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May 30, 2022
4 minutes read

The Differences Between Chatbots and Conversational AI

Although chatbots and conversational AI are sometimes used interchangeably, they aren’t the same thing. Today we’ll review the difference between the two and which option is better for your business.

What Is a Chatbot?

A chatbot is a software that automates conversations and communicates via voice or text. Chatbots are virtual assistants that can quickly respond to customer queries and streamline your customer service workflow using predefined rules or artificial intelligence. 

Chatbots fall into two main categories: rule-based chatbots and AI chatbots. Let's explore further below!

Rule-Based Chatbots

Sometimes known as menu-based or basic chatbots, rule-based chatbots are typically what people refer to when they talk about chatbots. They communicate using a set of predefined responses based on keywords and other language identifiers from the customer. In some cases, rule-based chatbots display a decision tree so users can select answers based on their situation.

Because these chatbots are oriented around pre-selected questions and responses, they are relatively easy to implement for customer support. Although rule-based chatbots seem fairly simplistic, they are an excellent tool for answering commonly asked questions and resolving basic customer issues. However, they will not be able to have a real conversation with a human being.

AI Chatbots

AI chatbots use advanced technology such as machine learning, natural language processing (NLP), and natural language understanding (NLU) to understand the context of a user request. By leveraging the power of AI technology to analyze thousands of points of contextual data in customer conversations, AI chatbots offer improved understanding and decision-making abilities.

Rather than being limited to preset rules, AI chatbots are constantly learning from each conversation with a customer. The more exchanges an AI chatbot has, the more helpful its responses will be as time goes on. An integral part of an AI chatbot is its ability to understand natural human language, which allows it to communicate beyond predefined questions and responses.

What is Conversational AI?

Conversational AI is a type of chatbot that combines artificial intelligence with other emerging technologies like machine learning, natural language processing, process workflows, and speech recognition, providing a personalized customer service experience. Thanks to its versatility and cost-efficiency, global spending by retailers on AI services like conversational AI will reach $12 billion by 2023.

Conversational AI extends beyond the basic chatbot capabilities and sets a new standard for the customer experience. By using deep learning technology, conversational AI tools can continuously learn and improve, making them more adaptable to the unique needs of any growing business.

Conversational AI typically uses a combination of tools, including:

  • An automatic speech recognizer (ASR)
  • A spoken language understanding module (SLU)
  • A dialog manager (DM)
  • A natural language generator (NLG)
  • A text-to-speech (TTS) synthesizer

Together, these tools use information from a centralized database that contains all the knowledge that conversational AI has gained in every customer interaction. As a result, conversational AI can deliver a dynamic, context-based experience personalized to the customer by constantly growing its knowledge base and language understanding.

Chatbot vs. Conversational AI: A Comparison

Chatbots

  • 24/7 Availability
  • Text Commands, Inputs, and Outputs
  • Keyword Focus
  • Fast Deployment

Conversational AI

  • 24/7 Availability
  • Text Commands, Inputs, and Outputs
  • Machine Learning
  • Natural Language Processing
  • Algorithm Training
  • Easy Scaling

Chatbot or Conversational AI: Which is Better For Your Business?

Recent research shows that 37 percent of companies in South-East Asia have accelerated their AI adoption plans in the next five years. Although automated messaging technology can offer a massive boost to your business’s customer service, the difference between a chatbot and conversational AI might affect your decision.

Because chatbots only need a set of predefined queries and responses, they can be set up and deployed very quickly. As a result, basic chatbots are often ideal for small- to medium-sized businesses (SMBs) because they don’t need to handle a lot of data or respond to complex customer inquiries.

Go Beyond Chatbots With CM.com’s Conversational AI

Chatbots are just the beginning of what technology can achieve in customer service. Thanks to the latest advances in artificial intelligence, conversational AI has proved to be a powerful tool for communicating with customers. If you want to know how conversational AI can work with your business, CM.com is here to help.

Our Conversational AI Cloud can help you create your exchanges in our user-friendly interface. In addition, our platform enables continuous learning and improvement for an ever-improving customer experience, from easy-to-build conversational bots to AI-powered analysis.

Contact an expert today to learn more about improving your customer service with Conversational AI Cloud.

Get Started with Conversational AI Today!

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