Spotlight

Report:

The Forrester Wave™: Conversational AI For Customer Service, Q2 2024

How does Forrester define the Conversational AI For Customer Service market in 2024?

Conversational AI for customer service is experiencing a fundamental transformation driven by large language models (LLMs) and generative AI (genAI). After 30 years of disappointing customer self-service applications, these technologies promise to finally deliver natural conversations and significantly reduced deployment times. Vendors in this market spent 2023 completely reinventing their products to embrace genAI. Differentiation is achieved through mastering the orchestration of multiple AI assets to deliver smarter, more useful chatbots and intelligent virtual assistants (IVAs). The market now offers fast deployment of conversational, highly flexible solutions that deliver a new level of customer self-service, while requiring careful attention to avoiding bot hallucinations and protecting data.

Key Facts for The Forrester Wave™: Conversational AI For Customer Service, Q2 2024 in 2024

How did the Conversational AI For Customer Service market evolve in 2024?

What product features are required to be included in this year's evaluation?

What are the common features of top products in the Conversational AI For Customer Service space?

No common features specified.

Scope Exclusions

Inclusion Criteria

Vendors must, among other requirements:

Offering Strengths — Relative Weighting

Strategy Strength — Relative Weighting

FAQs

Q: What does this research cover?

A: This research evaluates 14 conversational AI providers for customer service using 23 criteria grouped into Current Offering, Strategy, and Market Presence. The evaluation assesses how vendors orchestrate AI systems, CRMs, and communications channels; provide development and testing tools; and deliver modern, reliable, safe, and manageable platforms with proper genAI safeguards.

Q: Who should use this research?

A: Customer service leaders and professionals should use this research to select the right conversational AI provider for their needs, particularly those looking to deploy conversational, flexible chatbots and IVAs with genAI capabilities while ensuring protection against hallucinations and data security. The Excel-based vendor comparison tool allows buyers to adapt criteria weightings to their specific requirements.

Q: What are the mandatory features of vendors included in this market?

A: Vendors must have at least $20 million in revenue specifically from conversational AI solutions for customer service. They must offer complete, strategic, standalone conversational AI products (not just features within larger platforms). Vendors must demonstrate a strong focus on customer service users with dedicated sales and delivery teams. Finally, they must have significant Forrester client mindshare, being frequently mentioned in inquiries, briefings, and consulting engagements related to customer service.

Q: What are some reasons for not being included in this report?

A:

  • Revenue below $20 million from conversational AI for customer service
  • Conversational AI offered only as a feature rather than a strategic, standalone product
  • Lack of dedicated focus and resources for customer service users and buyers
  • Insufficient mindshare among Forrester clients in customer service context
  • Declining to participate or only partially participating in the evaluation process

Q: What should buyers consider when evaluating products in this market?

A:

  • Ability to orchestrate AI systems, CRMs, and communications channels to get work done
  • Quality of tools for building self-service applications, including no-/low-code approaches for both coders and noncoders
  • Partner and developer ecosystem that builds applications expertise and best practices
  • Modern, reliable, safe, and manageable platform with high uptime and flexible scalability
  • Tools and approaches to avoid hallucinations, bias, and jailbreaking in genAI/LLM implementations
  • Integration capabilities with speech technologies and multiple communications channels
  • Prebuilt modules for common tasks like payments or password changes
  • Administrative and management tools for spotting and addressing issues quickly

Q: How has the Conversational AI For Customer Service market evolved in 2024?

A:

  • LLMs and generative AI are revolutionizing conversational AI with inherently natural conversations and significantly reduced deployment times
  • Vendors spent 2023 completely reinventing products to embrace genAI technology
  • Differentiation achieved through orchestrating multiple AI assets to deliver smarter chatbots and IVAs
  • Conversational AI systems becoming execution engines that hold customer context for personalized interactions
  • Microservices and Kubernetes-based platforms becoming the norm for reliability and scalability
  • Focus on avoiding hallucinations, bias, and jailbreaking through tools like RAG, advanced LLM models, proper training and prompting
  • No-/low-code approaches continuing as the norm for building self-service applications
  • Integration with speech technologies and multiple communications channels to meet consumers where they are

Q: What differentiates Strength of Offering vs. Strength of Strategy?

A: Current Offering (50% weight) evaluates the strength of each vendor's existing product capabilities across technical features like AI orchestration, development tools, integrations, scalability, and security. Strategy (50% weight) assesses the vendor's future direction, including vision for the market, innovation capacity, roadmap commitments, partner ecosystem strength, pricing approach, and professional services support. Offering focuses on what the product can do today, while Strategy examines where the vendor is heading and their ability to execute on future plans.

Reference

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