The text discusses the importance of interaction models in conversational AI assistants, which are modeled after human conversation patterns to create a more natural experience for users. An interaction model should be informed by initial user research and define scenario ideations, information architecture, and conceptual models that capture the user's potential thought processes and questions. This model serves as a blueprint for other components of the conversational assistant, including NLU and dialog management. A well-designed interaction model influences every aspect of the conversation design experience and is crucial for creating a smart and effective conversational assistant. The text also highlights the importance of iteratively refining the NLU model based on live customer data and user feedback, and explains how dialog management plays a critical role in converting user inputs into machine outputs to create a natural conversational experience.