Conversational AI in Call Center: Transforming Customer Service

Customer service is a key differentiator in any competitive industry — if 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: It enhances the customer experience and enables efficient 24/7 support, while reducing operational expenses and facilitating business growth. It’s no wonder that Intercom reports that more than 3 in 4 support teams are already investing in AI for customer service.

For teams yet to adopt conversational AI, the good news is there’s still time to catch up but that window is closing fast. 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Today, cold, robotic responses are outdated — modern conversational AI solutions for call centers engage with users through natural dialogue that mimics human language. To process speech and text input, glean context and user intent, and generate appropriate responses, the solutions leverage several advanced technologies:

• 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. They are commonly used in AI-powered customer support to answer frequently asked questions, provide real-time guidance through troubleshooting steps, and provide product recommendations. Chatbots can be deployed on websites, messaging apps, and social media platforms. 44% of support teams already use AI chatbots for customer service, with 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. This technology has evolved significantly. 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 to deliver smooth and automated customer interactions.

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 tools empower AI contact centers to operate around the clock, ensuring that customer needs are met even when human agents are unavailable. Indeed, 50% of customer support teams name this extension of the service schedule as the top benefit of 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 — more than half (51%) report that they prefer interacting with AI bots to resolve basic inquiries, according to Zendesk research.

Cut Customer Support Costs

By automating time-consuming routine tasks, conversational AI significantly lightens the load on human contact center agents, leading to substantial cost savings. Indeed, according to Gartner, use of conversational AI in contact centers is projected to decrease 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 conduct cold calls, qualify leads, and gather key information, enabling sales teams to focus on high-value opportunities. Additionally, it can guide customers through their buying journey, suggest upsells, and recommend add-ons, driving 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. It’s no wonder that 66% of small companies believe AI systems can help them compete with larger ones in terms of customer service, according to Zendesk research.

However, that same report reveals that 44% of agents at SMBs are using AI tools beyond what their company provides. Since use of unsanctioned tools increases security, compliance, and business continuity risks, organizations are wise to provide their teams with carefully vetted tools that are properly managed by the IT department.

What Industries Benefit Most from Conversational AI?

The benefit of AI solutions in customer service operations and call centers is clear: when clients are happy, the business thrives. 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 are a game-changer in this sector because they can provide multi-channel support for a wide range of common issues: store locations and hours, order status, product availability, payment processing, and so on.

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 utilize conversational AI to manage routine inquiries about account balances, assist with simple transactions like fund transfers and bill payments, offer 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. And it can help financial institutions maintain compliance by automating tasks like verifying document and providing up-to-date policy information.

Related reading: Conversational AI in Banking and Financial Services

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, since 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, enabling customers to complete these steps efficiently without waiting for staff. AI can also manage food orders for delivery or takeaway and coordinate concierge services.

Additionally, AI enables upselling and cross-selling opportunities, such as offering better tables, room upgrades, or package discounts, providing thoughtful customer service while increasing additional revenue.

How to Use Conversational AI in Small and Medium Businesses

For years, AI technology was reserved for large enterprises with deep pockets and complex infrastructure SMBs were often left behind due to high costs and technical barriers.

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 seamless integration, allowing SMBs to automate customer interactions, streamline support, and enhance efficiency without the need for extensive IT resources.

The shift toward an AI-driven customer experience in SMBs is evident — 85% of small businesses are expected to integrate AI assistants into the customer journey, from answering FAQs and processing orders to handling customer inquiries in real time.

Explore more use cases of businesses using conversational AI: 5 Conversational AI Examples: Improve Customer Experience Across Industries.

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; they majority still opt to speak with a human representative for more complex issues, even if it means waiting. Accordingly, AI should be seen as an enhancement to customer service, not a replacement for human agents. After all, customer satisfaction isn’t just about answering questions — it is about creating positive brand experiences, building connections, and providing the level of personalization that AI alone can’t offer.

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, streamline support team workflows, and help your business grow:

• AI voice agents — Efficiently handle high volumes of inbound and outbound calls without hiring extra staff or losing customers to long hold times. Available 24/7 and effective in multiple languages, 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 — Easily review and reference conversations with highly accurate text transcriptions that are 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, saving 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 — Understand a customer’s level of satisfaction on a deeper level so you can promptly address concerns and ensure satisfaction. 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.