Conversational AI in Call Center: Transforming Customer Service

Customer service is a key differentiator in any competitive industry. When your customers don’t receive timely and effective support, they’ll quickly turn to your competitors.

Conversational artificial intelligence (AI) can be a valuable strategic investment for this reason. It enhances the customer experience and enables efficient 24/7 support, while reducing operational expenses and facilitating business growth. Intercom reports that more than 3 in 4 support teams are already investing in AI for customer service. 

If your team hasn’t implemented conversational AI yet, the good news is there’s still time to catch up. Read on to learn what conversational AI is, how it works, and how a smart AI transformation can drive your business forward. 

What is Conversational AI and How Does It Work?

Today, cold, robotic responses are outdated. Modern conversational AI solutions for call centers engage with users through natural dialogue that mimics human language. These solutions use several advanced technologies to understand speech and generate the right responses:

• Natural language processing (NLP) helps AI interpret and understand human language.
• Machine learning (ML) enables continual improvement from past interactions.
• Automatic speech recognition (ASR) converts spoken language into text, enabling processing of voice input.
• Text-to-speech (TTS) transforms text into speech to enable voice responses.
• Intent recognition identifies user intent to provide accurate responses.
• Context management maintains conversation history for personalized experiences.

Types of Conversational AI in Customer Service

To date, three main types of conversational AI tools have gained traction in customer service and support:

AI chatbots

Chatbots are AI-powered programs that interact with users through text. Companies often use them in AI-powered customer support to answer common questions, guide users through troubleshooting, and offer product recommendations. You can deploy chatbots on websites, messaging apps, and social media platforms.

In fact, 44% of support teams already use AI chatbots for customer service. Many reporting that AI successfully resolves up to 30% of their support requests, according to Intercom.

AI voice assistants

Before the advent of artificial intelligence, contact centers commonly relied on interactive voice response (IVR) systems to route incoming calls to the appropriate team. IVR systems use predefined rules and recorded voice prompts to guide callers to make the correct selections on their touch-tone keypads.

Today, sophisticated AI virtual customer assistants leverage speech recognition and natural language processing to understand and respond to voice commands. These AI-powered systems route callers to the correct department in a far more natural way. Plus, they can perform a range of other tasks, from answering general inquiries to taking messages.

AI voice agents

AI voice agents perform all the functions of AI voice assistants, and they can also handle more complex inbound and outbound calls. They engage in real-time dialogue by understanding voice requests and responding in natural language.

5 Benefits of Using Conversational AI in Customer Service

Deliver a Positive Customer Experience 24/7

72% of customers expect immediate service when contacting a company. And over 50% will switch to a competitor after a single unsatisfactory experience, according to Zendesk research. Conversational AI lets AI contact centers to operate 24/7, so customers can get help even when human agents aren’t available. Indeed, 50% of support teams say extended service hours are the top benefit of using conversational AI, according to Intercom research.

Moreover, conversational AI is effective at enhancing customer experiences. For example, Lyft's integration of AI assistants led to an 87% decrease in average customer service resolution time. Delivering fast, effective support improves customer satisfaction, brand perception, and loyalty.

Reduce Inbound Call Volume for Human Agents

As contact center call volume increases, wait times grow longer, more calls are abandoned, and customer satisfaction declines. Plus, the added pressure on agents can lead to burnout and inefficiency.

Conversational AI is an effective solution because it can handle a growing number of common inbound call scenarios. Already, well-trained AI voice agents can:

• Answer frequently asked questions (FAQs)
• Guide customers to relevant knowledge base content
• Provide order information and delivery updates
• Handle returns and exchanges
• Assist with payments
• Schedule and reschedule appointments
• Book and confirm reservations
• Renew subscriptions
• Troubleshoot simple technical issues

Moreover, using conversational AI is popular with consumers. According to Zendesk research, more than half (51%) report that they prefer interacting with AI bots to resolve basic inquiries.

Cut Customer Support Costs

Conversational AI automates many time-consuming routine tasks, which reduces the workload on human agents and lowers costs. Gartner estimates that using conversational AI in contact centers could cut agent labor expenses by $80 billion by 2026.

Increase Sales

In addition to handling inbound calls, conversational AI can automate outbound calls. AI voice assistants can make cold calls, qualify leads, and collect key information. This helps sales teams focus on high-value opportunities.

Additionally, it can guide customers through their buying journey, suggest upsells, and recommend add-ons. It drives higher conversions and increasing average order value.

Provide Growing Businesses with Vital Scalability

For SMBs and startups aiming to grow, conversational AI is invaluable for smoothly handling increasing call volumes. As we have seen, conversational AI enables consistent service, even during peak times, which helps businesses scale efficiently. According to Zendesk research, 66% of small businesses believe AI can help them compete with larger companies in customer service.

