The Conversational Economy: The Strategic Role of AI Chatbots in Customer Experience (CX)

The rapid advancement of artificial intelligence has transformed customer experience (CX) management, with AI-powered chatbots emerging as pivotal tools in what practitioners now call the "conversational economy." This paper examines the strategic role of AI chatbots in enhancing customer experience, analyzing their applications, benefits, and challenges within contemporary marketing frameworks. Drawing on a qualitative analysis of secondary data from industry reports, academic literature, and corporate case studies, the study identifies five strategic applications: 24/7 customer support, personalized product recommendations, lead generation, proactive engagement, and buyer's journey streamlining. The findings show that chatbots improve operational efficiency, customer satisfaction, and scalability, yet significant challenges persist, including technical limitations, customer frustration from poor implementation, integration complexity, ethical concerns, and the human touch deficit. The paper concludes with a strategic framework for effective implementation and discusses future trends such as generative AI integration, hyper-personalisation, and hybrid human-AI models.