Chatbots vs. Conversational AI: Know the Difference

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Chatbot vs Conversational AI

“How to keep customers engaged?” – With 75% of customers today expecting a multichannel experience, this question has become more important for Indian businesses than ever before. With the rising cost pressures of hiring well-trained employees to quickly deliver service expectations, customers are getting harder to please. That’s the reason Indian business leaders are leaning towards AI-enabled customer service to continuously deliver better customer service while simultaneously minimizing operational costs. 

Conversational AI solutions including chatbots have revolutionized the customer service industry. Over 90% of businesses worldwide have reported quicker complaint resolution and 80% have reported processing increased customer interactions. In a country like India with 22 officially recognized languages, building and implementing conversational AI and multilingual chatbots for Indian languages that are capable of speaking to customers in their mother tongue and registering their responses on their own is crucial in creating a pleasant customer experience and building long-term customer relationships for business.

While chatbots and conversational AI are often used interchangeably, they are not quite the same. Understanding the benefits and differences between Conversational AI and Chatbots is essential for crafting strategies for providing smooth customer service.

Let’s begin by setting the stage with definitions and benefits of each solution. 

Chatbots vs. Conversational AI: Unveiling Their Meaning and Benefits


Chatbots are computer programs that simulate humanlike textual conversations with customers to save time and improve customer experience. Traditional chatbots are based on predefined conversational flows, which means they are trained to answer a specific set of customer queries. Modern chatbots are increasingly using machine learning techniques such as Natural Language Processing (NLP) to understand the customer’s queries and answer them.

Benefits of Chatbots

24/7 availability

Imagine a customer shopping at an e-commerce website late at night. He or she cannot find a particular product. It’s late and there’s no support team available. That’s when a chatbot pops up and assists them in getting the answers they want. 

Because chatbot never rests or sleeps, they can provide global 24/7 support for the customer. They can ask a query at any hour, day or night, and get an instant response, enhancing the customer experience.

Reduces Time and Costs. Boosts Operational Efficiency

Staffing customer support 24/7 is expensive and time-consuming. Human agents spend too much time answering repetitive questions. Many businesses outsource their customer service which increases their operational costs and reduces their control over customer’s interaction with the brand.

Because a chatbot can answer questions 24 hours a day, seven days a week, it can offload the tiresome repetitive questions from human agents, so that they can focus their time on more complex tasks. While reducing human assistance, chatbots help businesses cut their costs so that they can focus on scaling and increasing their operational efficiency.

Multilingual Support

How likely are you going to engage with a person if both of you don’t speak the same language? That’s exactly the same situation between a customer and a brand. Chatbots can be integrated with multiple language settings so no matter which language your customer is comfortable with, they will get the support they need in their mother tongue. 

Gaining Customer Insights

Analyzing customer conversations with chatbots helps businesses make strategic decisions. For example, some customers may be more interested in the technical aspects of the product and some might be concerned about the cost. Insights like these will help businesses develop a promo code if more customers are dropping off because of the price of any service or product.

Conversational AI

Conversational AI refers to technologies that help machines understand, process, and respond to languages meaningfully and naturally. Through AI, Natural Language Processing (NLP), and Machine Learning (ML), they get more efficient over time through continuous learning, as businesses build up a larger customer base with a wide range of conversations. 

Benefits of Conversational AI

Personalized Interactions

By leveraging machine learning and natural language processing, conversational AI can understand the preferences of customers such as their specific needs and interests. Online retail businesses can use this information to suggest products and services increasing the chances of conversion.


Conversational AI can handle huge volumes of customer interactions ensuring scalability and sustainability. This guarantees every customer gets the response they deserve, and your business can grow and expand to an increasing customer base.

Omnichannel support

Conversational AI helps in providing support for customers on multiple platforms simultaneously. By integrating it with both social media and websites, conversational AI can respond to queries and businesses can learn about the progress of the customers easily through an omnichannel strategy.

Efficient Communication

Conversational AI streamlines the communication between the business and the customer. This increased efficiency provides an optimized workflow for customer support teams which can allocate their time to solving more complex customer queries that require a higher level of expertise. 

Chatbots vs. Conversational AI – Key Differences

Chatbot Conversational AI
Understands and responds to only text inputs  Understands and responds to both text and audio inputs
Predetermined and scripted conversational flow Intelligent and natural conversations through  NLP, and ML
It has to be reconfigured with new updates from time to time Learns new things regularly through customer interactions 
Functions within a singular channel as a chat interface. Functions on multiple channels like blogs, applications, and social media

Use Cases in Customer Service (CS): Chatbots vs. Conversational AI:

Use Cases for Chatbots in Customer Service 

Answering Basic FAQs

Businesses publish various FAQs on their websites but they might not be user-friendly for customers to navigate through. Chatbots solve this problem by providing questions and answers with an intuitive chat interface. This helps customers to get answers quickly and they can go ahead and interact with your brand. 

Lead Generation

Chatbots help website visitors by guiding them through the buying process which helps businesses to actively engage with potential customers. This helps companies to connect with leads, gather their information, and nurture them through the marketing funnel. 

Scheduling Appointments

With chatbots, customers can easily book, cancel, or reschedule their appointments. For example, a doctor appointment chatbot on a hospital’s website helps patients select their preferred time and date for the meeting with the doctor.  

Tracking Orders, Deliveries, and Refunds 

Chatbots help customers easily track their orders without having to be in touch with an agent. An e-commerce company can install a tracker chatbot for their customers so that they can track the status of their orders and also if there’s any trouble with delivery, customers can select the refund option to make their life easier.

Use Cases for Conversational AI in Customer Service 

Personalized Product and Service Recommendations

Imagine a customer seeking a laptop recommendation. Conversational AI, through chat or voice interaction, assesses their requirements, considering factors like usage patterns and preferences. It then suggests personalized options, such as a high-performance laptop for gaming or a lightweight model for travel.

Troubleshooting Complex Problems 

A telecommunications company employing conversational AI in customer service assists a user experiencing connectivity issues. The AI system, through NLP, could identify the problem, ask relevant questions, and guide the user through troubleshooting steps, leading to a swift and effective resolution

Customer Data Collection 

In the banking sector, conversational AI plays a crucial role in customer service. Virtual assistants powered by conversational AI deployed through banking mobile apps or websites engage customers in natural language to collect customer data like transactions and account details to resolve queries. 

Efficient Ticket Management 

In the travel industry, conversational AI is employed through a modern chatbot to manage ticketing efficiently. They resolve queries related to booking, timing, and cancellations by providing real-time updates on the queries and resolutions. 

Conclusion: The Future of Chatbots and Conversational AI 

Both technologies are rapidly becoming the preferred norm for businesses to engage with their target audiences, offering timely responses and fast resolution times. Compared to traditional chatbots, conversational AI offers a higher level of customer engagement and accuracy in understanding human language. Their ability to recognize user intent and understand their languages makes them superior when it comes to providing personalized customer support experiences. Enhancing customer experience is the goal for every business and leveraging AI-powered customer service solutions can help them achieve their goals and build brand loyalty.

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Reverie’s language practice is dedicated to helping clients future-proof their rapidly expanding content by combining cutting-edge technologies like Artificial Intelligence and Neural Machine Translation (NMT) with best-practice approaches for optimizing content and business processes.

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