Welcome to the forefront of conversational AI as we explore the fascinating world of AI chatbots in our dedicated blog series. Discover the latest advancements, applications, and strategies that propel the evolution of chatbot technology. From enhancing customer interactions to streamlining business processes, these articles delve into the innovative ways artificial intelligence is shaping the landscape of automated conversational agents. Whether you’re a business owner, developer, or simply intrigued by the future of interactive technology, join us on this journey to unravel the transformative power and endless possibilities of AI chatbots.
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As competition and customer expectations rise, providing exceptional customer service has become an essential business strategy. Utilizing AI chatbots is one of the main methods for meeting customer needs and optimizing processes.
These conversational AI applications can efficiently handle customer inquiries and provide support around the clock, thereby freeing up human support agents to handle more complex customer issues.
To what extent is the use of artificial intelligence chatbots prevalent in customer support? Are customers inclined towards conversing with a chatbot as opposed to a human representative?
It is anticipated that the chatbot industry will experience substantial growth and reach around 1.25 billion U.S. dollars by 2025, which is a considerable increase from its market size of 190.8 million U.S. dollars in 2016.
According to Emily Potosky, Director, Research, in the Gartner Customer Service & Support practice, “While self-automation has been happening for a while in the software space, this trend will become more present internally in customer service because reps now have improved access to automation tools.”

Source: Statista
AI chatbots are commonly used in the retail industry. Precedence Research shows that 21.50% of applications are segmented into customer relationship management (CRM).

Source: Precedence Research
Further, the Statista’s global survey of hotel professionals conducted in January 2022 found that the adoption of chatbots in the hospitality industry was projected to rise by 53 percent during the year.
According to Tidio’s study, the majority of consumers, specifically 62%, would choose to utilize a chatbot for customer service instead of waiting for a human agent to respond to their queries.
AI chatbot offers immediate assistance to customer inquiries, providing real-time responses without the need for human intervention. Their automated and efficient nature enables them to swiftly resolve routine queries, leading to quick resolution and improved customer satisfaction.
Unlike human support agents who work in shifts or have limited availability, conversational bots can operate 24/7 without any breaks. They are always there to answer user queries, regardless of the time of day or day of the week. This ensures that customers can access support whenever they need it, even during non-business hours or holidays.
There are multiple ways to enhance personalization using conversational artificial intelligence solutions. Here are some examples:
Conversational AI reduces operational costs and increases profitability by automating repetitive tasks, providing 24/7 support, and handling a large volume of inquiries, resulting in improved efficiency, cost savings, and increased revenue opportunities.
AI chatbot can provide support in multiple languages, allowing businesses to expand their customer base globally by leveraging language recognition and translation capabilities to communicate with customers in their preferred languages, overcoming language barriers and providing a seamless support experience for customers around the world.

Source: HootSuite Blog
Chatbots can handle multiple conversations at once, allowing businesses to serve a larger customer base without increasing staffing needs by leveraging their ability to engage in parallel conversations with customers, providing efficient and scalable customer support without the need for additional human resources.
Chatbots can collect valuable data on customer inquiries, preferences, and behavior, providing insights to inform business strategies by analyzing and recording interactions with customers, identifying trends, patterns, and customer preferences, which can be used to improve business operations, product development, and marketing strategies, leading to informed decision-making and better customer engagement.
The conversational AI tools can increase customer engagement and satisfaction through prompt and personalized interactions by providing quick responses to customer inquiries, offering personalized recommendations, and deliveringtailored solutions that meet customer needs, resulting in enhanced customer experience, increased engagement, and higher levels of customer satisfaction.

Source: Tidio
Conversational AI solutions can enhance a business’s brand image by providing modern and innovative customer service solutions through cutting-edge technology that reflects the business’s commitment to staying current with customer service trends, offering seamless and convenient interactions, and showcasing a forward-thinking approach, thereby positioning the business as modern, customer-centric, and innovative in the eyes of its customers.
Conversational AI solutions can handle and resolve complex customer inquiries and provide support by leveraging advanced natural language processing (NLP) capabilities, interactive decision trees, and access to relevant data sources, allowing them to understand and analyze complex customer queries, provide accurate responses, and guide customers through issue resolution steps, resulting in effective and efficient support for complex customer inquiries.
The virtual agents can assist in product recommendations, cross-selling, and upselling by leveraging customer data, preferences, and browsing behavior to offer personalized recommendations and suggest related products or services during customer journey, resulting in increased sales and enhanced revenue opportunities for businesses.
Imagine you are visiting an online clothing retailer’s website and start a chat with their chatbot to inquire about a pair of jeans. The chatbot engages with you in a conversation and asks about your style preferences, size, and desired fit. Based on your responses, the chatbot uses its recommendation algorithm to suggest a few options of jeans that match your preferences.
After you express interest in one of the suggested jeans, the chatbot takes the opportunity to cross-sell by recommending a matching belt or a pair of shoes that would complement the jeans. The chatbot may also offer an upsell by suggesting a premium version of the jeans with additional features or a higher-end brand.

Source: HootSuite
Chatbots can assist in booking and reservation processes for, among others, businesses in the hospitality industry by offering a seamless and convenient way for customers to make reservations, check availability, and receive booking confirmations. Here’s an example of how chatbots can assist in the booking and reservation processes:
AI bot can provide real-time updates on order status and delivery information. After a customer places an order, the chatbot can automatically send a confirmation message with order details, including the order number, items ordered, and estimated delivery time.

