When we talk to companies about the way they manage their customer contact, we ask them why they are not using live chat yet. Their reply often comes down to the same: “Because we’re already using phone, email and social media.”
These companies are not focussing on what chat can yield them, but on the extra work that another contact channel will bring them. We made a list of 10 benefits that will help companies to see the benefits of chat rather than the redundancy and extra work.
Before we look into the benefits of using live chat, it’s good to highlight that the concept of chatting on your website makes sense. We often compare websites to physical stores. In a physical store, visitors are always greeted and provided with assistance from store employees. Exactly this is what chat allows you to do online.
1 – Boost Conversion and Retention
One of the most important reasons for companies to implement live chat is because of its positive influence on sales. Numerous researches and data reports show the strong effect chat has on conversion rates.
Research by Boldchat shows that visitors who chat convert up to 2.8 times faster than people who don’t chat. The study also shows that these visitors spend up to 60% more on their purchases, making them 4.5 times more valuable than visitors who don’t chat.
A case study with Under Armour showed a conversion rate of 10.9% to direct sales from a chat conversation.
Besides increasing conversion, chat also has a positive effect on retention rates. A study of eMarketer shows that 63% of customers were more likely to return to a website that offers live chat.
But how does chat have such a positive effect on sales? This leads me back to the comparison with a physical store. People on your website have questions, just like the visitors in physical stores. However, many companies still rely on traditional contact channels like phone and email.
Do you think many visitors will call an electronics webshop about a product-related question? No, it is very unlikely that a visitor will pick up the phone, probably wait in line and ask a product-related question that seems relatively trivial. The threshold is just too big.
Sending an email forces visitors to leave the website. They will not receive an instant reply, so visitors will not convert immediately. It creates the risk of losing potential buyers to competitors.
Live chat combines both factors by being real-time and on-site. While looking for the desired information on your website, visitors can ask questions simultaneously. This allows you to take away hesitation and uncertainty during the buying process. That is the main reason why chat converts better than other contact channels.
Moreover, most marketing teams don’t take sufficient action to improve conversion rates. They mainly focus on generating traffic. But when customers enter their website, they A/B test and optimize the website, that’s all. It means that there is so much potential in conversion optimization, and chat is an ideal tool to do so because it answers questions right away.
2 – Reduce Shopping Cart Abandonment
In line with increased conversion rates, allowing real-time contact on the website reduces shopping cart abandonment. Consumers are not bound to your products, because there is simply too much supply. When the checkout process is unclear, paying methods are not properly communicated or shipping costs are not stated, consumers want an answer straight away. Without immediate answers, they will not complete their order.
The Baymard Institute has collected data from 41 different surveys about the disconnection of visitors from the online shopping cart. The average leaving rate that came out of this study is 69 percent. It means that more than two-thirds of all potential purchases are lost, totaling about 4 trillion dollars. Research by Forrester Research shows that 53 percent of the visitors almost certainly end the purchase when they cannot get an immediate answer to a question.
Live chat is fast and allows personal contact when customers are ending a purchase. By quickly answering questions when making a purchase, the shopping cart abandonment rate significantly reduces and sales increase.
A report by Business Insider Intelligence shows that 63 percent of abandoned shopping carts are potentially repairable. An important fact, because a small reduction in the abandonment rate already translates into a large increase in turnover. A departure rate of 60 percent that can be lowered to 56 percent, means a 10 percent increase in sales. On a sample of 100 shopping trolleys, the number of purchases cut off drops from 44 to 40, an improvement of 10 percent.
3 – Increase Customer Satisfaction
Increased conversion and less abandoned shopping carts sound very exciting and interesting, but live chat also influences the way your customers engage with you. In short, chat is direct and easy to use, making it a highly preferred contact channel for customers. Many pieces of research on customer satisfaction prove this.
eDigital Research conducted a survey on the customer satisfaction of customer service channels. The results show that live chat scored highest on customer satisfaction of all customer service channels. More than 71 percent of the people who used live chat were satisfied.
Comm100 found that 83% of customers are satisfied with their customer services through chat, compared to just 61% for email and 44% for phone.
The figures vary across studies (some going as high as 92%), but the message is undeniable. Live chat satisfaction benchmarks are higher compared to other contact channels. There are a couple of important characteristics of chat that make it such a preferred channel.
The most valued characteristic of chat is that it’s fast. Phone contact is also relatively quick but is likely to annoy visitors when they have to wait in line. When visitors need quick replies they don’t even bother about asking via email. According to Econsultancy, 79% of customers prefer live chat because it provides instant replies.
Unlike email and phone, live chat allows customers to contact companies and organizations anonymously. It increases both the number of customers that contact the company in question, and it increases their satisfaction. In many situations, customers prefer to stay anonymous because of the type of product or service they are looking for (f.e. plastic surgery clinics). Also, organizations dealing with sensitive topics value chat for its anonymity.
During the corona outbreak in the Netherlands, the Dutch government launched a website that included a live chat where citizens could take notice of domestic violence. Anonymity has a positive effect on the likelihood of people contacting your business or organization.
On the channel people use
The on-site aspect of chat has been described as one of the reasons why it positively influences conversion. This characteristic also increases customer satisfaction, because customers don’t have to switch between channels to ask questions.
