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Conversational AI: The One-Shot Marketing Cure-All?
According to Deloitte, the global conversational AI market, which includes chatbots and intelligent virtual assistants, is slated to grow at a CAGR of 22 per cent between 2020 and 2025, touching USD 14 billion by 2025
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Humanity has increasingly gotten chattier online with the internet's proliferation, social media's popularity, and messaging apps. It is now evident that a significant number of us are today spending a sizeable amount of time on WhatsApp, WeChat, and Facebook Messenger. This has given rise to a 'conversation economy' that is driven by interactions curated by responses to customer complaints on social media, engaging with prospects through chatbots, and providing seamless omnichannel buying experiences across physical stores, the internet, and the phone. And Conversational AI is pushing this revolution forward.
Gone are the days when conversational AI (chatbots) would annoyingly follow scripted dialogues to respond to customer queries. Today, modern machine learning (ML) and deep learning capabilities enable chatbots to handle multi-turn conversations and respond to the user in context. This has become one of the ways in which brands today are unlocking hyper-growth by combining the power of commerce and conversational AI. With real-time access to customer data, AI chatbots are much more intelligent and can provide personalised offers at any time.
According to Deloitte, the global conversational AI market, which includes chatbots and intelligent virtual assistants, is slated to grow at a CAGR of 22 per cent between 2020 and 2025, touching USD 14 billion by 2025.
"When done right, conversational AI can be more efficient and effective than other forms of digital interaction because it responds to the user queries in the most direct and understandable way possible. Additionally, with advanced features, conversational AI makes the consumer feel that they are directly talking to the brand and not a digital chatbot, creating a more seamless and engaging experience," says Manoj Malhotra, co-founder and CTO, Amplify.ai.
The world of marketing has received a huge boost in this age of digitalisation, with automation and chatbots becoming an integral part of the latest marketing strategies. These strategies today entail customer analysis, customer engagement, retention lead, lead generation, e-mail marketing, and reaching out to customers through social media. But at the very core of it, AI plays a crucial role for companies to make these processes easier by automating the conversations when the potential client shows interest culminating in better business.
"Ad costs are tripling, and conversion rates are dropping dramatically. It's more effective for brands to capitalize on users' initial attention instead of trying to win it back. That's where Conversational marketing can be an excellent acquisition strategy. It gives customers the ability to have real-time conversations and get instant answers," explains Aakrit Vaish, co-founder and CEO, Haptik.
Brands have already caught on to this and are using Conversational Ads on popular social media channels to maximise their Return on Ad Spends. Conversational Ads are interactive ads that allow users to interact with a chatbot that can handle in-the-moment queries. Marketers can acquire more users in the same budget by using the most effective marketing format today – Conversational Ads, says Vaish.
Addressing CX Challenge
In the current conversational economy, customers use conversations to obtain product info, gift ideas, shop locations, delivery options, and to even make an impulse purchases. And people are today comfortable chatting with businesses in real-time.
Brands have identified that customers are more likely to gravitate towards businesses that provide personalised shopping experiences. This is prompting enterprises to turn towards conversational commerce and recreating in-store experiences on popular messaging apps that customers already use.
Conversational commerce allows users to find products customers are looking for, get tailored recommendations based on their purchase history and preferences, receive reminders and promotions, and make their purchases in chat. Using the technology, brands are witnessing an improvement in cart conversion, add-to-cart rates, and an overall increase in average order value.
"Post conversational AI integration, businesses have witnessed an increase in sales since it provided customers with the best product recommendations based on user preferences. It also Improved conversion rate by providing the most relevant content at the right time via messaging apps or voice assistants and helped generate qualified leads by identifying potential buyers and reaching out to them immediately with personalised messages," says Manoj Malhotra.
Recently, Gartner predicted that chatbots will become the primary customer service channel for roughly a quarter of organisations by 2027.
Conversational AI To Replace Human Expertise?
Conversation AI is delivering for businesses reduced costs, increased workforce productivity, and efficiency – the holy grail in a competitive business landscape. They are truly shaping the future by changing how businesses gather information and interact with customers.
The technology holds great promise for fostering corporate expansion, automating the manufacturing processes, delivering insightful results, utilising tailored ads, etc. In addition, artificial intelligence has many practical uses in everyday life.
"As of date, Artificial Intelligence continues to be a level ahead of automation in the business that streamlines both workflow and customer experience cost-efficiently. The customer services offered by organizations are vulnerable without artificial intelligence, and poor service hurts customer satisfaction levels and businesses end up losing their customers," says Amit Gandhi, founder, NovelVox.
"So, the CX industry is hopeful that it will improve the agent experience as well as solve queries for the customers in a quicker time frame. AI helps to take over repetitive tasks, but it will not impact the jobs in the CX sector since we will be looking for better avenues for customer satisfaction, and human intelligence is much needed at this step," he adds.
Initially, conversational AI was considered an extension of the contact center. But today, chatbots have become mainstream and are no longer just allotted support roles and automation tools. They act as Sales Assistants that can manage the entire customer lifecycle from discovery to acquisition to conversion.
Further, Advancements in AI and NLP have made Conversational AI capable of handling software development, sales operations, and recruitment. Companies are actively leveraging the enormous potential of NLP and conversational user experience to power their recruitment processes. "Conversational AI is also doubling up as an employee self-help tool for leave applications, making travel claims, and access salary slips. The potential for what Conversational AI is capable of is virtually limitless," says Aakrit Vaish.
With the arrival of the metaverse, chatbots are going to become even more relevant as they will play a pivotal role in bridging the communication gap between digital humans and brands. In fact, when brands come up with their virtual stores in the metaverse, virtual sales assistants will be needed to guide visitors just like any in-store assistant. Conversational AI can be used to create these metaverse assistants that proactively engage with walk-in customers, understand their preferences and then recommend the right products to them. Conversational AI is, in fact, also beginning to embrace the world of digital avatars, and quite a few companies have started leveraging chatbots to build digital avatars for their products and services.