Live Chat Proves Efficient, But Has Yet To Gain Wide Adoption

September 10, 2012 / 2 Comments

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In a time when consumers crave instantaneous gratification, live chat stands out as a practical way to help customers receive  swift, high-quality customer service without ever having to leave the webpage.

In a recent study of the top online retailers, STELLAService found that only 14 of the top 25 online stores have an active live chat option for providing customer service. Those offering live chat include: Overstock.com, Newegg.com, OfficeDepot.com, Amazon.com, HSN.com, LLBean.com, Sears.com, Macys.com, TigerDirect.com, Dell.com, Staples.com, Zappos.com, BestBuy.com, and HPShopping.com.

What’s more is that on a broader scale, fewer than half of the retailers researched by STELLAService provide live chat assistance: Out of 512 online retailers investigated by STELLAService, only 221 offered live chat service assistance, showing there’s some reticence to adopt live chat as a service channel.

The study showed that the 14 companies offering live chat are much more responsive over that channel than any any other medium. In the month of July, these 14 retailers posted the following average response times across the four major customer service channels:

Live Chat, 1 minute 11 seconds; phone, 1 minute 12 seconds; email, 10 hours 33 minutes and Twitter, 4 hours 6 minutes.

Aside from delivering faster with live chat, companies that use live chat also delivered higher quality service. Over the month-long period, STELLA analysts logged an average of 30 live chat interactions for each company and found that their questions were fully answered 88.5% of the time. This statistic stands in stark contrast to the 58.6% of emails sent to the same companies that were answered completely.

Live chat is also gaining traction among consumers. Internet Retailer recently reported that Lord & Taylor, a Hudson’s Bay Trading Co. subsidiary, receives a quarter of its customer service questions via live chat. In a separate story, Internet Retailer reported that conversion rates for Virgin Atlantic Airways Ltd. are 23% higher for consumers who use its live chat tool.

And while some may be surprised that live chat has come to account for a larger share of customer traffic and increased sales, it comes as no surprise to those in the business of providing live chat solutions.

Sunir Shah, chief marketing officer at Olark Live Chat, a live chat solutions vendor, sees live chat as an obvious way to increase conversions, by effectively turning their website into a showroom.

“If you go to the Gap and look for jeans, a salesperson can come up to you and help you find the right fit,” Shah said. “But what if they asked you to step outside onto the sidewalk in order to give you advice? That would be crazy, but that’s essentially what the customer has to do without live chat.”

So what are companies so afraid of? Why hasn’t every online retailer jumped on the live chat bandwagon?

According to Shah, one of the biggest objections companies have is that they’re afraid there will be too many chats and that it will cost a great deal to hire the requisite number of representatives to respond to all the service requests.

“They wonder: Where are we going to find the people to work on live chat? We won’t be able to handle it,” Shah said.

But Shah believes that retailers who have not adopted live chat solutions for this reason have missed the mark, that live chat is extremely cost effective.

“A live chat operator can handle five to ten chats simultaneously, which is certainly much more bandwidth for dealing with customers.”

Compared to the single interaction a customer service representative can manage with phone support, live chat allows retailers to handle multiple customer service requests with equal or less manpower. This has been a main selling point for vendors interested in initiating retailers into the world of live chat service.

Besides being a cost-effective customer service strategy, Shah also sees in live chat an opportunity for retailers to make the online shopping experience more consistent with the in-store experience.

“You have the same context as the customer with live chat. Just like if you’re in the store, you’re able to see what’s in their shopping cart online,” Shad added.  “They’re on the page with the customer seeing exactly what the customer is seeing, so its a lot faster to resolve issues because you’re not going through the whole ‘what are you seeing now?’ dance on the phone.”

Others in the live chat business see investing in live chat technologies as a logical step in the evolution of serving the modern shopper.

Grant Miller, founder of mobile live chat platform Look.io, believes that the new generation of shoppers have particular tendencies and affinities that would make live chat their customer service mode of choice.

“People, especially the younger demographic, are fed up with talking on the phone,” Miller said. “Retailers have begun to recognize that real-time chat, when done correctly, is an incredibly useful tool.”

Miller also believes that current trends necessitate live chat finding a home on mobile devices. And others agree: His young company was acquired earlier this year by LivePerson, a leading live chat vendor.

Shah agrees with Miller, but sees the adoption of  live chat by major retailers as a part of a much larger ideological shift.

“Over the past few decades there was a trend to automate away customer care,” Shah said. “In the coming years, I believe that retailers and other companies will become more and more personal and will place customer service at the top of their priority lists.”

2 thoughts on “Live Chat Proves Efficient, But Has Yet To Gain Wide Adoption

  1. Pingback: Can Text Messages Become The Next Big Channel For Customer Service? | Happy Customer

  2. Pingback: JackThreads Sees 15x Bump in Conversions With Live Chat | Happy Customer

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