The anonymity of live chat creates inclusivity. It doesn’t discriminate based on gender, race, age or disability. For example, live chats can meet WCAG guidelines to make sure people with physical impairments are able to use the chat.
Live chat allows users to share documents, have video chats and add extra explanatory information like screenshots and pictures. Not having to switch channels while doing so highly increases the speed of the conversation, and thus customer satisfaction.
4 – Reduce Costs and Increase Efficiency
Live chat has the image of being a conversion booster, but it works both ways. Since trained chat operators are able to handle 6 chats simultaneously, it’s way more efficient than calling or emailing.
A study by Forrester shows that live chat is more than 50% cheaper than handling phone calls.
Moreover, implementing a live chat on the website also reduces the number of incoming calls and emails. The accessibility of chat causes more people to contact companies through their live chat instead of calling or emailing. So costs are reduced by using fewer employees to manage customer contact, but also by reducing the amount of customer contact moments that are more expensive.
Besides increased efficiency, live chat increases scalability. The fact that chat operators can manage more customer contact provides you with the opportunity to grow your business and customer service. Since chat software is cloud-based or an application, your customer contact team can be increased in a wimp, without having to buy more phones and add phone lines.
5 – Generate Valuable Data
An easily overlooked benefit is that live chat collects a large amount of valuable data. Data is becoming extremely valuable and live chat is an ideal way to generate it.
Customer questions are saved within the chat software in written form, making it easy to convert it into analyzable information. The information provides insights into what your customers ask, when they contact you, how they convert, and why they value your business.
Often, these customer insights can lead companies to develop and execute new business cases. For example, a case study of Arval, the lease company of BNP Paribas, shows that a private lease label was started by analyzing chat data. Most customers that started a chat were interested in a private lease instead of a business lease (which was the only label they offered). They established a private lease label which is now more profitable than the business lease label.
Chat and marketing
Data generated through the chat can be used to optimize marketing activities. First of all, to improve the information provided on the website. When customers repeatedly ask about certain product information, it’s a sign that this information needs to be clarified on the website. Secondly, data can be used to check on the performance of your chat operators. Which ones receive positive feedback and which ones convert more customers? And third, by using the data properly chat can become an integral part of marketing activities. Two chat innovations show how:
1 – Retargeting by textmining
This innovation allows you to increase the relevance of your ads by using information that customers requested in a chat. Most ads are based on click behavior, but people often visit pages they are not truly interested in. However, the information they request in a chat is very reliable.
2 – Chatbanners
Chatbanners allow you to talk to potential customers on the domain where your ad is published. It gives you the chance to contact people without them entering your website, increasing the CTR of your ads and engagement with your brand.
6 – Track Results
Keeping track of your performance is key to providing customers the best possible experience. Chat software platforms are an ideal platform to track your results. The statistics generated within the software give a lot of information to improve customer contact through chat.
The number of chats per hour allows you to schedule the number of chat operators needed on specific moments. Also, agents’ performance can be tracked by looking at satisfaction and conversion scores. Moreover, the first response time allows you to see if chat operators reply quickly enough.
A convenient way to track results in your chat software is by using success codes. These are codes that you add to a conversation to categorize chats (f.e. sale, support, general). These codes allow you to track the different types of chats that were managed in a specific period.
7 – Provide Human Interaction
Often when we talk about live chat, people think of its automated version: the chatbot. Although chatbots offer an important value when it comes to efficiency and 24/7 availability, real human contact still wins the battle. For now, the quality of human brainpower simply beats the technology of chatbots.
An important aspect of live chat is the capacity of chat operators to show empathy. When customers have complaints or they experienced problems, showing that you care and that you will do your best to solve the issue provides customers with a sense of comfort. It’s the human interaction that increases customer satisfaction and leads people to return to you.
Chat operators are also able to think along with the customer and understand the issue, rather than providing a set of solutions based on some keywords. This is how most chatbots work. They are useful to first-line answers and repetitive questions, but when they’re not able to assist it increases annoyment and people desire human interaction. That is why a hybrid model with a connection to a chat operator is preferred when using a chatbot.
8 – Personalize Your Brand
We see live chat as the online translation of the physical store employee. Websites are often jungles of information which leads to confused visitors. A service employee at the forefront of the website allows your customers to personify your brand within the digital jungle.
An aspect that helps with this personification is the design of the chat window. The chat window can be designed to personal preferences in order to make it compatible with the overall design of the website. By doing so, the chat becomes an integral part of your business.
9 – Available Outside Regular Office Hours
Unlike physical stores, websites never close. Therefore customers purchase products online all the time, also outside office hours.
Live chat allows you to provide customers the chance to ask questions during their website visit outside office hours. On average more than 40% of all questions through chat are asked outside office hours. The case study of Under Armour shows that 50.6% of all their chats are during outside office hours.
Being there for your customers when they intend to buy, that’s what chat is about.
10 – Work Remotely
In our modern society working remotely will be more common. Live chat software allows your employees to do this because they’re not on the telephone lines. All they need is their computer and an internet connection.
In case another pandemic breaks out, you will not need to reorganize the complete customer service. Everybody does exactly the same but from home.