Conversational AI vs Chatbots: What’s the Difference?

Gartner predicts that by the end of 2021, 15% of all global interactions will be handled by AI-powered solutions, which includes chatbots. To give an example, experts predict that 75% to 90% of all queries in the healthcare and banking industries will be managed by chatbots in 2022. The same report also suggests that chatbots will reduce business costs by more than $8 billion per year. Furthermore, Chatbots have a conversational chat-based interface, while virtual assistants can work on both voice and text commands.

In fact, Gartner forecasts that conversational AI will reduce agent labor costs by $80 billion by 2026.⁵ It’s important to note that cost reductions through AI does not necessarily mean downsizing support teams. Rather, automation aims to make personnel more efficient by enabling them to focus on higher-value tasks. Learn about 35 different chatbot use cases and discover how to easily create your own chatbot with SiteGPT’s custom chatbot creator.

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Now that we’ve explored various use cases for conversational AI, it’s important to emphasize its versatility. This is a technology that can be tailored to a diverse array of contexts and requirements. Faster implementation and 24×7 support – Freshchat offer 30 hours of free consultation to help you implement Freshchat in a way that suits your needs. You can reach out to us with any issue, and someone from our support team will be with you right away. As a business, you should look for vendors to help you deploy this technology quickly and without hiring an army of consultants and developers.

A programming language polyglot supporting more than 70 languages, integrating with over 40 IDEs, Codeium is another solid app to consider if you’re a coder. The app is minimalistic and filled with loads of cute details and animations. Instead, it prefers shorter bursts of conversation and loves asking questions.

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As consumers move away from traditional forms of communication, many experts expect chat-based communication methods to rise. Organizations increasingly use chatbot-based virtual assistants to handle simple tasks, allowing human agents to focus on other responsibilities. The difference between rule-based and AI chatbots is that rule-based chatbots don’t have artificial intelligence and machine learning technologies supporting them. Online business owners build AI chatbots using advanced technologies such as machine learning, artificial intelligence, and sentiment analysis. Natural language processing plays a significant role in building rule-based chatbots. NLP technology is beneficial for the bots to understand customer requests and break down the complexity of human language.

• Organizations have historically faced challenges such as lengthy development cycles, extensive coding, and the need for manual training to create functional bots.
• Also, if a customer doesn’t happen to use the right keywords, the bot won’t be able to help them.
• Still, that doesn’t mean customer service should ever sit on the back burner.
• This type of artificial intelligence (AI) uses machine learning and natural language processing (NLP) to make human-machine interactions more intuitive.
• With a lighter workload, human agents can spend more time with each customer, provide more personalized responses, and loop back into the better customer experience.

With REVE Chat, you can start a free trial of a chatbot and other support tools and see how they would fit into the specific needs of your business. In this blog, we will discuss in detail all the differences between a chatbot and a conversational AI technology and also show examples from across industries to ensure absolute clarity on the subject. For example, the Belgian insurance bank Belfius was handling thousands of insurance claims—daily! As Belfius wanted to be able to handle these claims more efficiently, and reduce the workload for their employees, they implemented a conversational AI bot from Sinch Chatlayer. With this bot, Belfius was able to manage more than 2,000 claims per month, the equivalent of five full-time agents taking in requests.

This makes them a valuable tool for multinational businesses with customers and employees around the world. Our customer service solutions powered by conversational AI can help you deliver an efficient, 24/7 experience  to your customers. Get in touch with one of our specialists to further discuss how they can help your business. Also, conversational AI has the power to integrate to multiple platforms and channels to deliver transactional, resolutive and personalized information. Unlike a traditional chatbot, conversational AI isn’t just a set of structured flows of pre-built questions and answeres.

Book a demo of Raffle Chat now to see our AI chat in action, and explore our customer success stories. Some conversational AI engines come with open-source community editions that are completely free. Other companies charge per API call, while still others offer subscription-based models. The cost of building a chatbot and maintaining a custom conversational AI solution will depend on the size and complexity of the project.

Solutions and Services

Depending on your budget, team acceptance of new technologies, and your level of operations, figure out what would work best for you. Your ultimate goal is to have engaging conversations with your customer. However, if your business involves a more personalized conversation style, you have to integrate conversational AI into your operations. Try asking a conversational AI bot, “Where’s the nearest fast food joint? ” Conversational AI can provide answers to all these open-ended questions using NLP that a simple bot cannot answer. If you know what people will ask or can tell them how to respond, it’s easy to provide rapid, basic responses.

Domino’s messenger bot is a good example of how to make the best of chatbot technology and ensure amazing service to customers. Since this chatbot lives in Facebook Messenger, customers will have the flexibility to order from different devices. More so, the chatbot can also track previous purchases and make the entire food ordering procedure as smooth as it can get. However, there are some marked differences between these advanced technologies, even if they serve entirely the same purposes across sales, support, and marketing. Despite the differences, both technologies have the potential to transform the way customer service is delivered, which can ultimately have a big impact on the bottom line of a business. Essentially, chatbots are conversational AI applications put into action.

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Conversational AI can be used to better automate a variety of tasks, such as scheduling appointments or providing self-service customer support. This frees up time for customer support agents, helping to reduce waiting times. Conversational AI can also be used to perform these tasks, with the added benefit of better understanding customer interactions, allowing it to recommend products based on a customer’s specific needs. This can include picking up where previous conversations left off, which saves the customer time and provides a more fluid and cohesive customer service experience. If a conversational AI system has been trained using multilingual data, it will be able to understand and respond in various languages to the same high standard.

Memorable shopping experiences are what motivate customers to come back to your website and do more business with your brand. It’s your job as the site manager to provide that experience from the first meet and greet opportunity all the way through the point of conversion and post-sale engagement. Adecco used Kindly’s recruitment chatbot to reduce the number of enquiries submitted to their live chat feature, which was the tool handling the bulk of customer enquiries for a long period of time.

Conversational AI vs Chatbot – The Key Differences and Examples

Depending on the sophistication level, a chatbot can leverage or not leverage conversational AI technology. It uses speech recognition and machine learning to understand what people are saying, how they’re feeling, what the conversation’s context is and how they can respond appropriately. Also, it supports many communication channels (including voice, text, and video) and is context-aware—allowing it to understand complex requests involving multiple inputs/outputs. A chatbot is a computer program that emulates human conversations with users through artificial intelligence (AI). Your typical automated phone English, press one; for Spanish, press two) is basically a rule bot.

Implementing AI technology in call centers or customer support departments can be very beneficial. This would free up business owners to deal with more complicated issues while the AI handles customer and user interactions. As conversational AI has the ability to understand complex sentence structures, using slang terms and spelling errors, they can identify specific intents. Like we’ve mentioned before, this is particularly useful with virtual assistants and spoken requests.

Read more about Chatbot vs Conversational Differences You Should Know here.