Recently, a survey by Software Advice found that 56% of consumers have sought an answer to a question via a website’s live chat feature at least once, while nearly 10% have done so “many times.”

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Further, research from eMarketer (albeit dated, but likely still relevant) discovered that, of those consumers who had used live chat, 65% were more likely to visit the site (on which they used the chat) again, while 27% had actually ended up purchasing more than they initially intended.

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This says to me that there’s heaps of untapped potential out there for anyone who isn’t yet offering a live chat option on their website.

So today, let’s take a look at why and how live chat can help you in your mission to growth hack your company. Skip down a few sections if you’re ready to implement live chat and just want to find out how to utilize it to the best of its potential.

(Also, as a side note, I’m not going to review individual live chat providers here, as plenty of sites have already done so to great effect. This post, instead, will focus on how to get the most out of the tool you’ve already selected.)

Customers love it

According to Forrester Research, “44% of online customers say that having questions answered by a live person while in the middle of an online purchase is one of the most important features a web site can offer.”

It makes absolute sense. Back when we still visited bricks and mortar stores (remember those days?!), if we had a question, we’d just ask the nearest member of staff. Quick. Simple. No fuss.

Online, it’s (generally) a lot more difficult to get our questions answered. Sure, we can usually call in or send an email, but both of these approaches have their drawbacks – namely, waiting on hold and lengthy email response times. In fact, a survey by KANA Software found that 59 percent of companies take more than eight hours to reply to customer emails, while more than a quarter take more than 24 hours!

It’s little wonder then that 79% of customers said that they prefer to use live chat because they “get their questions answered immediately.”

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Or that, of all methods of customer service, live chat was found to have the highest satisfaction levels:

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So how does this translate into growth for you? It’s pretty simple really: happy customers spend more and are more likely to become return customers. Translation: happy customers are loyal customers.

Key Takeaway: First of all, get a live chat system set up (customers think it’s very important!). However, don’t actually make it available to customers until you have the resources to manage it properly, and ensure all queries will receive a quick response.

It can save you money

Live chat systems enable employees to handle multiple customer queries simultaneously. This boosts workforce productivity, meaning you get increased output with less staff.

In fact, Virgin Atlantic states that “one live chat agent can typically do the work of about 15 customer specialists who are handling emails and calls.”

Less staff means reduced operational costs, which means more revenue and profit for the business – or, more money to invest in marketing and growth.

Yes, there will likely be some setup costs involved, and you’re going to be paying your provider a monthly fee, but these costs are negligible when compared with the cost of finding, training, and employing a full-time member of staff.

Key Takeaway: If you want to cut the cost of customer service, implement a live chat system – its management requires significantly less manpower than that needed to answer phone calls or emails.

You can use it to up-sell

Let’s start by clarifying something… I’m not suggesting you use live chat to sell products to people who don’t need them. Frankly, that would be immoral, and isn’t going to do you much good in the long run. If, or when, a customer realizes they’ve been sold something they didn’t want or need, do you think they’re going to return? I highly doubt it.

If a customer wants to buy something, and you believe a cheaper alternative would suit them better, take the hit on your revenue and speak up.

Down-selling like this can help a customer to trust you more. After all, you didn’t have to down-sell, so why would you unless you were simply looking out for their best interests? This technique can greatly increase customer loyalty.

However, in addition to using live chat to slash customer service costs, Virgin “found that average order values for consumers who use live chat is some 15% higher than for consumers who do not use the tool.”

Use your live chat feature to add value to a customer’s purchase – if an alternative or additional product will serve the customer better, educate them on why and how.

The trick lies in getting “perceived value” to work in your favor: an alternative product may cost more than the customer initially intended to spend, but, if the customer believes that this alternative offers them better value for money, they will spend more and go away happy.

In other words, everybody wins.

Key Takeaway: Use live chat to assist your customers in making wise purchasing decisions – if it would be right to upsell, then do. Likewise, if it would be in the customer’s best interests to suggest they purchase something of a lower value, then you should take the revenue hit and advise them accordingly.

Live chat can reduce product returns

It makes sense that the more informed a customer is about a product, the less likely they are to return it.

