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AI chatbots for customer engagement

Updated: November 07, 2023
AI chatbots for customer engagement
AI chatbots for customer engagement

Redefine customer engagement with AI chatbots

AI chatbots are transforming and redefining customer engagement globally. According to Gartner reports, by 2027, chatbots will be the primary channel for customer engagement in most organizations. There is a forecast that by 2025, the chatbot market size will reach around US$1.25 billion. By 2027, you can expect the revenue generated by the global chatbot market to reach US$454.8 million

With proper design and implementation, AI-enabled chatbots boost customer experience and enhance customer engagement strategy

What can you expect from this blog?

  1. Understand how businesses are redefining customer engagement with AI chatbots.
  2. How AI chatbots boost customer satisfaction
  3. Best software to improve customer engagement

AI chatbots and business transformation

Initially, AI chatbots seemed like a simple customer service tool, but with advanced technological advancements like machine learning and natural language processing, AI chatbots contribute to value-adding across business processes, including customer experience and engagement. 

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Industries like retail, healthcare, banking, travel, real estate, e-commerce, FMCG, education and so on are using AI chatbots to achieve marketing objectives, induce brand loyalty, drive customer engagement and deliver optimal customer experience. An excellent customer engagement platform, AI chatbots are revolutionizing business operations. 

Case Study:

Sephora, a leading beauty retailer whose mission was to create a welcoming shopping experience for all. With a shift in consumer behavior in recent times to more online purchases, Sephora analyzed how consumers interacted with their online store and found it to be similar to their purchase behaviors at brick-and-mortar outlets. 

Aligned with the vision of providing a best-in-class retail experience across both offline and online channels to all its consumers 24/7, Sephora adopted an omnichannel approach to enhance the overall shopping experience for customers. 

How AI chatbots boost customer engagement and experience 

Online communication continues to grow for businesses. Thus, it is imperative that they learn how to interact with customers for successful conversions and a better customer experience. Adopting AI chatbots for businesses breaks down communication barriers between businesses and customers, bringing them closer. 

AI chatbots also help in customer engagement planning. Engaging the customer is a daunting task as businesses need to be well-acquainted with the customer’s likes, dislikes and preferences. AI chatbots are replacing customer care agents, engaging with the customer in real-time with relatable and real conversations. Chatbots have become the quickest response channel for customer communication.  

1. Gap identification in customer conversations

Gaps during customer conversations are not uncommon. However, when left unaddressed, it could result in missing out on crucial queries. AI chatbots help identify these gaps by ascertaining the interaction patterns with a customer, helping in quick issue resolution. Most importantly, the chatbot can adjust the conversation flow during customer interaction, resulting in a highly engaged and content customer. 

2. Personalized conversations

AI chatbots facilitate automated customer engagement, offering quick responses to different kinds of queries. Along with the rapid service, AI chatbots impart a personalized feel to conversations. Chatbots have the ability to answer customers’ fundamental questions as the programming uses AI logic and simple rules imitating human speech. 

Implementing AI in chatbots helps them decipher and understand the context of every conversation. Quick and proper issue resolution results in high satisfaction and enhanced customer experience. 

3. Better product accessibility and navigation

We often face problems navigating a website to find the product we are looking for. It is like going to a store with a large inventory, and you must find your way through various categories and options to reach your destination.

When you have an AI chatbot, customers can type the product’s name, and the bot will direct the customer to the product. This chatbot guidance enhances customer engagement and leads to satisfied customers. 

4. Round-the-clock availability 

Brands leave no stone unturned to keep customers happy. Still, certain gaps remain. For instance, customers now demand 24/7 availability, which humans cannot fulfill. This is making way for AI customer engagement via chatbots. The combined efforts of AI and humans are reshaping the customer experience completely. 

Many people now have short attention spans, along with being highly impatient. With an AI chatbot, brands can resolve queries, provide on-demand, round-the-clock support in any language, across text and voice. Users can seek support whenever and wherever they want and resolve their queries with minimal human intervention. 

5. Seamless customer experience

Along with 24/7 customer support and assistance, AI chatbots raise customer experience standards. A user gets instant access to proper resources without waiting to connect to a support executive or repeating the issue. 

AI chatbots ensure that customers get proper and satisfactory answers to their queries. This enhanced experience is crucial to improving customer loyalty and engagement for the business. AI chatbots offer customized interactions and recommendations with users as they learn from previous conversations. Chatbot conversations and interactions replace sign-up forms or contact forms and so on. 

6. Access to customer feedback and data

Have you ever thought of the enormous volume of information we exchange during a conversation? There is information sharing between two parties, whether we are talking to humans or AI chatbots. 

A unified/single view of customer data helps businesses understand the customer journey and the key touchpoints of maximum drop-offs and conversions. These touchpoints are crucial for designing customer-first experiences. They can also use this information to streamline marketing efforts and recommend services and products to particular users. 

7. Better customer satisfaction tracking

Online businesses struggle to track and measure customer satisfaction, and AI chatbots offer a practical solution to this issue. Chatbots allow customers to rate the business via short surveys or questionnaires while being neither pushy nor annoying. 

The surveys are generally sent out through different messaging applications like WhatsApp, Messenger and similar apps. Interestingly, response rates are pretty satisfactory. Once businesses ascertain the customer satisfaction score, they can work on their entire workflow. 

With the scores in place, businesses can modify their processes for higher customer satisfaction. AI chatbots store valuable customer data and track customer satisfaction effectively. 

8. Timely human intervention

AI chatbots simulate human-like conversations and interactions. However, it is also true that they cannot replace human support entirely. The human takeover is probably the most critical feature of an AI chatbot. The business or the support team can intervene and take over any ongoing chatbot conversation. 

There are many complex problems and queries involving deal closure, real-time payments, and so on, which chatbots cannot resolve. AI chatbots are smart to recognize cases where human intervention is mandatory, immediately prompting a human representative to take up the case for a quick resolution. 


The future of business ventures shows that no business will be successful without customer engagement. The lack of communication flow will make customers lose interest in the business. With customer engagement automation via AI chatbots, businesses can retain customers. The AI chatbots are like digital assistants helping companies to connect to their user base and assist users with their queries regarding the business.

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