else, it won’t handle it.
Conversational AI platforms offer a lot of customization features, with ability to personify your brand voice, ability to do multiple tasks and integrations. Conversational AI platforms like Alltius, can have integrations with your CRM thus, speaking to your customers using data in CRM and updating conversations to relevant profiles.
Type of queries
Chatbots are more suited for simpler queries that don’t require more than one lookup. Conversational AI on other hand, can search through multiple documents to find answers to the query and provide answers. It is suited for simple to complex & nuanced queries too. Also, it can learn iteratively.
In short, Chatbots are better suited for businesses with:
- Lower volumes of customer interactions
- Simpler products, services, and internal process
- Predefined, rule-based scenarios that can be easily programmed
Conversational AI platforms are better for businesses that need:
- Ability to handle larger volumes of customer interactions
- More complex, nuanced, and contextual conversations
- Continuous learning and improvement through machine learning
- Integration with other business applications and CRMs
- More personalized and human-like interactions
By carefully considering these criteria and aligning them with your business goals and requirements, you can make an informed decision about whether to choose a chatbot or conversational AI platform for your business.
If you’re not sure which path to go to, you can book a free consultation call with us. We can evaluate your business and see which kind of platform can suit your requirements.
Examples of Chatbots and Conversational AI
Let’s take a look at chatbots and conversational AI in action.
Example of chatbot in customer support- Dominos’ chat pizza order
Dominos has implemented a chatbot for assisting users for placing an order on their website, facebook and other channels. When you interact with it, you’ll realize it’s a rule based chatbot that has menu items included in the rules and at the end, it places order for you.
Example of conversational AI in customer support- AngelOne’s ‘Ask Angel’ widget
The conversational AI customer support agent is trained with more than 20,000 multilingual web pages,user account APIs, canned responses and Google Drive documents as its knowledge base. The support assist is able to do the following:
- Identify the intent of the user
- Understand user needs from queries
- Provide accurate response within seconds
- Handle complex query requiring the assistant to log into user account & take actions
This widget caters to 18 million users and has over 100k conversations per week! It has reduced the workload on the customer support team by handling more than 20% tickets.
Conclusion
We saw the main differences between chatbot and conversational AI. We saw different examples and even drilled into specifics of chatbot vs conversational AI. We hope this helps you make a decision of which technology to choose for your use case.
On that note, conversational AI is becoming the norm, at least for customer support. According to PwC, 52% companies are ramping up their AI adoption. Conversational AI has shown improvement in customer support metrics for many companies and therefore, can quickly become a competitive edge to have one.
So, if you have a complex use case, offering or are swamped with customer tickets, conversational AI is worth the try and way to go. Alltius offers companies an effortless way to implement conversational AI in their organization within a week with almost 0 development.
So, if you’re looking to explore generative AI, try Alltius. Alltius is a platform created as a result of decades of research at Carnegie Mellon and Wharton. Alltius is a gen AI assistant platform that can 3X sales and slash support costs by 50% within weeks of implementation.
We’ve helped major companies reduce their customer support costs by $50k per month. In case you’re interested:
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