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You can use live chat to monetize on this fact by actively encouraging your customers to ask questions. It’s the digital equivalent of a shop assistant enquiring as to whether there’s anything they can help you with, except this is less intrusive.

While your live chat should not be in any way forceful or aggressive (a customer should be able to minimize or remove the box, and it shouldn’t pop up again unless activated by said customer), it’s fine – helpful, in fact – to let the customer know an operative is there and ready to answer any questions, should they be needed.

Key Takeaway: Don’t be afraid to activate your live chat and let a customer know that someone is there if they have any questions – but don’t be annoying. Once is enough

You can extract data from your live chat that can help you to make better, more informed decisions

Most live chat platforms incorporate real-time data and analytics tools that can enable you to pinpoint what’s working and what can be improved, as in the image below from Zopim Live Chat:

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For starters, you should be able to monitor your agents’ performance on metrics like how many customers each agent is handling and how satisfied those customers are. This can help you to identify each agent’s strengths and weaknesses, so that you can adapt your training and support processes accordingly. From there, you’ll be able to optimize your existing team’s performance and minimize the need to hire additional staff members.

What’s more, this type of data should enable you to determine an optimum customer to agent ratio – i.e. the maximum number of customers an agent can deal with at one time while also maintaining optimum customer satisfaction levels.

However, what I’m really excited about with live chat analytics is the ability to quickly identify common trends that are causing customers to turn to live chat; for example, a problem with your checkout system.

First of all, live chat means that you can actively encourage customers to tell you when something’s wrong – something you’d never initiate over the phone (even if you had their phone number, calling customers up to ask them if they’re having any problems would still be super creepy…).

Similarly, a customer is unlikely to pick up the phone and call you to tell you there’s a problem with your checkout. That’s a lot of effort to go to for something that will benefit you more than them. Unless the customer really, really wants to make that purchase, chances are they’ll just go and buy it (or something similar) elsewhere.

However, live chat enables you to initiate the conversation and ask your customers to tell you if there’s anything wrong or if there’s anything they have a problem with.

What’s more, live chat analytics tools should enable you to see which pages of your site visitors are on when they begin to chat.

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Why is this helpful?

Because… if an unusually large number of chats are stemming from a particular page of your site, this should signal that there’s an issue with that page (or a page linked to it). You’ll want to take a closer look at that page (heat map tools can be helpful here as well) and try to make the necessary improvements to increase effectiveness.

The information you gain, both directly from your customers, and via your analytics, is priceless. Used correctly, it will enable you to quickly identify, and more importantly, tackle problems that could be hindering your growth and hurting your bottom line.

Key Takeaway: All good live chat programs should incorporate analytics tools that will help you extract valuable data from your conversations. Use them!

It (can) place you ahead of the competition

A study by TELUS International found that many leading ecommerce sites don’t offer live chat.

For something that’s relatively simple to implement and manage, I’m frankly baffled by this. However, for you, it’s great news.

I may have said it before, but customers love live chat. Not every customer of course, so don’t close down your phone support just yet…

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But, if you can offer a line of communication that your competitors can’t, you’ve instantly got one over on them, giving potential customers a reason to buy from you instead of somebody else.

Key Takeaway: Using live chat can help you get one over your competition, but not all customers want to – or will use it. Make sure to offer more traditional forms of contact (such as phone and email) as well.

Are you convinced yet that live chat is worth implementing? Good. Now let’s take a look at what you can do in order to maximize its benefits…

Use triggers to automate page tracking (where appropriate)

Here’s a tip that led Blue Soda Promo to achieve a 60% live chat to sale conversion rate: initiate the chat yourself, when behavior suggests a customer may be encountering problems.

Using Bold Chat software, Blue Soda Promo analyzed their customers’ on-site history and the time they were spending on each page. If the system detected enough signals to suggest a customer may be having problems, or seeking an answer to a question, their live chat feature would automatically activate.

Rather than being intrusive, this careful targeting meant that soon enough, a massive 60% of their live chat conversations were resulting in a sale.

Key Takeaway: It can benefit both you and your customers to initiate a live chat conversation; however, timing is everything. Avoid distracting customers (who many be close to making a purchase) by utilizing “triggers” that automatically initiate conversations at appropriate moments.