However, that same report reveals that 44% of agents at SMBs are using AI tools beyond what their company provides. Because using unapproved tools creates security and compliance risks, organizations should give their teams vetted tools that are managed by the IT department.

What Industries Benefit Most from Conversational AI?

The benefit of using AI in customer service is clear: when customers are happy, the business grows. Here are some of the top ways that different sectors are leveraging conversational AI.

How to Use Conversational AI in Retail and E-Commerce

Retail and e-commerce organizations process an enormous volume of inquiries daily, many of which are basic questions. AI-powered assistants can handle many common requests across multiple channels. They can answer questions about store hours, order status, product availability, and payment help.

Moreover, conversational AI solutions can offer tailored product recommendations, create special offers, and identify upsell opportunities based on individual customer preferences. They can even check real-time inventory and proactively notify customers when desired items are back in stock.

How to Use Conversational AI in Financial Services

Financial institutions use conversational AI to handle routine questions about account balances and help with simple transactions. They also provide personalized financial advice based on spending habits and guide customers through loan and credit applications.

AI also can enhance security through voice recognition and fraud detection. It can also help financial institutions stay compliant by automating tasks like verifying documents.

How to Use Conversational AI in Healthcare

Like financial services, the healthcare sector requires accuracy and speed — both of which conversational AI excels at. AI systems streamline administrative tasks like appointment confirmations and billing inquiries, freeing up staff to focus on patient care.

Plus, AI can answer common questions, help patients schedule appointments and access test results, and deliver medication reminders securely. Conversational AI can even assist with follow-up care and provide personalized recommendations.

How to Use Conversational AI in Hospitality and Travel

Exceptional customer service is vital for hotels, restaurants, and related organizations. Customers expect a top-notch experience and will quickly turn to competitors if they find service lacking.

Conversational AI can handle the entire booking, reservation, and pre-payment process. This enables customers to complete these steps efficiently without waiting for staff. AI can also manage food orders for delivery or takeaway and coordinate concierge services.

AI also creates upselling and cross-selling opportunities, such as offering better tables, room upgrades, or package discounts. This provides thoughtful customer service while boosting extra revenue.

How to Use Conversational AI in Small and Medium Businesses

For years, only large enterprises with big budgets and complex infrastructure could use AI technology. High costs and technical barriers kept most SMBs from adopting it.

However, that landscape has changed dramatically. With the rise of cloud-based solutions like DialLink, AI has become more accessible, affordable, and scalable. These platforms offer flexible pricing and easy deployment. They let SMBs automate customer interactions and streamline support without needing large IT teams.

The shift toward an AI-driven customer experience in SMBs is evident. 85% of small businesses are going to integrate AI assistants into their customer journey.

Can Conversational AI Completely Replace Human Agents?

Both support teams and customers recognize the benefits of incorporating conversational AI into customer service workflows. Indeed, Intercom research reveals that 82% of customer support teams feel positive about working alongside AI. And 89% believe that their customers feel positive about interacting with AI.

However, many customers prefer using AI bots only for simple queries. The majority still opt to speak with a human representative for more complex issues, even if it means waiting.

Businesses should view AI as a way to enhance customer service, not replace human agents. After all, customer satisfaction isn’t just about answering questions. AI alone can't create positive brand experiences, build real connections, and offer the kind of personal touch.

Improve Customer Service with DialLink’s AI-Powered Platform

Conversational AI is reshaping how businesses provide customer service. DialLink offers a variety of AI-powered capabilities designed to improve the customer experience and streamline support team workflows:

• AI voice agents — Efficiently handle high volumes of inbound and outbound calls without hiring extra staff or losing customers to long hold times. DialLink’s AI voice agents can answer frequently asked questions, pre-qualify leads, process payments, schedule appointments, and handle many other essential tasks.
• AI call and voicemail transcriptions — Review and reference conversations easily with highly accurate text transcriptions generated automatically.
• AI call summaries — Stay focused during calls instead of scribbling notes. DialLink’s AI provides searchable call summaries with all the key discussion points. It saves you time while ensuring nothing gets missed.
• AI action items — Ensure proper follow-up without having to take the time to replay an entire call. DialLink automatically generates a structured list of action items for each participant. This feature is especially valuable for small teams juggling multiple responsibilities.
• AI sentiment analysis — DialLink automatically detects emotional cues in a conversation and categorizes sentiment as positive, neutral, or negative to help you enhance the customer experience.

Interested? Discover how DialLink can help you unlock the full potential of conversational AI and transform your business communications.