Saloni Walimbe, research content developer at GMI
Customer experience has long been hailed as an integral factor that can make or break a business. In fact, a report by Forbes reveals that over 96% customers hold the belief that customer service is a major contributing factor to their loyalty towards a brand, says Saloni Walimbe, research content developer at Global Market Insights (GMI).
In light of this, modern businesses are continuously working towards standing out from their competition by inculcating new and innovative ways to enhance their customers’ journey.
To provide the ideal customer experience, or CX, businesses are now focusing on providing tailored customer services designed to bring higher conversions, by identifying evolving preferences and needs as well as predicting their behavior. One of the best tools to support this process is artificial intelligence or AI.
With customer experience forming the foundation of a successful business, conversational AI technologies such as intelligent virtual assistants and chatbots can provide a deeper insight into customer interactions and in turn predict their behavior.
As businesses become more attuned to these different use cases, conversational AI technology will potentially continue to evolve, adapt and improve, becoming more responsive and intuitive with each interaction it undertakes.
Chatbots or Intelligent Virtual Assistant? – Evolution of conversational AI
Various reports suggest that as much as 95% of all customer interactions will take place through AI-supported channels by 2025.
In the conversational AI landscape, the terms virtual assistant and chatbot have long been used interchangeably, by both businesses and customers, owing to their core commonality; a conversational interface designed to respond to user inputs.
While the concept behind both technologies is inherently similar on a surface level, they are differentiated by distinct characteristics in terms of complexity, scope and capability, which are all significantly more apparent in IVA technology than in chatbots.
Essentially, the intelligent virtual assistant market has emerged as the product of a long-term chatbot evolution.
Chatbots were first developed in the late 1960s to early 70s. These bots were programmed with specific scripted responses that were delivered to users based on their inputs, recognised as specific phrases and keywords.
However, as the flow of conversation became more complex and defined over time, the limitations in these bots began to show through. For instance, they featured no learning process and could respond with only those phrases that they had been programmed with. They had no memory or context retention capabilities, which meant that these chatbots could not retain important user information between sessions or even during conversations. Their application scope was limited to basic tasks such as responding to FAQs, etc.
There came a turning point in conversational AI technology evolution, however, facilitated by the emergence of ML (Machine Learning) and NLU (Natural Language Understanding).
NLU, which allows bots to comprehend and interprets inputs from users in natural language, and machine learning, which enables bots to learn from previous customer interactions and train themselves, play critical roles in the gradual progression of chatbots into intelligent virtual assistants, as they are known in the modern era. IVA technology is equipped with a deep domain knowledge base that can help accurately interpret customer preferences and intent, fulfil their requirements, and augment the overall customer experience by learning from each interaction.
Digital assistants have several advanced capabilities which ensure automation and improved customer satisfaction. Brands that incorporate IVA technology in their business operations can therefore be assured that the primary focus is on consistent ROI through constructive customer interactions.
How is IVA technology reinventing customer experiences?
One of the most prominent contributors to customer loyalty is a positive experience. As a matter of fact, studies have shown that nearly 80% US consumers consider convenience, speed, knowledgeable assistance and friendly service as vital elements of a successful customer experience.
An efficient way for business to product this result is by adopting novel and innovative technologies, such as AI assistants. Intelligent virtual assistants can offer customers quick, automated services, high convenience owing to IVA accessibility through text, chat, voice, etc. as well as human-like understanding capabilities which can prevent the need for unnecessary repetitions from the customer’s end, all of which combine to create productive and personalised CX.
With such robust capabilities, intelligent virtual assistants are increasingly considered on par with well-informed human agents. Reports suggest that businesses who have adopted IVA technology have seen a nearly 2.5 times greater increase in customer satisfaction rates, annually. Also, retention rates are almost 88% higher among intelligent virtual assistant users.
Various companies have demonstrated the merits of incorporating conversational AI into their operations. For example, a Brazilian investment platform, Easynvest found that implementing an AI-powered chatbot enabled it to offer 24/7 investor support and in turn achieve over 260,000 conversations with a 57% increase in customer retention.
Likewise, Movistar, a Latin American telecom company increased customer retention by over 80% and achieved over 2.5 million conversations at 30% lower costs, by deploying chatbot technology.
IVA technology has come a long way over the years, and the future outlook for the technology is expected to offer several more lucrative opportunities, with AI researchers studying the possibility of improving the assistants’ emotional intelligence. With the capability to understand not just the customer’s preferences, but also their emotions during the actual interaction, the intelligent virtual assistant market is expected to evolve even further as years progress, to deliver more humanised, engaging and productive customer experiences, establishing the technology as a vital component of the future customer service landscape.
Global Market Insights Inc. has a market report dedicated to global intelligent virtual assistant, available at:https://www.gminsights.com/industry-analysis/intelligent-virtual-assistant-iva-market
About the author
Saloni Walimbe, research content developer at Global Market Insights.(GMI)
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