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Conversational AI vs chatbot can be confusing because, they can both mean the same thing to some people, but they may mean something completely different to others.
These terms are often interchangeable, which is fine up to a point. Their differences are important in business settings and more so overall.
Chatbots are easy to understand for most people, but conversational AI is more complex and technical. This is where differentiation really comes in.
Let us explore the similarities and differences between conversational AI and chatbots.
What is a Chatbot?
Chatbots are software programs that simulate human-like conversations with users via text. Chatbots tend to be rule-based. This means that they can only answer a set of questions (mostly FAQs), which is what distinguishes them from conversational AI. It means the answers are predetermined and there is little room for error during the conversation.
Chatbots are being increasingly used by businesses worldwide to provide user support across multiple channels. Chatbots can be frustrating for users who do not understand the context of conversations.
What is Conversational AI?
Conversational AI differs from chatbots that are pre-determined, and rule-based. Conversational AI uses Natural Language Processing, Natural Language Understanding and Deep Learning to provide a dynamic and more flexible user experience than chatbots.
Conversational AI goes far beyond a conventional chatbot and sets the new standard for the customer experience to deliver a more personalized customer experience while lowering the cost to serve.
A Study predicts that the global Conversational AI market will grow to $32.62 billion by 2030. This is compared to its current value of $5.78billion in 2020.
Conversational AI can respond to text and speech inputs. This technology is used in customer service to interact with customers in a human-like manner. You can interact with the bot through a messaging channel, or via a voice assistant over the phone. Conversational AI uses substantial amounts of training data to help deep learning algorithms understand human language and determine user intent.
Chatbots vs Conversational AI
Automated messaging technology can help brands provide quick customer service, regardless of whether you use chatbots that are rule-based or any other type of conversational AI.
Chatbots can only perform a few functions. This is most often limited to answering basic questions. Conversational AI allows chatbots to interpret human language better and provide more personal, two-way interactions with customers to meet modern customer expectations.
Based on what we know so far, chatbots need conversational AI technology to grow smarter and more powerful. However, not all chatbots employ conversational AI technology.
Chatbot v/s conversational AI
Features/Capabilities | Conversational AI | Basic Chatbot |
|---|---|---|
Natural Language Understanding | Advanced | Basic keyword recognition |
Multichannel/ Omnichannel | ✅ | Single channel |
Multi-Lingual | ✅ | Limited |
Machine Learning | ✅ | ❌ |
Personalization | ✅ | Limited/none |
Dialog State Management | ✅ | ❌ |
Integrated Processes/Workflows | ✅ | ❌ |
Data/System Integration | ✅ | Simple/limited integration |
Identity & Access Management | ✅ | ❌ |
Security Management | ✅ | ❌ |
Online 24/7 | ✅ | ✅ |
Dynamic, context-based navigation | ✅ | Button-focused navigation |
Unlimited scalability | ✅ | Limited improvement capacity |
Broad scope | ✅ | Narrow scope |
3rd-party integration support | ✅ | Limited understanding |
Self-improving over time | ✅ | ❌ |
Consistently high-resolution rates | ✅ | ❌ |
Entity extraction | ✅ | ❌ |
User authentication | ✅ | ❌ |
Voice and conversational IVR | ✅ | ❌ |
Privacy & security compliant | ✅ | ❌ |
*Not all these features are necessarily part of a conversational AI solution
Which One is Better for Your Business?
Conversational AI is the best choice if you want to increase user satisfaction, engage users, and reduce human agent workload by automating support across multiple platforms via both voice and text.
Conversational AI agents can automate up to 80% of query resolution without any human intervention.
Benefits of Conversational AI for your Business
Understand Human Factor
Sentiment Analysis
Improve Employee Productivity
Enhance service speed
Minimize Operating Expenses
Better Conversion Ration
Easy Scalability
Optimal Data Collection
Omnichannel Presence
Superior Approach to Global Market
Final Thoughts
Chatbots are a fantastic way to get started, especially when you are using text-based communication. However, Conversational AI is the only way to provide real value to customers.
Brands use conversational AI across their channels to provide hyper-personalized conversations for customers in real time.
ORAI is a Conversational AI platform that recognizes the needs and demands of the present market and has devised solutions that smoothen the functioning of a business and accentuate customer relationships.
Swapnil Jain
CEO-ORAI Robotics
Stay in contact with ORAI
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