AI has developed over the years. It is becoming more and more valuable each day. Numerous companies now invest in AI.

AI helps businesses improve customer service. AI can reduce the time it takes customers to get help. This is especially true if it is something AI can handle quickly, such as a cancellation or booking change. AI can also save employees valuable time that they can use for other tasks.

The 18.6-billion dollar conversational AI market will reach its peak by 2026. It is rapidly expanding and more than half the companies believe it is disrupting other industries.

As you can tell, conversational AI is a major part of many businesses Marketing strategies and customer services.

It is important to be able to use conversational AI in your business. That is why we are going today to look at the ultimate guide on conversational AI for 2022.

What is Conversational Ai?

Conversational AI works in the same way as a chatbot, but with more features. It’s used to send automatic messages and have conversations with humans and computers. It’s still an automated chatbot but can have a conversation more human-like.

They can communicate with humans by understanding the intents of sentences and then reply in a text imitating that of a person. This chatbot can engage customers by making them feel like they’re talking directly to a human.

This allows them feel more important and personalized.

A chatbot responds faster to small issues that might be more difficult for humans to address.

Chatbots – Who invented them!

ELIZA was the first chatbot in computer science’s history. It was recorded in 1994. Joseph Weizenbaum made it at MIT. It was there that the term “Chatterbox,” was created.

ELIZA worked by recognizing keywords from the input. After that, it used those keywords in a pre-programmed return. This implies that ELIZA could not be personalized and would respond to different phrases or sentences in the same way.

For instance, ELIZA would respond to you if your family mentions your father as a fisherman.

ELIZA recognizes that the word “father”, and provides an automated response. The same answer will be provided for any written word that includes the word “father” (or “dad”)

What is the difference in conversational AI and traditional chatbots?

It’s easy, though, to confuse conversational Ai with a typical chatbot. There are enough differences to make them distinct.

Conversational artificial intelligence is at the heart what makes chatbots useful and virtual assistants effective.

ConversationalAI uses computer learning to interpret and comprehend human writing. It can then produce a response that matches the user’s words.

Chatbots have the ability to use conversational intelligence. But there are many reasons they can’t. Chatbots that are basic use pre-programmed answers, or have rules to guide them.

Conversational Artificial Intelligence is not rule-based. It responds to user’s intent and context.

A new study shows that the global conversational AI market is expected to reach 32 Billion dollars by 2030. It is currently being invested in numerous companies without end.

How does conversational AI operate?

Conversational Ai uses a set of structures that can send specific outputs depending on the input.

Conversational AI is able to learn new queries and expand its knowledge base through machine learning. This is because conversational AI can understand the context of each user’s replies and learn new questions.

While machine learning may appear straightforward initially, it’s much more complicated than answering questions and finding answers. It is vital to have an accurate AI structure.

Here are some key components of conversational Ai that comprise natural language processing.

Machine Learning (ML). Machine learning is part AI, built around algorithms. These algorithms learn from previous messages and can determine how humans respond to specific questions.

Natural Language Processing. This is a combination of machine learning and natural language processing. It’s being used at the moment, but deep learning is coming soon so most conversational AI users will be able to switch to deep-learning to help AI understand language better.

Analyzing the received input. This is the part in which AI analyzes text sent by users and scans it for context and intention.

Dialogue management: After NLP is completed and the input has already been analyzed by the AI, it’s time for the AI to respond with the correct response. Dialogue management refers to how the AI chooses which answer it is most appropriate to give to the user.

ReinforcementLearning: The final step is to store the user’s or the AI’s response. Machine learning analyzes both the input AND output to ensure that they match. Machine learning can then compare the answer of the AI to the user’s intent, and then better learn how to respond to the next similar input.

What does conversational Ai serve?

Most people are familiar with some type of conversational Ai and may not be aware that they are talking to an artificial intelligence instead of a person. Some chatbots will be obvious, others may not.

Customer service

Conversational AI is used for many purposes. Chatbots are a common use of conversational AI. The chatbot is often used to assist customers as it can answer FAQs.

IT desk service

Conversational AI is also useful for IT support, helping with simple IT queries and fixings. Chatbots provide simple fixes and help instead of keeping IT employees busy. Chatbots can send users through to a live person if the problem does not resolve.


A conversational AI system can be used to sell products and advertise them. These bots could be used to send targeted audience offers or sales promotions. If your chatbot is properly configured, it should be capable of addressing the person by their first name and possibly knowing some basic information about them.

These bots allow users to signup for subscriptions and direct them towards your product page.

Data collection

Many businesses don’t realize that conversational AI could be used to collect information.

With so many interactions per day, your conversational AI software should be able record all information and offer detailed analytics about the day’s activities.

Take notes on all messages and calls from customers.

So customers can easily find issues, make all conversations searchable.

Track the keywords associated with specific issues on all calls, messages, and look for customer answers.

Collect important data like call times and how many responses you get each day, as well as the results of your reactions for the day.

Experiments in conversational AI across industries

Conversational Artificial Intelligence is used in many industries and for many purposes. These three conversational AI examples are from different industries.


SmarAction, a scheduling software with built in conversational AI, can understand questions about bookings.

This AI can comprehend natural language and can deal with any scheduling issues or requests users may have.

Watson Assistant

IBM created Watson Assistant. And who better to create a conversational Ai that can manage customer transactions?

This AI assistant has the potential to work in many industries.

It’s capable of answering simple questions, executing transactions, and contacting agents when needed.

Watson Assistant is a tool that can help companies reduce their handling time by 10 percent, which in turn improves customer satisfaction.


Cognigy enables efficient customer service 24 hours per day through conversational AI tools.

Cognigy works best for customer service. It reduces the time required for customers with questions or to find the answer they are looking for.

This software is used extensively by airlines. This was particularly true after Covid. Many airlines had to deal directly with customers regarding cancellations and refunds. Cognigy allows you to refund customers or reschedule them without having to contact a customer representative.

Check out this list of the best conversational AI tool.


With so many uses for conversational intelligence, it’s no surprise that it’s gradually taking over certain industries. This is not to suggest that you won’t need to speak to real people, but simple tasks such as answering a question can make it faster than real humans.

By Manali