AI Chatbots – Transforming Customer Engagement on Your Website

‍Today’s chatbots are entering a new era of digital interactions, moving beyond simple communication based on a limited set of questions. Advanced, conversational AI chatbots are taking over the market in many industries, analysing data, anticipating customer needs, and delivering personalised experiences. The drive to optimise customer engagement is intensifying.

Traditional chatbots vs. AI chatbots

Traditional chatbots are becoming less relevant. They primarily served as a channel for customer interactions, limiting text-based dialogues to a set number of responses and range of topics. These rule-based chatbots had difficulty understanding context and conducting more complex conversations. Users were reluctant to comply with automated requests sent by these systems.

They are being replaced by AI chatbots – a system designed using specialised natural language processing and machine learning algorithms adapted to training data. These chatbots can analyse vast amounts of data and select the optimal answer to a user's question.

Research shows that fast service significantly increases customer satisfaction

Key benefits of AI chatbots:

• 24/7 support;
• proactive customer engagement;
• handling large volumes of queries;
• personalised customer interactions and experiences;
• seamless integration with business ecosystems;
• easily scalable operations;
• increased efficiency;
• lower operating costs.

Chatbots Powered by Generative AI

Next-generation AI chatbots, powered by generative artificial intelligence (GenAI) technology, offer a wide range of possibilities in digital communication. Advanced natural language processing (NLP) and predictive capabilities enable the creation of hyper-personalised interactions in real-time, significantly increasing customer satisfaction and business process efficiency. This new technology, often referred to as ‘conversational’, highlights its ability to simulate natural, human-like dialogue.

What is conversational AI?

Conversational AI is a field of artificial intelligence that focuses on creating systems that can understand, interpret, and generate human language in a contextually relevant and responsive manner. Such enhanced conversational capabilities in chatbots are redefining the customer relationship with the goal of providing more contextual and personalised experiences.

How AI Chatbots Learn About Users?

Conversational AI chatbots learn user patterns and preferences from diverse inputs. They can not only analyse and interpret customer queries but also capture intent from prompts and understand the context. This way, they engage users in dynamic conversations resembling human interactions. AI chatbots support multilingual interactions, including native and additional languages tailored to customer needs.

Hyper-Personalisation and Conversion Boost

AI chatbots offer another important advantage: increasing conversions number. Transformed into a kind of hyper-personalised partner, they effectively fulfil various roles necessary for a visitor to make a purchasing decision.

AI chatbots can understand and interpret a various customer queries, providing quick and contextually relevant answers

Designing Truly Engaging Chatbots

Developing and maintaining personalised chatbots requires using a company’s knowledge base and seamlessly integrating it with the chatbot system. Well-designed chatbots need to be adaptive to changing circumstances, customer preferences, and market dynamics.

However, for AI chatbots to be helpful in practice, it is important to focus on user experience and quality of interaction. A chatbot should be able to analyse past interactions and customer data and customise conversations, making each subsequent one relevant and unique to the individual user. The more often a chatbot interacts with customers and learns from the stored data, the more personalised answers it will offer in the future.

AI chatbots can also guide the customer through the entire purchasing process by offering recommendations, resolving doubts, and assisting with checkout. Such solutions already exist.

The role of personalisation in retail and services

To help customers find exactly what they are looking for or to guide shoppers who do not have a specific product in mind, you need to make personalised recommendations based on their unique needs and preferences. Personalisation is vital for customer acquisition and retention, fostering loyalty through tailored experiences.

When customers visit a company website for a second time, the AI chatbot can recognise their shopping history and preferences. It suggests new products tailored to their taste and can remember previous choices, like preferred style, size, or colour of clothes. This level of personalisation creates a sense of brand loyalty and increases the likelihood of repeat purchases.

💡 Studies show that 82% of customers would recommend a company solely because of excellent customer service. Customers expect personalised service, recommendations, interactions, and a shopping experience when visiting an online store.

AI Chatbots – examples of use in selected industries

The introduction of AI chatbots, available 24/7, has revolutionised how businesses interact with customers. With advanced features like real-time data analysis, chatbots can tailor their responses to industry specifics, increasing conversions and improving the user experience.

Along with digital technology, customer expectations are also evolving. They no longer want to fill out a form requesting a price or send an email for information and wait for a response. They expect fast, real-time interactions and immediate satisfaction.