Answer customers quickly

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As mentioned above, of those customers that prefer to communicate via live chat over other methods of customer support, 79% do so because it “enables them to get their questions answered immediately.”

However, this doesn’t mean that customers never have to wait to talk to a live chat agent. Unexpected peaks in traffic could see your support team becoming overwhelmed, which is why you need to be prepared.

If your team is completely swamped, the worst thing you can do is ignore the customers that are trying to contact you. To overcome this, implement a system that enables you to limit damage resulting from customers waiting in line. At a minimum, the customer should be made aware that you know they’re waiting, that you’re very busy, and that you will be with them as soon as you can.

If possible, they should also be provided with an estimated wait time so that they can make an informed decision about whether to wait around or try back later.

Key Takeaway: Implement a contingency plan that details exactly what will happen should your live chat support become overwhelmed and your operatives are unable to answer all queries in a timely manner.

Utilize historical data

Live chat software will allow you to store previous conversations. Utilize this feature by giving operatives time to scan through historical conversations with repeat customers. This can help them to:

  • Identify what problems they’ve had previously. Let’s say a previous problem wasn’t resolved. In this case, the operative can be prepared to pick up the conversation right where it left off.
  • Learn what products they’ve previously purchased (and consequently, are likely to purchase this time around).
  • Establish the “type” of customer they’re about to talk to and the style of language they use and will respond best to.

Using this information, your operatives can build rapport with the customer and offer an improved, more personalized, and just downright more helpful service.

Key Takeaway: Where historical (chat) data is available, allow your operatives the time to review the information, and train them in how to best utilize it.

Walk like a human, talk like a human

Which of these live chat introductions would you relate to more… This one:

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Or this:

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Granted we’re all different, and some people might prefer the formality of the former example. However I think we can all agree that the second example sounds more natural, and more…. real.

Let’s take a look at the key differences:

  • Stock photo vs. real photo. Studies have shown that stock photos are often ignored. One retailer actually enhanced their site with real photos of their customer service agents and increased conversions by 21%. Basically, stock photos suck.
  • Operator listed as “admin” vs. operator listed as “their real name.” Yes, the agent introduce herself as Karen, but each time “Karen” types a message, it will be preceded by the very impersonal “admin.” Not ideal from a rapport-building standpoint.
  • Customer addressed using their full name vs. customer name not used at all. This is where customers’ preferences may differ. Some prefer a more casual tone, while others might find having a stranger refer to them by their full name to be a little creepy. Err on the side of caution and don’t use their name at all. Or even better, split test both options.
  • Robotic and formal language (“How may I help you today?”) vs. more natural and casual sounding language (“I noticed you’re looking at our pricing”). Ultimately, most businesses find that casual, engaging language leads to better results than off-putting, formal expressions.

So how do you get your team on the same page? Some companies choose to hand out “style guides” to live chat operatives. While it can be worth having this information available (operatives, especially new ones, may occasionally become stuck for words and will appreciate the help), relying too much on a style guide could actually cause more problems than it solves. Namely, operatives can fall into the trap of sounding automated.

As you implement live chat, you’ll likely find that you’re asked the same questions over and over again. You might, therefore, be tempted to save time and ask your agents to answer these questions with a canned response when they see them. Believe me, I totally get that.

Unfortunately, this technique doesn’t come across as particularly personal. Actually, scrap that. Canned responses come across as the polar opposite of personal.

As with any form of customer service, live chat presents an opportunity for you to build relationships with your customers – relationships that will encourage them to remember you in a positive light.

Think back to when you’ve received great customer service. Chances are, you won’t remember the times where an operative simply solved your problem. Instead, you’ll remember when operatives went out of their way to help you and treated you as an individual.

Key Takeaway: Provide your agents with style guides and templates to fall back on, but try to deter them from relying on them too much. Encourage your agents to treat each customer as an individual, and inject a little personality into their communications, instead.

In fact, if you want to offer excellent customer service via live chat, the language you use is critical. Let’s talk about that a little more…

Ask open ended questions

“Can I help you today?” is a pretty standard customer service greeting. It sounds polite enough, but it practically invites the customer to say “No.”

Instead, your opening question should be structured in such a way that it’s impossible to answer with a “Yes” or a “No.”

