Why Chatbots Are Failing Your Business and How Virtual Agents Will Save It

Brett Weigl, the SVP of Product Management (AI) at Genesys, explains why he thinks chatbots are failing and how virtual agents can (and should) replace them. This article originally appeared in Insight Jam, an enterprise IT community that enables human conversation on AI.

In today’s complex economic landscape, businesses must rely on automation to drive efficiency and do more with less. Chatbots were heralded as the answer to scalable support and introduced the promise of always-on self-service experiences to customers. But let’s face it: many chatbots aren’t getting the job done. Their interactions often feel stiff, limited, and, in many cases, downright infuriating. According to the Genesys State of CX Report, chatbot satisfaction has tanked rapidly over the years, dropping to 21 percent. Even worse, 15 percent of consumers admitted that repeating information to a chatbot makes them want to flat-out scream.

The typical chatbot experience goes something like this: you’re on a brand’s website and need to ask a question. The bot pops up eagerly, offering help. You type in your query, but instead of a meaningful, thoughtful response, you’re met with a pre-canned reply that’s either irrelevant or painfully obvious. You try again but get more of the same robotic nonsense. It’s like trying to have a conversation with a brick wall that somehow thinks it’s clever. Before long, you’re clicking “speak to a human” with a vengeance to escape the infinite loop of inefficiency.

We’re often trapped in customer service purgatory because basic chatbots operate with rigid flows and narrow pre-defined responses. They can’t handle complex or nuanced conversations. For example, if you’re booking a flight and want to know if you can pay with miles and cash together, most chatbots won’t know what to do. They’ll stick to the script: “Are you paying with cash or miles?” Anything outside of that, and you’re out of luck. Basic chatbots cannot understand more intricate customer requests or switch between different intents within a conversation.

Context is king, and this is where chatbots fail.

Now is the time to retire one-dimensional chatbots and deliver the dynamic and highly personalized experiences consumers desire. Enter virtual agents. Large language models (LLMs) allow virtual agents to talk like real humans, handle complex questions, and understand various inputs. They can pass your information seamlessly to human agents and adjust experiences on the fly based on your preferences.

The Human Connection: Why Chatbots Can’t Compete

Humans are complex. We weave in and out of conversations, ask follow-up questions, and shift topics mid-sentence. A good customer service agent can adapt, pivot, and respond based on the flow of the conversation. Chatbots? Not so much. They’re linear and restricted, which means they can’t address the nuances that result in a productive and satisfying interaction.

Imagine a customer booking a flight who asks about upgrading their seat, redeeming miles, and purchasing additional baggage, all in the same conversation. A typical chatbot would struggle to follow this multi-threaded flow. Instead, it would be stuck in a one-track conversation that doesn’t allow for real-time flexibility. This lack of adaptability frustrates customers and results in higher abandonment rates. Essentially, chatbots turn customer service into a dead end.

Furthermore, chatbots often don’t retain context. Once a conversation ends, the slate is wiped clean. The next time customers engage with a bot, they’re forced to repeat themselves. The same scenario occurs once the issue is escalated to a human agent. This doesn’t just hurt customer experiences; it damages the relationship entirely.

Virtual Agents: The Next Evolution of AI-Driven Customer Support

So, what’s the solution? Virtual agents are here to save the day and your sanity.

Driven by LLMs and machine learning, virtual agents can navigate through complicated conversations, predict your needs, and keep learning with every twist and turn. They bring the kind of adaptability and context that basic chatbots can’t handle. It’s like comparing Neo in full Matrix mode to a glitchy 90s computer. Virtual agents are bending reality while the old bots are still trying to process your first question.

Unlike chatbots, virtual agents don’t operate on a strict, pre-defined script. They are dynamic, conversational systems that can follow the natural flow of human dialogue. Think of them as your best customer service agent, but one that never sleeps and can conduct a million conversations at once. What sets virtual agents apart from chatbots is their ability to manage complex interactions.

Let’s return to the example of booking a flight. A virtual agent can shift between topics fluidly, allowing you to inquire about payment options, seat upgrades, and loyalty points in the same conversation without missing a beat. Want to use a mix of miles and cash? No problem. The virtual agent can handle multiple layers of complexity, just like a human agent would.

Virtual agents evolve and level up with each interaction. Over time, they learn your preferences, predict your needs, and can even make recommendations based on previous behavior. This is what customer service should be—intelligent, anticipatory, and seamless.

Let’s not forget about context retention. Virtual agents summarize every conversation so context always follows the customer. If a customer calls back a week later, the virtual agent has automatically summarized the previous conversation, ensuring self-service interactions and human agents are equipped with accurate customer context and history. This reduces frustration, eliminates the need for customers to repeat themselves, and leads to more efficient resolutions.

Chatbots Are Dead, Long Live Virtual Agents

In an era where loyalty can be gained or lost after one experience, the need for advanced, reliable AI-driven virtual agents has never been greater. The age of chatbots is ending. Businesses that continue to rely on outdated chatbot technology risk alienating customers and falling behind competitors.

As we look ahead, we believe virtual agents will shape the next generation of customer service. These savvy digital assistants move customer experiences from reactive to proactive. Instead of simply responding, they engage, learn, and evolve alongside your customers. Virtual agents are the future—smarter, faster, and more human-like than chatbots could ever hope to be.