Generative AI vs Chatbots: Understanding the difference

Picture this: A customer is looking to update their shipping address. They engage with your chatbot, expecting it will be able to help, but the  chatbot provides unhelpful responses. Ultimately, the customer is redirected to a human agent, leading to delays and frustration.

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This scenario underscores a costly truth: customer service isn’t just about being available — it’s about providing information and taking actions that drive sales and generate loyalty among shoppers. The chatbots you see all over the web rely on scripts and decision trees, an outdated approach that falls short of what users really need.

While chatbots remain stuck in their ways, generative AI breaks free by delivering natural, contextual, and adaptable responses in real-time. “Generative AI has the ability to truly understand the conversation and the customer’s request,” says Guillaume Luccisano, CEO of Yuma AI. “This level of understanding wasn’t possible before.”

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In this blog, we’ll explore the key differences between chatbots and generative AI, and how Yuma AI is setting a new standard for e-commerce customer support.

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Chatbot limitations

Chatbots have been around for years, providing businesses with a way to automate customer interactions. At their core, these programs are designed to simulate human conversation, typically by responding to specific commands or keywords. They rely on predefined scripts and rules-based algorithms to handle tasks like answering FAQs.

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However, chatbots come with significant limitations. Since they follow a rigid structure, responses are often pre-programmed. If a customer’s question doesn’t fit neatly into a specific category, the chatbot can become confused, offering irrelevant information or cycling through unhelpful responses.

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Chatbots also struggle to perform complex tasks that require real-time actions, such as changing an address, canceling an order, or processing a refund. This leaves customers frustrated, especially when they need help with transactional or account-related issues that typically require a human agent to intervene.

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Here are some issues you might encounter with a chatbot:

Limited flexibility

‍Chatbots rely on fixed decision trees, leading to predictable and sometimes irrelevant responses. For example, if a customer asks, “Can I exchange this product for something else even if I’ve already opened it?,” a chatbot might only recognize “exchange” and provide information about the company’s return policy.

Lack of contextual understanding

‍Chatbots often fail to grasp the nuances of a conversation, offering responses that don’t align with the customer’s intent. For instance, if a shopper wants to cancel their membership before the next billing date, a chatbot might miss the urgency of the situation and respond with general information about account management.

Inability to adapt to varied phrasing

‍If a question isn’t phrased exactly as expected, a chatbot might fail to provide relevant responses. Suppose a customer asks how long they have to return an item, they might receive information about product shipping times if the chatbot focuses on the keyword “how long” and overlooks the context of “return.”

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Generative AI benefits

While traditional chatbots struggle with fixed responses, generative AI breaks free of these restrictions. Unlike chatbots, which rely on predefined scripts and rules, this technology uses advanced machine learning models capable of understanding and producing human-like responses in real-time, allowing for more dynamic and contextually appropriate interactions.

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One of the most significant advantages of generative AI is its ability to take meaningful actions, just like a human agent. Generative AI can seamlessly manage complex requests like processing refunds or changing shipping addresses, all within the chat session. That's why we're seeing more and more companies like Atlas.so coming out that's maximizing the benefits of Gen AI.

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Generative AI offers several key benefits a chatbot can’t match:

Nuanced understanding

‍Generative AI can interpret the full meaning behind customer queries, even when phrased in unusual ways. For example, a customer asking, “Can I return an item if I’ve already used it a couple of times but kept the packaging?” will get a thoughtful, contextually accurate response instead of a templated return policy message.

Real-time adaptability

‍Generative AI adapts to the conversation in real time, smoothly handling follow-up questions or changes in direction. If a customer asks, “What’s the warranty on this product?” followed by “Can I get an extended warranty?”, it can pivot and offer relevant information about both regular and extended warranties.

Human-like interactions

‍With its ability to generate coherent, fluid responses, generative AI delivers conversations that feel more natural, often mimicking how a human representative would speak. For instance, a customer asking, “Can you help me find the perfect gift for a 12-year-old?” will receive a personalized suggestion, not just a list of product categories.

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It’s also worth noting that advanced AI models improve over time by learning from past interactions. This means the system becomes more accurate and efficient at resolving complex issues with every use.

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How Yuma AI ensures accuracy and reliability

Generative AI is only as good as the models behind it, and that’s one area where Yuma AI stands out. While a chatbot is likely to produce errors, Yuma AI leverages cutting-edge generative AI models like GPT-4, which significantly reduces issues like hallucinations (when AI delivers irrelevant responses).

But our approach goes beyond just using the best AI models:

Data validation

‍We continuously verify responses against real-time data to ensure accuracy. This is especially crucial for e-commerce businesses, where outdated or incorrect information can lead to customer frustration and lost sales.

Quality control

‍Our system monitors and adjusts AI performance in real time to ensure responses remain accurate and contextually appropriate. These quality checks prevent issues like irrelevant answers or repeated information.

Guardrails‍

Unlike generic AI models that may produce misleading or confusing responses, Yuma AI’s guardrails — including intent recognition, restricted automations, and rigorous policy checks — help keep interactions on track. For example, if a customer asks a question involving complex terms like warranty policies, our technology ensures the response adheres to the brand’s guidelines, preventing potential errors.

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By integrating these advanced features, we’re redefining generative AI-powered customer service. Whether it's resolving issues on the first interaction or providing timely, accurate information, our mission is to empower businesses to deliver exceptional support at scale.

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Try Yuma AI for free

Companies that trust Yuma AI can confidently automate up to 50% of customer interactions, knowing that the AI is both accurate and adaptable. Our combination of advanced technology and meticulous quality assurance ensures customers don’t just get responses, they get solutions.

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Find out for yourself how Yuma AI can revolutionize your customer support through generative AI. Contact us to start your free trial.