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Virtual Agents vs Chatbots: The Differences Explained

With AI moving well beyond the realm of sci-fi and cementing itself into the everyday, most people are now familiar with the technology and what it can do for us. But wading through the terminology around it can be confusing. Two of the terms we often hear thrown around, often in a way that suggests they’re interchangeable, are virtual agent and chatbot. While these tools are undoubtedly similar, are they really just two different names for the same thing?

We’re glad you asked–the short answer is no. 

Both virtual agents/assistants and chatbots use AI to provide automated consumer assistance via a digital interface. But the kind of assistance varies, as well as the channels they’re typically used in and the extent of their capabilities. Before you invest in AI-powered technology, it’s a good idea to understand what you're putting your money into and what you can expect to get out of it.

Virtual agents: For personal assistance

Virtual agents, also known as virtual assistants or virtual personal assistants, are consumer-oriented interfaces that are usually embedded in a gadget designed for individual use. Think Siri, Cortana, and Alexa. They can provide assistance with tasks ranging from answering questions and retrieving information (“Siri, tell me what the weather is going to be today”) to managing to-do lists, reminders, and other personal needs (“Alexa, wake me up at 7am”). Many virtual agents are controlled by voice interactions, though some may also be controlled by text interactions, depending on the channel or platform where they’re deployed.

Virtual agents may be more well-known in the consumer world due to their prominence and popularity, but their orientation limits their functionality for the business world—which is where chatbots shine. 

Chatbots: Built for business

While the name “chatbot” may sound less sophisticated than “virtual agent,” the underlying technology is anything but. The first chatbots appeared decades ago, and could be programmed to communicate using simple, scripted responses triggered by keywords or phrases. Today’s chatbot technology has come a long way.

 A chatbot is an AI-powered platform that’s consumer-facing and oriented around business needs. It automates consumer interactions to make it easier for them to do things like make account inquiries, ask questions about products, and even make payments. As the name suggests, chatbots communicate using text on a digital messaging interface. This can be a website-embedded chat platform or any external messaging channel a company uses to communicate with its customers, such as Facebook Messenger, WhatsApp, etc.

In recent years, chatbot technology has taken leaps and bounds forward, advancing its capabilities—and its benefits for business. While early chatbots were only able to support simple FAQ-type exchanges, today’s chatbots leverage natural language processing (NLP), machine learning (ML), and other sophisticated technologies to interact with consumers in a way that’s both intelligent and satisfying. 

More than chit-chat

A common misconception about chatbots is that they can still only perform simple Q&A-type functions, but this simply isn’t true. A good chatbot platform can easily automate 30% of customer inquiries right off the bat, which frees up support agents to focus on the high-value contacts that require a human touch. The value of this can’t be underestimated. At Ada, we’ve found that identifying and automating the top 10 account-specific questions can help our clients solve up to 70% of all inquiries without human assistance. That’s a pretty staggering stat, with a far-ranging impact on the bottom line for any business.

Not replacing—augmenting

For the inquiries that do require human assistance, a chatbot can also add value. By taking an automation-first approach and routing all customer contacts through an intelligent, AI-powered platform, companies can drastically reduce the time and effort required by both agents and customers to reach resolution. The right chatbot can act like the front-desk agent, quickly capturing all the contextual and account information needed to provide the instant, meaningful support customers have come to expect in today’s fast-paced digital world, and passing it on to the live support agent.

 Acting as the first point of contact, the chatbot sets the live support agent up for success. For example, a telecom customer with a question about a data overage charge on their account can be routed through the chatbot first, which will quickly identify their account, note the recent activity, and pull up the relevant plan information, which it places on the human agent’s dashboard. This arms the agent with everything they need to start serving the customer as soon as they begin the interaction.

Implementing a chatbot will save the customer from having to repeat him/herself, which is annoying and time-consuming, as well as saving the agent from asking the same questions over and over. Frustrated agents tend to be less engaged, which leads to poor service quality and can contribute to high attrition rates. Far from replacing live agents, chatbots support them and make their jobs more satisfying.    

Flipping the cost

With the right chatbot platform, companies can even turn customer service from a cost centre into a revenue generator. In addition to the significant cost savings that come with automating a large chunk of inquiries, automating cross-sell and up-sell opportunities allows businesses to uncover new revenue streams from traditionally cost-heavy support channels. This model is fuelling the chatbot of tomorrow—Juniper Research estimates that 70% of chatbots will be used in retail within the next four years.

Conclusion: Invest wisely

While virtual assistants are in nearly every consumer’s home or pocket these days, for businesses looking to lower costs while boosting customer satisfaction and revenue, investing in an AI-powered chatbot is the first (and smartest) step. This technology is robust, intelligent, and best of all, easily accessible. You don’t need to hire a whole team of AI experts to get started. With the right platform, you can build and manage an automated customer experience quickly and easily, leveraging the power of your existing employees—especially the customer service experts who know your business best.

To learn more about Ada’s automation-first approach, download our automation 101 guide today.

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