Source: Haptik
The AI powered chatbots can also provide a summary of the order and request confirmation from the customer. It can also provide real-time updates on the order status and location by integrating with the business’s order tracking system.
Moreover, the chatbot can send proactive notifications to customers as the order progresses through different stages, such as order processing, out for delivery, and delivered. These alerts can be sent via messaging platforms, SMS, or email, depending on the customer’s preferred communication channel.
If there are any changes to the delivery schedule, such as delays or rescheduling, the chatbot can promptly notify the customer and provide updated information.
Chatbots can assist in onboarding new customers and providing training on product usage by delivering personalized and interactive tutorials, answering frequently asked questions (FAQs), and guiding customers through the onboarding process. Here’s an example of how chatbots can assist in onboarding new customers and providing training on product usage:
A conversational AI solution can assist in account setup and management by guiding customers through the account creation process, handling password resets, and addressing billing inquiries. Here’s an example of how chatbots can assist in the following tasks. Chatbots can help customers create new accounts by:
Chatbots can handle password reset requests from customers by verifying their identity using various authentication methods, such as email verification, phone number verification, or security questions. The chatbot can then initiate the password reset process and guide customers through the necessary steps to create a new password.
These AI tools can also assist customers with billing inquiries, such as checking account balances, reviewing past invoices, updating payment methods, or resolving billing disputes. The chatbot can access customer account information in real-time and provide accurate and up-to-date billing details. If necessary, the chatbot can also escalate complex billing issues to a human representative for further assistance.
Chatbots can provide troubleshooting and technical support for product or service-related issues by utilizing their knowledge base and conversational capabilities. Here’s an example of how chatbots can assist in troubleshooting and technical support:
Chatbots can be integrated with social media platforms to assist in social media customer service and engagement by responding to customer inquiries and complaints in a timely and efficient manner. For example, it is very common to integrate conversational Ai into Facebook Messenger.

One limitation of chatbots is their lack of human touch, including empathy, which may make them unsuitable for all customer interactions. While chatbots can efficiently handle common inquiries and provide prompt responses, they may not possess the emotional intelligence, real conversational abilities that human agents can offer in certain situations where customers require emotional support or personalized attention.
Additionally, customers may have unique or complex inquiries that require human interactions and human judgment, creativity, or critical thinking skills that a chatbot may not possess. Chatbots rely on pre-programmed responses and may struggle to understand nuanced inquiries or provide customized solutions beyond their programmed capabilities.
Chatbots may not be able to handle complex issues that require human intervention, leading to customer frustration and dissatisfaction. Further, chatbots may encounter technical errors, such as misinterpretation of customer inquiries, leading to inaccurate or irrelevant responses.
Chatbots may be vulnerable to hacking and security breaches, leading to the potential compromise of customer data. There are several ways in which chatbots may be vulnerable to hacking and security breaches.
First, they may be susceptible to phishing attacks, where attackers try to trick users into revealing sensitive information such as login credentials or financial information. This can occur through the chatbot conversational interfaces itself or through links and attachments sent within the conversation.
Second, chatbots may be vulnerable to malware attacks. Malware can be introduced into the chatbot software through various means, including unsecured networks or malicious code hidden within messages sent to the chatbot. Once the malware is introduced, it can be used to steal sensitive data or take control of the chatbot.
Netguru is a company that provides AI consultancy services and develops AI software solutions. The team of proficient engineers, data scientists, and AI specialists utilize their knowledge of artificial intelligence, machine learning, and data analytics to deliver creative and tailored solutions for companies in different sectors.

When it comes to developing and implementing conversational chatbots for customer service, Netguru provides comprehensive services including discovery, strategy, design, development, integration, testing, deployment, and maintenance. We leverage industry-leading tools and technologies to build custom solutions that are tailored to each business’s specific needs.
Here are some of the conversational AI chatbots projects Netguru worked on:
In an effort to enhance the online customer experience, an AssistBot was developed to assist buyers in finding the right products in IKEA online shop. The primary objective was to create a tool that was user-friendly and proficient in resolving customer issues.
By leveraging IKEA’s product database, the AssistBot has an exceptional understanding of the company’s catalog, surpassing that of a human assistant. Additionally, it has the ability to determine which products can be ordered online. Rather than leaving customers to navigate the complexities of tags, categories, and collections on their own, the AssistBot will offer guidance throughout the process.

During the Grand Finale, the GOCC Communication Center receives thousands of queries from people wanting to support the initiative, with many coming from online touch points such as Messenger. Responding quickly to questions about volunteering and the current fundraiser status is crucial for maintaining the organization’s social trust that has been built on operational transparency over the past 30 years.
To streamline online communication,the most effective method was to automate responses to frequently asked questions. The organization required a chatbot that could easily integrate with Messenger and help volunteers save time by handling repetitive queries, allowing them to focus on answering more unique or specific questions.
The results:

Example interaction visualization
Conversational AI chatbots are transforming customer service by providing instant assistance to customers, enhancing customer satisfaction, and reducing operational costs for businesses. The tools are powered by advanced machine learning algorithms that enable them to handle a wide range of customer queries and offer personalized solutions, thus improving the overall customer experience.
While chatbots and assistants have proven their value in customer-facing scenarios, the next frontier lies in AI agents—autonomous systems capable of proactively supporting internal processes. At Netguru, we’ve built an internal AI agent that helps our sales team manage opportunities more efficiently.
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Kacper Rafalski
At Netguru we specialize in designing, building, shipping and scaling beautiful, usable products with blazing-fast efficiency.
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