7 reasons why your business needs a conversational AI chatbot

If you're like most business owners, you're always looking for new and innovative ways to improve your bottom line and serve your customers better.

Today's widespread adoption is chatbots, specifically its more advanced cousin - conversational artificial intelligence (AI) chatbots.

And for a good reason.

Cognizant suggests that the global chatbot market is estimated to reach USD$1.3 billion by 2025, growing at a compound annual growth rate (CAGR) of 24%.

According to Google Trends, interest in chatbots has also increased 5x over the past five years.


So while we've established the importance of chatbots, you may still wonder whether your business even needs a conversational AI chatbot.

And in this blog post, you'll see seven reasons why the answer to that is a resounding yes!

But first, what is a conversational AI chatbot?

Again, you can think of conversational AI chatbots as the cooler cousin of chatbots.

While regular chatbots use pre-determined responses to answer customer queries, conversational AI chatbots use artificial intelligence technologies such as machine learning (ML) and natural language processing (NLP) to understand human conversations and respond accordingly.

In other words, these chatbots can have intelligent and human conversations with your customers.

Pretty nifty, right?

But look, I get it - chatbots still have a pretty bad rep. Take these brutal tweets as an example:



But I promise chatbots have matured over the years, especially when deployed as conversational AI. So it can benefit your business in more ways than one when implemented correctly.

The 7 benefits you'll gain by implementing conversational AI solutions

1. Round the clock 'conversational' availability instead of boring emails or voicemails

It doesn’t matter what business sector or industry you’re part of. If you have an online presence, then you have to be there for your customers at any given time.

One of the main problems with traditional customer service channels (like phone calls and email) is that they're not available 24/7.

This can be a significant issue for businesses, especially if they operate in multiple time zones or offer global customer support.

And you probably already know that chatbots are a key automation solution to this problem, answering customer queries with technologies like natural language understanding (NLU), allowing them to engage in human-like conversations 24/7.

However, you probably don't know exactly how important this is.

According to Drift, 64% of internet users say 24-hour service is the best feature of chatbots, with 82% of consumers claiming that instant responses were very important when contacting brands.

Think about it; most people work a 9-5.

Your customer service team probably works a 9-5 too.

People are researching and asking questions after hours.

For businesses, being able to answer those queries without having to invest in more staffing means that your customers can get the help they need when they need it.

It also means not losing out on potential sales opportunities just because no one was available to answer customer questions at odd hours. And it does happen.

2. It's one of the most cost-effective solutions out there

Like all automation solutions, one of the key benefits of conversational AI is the reduced cost of maintaining a human conversation in a scalable way (i.e., 24/7).

This is especially beneficial for businesses that receive high volumes of customer queries.

It's no secret that hiring more staff can be expensive - not to mention the added cost conversational AI chatbot can help deflect some of this cost by handling multiple potential or existing customers at once.

Just look at the data - conversational AI chatbots can potentially help you save up to 30% on your customer support costs.


And before you ask - no, that doesn't mean you need to fire your staff.

In fact, you shouldn't. The reality is that people are always asking your customer service reps the same questions repeatedly.

The best chatbots are built in tandem with customer support teams to offload repetitive questions so they can focus on more complex or unique issues.

3. It caters to the generation of 'Zoomers'

As mentioned before, there is a small stigma surrounding chatbots.

And you'll find that it's usually older generations who still find the idea of a chatbot a novel concept.

However, it's a different story for the tech-savvy digital natives - with over 75% of millennials preferring text communication over phone calls.



Not only that, but 40% of millennials say they interact with a bot daily, according to a study done by 3Cinteractive. And it makes sense - today's digital landscape has fostered an environment where answers are generally expected instantly.

Which is what makes conversational AI chatbots, especially when implemented in SMS text campaigns, so powerful and critical to your business operations. If anything, just being able to raise customer satisfaction is a big enough reason on its own.

4. Conversations foster better engagement and loyalty

The pandemic has created a fundamental shift in the way we communicate with one another.

Communication and conversations these days have become more transactional. When was the last time you set up a meeting with a colleague to just chat? You don't. And what can be more transactional than marketing and sales?

Thus the rising trend and need for conversational marketing.

Conversational marketing, in a nutshell, is about creating a more personalized, engaging, and human experience for your customers. It's a customer-centric approach that, when done successfully, will make your customers feel that you're speaking to them rather than at them.

