A simple, easy-to-read glossary of common AI terms for small business owners and beginners.
A software application powered by artificial intelligence that automates tasks, provides insights, or enhances productivity for users. These tools are often designed for non-technical users.
A software tool powered by artificial intelligence that interacts with customers, answering questions and automating tasks like customer support.
💡 Example: ManyChat and Tidio are chatbots used for customer engagement. Sarah uses Tidio to handle customer inquiries 24/7 for her boutique.
A sequence of instructions that a computer executes to achieve a specific outcome, such as solving a problem or making a decision. AI tools use algorithms to process data and generate intelligent outputs.
💡Example: Social media feeds use algorithms to show you relevant content.
A software tool powered by artificial intelligence that interacts with customers, answering questions and automating tasks like customer support.
💡 Example: Sarah uses Tidio to handle customer inquiries 24/7 for her boutique.
Automation
Technology-driven automation of tasks. In small businesses, automation can handle repetitive work like email responses, scheduling, or data entry.
AI-powered automation saves time and reduces errors.
Automated actions are triggered by specific user behaviors, like clicking a button or spending time on a page.
💡 Example: ManyChat uses behavioral triggers to send personalized messages.
The term for exceptionally large and complex data collections that are computationally analyzed to extract meaningful patterns, trends, and correlations. AI tools often use big data to improve predictions and personalization.
💡Use Case: E-commerce stores use big data to recommend products based on customer behavior.
Chatbot
An AI-powered program that simulates a conversation with users through text or voice. Chatbots are commonly used in customer service to answer FAQs, provide support, and guide users.
💡 Example: ManyChat and Tidio are chatbots used for customer engagement.
AI that can engage in realistic, back-and-forth conversations with users, not just giving static answers but responding contextually.
💡 Example: Perplexity AI and Jasper AI use conversational AI for better user interaction.
The ability of an AI to remember previous interactions and adjust responses accordingly.
💡 Example: Jasper AI remembers past conversations to provide consistent replies.
How a business interacts and builds relationships with customers, often through support, messaging, or personalized experiences.
💡 Example: Copilot.Live improves customer engagement across multiple channels.
CRM (Customer Relationship Management)
Use of AI tools to manage routine customer inquiries reduces the need for human agents and saves time.
💡 Example: Sarah’s chatbot automates responses to questions like “Where is my order?”
Analyzing raw data to uncover insights and guide decision-making. AI-driven analytics tools enable small businesses to better understand performance, customer behavior, and market trends.
💡Tool Example: Google Analytics uses AI to provide website traffic and user behavior insights.
A visual interface that lets you build chatbots or websites by dragging elements and dropping them where you want; no coding is required.
💡 Example: Botpress offers a drag-and-drop builder for creating custom chat flows.
AI tools are designed to enhance online stores, such as personalized product recommendations or cart abandonment recovery.
💡 Example: Lisa uses Klaviyo AI to send emails that recover abandoned carts in her artisanal goods store.
A pricing structure where basic features are free, but advanced features require payment.
💡 Example: Botpress offers a freemium plan up to 2,000 messages/month.
A type of AI that creates content, like social media posts, emails, or chatbot responses, is often used in marketing.
💡 Example: Jasper helps John create Instagram captions that showcase the special offerings at his restaurant.
An advanced type of AI model developed by OpenAI that generates human-like text based on prompts.
💡 Example: ChatGPT uses GPT-4 to write emails, create content, and answer questions.
Connecting one tool with another (like connecting your chatbot with your CRM or email system) to streamline workflows.
💡 Example: Zoho SalesIQ integrates with Zoho CRM to unify customer data.
Intelligent Automation
The combination of AI and automation is used to perform complex tasks that traditionally required human judgment. This includes invoice processing, inventory management, and customer segmentation.
💡Use Case: QuickBooks uses intelligent automation to categorize expenses automatically.
These AI systems help e-commerce businesses predict demand and optimize their inventory.
💡 Example: Lisa uses TradeGecko AI (now known as QuickBooks Commerce) to ensure her artisanal goods store does not run out of popular soaps.
This feature offers website visitors the opportunity for immediate communication with a human support agent, usually through a chat window.
💡 Example: Zoho SalesIQ and Tidio offer live chat alongside automated bots.
A branch of AI that enables systems to learn and improve from experience without the need for explicit programming. Machine learning powers many AI tools that adapt to user behavior over time.
💡Example: Netflix’s show recommendations are driven by ML analysis of your watch history.
AI solutions that assist with creating content, targeting ads, and analyzing campaigns for small businesses.
💡 Example: John uses SEMrush AI to track the performance of his restaurant’s ads.
The ability of an AI tool to understand and generate content in multiple languages.
💡 Example: Gemini supports over 40 languages, making it great for global businesses.
The ability of machines to understand and respond to human language in a natural way, like how we talk or write.
💡 Example: Claude excels at NLP, making its responses feel more like talking to a real person.
Personalization
Tailoring experiences or content to individual users based on their preferences, behaviors, or past interactions. AI makes personalization scalable and efficient.
💡Use Case: Shopify uses AI to personalize product recommendations for each shopper.
A tool that is easy to install and start using right away, with no complicated setup needed.
💡 Example: Tidio is known for its plug-and-play integration.
Robotic Process Automation (RPA)
Software bots that replicate human actions to automate repetitive digital tasks. Although not always powered by AI, RPA tools are often integrated with AI to improve their intelligence and efficiency over time.
💡Use Case: UiPath and Automation Anywhere help small businesses automate workflows like data entry and report generation.
An AI process that analyzes customer feedback to detect emotions, helping prioritize urgent issues.
💡 Example: Sarah uses Medallia AI to flag a customer’s complaint about a late delivery.
Smart Assistant
An AI-powered virtual assistant (e.g., Amazon Alexa, Google Assistant, or Apple Siri) that can perform tasks or answer questions using voice commands.
💡Small Business Use: Managing calendars, setting reminders, or controlling smart office devices.
Task Management
You can customize pre-written formats for your own needs, like ad copy, social posts, or email drafts.
💡 Example: Jasper AI offers templates for marketing content.
User Experience (UX)
How a person interacts with and feels about using a product or service. AI improves UX by making apps smarter, faster, and more personalized.
💡Example: Canva’s AI recommends layout adjustments tailored to your design preferences.
Why This Glossary Matters for Small Businesses
Understanding these terms helps you:
- Choose the right AI tools for your business
- Communicate better with tech-savvy partners or developers
- Make informed decisions when setting up automation or chatbots