E-commerce

In e-commerce, AI chatbots can assist users at every stage of their purchasing journey. From providing quick answers to inquiries, recommending products, to facilitating the payment process, these chatbots help increase sales and tailor offers to individual customer needs, resulting in greater customer engagement.

Banking and Finance

In the banking sector, chatbots help tailor services to customer needs by offering automated advice, assisting with product comparisons, and providing real-time responses to queries. These solutions enable banks to offer more personalised services, giving customers fast access to information and services, which enhances their overall experience.

💡 Forrester reports that almost 70% of decision-makers and executives in the banking industry recognise that personalisation is crucial to effective customer service and is essential for achieving business success. At the same time, only 14% of surveyed customers believe that banks currently offer excellent experiences, which indicates a significant opportunity for improvement through AI chatbots.

Law

AI chatbots in the legal industry can answer questions about legal procedures, conduct preliminary document analysis, and assist with scheduling appointments. These technologies allow clients to receive answers to their queries at any time of day, while law firms save time and resources on routine tasks.

Tourism

In the tourism industry, AI chatbots assist customers with trip planning, hotel and flight bookings, and recommendations for tourist attractions. Thanks to these solutions, customers can quickly find relevant travel options and make reservations in real time, improving their satisfaction and streamlining the entire process.

Customer Service (General)

AI chatbots in customer service provide instant support for website navigation, troubleshooting, and answering queries. By automating many processes, companies can offer better service availability, reduce response times, and lower operational costs.

Examples of successful chatbot implementations

Many companies are already successfully using AI chatbots to increase customer engagement:

H&M

The H&M brand has implemented a chatbot that recommends products based on customer preferences – after choosing a series of preferred styles and defining your own style. It helps you create collections, browse other users' outfits, and store stylists. It is a unique solution for driving sales – from selected styles, you can go directly to the website and make a purchase.

Lego

Lego uses an AI chatbot called Ralph AI, which works on Facebook and Messenger and guides customers through the company's entire catalogue. It is communicative and engaging – in addition to answering customer queries, Ralph offers product recommendations and gift suggestions for online shoppers.

Sephora

Sephora is one of the first cosmetics retailers to introduce AI chatbots to its services, offering assistance during the shopping process. Sephora Reservation Assistant handles appointment bookings and Sephora Virtual Artist scans images and recommends color-matching makeup products. It asks questions and recommends the most personalised products and takes them to the store's website to complete their purchases.

KLM

KLM Royal Dutch Airlines took a step forward in its social media strategy by offering personal service via the BB chatbot to provide individual, timely and accurate answers. Handling over 16,000 cases weekly has improved the customer experience and influenced their loyalty.

Stanley Morgan

Stanley Morgan, one of the world's largest investment banks, has launched an AI chatbot to help the firm's 16,000 financial advisors tap into the bank's vast research and data resources. The chatbot provides quick answers based on the bank's research, reducing errors, and human bankers check answers to ensure they're accurate.

Meta

Meta has gone a step further, introducing chatbots in the form of personas with unique personalities (there are said to be 30 types). AI personas are designed to help users in a variety of ways, including text interactions in Messenger and WhatsApp, creative filters on Instagram, and even multimodal experiences. For example, there's a bot resembling a surfer giving travel advice.

Future trends and innovations

The development of AI chatbots is driven by advances in generative AI (GenAI). Key innovations include:

1. Personalised chatbots – adaptive capabilities give chatbots individual personas, tailored to a brand or customer preferences;
2. Multimodal interactions – integration of visual, text, and audio communications, allowing for a more natural and comprehensive user experience;
3. The development of predictive capabilities – chatbots can predict customer needs, offering solutions before a problem occurs.

Implementing these innovations will allow companies to build even stronger relationships with customers and increase operational efficiency.

Summary

If you are considering implementing an AI chatbot, in WEBSENSA we can design a perfect solution for you. Knowing newest AI models' strengths, we create a product that perfectly matches your organisation's goals, values and customer service style.

You define what you want the chatbot to achieve (improve customer service, offer new products, increase sales, etc.) and we ensure that it works seamlessly with your existing systems. Then, we design it to be user-friendly, update the information it contains, regularly monitor it, and improve it. Interested? Send us a message, and we will get back to you on the same day!