Enhancing loyalty with conversational AI for customer experience

Katie Morley

Jul 4, 2024

Katie Morley

Jul 4, 2024

It’s easy to think that AI will hinder a personalized customer experience. When today’s consumers are hungry for tailor-made interactions and a human touch, using AI-powered chatbots and other tools seems like the antithesis of what you should be doing.

But in reality, conversational AI for customer experience (CX) helps you achieve the best of both worlds. Customers benefit from personalized and prompt interactions, while businesses benefit from the ease and efficiency of modern technology. 

If you think customers will be skeptical of your use of AI for CX, think again. The majority of them are surprisingly optimistic about how AI will improve customer service, especially when it comes to availability and wait times.

So, what exactly is conversational AI? And how can you use it to elevate your customer experience and boost your bottom line? This guide has the answers you need.

Table of Contents
  1. What is conversational AI in customer experience?

  2. How to use conversational AI for customer experience: 6 ideas to inspire you

  3. The future of conversational AI for customer experience

  4. Getting started with Insider

What is conversational AI in customer experience?

Conversational AI for CX refers to using artificial intelligence to engage in human-like, two-way interactions with customers using text-based messages or voice.

AI-powered chatbots or virtual assistants can understand, interpret, and respond to customer inquiries in real-time, much like a real human would. These tools allow for conversational messaging that feels natural, and less like the stiff language you might expect from a robot.

Here are a few examples of how businesses could use a conversational AI platform for customer experience:

  • Customer support: Chatbots can handle basic customer service inquiries like troubleshooting, returns, exchanges, or cancellations.
  • Order tracking: Chatbots can help customers place orders, provide information about product availability, and track existing orders.
  • Appointment scheduling: Service-based businesses can also use chatbots or a voice assistant to help customers schedule or reschedule appointments and send automated reminders.

Conversational AI allows businesses to quickly and effectively handle routine or basic tasks, which saves human agents’ time for more complex or nuanced interactions that demand a more human element.

You don’t need to get too into the weeds on how conversational AI works to use it effectively. But if you’re curious, the simple explanation is that it uses a combination of natural language understanding (NLU), natural language processing (NLP), and machine learning (ML) to digest a user’s input and respond accordingly—using everyday, human language that’s intuitive for your customers.

What are the key benefits of using conversational AI for businesses?

An impressive 86% of consumers state that they want to hear from the businesses they frequent. They’re eager to engage and conversational AI meets their demands for personalized attention and immediate responses. With that in mind, here are some of the most notable benefits of conversational AI: 

  • Faster response times: Exactly how long customers are willing to wait for a response varies from channel to channel. But, in general, the sooner you can get back to them, the better. Conversational AI allows for instant responses so customers aren’t left waiting.
  • Improved personalization: McKinsey research states that 71% of consumers expect companies to deliver personalized interactions. AI tools can quickly pull data from past customer interactions and tailor responses accordingly.
  • Proactive and personalized marketing: AI leverages data to respond to incoming customer inquiries, but it can also use that information to personalize marketing efforts, like providing targeted recommendations based on a user’s history and delivering relevant content.
  • Shorter purchase cycles: Conversational marketing and speedy service simplify and improve the customer experience, which can push customers to purchase without the typical hemming and hawing.
  • Lower agent burnout: An alarming 59% of customer service representatives are at risk of burnout. Conversational AI automates some of their work and reduces overwhelm. 

In short, conversational AI translates to both better efficiency for businesses and a better experience for customers.

How to use conversational AI for customer experience: 6 ideas to inspire you

Support inquiries are the most obvious use case for conversational AI, but that doesn’t make it the only use case. Leveraging it across the funnel allows businesses to deliver a seamless and interactive experience before, during, and after purchase.

Need some inspiration? Here are a few ideas for how to use conversational AI for customer experience.

1. Convert your social media audience to subscribers

Use WhatsApp click-to-action ads that push users to start a conversation with your business on WhatsApp. When they reach out, you can continue the conversation, collect their details, and add them as subscribers.

2. Generate leads with zero friction

With WhatsApp Flows, you can create interactive and immersive customer experiences directly within WhatsApp. Allow customers to provide their contact details, make a booking, or subscribe—all without ever leaving the platform.

3. Create end-to-end conversational buying experiences 

You can even facilitate entire purchasing experiences directly within WhatsApp with WhatsApp Commerce. Your customers can discover, browse, and buy in WhatsApp while receiving friendly and conversational messages from your business along the way.

Insider enables marketers to easily connect with customers on WhatsApp

4. Boost confidence with an intelligent concierge

For customers who don’t want to navigate the product discovery and purchasing process alone, create a virtual assistant that’s present throughout their entire journey. Providing personalized recommendations and answering questions on the spot will boost their purchase confidence.

5. Offer strategic upsells and cross-sells

After they’ve made a purchase, create interactive flows to offer strategic upsells and cross-sells with their order confirmation. From updating their seats to adding a meal to purchasing more relevant items, these personalized recommendations generate more revenue with little effort.

6. Elevate the post-purchase experience

The purchase feels like the finish line, but it’s actually a time when you want to continue engaging with the customer. Doing so fosters deeper loyalty and increases the chance of future purchases. Send friendly, conversational reminders where they can ask questions, track their shipment, and more.

The future of conversational AI for customer experience

AI has been a growing topic of conversation everywhere in recent years, so it makes sense that the adoption of conversational AI will also continue to increase.

Research predicts that the global conversational AI market will grow at a compound annual growth rate of 22% during 2020-25. Forecasts also predict that the market will rapidly expand from $13.2 billion in 2024 to an eye-popping $49.9 billion by 2030. 

As far as the capabilities of the technology itself, Deloitte foresees that it will continue to get smarter and, as a result, be able to handle more complex conversations and interactions as opposed to the simple and routine tasks it’s currently focused on. 

Looking forward, conversational AI for customer experience will quickly move from being a competitive differentiator to being table stakes for businesses—especially as conversational commerce continues to grow.

Today’s customers expect that they can interact with businesses at all stages of the purchasing journey, and businesses that don’t rise to the occasion with the right technology risk being left behind. 

Getting Started with Insider

When you’re ready to reap the benefits of AI, you need a conversational AI platform for customer experience to simplify the process.

Insider’s conversational customer experience solution allows you to engage with customers in two-way dialogues on their favorite channels like WhatsApp, Instagram, web, app, and more. By combining conversational AI with predictive and generative AI, you can reach and engage your customers on their favorite channels and boost conversions.

Even better? You don’t need to start from scratch. Insider offers conversational templates like WhatsApp Commerce and Flows so you can promote, sell, and support users in real-time and on autopilot.
With the best conversational AI platform, implementing AI doesn’t need to hinder personalized and engaging customer experiences. When it’s done right, it’s not a barrier—it’s a boost.

Katie is an award-winning content marketer with over eight years of experience in content strategy, development, and copywriting. As Global Content Director at Insider, she currently oversees content strategy across 26 regions. Fun fact: Katie read 64 books last year (for which she owes a long commute and two week-long holidays where she spent approximately six hours a day with her nose in a book).