It’s impossible to ignore the roles that chatbots play in today’s customer experience (CX) – some serve as sales associates, helping customers find the perfect product or service; others triage customer queries and issues. They weren’t always this helpful. Chatbots have actually existed since the 1960s when Joseph Weizenbaum developed ELIZA that leveraged pattern matching to mimic human conversation. ELIZA kickstarted efforts by developers and engineers to beat the Turing Test, a method of determining whether machines can think like humans. Of course, with the explosive growth of generative AI (GenAI), virtual assistants and conversational AI chatbots have come a long way since then.
Because of this, a seemingly unlimited number of use cases have propulsed AI-powered chatbots to become a business imperative. This is backed by Bloomberg Intelligence’s prediction that the GenAI market could grow by 42% over the next decade, becoming a trillion-dollar market by 2032. Additionally, in a recent survey conducted by Everest Group and supported by my firm, TELUS International, we found that 55% of customer experience management (CXM) leaders surveyed plan to invest $1 million or more in GenAI in the next 12-18 months.
Next-generation chatbots are poised to revolutionize CX with human-like communication capabilities. GenAI can improve first-call resolution metrics by providing accurate answers so all of the customer’s needs are met during a single interaction. The same report found that 41% of surveyed CXM leaders expect increased call containment as GenAI becomes capable of handling more customer issues, and 50% expect improved customer satisfaction. The most significant impact is predicted for operational efficiency improvements.
Emotionally Intelligent AI
Since the inception of ELIZA in the sixties until recently, chatbots’ weakness has been their lack of human touch. The nuances of conversation with another human being just didn’t exist with chatbots during this period of time. As humans, we take the natural ebb and flows of conversation for granted, such as recognizing minute details and different speech patterns that individuals have. This could include understanding people with heavy accents, speech impediments, different speaking patterns and tonal differences.
With GenAI, chatbots can be built to address these complexities. Instead of having to rely on a set of predetermined, hard-coded responses, GenAI-enabled chatbots generate answers based on patterns learned from diverse datasets and integrate corrected inputs through reinforcement learning from human feedback (RLHF). As a result, these emotionally intelligent chatbots can better understand context, display empathy, perceive customer sentiment and establish a personal rapport. Instead of regurgitating generic responses, they can produce thoughtful, personalized answers and handle proactive outreach.
Transforming CX with Humanized Chatbots
Today’s GenAI-powered chatbots utilize conversational AI to uplevel communications between brands and consumers. Conversational AI combines natural language processing (NLP), the ability of computers to understand text or spoken words, with machine learning (ML) capabilities and backend system integration to enable more realistic interactions beyond a typical human-to-bot conversation. As part of a larger omnichannel strategy, conversational AI bots are one more way that customers can receive personalized and empathetic care from a brand, 24/7.
One benefit of conversational AI and omnichannel communications is the flow between platforms. Interactions can go from social media direct messages to chats, emails, phone calls or augmented reality naturally and seamlessly. Conversational AI systems can understand accents, cultural nuances and tones of voice. When people interact with smart devices, chatbots or virtual assistants, they want assurance that the technology values them as unique individuals. Think about the difference between receiving a generic email that says “Hello Customer” and a personalized greeting (in my case, “Hi, Mike!”). In the age of e-commerce and digital-first interactions, personalization and uniqueness still matter. In fact, Adobe Commerce found that 67% of consumers value personalization, and 72% buy more with a personalized experience. As such, GenAI is crucial to business success, helping brands deliver customized recommendations tailored to unique needs with never-before-seen accuracy and at scale.
A Future of AI-Human Collaboration
However, as I shared in an article with Forbes, humans will always play an essential role in designing, implementing and overseeing GenAI. There are complexities — slang, abbreviations, intonations — that technology still doesn’t understand well. Humans experience emotions that technology cannot imitate and can ensure correct issue routing and escalation when necessary. And while AI’s automation capabilities are crucial for streamlined CX, they complement humans, not replace them. Every AI development has a contingency attached: garbage in, garbage out — training AI using poor-quality or incorrect data will result in low-quality AI.
“Garbage out” can be mitigated through RLHF. Models receive datasets pre-filled with prompts and responses, which they use to predict a response based on the input. Those responses are reviewed by a human, evaluated and adjusted for quality and accuracy. This creates a feedback loop where the model is constantly checked for accuracy and fine-tuned to eliminate inappropriate answers, biases and hallucinations. Without humans in the loop, GenAI models would never have reached today’s levels of sophistication and accuracy, nor would they continue to advance. Moreover, GenAI development cannot happen through trial and error; parameters must be in place to guide growth.
Next-Generation Emotional Intelligence
The world is dominated by digital tools that influence our interactions with each other and our preferred brands. Businesses must recognize the trends and seize opportunities to leverage valuable data that improves and enhances the customer experience. The results are clear: when implemented mindfully and responsibly, emotionally intelligent chatbots powered by GenAI will be a crucial driver of exceptional CX, enabling brands to meet the ever-evolving needs of the modern consumer. Those who invest in this technology will be better positioned to achieve a larger share of wallet, increased efficiency and customer satisfaction now and in the future.