So how does that tie into chatbots?

Let's turn to pizza as an example.

Say it's a Thursday night. You've just finished work, you're tired, you haven't cooked, and all you want is something cheesy.

So you're flipping through different websites, looking at different menus, Uber Eats isn't hitting the spot, some sites don't have pictures, others need you to call them - the list goes on.

Look at how straightforward Dominos makes this process.


You select your store, choose your pizza, customize your crust, etc., all without downloading a native app or signing up for anything. You basically have your own pizza sales assistance there to cater to you and their 1000s of other customers simultaneously.

And their key seller? Being able to retain their customer’s pizza preference for future orders. It makes it much easier for Domino's to increase their sales and have returning customers.

As they say, the easier you can make it for your customers, the easier it is to make that sale.

5. Conversational AI can qualify leads better than your salespeople

In the previous example, we saw how conversational AI chatbots can be used for customer service and engagement.

But they can also drive sales beyond taking pizza orders.

While AI is far from being able to outperform your salespeople, one of the most prominent use cases of chatbots outside of answering routine questions is the ability to qualify leads at scale.

If you think about the lead qualifying process, it's generally a series of questions that leads down different paths depending on the answer. So taking the time to transmute those questions into a chatbot would allow you to scale the leads you qualify.

Not only that, but a study by Harvard Business Review found that if businesses don't respond to a lead within the first 5 minutes since the initial contact, the odds of qualifying the lead go down by 400%.


So if you were getting 10,000 leads, that's 8,000 leads that could be falling through the cracks.


Even if you managed to convert a mere 1% of that 8000, that's 80 potential sales you could be missing out on just because you weren't able to respond in time.

That's an issue you will never have with chatbots.

Looking to close more deals? Try the Close CRM free today to see how simple sales should be.

6. You'll get essential customer insights and behavior patterns

As your conversational AI chats with more and more customers, it will start to build up a pattern of customer behavior. This is insanely valuable data that you can use to improve your marketing and the product or service itself.

There are many data points that chatbots can collect, but here are three main ones I think make the most significant impact on businesses:

  1. What your customers are asking about
  2. Where they are dropping off in your sales funnel
  3. Customer profiling

By knowing what your customer asks, you can identify pain points gaps in knowledge and find ways to improve your business operations or products and services.

In the same way, you can see where customers have disengaged from the conversations.

And circling back to Domino's example, having contextual, relevant customer profiles can hugely impact brand loyalty and customer preference. You'll also be able to segment different customers based on location and needs.

I'm sure I don't need to go on about how valuable insights like these are - especially at an aggregated level.

7. Easier to blend in with live chat for the hybrid model (chatbot + human)

Even the most sophisticated conversational AI relies on great conversation design and human intervention. After all, machine learning is limited in only understanding what we allow the chatbot to understand, and there are limitations to how 'human' they sound.

As a best practice, chatbots shouldn't need to try to be human but have human conversations instead.

As we all know, there are many nuances to the human problem. Sometimes, it's not as simple as people asking, "How much do your services cost?", sometimes it's, "How much do your services cost? I see X agency selling it for Y price, could you give me a deal on that?".

And if you haven't identified those sorts of intent, you may not get happy customers.

So the ability to have a chatbot-live chat hybrid is an excellent solution for answering those more complex questions.

It also gives a more personal feel to customer service - where humans taking over can provide that additional layer of support and engagement.

Somewhere along the way, chatbots have become essential

And it’s not hard to see why. With low deployment costs and the ability to scale with your business, they’re a great way to augment customer service inquiries and sales operations.

But it’s not just about cost-effectiveness - conversational AI chatbots can provide insights that you wouldn’t get from other channels, like website data and real-time customer queries. And by collecting this data, businesses can improve their products and services to meet customer needs better.

All of these are reasons why your business should be looking into implementing a conversational AI chatbot for your customer interactions. But if there’s one thing you should take away from this article - it’s that conversational AI is here to stay.

About the Author: Jessica La is a writer with over six years in the SEO, AI, and content industry. On her blog ByJessicaLa.com, she explores all things marketing and is passionate about the unique ways businesses can improve, innovate and grow. You can reach her at jessica@byjessicala.com

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