It’s tough running a small or medium-sized business. Small-to-Medium-Sized Businesses (SMBs) face numerous operational challenges in today's fast-paced and demanding business environment. One such challenge is providing timely and accurate information to customers, employees, or business partners at any time – even when no one is available to respond.
Traditional methods for addressing frequently asked questions (FAQs) often rely on manual and self-service processes, which can be time-consuming, prone to errors, and frustrating for users, not to mention lacking the level of personalization that modern consumers expect. Yet, nearly every SMB starts off with (or quickly acquires) at least a website and a phone number.
So, the question becomes: how can we leverage technology to help SMBs deliver accurate answers to common customer inquiries, automatically and authentically?
While FAQ pages (and AI-powered tools to help build them) exist, web-based solutions aren't always convenient. Customers don't want to hunt for information; they want to ask and get an answer.
With the advent of effective conversational AI, we can go beyond static pages, especially if we enable a more natural, conversational design. Why not build an innovative solution that leverages Artificial Intelligence (AI) and Retrieval Augmented Generation (RAG) to develop a flexible, intelligent FAQ response system that can respond to phone calls or texts – instantly, in natural language, and in your brand's tone? This system could deliver accurate, spoken summaries of relevant information in real time, ensuring a seamless user experience even when no human is available to answer.
The widespread deployment of Voice User Interfaces (VUIs), such as Amazon Alexa, Google Assistant, or Apple Siri, has revolutionized the way people interact with personal technology. VUIs have become an integral part of our daily lives, making it possible to perform various tasks using voice commands. Yet most SMBs still struggle to offer a similar level of service.
Ideally, such a system for small businesses should be simple to set up, easy to maintain, and cost-effective. After all, research shows that roughly 80% of SMB customer inquiries are repetitive and easily resolved1 — things like:
- Opening or operating hours
- Availability of specific products and services
- The status of an order or an appointment
- And similar routine inquiries
A RAG-based system can ingest existing business information — typically PDFs or plain text files — uploaded via a simple web interface, and turn it into a live, easily accessible knowledge base. Documents can be stored in a file system or database, ready for the AI to reference as needed. Using natural language understanding, the AI can accurately identify a caller’s intent and match questions to the most relevant answers — the core of the retrieval-augmented process. Short questions can be answered with text-to-speech (TTS), while longer responses can be summarized, with the option to send full details via SMS or email.
Questions that can't be answered can be directed to voicemail, where they're scanned for intent and prioritized for a call back or text from the business owner. Over time, if we keep track of the questions we can’t answer, the system continuously expands and refines your FAQs library. At a high level, our platform works like this:
In practice, we need a bit more sophistication, particularly because we want the system to be able to be updated when needed and expanded as we learn from experience.
The AI-powered component will listen to and analyze user queries, providing accurate responses drawn from the company's knowledge base while also handling exceptions – questions we can’t answer yet. Meanwhile, the RAG component automates routine tasks, including:
- Categorizing FAQs and mapping them to relevant intents
- Identifying key phrases and synonyms for improved tuning and more efficient search functionality
- Providing API-based access to SMB back-office systems for content (product catalogs, customer orders, appointment schedules)
- Integrating with a customer relationship management (CRM) system, if available, to update customer contact records. A phone-based interface offers the added advantage of using the caller’s phone number as an identifier and, with opt-in consent, potentially recognizing the caller’s spoken voice through speaker recognition
Keeping the system simple helps ensure efficient performance and keeps operational costs for AI model inference and RAG data storage manageable. By caching frequently requested responses, latency – the time to generate an answer – can typically be kept to two to three seconds, which feels natural in a conversation. For longer, dynamically generated responses, latency may increase slightly, in which case conversational prompts (e.g., “Processing, please wait”) can be used to maintain a smooth user experience.
An AI-powered RAG conversational platform can offload much of the routine work from a SMB’s staff while providing 24/7/365 access to FAQs. The system is easy to set up, requiring no code or additional equipment, and operates at a low cost. That said, there are a few key design considerations to keep in mind:
- Order processing is not included. While conversational ordering or appointment scheduling could be added, these features introduce significant complexity and require integration with other systems. We recommend starting with the “low-hanging fruit” of FAQs first.
- Not every customer request should be automated. The platform includes options for voicemail and callback requests. Avoiding all human contact can mean missing valuable insights into why customers call and what drives their questions, as well as opportunities to strengthen customer relationships.
Decades of behavioral research show that people interact differently with machines than with humans. While automation can be useful, relying on it too heavily can diminish the quality and value of customer interactions. Efficient self-service should be balanced with meaningful relationship building and reinforcement. Well-designed AI and RAG platforms offer significant advantages for SMBs, but they aren't a complete replacement – human connections still matter.
Curious how RAG and conversational AI can transform your business? Contact us to learn more.
1 From Intercom, Customer Service Trends Report 2024 and internal FreeClimb Research analysis.