AI chatbot vs. traditional chatbot - all you need to know

And which should you think about for your business?

Taking this into account, one might deduce that for a fraction of the cost and with potentially greater results, a business could provide a stellar customer experience for its loyal consumers, even during times when you experience peaks. That’s been the goal of artificial intelligence programmers the world over for several years now, and the advances made in this field of technology have provided some of the most exciting opportunities for brands and their customer service teams in a long time. But what exactly is a chatbot, and how is an AI chatbot different? Is one better than the other? As you’ll see from our guide below, the answer, as it often is in life, is: it depends.  

A history of virtual assistants.

How have these virtual assistants evolved to become such an integral part of our lives? Well, the first chatbots were created in the 1960s and were used to simulate a human conversation. MIT computer scientist Joseph Weizenbaum introduced the world to Eliza in 1966. She was a bot that used a pre-programmed script that simulated a psychotherapist’s conversation.  The conversations that Eliza carried out were achieved through matching patterns and a substitution methodology that gave users the impression that she truly understood them. However, there was no actual ‘understanding’ on behalf of the program, and what began as an experiment to demonstrate the superficiality of communication between man and machine, ended up kickstarting a revolution in the field of computer-generated speech.   As we can see, these early tools were not very effective - they couldn’t truly understand what the user was saying to them, and as a result, often produced nonsensical responses. In the 1990s, a new generation of technology was developed that was based on artificial intelligence. These chatbots were able to understand human language and respond in a more natural way. In modern times, these applications have evolved to become even more sophisticated. With the help of machine learning and natural language processing, they are now able to understand human emotions and provide a more customized experience. Some studies claim that an AI chatbot can produce 3,400% growth in operational savings in just over 4 years. But how is this possible, and in what ways do these digital friends help businesses create such a robust operational model? Let’s dive in.   

What’s the difference?

That’s a long story, and we’ll explore that in this article in a lot more detail - but in a nutshell: So, what's the bottom line? If you're looking for something to simply answer a few questions or provide customer service, then a chatbot is probably all you need. However, if you're looking for a more complex solution that can handle tasks such as booking a hotel room, ordering a pizza, upselling by recommending other products, updating customer personal information, etc, then you'll need a more advanced solution. But this is a strongly simplified view of quite a complex field, so let’s get into some juicy details.  

What is a traditional chatbot?

First, some clarification. When we talk about this, we are referencing traditional bots that have been somewhat augmented by machine learning and other artificial intelligence capabilities, that they use to, for example, understand and respond to customer inquiries. They can provide a some level of accuracy and personalization, but they may also have difficulty understanding and responding to unusual or unexpected requests. This is a slight upgrade on the rule-based solution, which may be based on ‘decision trees’ or other basic programming that allow them to respond to very specific queries with predetermined answers, or carry out simple administrative tasks. They operate with a basic level of NLP (natural language processing) in order to understand what the customer is saying and be able to respond.   

Traditional bots, or even bots that have been augmented with NLP or machine learning elements, carry certain benefits (and challenges) with them as well. You can see a summary of the key components and outcomes below.

What is conversational AI?

Where a traditional chatbot is like an alarm clock that can be set to wake you up at a certain time, with a preselected ringtone, or even on a consistent schedule, an AI chatbot can be compared to a more advanced application that monitors your sleeping rhythms, can determine what phase of sleep you’re in, and thus wake you up at an optimal time. This analogy may be a bit of a stretch, but at the core is the same idea - the latter is a highly advanced version of the former, utilizing complex processes such as machine learning, NLP, NLU (natural language understanding), deep learning, and predictive analytics to deliver a truly unique and personalized experience for the user. Whilst the first option may seem like it accomplishes enough on its own - it can track orders and provide customers with answers, after all - a conversational AI adds a layer of complexity that can be a truly cost-effective alternative to agent-driven conversations. It can understand intent, context, and sentiment, and then use the platform to provide human-sounding replies that drive the interaction forward. You can take a look at some of the key components and outcomes of an AI chatbot below.  

How can brands leverage these tools, whichever they choose?

These digital powerhouses can be a valuable tool for businesses and organizations. Although the benefits are extensive, here are some of the main ones.

So what’s better for your business?

The answer to this question depends on a variety of factors, including your business goals, budget, and resources. It may be that you’re looking for something quick and easy, cheaper to implement, or you simply don’t have the means to develop something more complex. Conversely, your business could be looking for new opportunities to develop its CX operations with a smart new tool. If you're looking for a quick and easy solution that doesn't require a lot of data or training, then a traditional chatbot may be the right choice for you. However, if you're looking for a more sophisticated solution that can provide a more natural and human-like conversation, then an AI chatbot may be a better option. At the end of the day, the best advice will come from an experienced partner who understands the needs of your business and which option will benefit you the most, while keeping costs down. At Transcom, our CX Advisory team is able to survey your entire customer journey and match your goals with what you’re working with. They can then recommend which solution is right for you based on that assessment.