Basic Chatbot vs. Conversational AI: What’s the Difference? 

By Machielle Thomas

Technological advancement has led to the creation of a variety of tools that help businesses become more efficient, customer-centric, and adaptive. Among these tools are chatbots and conversational artificial intelligence (AI). But what exactly are they? How do they differ? Let’s dive into the core differences between a basic chatbot and conversational AI.

Conversational AI tailor-made to suit your business needs 


Chatbot vs. Conversational AI: An Overview 

Function Chatbot Conversational AI 
Customer ServiceSimple answers to pre-programmed queriesLonger, more sophisticated responses to any query; capacity to follow up and guide user to problem resolution 
Customer Interaction Gathering of basic information, responds to “yes” and “no” answers Capable of engaging with potential leads and having personalized conversations based on customer input 
Data AnalysisCan collect basic data; no processing capability Understands the data it’s being fed and uses it in future responses
Operation Scaling Slows down upon a significant increase in queries Dynamic adaptation, can handle multiple tickets/conversations at the same time without slowing down 

What is a Chatbot? 

A chatbot is a software program designed to interact with humans in a conversational way, typically used in customer service to answer simple, repeated questions. It can mimic human interactions but is limited by its programming. A basic chatbot follows a script and answers queries based on pre-set commands.

For instance, if you interact with a retail website’s customer service chatbot about a product return, it may ask you: “Do you want to return a product?” based on certain keywords from your initial message. If you reply with “Yes,” it won’t ask “Why?”, but instead would simply show you their standard procedure for returning items because it was programmed with predefined responses.

What is Conversational AI and How Does It Work?

Conversational AI mandates a deeper level of sophistication. It utilizes natural language processing (NLP), understanding, and generation to accommodate unstructured conversations, handle complex queries and respond in a more human-like manner. Unlike basic chatbots, conversational AI can both grasp the context of the conversation and learn from it.

Let’s look at our earlier example but replace the chatbot with conversational AI. When you confirm your intent to return a product, the conversational AI might inquire if there was an issue with your purchase. Based on your response, it could then offer solutions, such as an exchange for another product or extending its deepest apologies and guide you through the return process. This interaction is more reminiscent of a discussion with a well-trained human customer service representative.

Conversational AI not only comprehends the explicit instructions but also interprets the implications and sentiments behind them. It behaves more dynamically, using previous interactions to make relevant suggestions and deliver a far superior user experience.

Chatbot vs. Conversational AI: Head-to-Head Comparison 

Let’s examine these two technologies side by side in several essential business operations for a clearer picture of how they relate and contrast.

  • Customer Service: Both tools can handle customer queries, but their approaches vary greatly. While a basic chatbot may suffice for simple FAQs, conversational AI enhances the embodied digital experience by providing tailored support for complex issues.
  • Customer Interaction: A chatbot can gather basic customer information and record straightforward yes/no responses. On the other hand, conversational AI can engage intelligently with potential leads, guide them through a complex purchase journey, and tailor conversation based on prior customer interaction data.
  • Data Analysis: While neither a basic chatbot nor conversational AI explicitly specializes in data analysis, both can compile valuable customer interaction data. However, conversational AI’s ability to comprehend and learn from these interactions allows it to predict patterns and trends with higher accuracy.
  • Scaling Business Operations: Both chatbots and conversational AI can function 24/7, which gives businesses significant scalability. But where a sudden increase in inquiries may bog down a chatbot—forcing it into slower response times or repetitive scripted dialogue—a conversational AI adapts dynamically, handling multiple conversations simultaneously while maintaining its personable and attentive tone.

Set Up Your Own Conversational AI Chatbot with Forethought’s SupportGPT 

Our proprietary customer support automation platform, SupportGPT, makes use of Large Language Models to deliver a personalized service experience that’s unique to your company. Furthermore, with the Autoflows functionality, your support agents can easily give plain-language instructions to the AI, which will trigger a specific Autoflow that builds, finds, and implements specific policies, taking action to achieve the goal it’s been given. 

With us, your customer service agents will be able to handle more queries than ever. Through leveraging AI to handle most of the menial, administrative work, as well as resolve simpler problems, they can deliver the best possible support to customers who reach out with more complex, intricate issues. 

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The Bottom Line 

Ultimately, discerning between a basic chatbot and conversational AI comes down to understanding the complexity of your use case, budgetary constraints, and desired customer experience. While both technologies have their respective strengths, the value they can provide to your business hinges on your distinct needs and aspirations. 

Frequently Asked Questions 

Can AI fully replace my customer support team?

AI can significantly augment or streamline your customer support team, but fully replacing human support is not currently recommended. No matter how advanced AI gets, there will always be certain issues requiring a human touch —   be it to display empathy in sensitive situations or to use creativity and intuition when dealing with complex, specific cases. It would be more beneficial to use AI to handle routine queries and admin tasks, freeing up your humans for the more complex or nuanced interactions.

Are simple chatbots viable for small eCommerce businesses? 

For smaller eCommerce businesses with limited resources, simple chatbots can be an invaluable resource. They provide 24/7 customer service, easing the load on your limited team while ensuring customers get immediate answers to their basic queries or guidance through common processes like tracking a shipment or making a return. 

With that said, as your business grows and your customer interactions become more complex, an upgrade to more sophisticated conversational AI might become necessary. Solutions like Forethought, i.e. approachable, affordable AI platforms, can save your eCommerce business a ton of time and money by introducing conversational AI early, making it easier to scale up. 

What are the cost differences between implementing chatbots and conversational AI? 

Implementation of either chatbots or conversational AI incurs costs; what differs is the magnitude and time scale of these costs. Basic chatbots generally have lower upfront costs as they use pre-defined scripts and simple branching logic. Conversely, conversational AI typically requires significant upfront investment due to its complicated architecture—involving machine learning models, language processors, and more.

However, implementing conversational AI may prove cost-effective in the long run as it reduces workload on human agents, increases customer satisfaction with personalized service, and furnishes valuable insights to drive sales up. 

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Interested in generative AI for customer support? Check out this guide to learn about the 3 key pillars you need to get started.

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