So instead of “Can I help you?” try “How can I help you?” or “What can I help you with?”

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Mirror your customer’s language

This is classic sales psychology – mirroring the customer’s behavior helps to build rapport between the customer and the salesperson. That said, this tactic should always be approached with caution: go overboard and the mirrored may wrongly believe they’re being mocked.

This technique isn’t exclusively useful in sales, either. Any situation in which you want to build a relationship with somebody can benefit from tactile mirroring. This includes customer service and – of course – live chat.

If the customer is using very formal language, then the operative should respond accordingly. Similarly, if the customer is being more casual, the operative should adopt the same tone.

Over time, you should be able to build a clearer picture of the type of language your customers most commonly use. This can then be used to model style guides and be incorporated into your customer service training.

Avoid being sarcastic or making jokes

Even if it’s intended completely innocently, sarcasm can easily be misconstrued, while jokes are often lost in translation. Play it safe and instruct your operatives to avoid them entirely.

As much as possible, use succinct replies

It’s important for live chat operatives to communicate using messages that are short and to the point (without, of course, succumbing to the use of robotic-sounding responses). Doing so respects your customers’ time and allows your operatives to assist more prospects in the same amount of time.

But since this doesn’t come naturally to all people, take the time to teach your operatives the art of writing succinctly in training.

Avoid using jargon

Err on the side of caution and assume your customers have zero product knowledge. This doesn’t mean you should be patronizing; it means that you should always try to use the simplest language possible to ensure your message is conveyed clearly. In one manifestation, this means avoiding using industry jargon that could confuse prospects.

Use positive language

Sound obvious? Well okay, anyone working in customer service should make staying positive a priority. That’s hardly groundbreaking advice.

However, there’s more to using positive language than simply “staying positive.” It’s all in how you frame your words.

In 1973, Richard Nixon stated at a conference that “people have got to know whether or not their President is a crook. Well, I’m not a crook.”

By repeating the negative word “crook”, Nixon inadvertently encouraged people to view him as a crook.

The lesson here is to avoid using negative words, even if your intentions are positive.

So let’s recap on how you can use live chat to growth hack your company…

Fundamentally, it comes down to offering a really awesome customer experience. This doesn’t start and end with live chat – it’s one of many tools available to you – however live chat can, and should, be a valuable weapon in your arsenal.

RightNow Technologies 2010 Customer Experience Report found that 82% of customers have stopped doing business with an organization because of a poor customer experience.

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While, to put it as simply as possible, good customer service increases sales.

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Increased sales means more money in your back pocket, or, more money to invest in other means of marketing your products and growing your company.

Used correctly, live chat can even help you to up-sell, and to reduce potentially costly returns.

What’s more, live chat can reduce staffing costs – unlike phone operatives (who, for obvious reasons, can only help one customer at a time) the figures suggest that a single agent should be able to manage multiple live chats at the same time.

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Of course, implementing live chat isn’t as simple as setting it up and letting your staff loose. The language you use is key, while paying attention to historical data can help you make more informed decisions that serve your customers better.

However, when used correctly, live chat can have a tremendous effect on the quality of service you offer your customers and can, both directly and indirectly, positively affect your bottom line.

Are you using live chat? Has it helped you to improve the service you offer, increase sales, and grow your company? Let me know by leaving a comment below:

Comments
  1. Hi!

    Thanks for the great, comprehensive article. I agree with you that LiveChat can be a growth hacking tool – not only for support but also for sales. Speaking of sales – from my point of view using proactive chats can also can help you handle with cart abandonment. You just need to ‘catch’ the client when he is about to leave 😉 Here you can find more information about selling with LiveChat, take a look if you’re interested: http://bit.ly/how_to_sell_with_LiveChat

    Actually I don’t agree with what you said about jokes. ‘Being sarcastic’ – ok sometimes people don’t understand irony 😉 In my opinion joking makes a conversation more ‘human’ and personal.

    Cheers!

    Agnieszka / LiveChat

  2. As usual, amazing article Sujan,

    I agree with you completely. HappyFox Chat believes that live chat is the next big thing with business communications..in fact, it’s an untapped channel for marketing and sales as most businesses consider live chat as a channel for customer support.

    In fact, we build a live chat product specifically for sales and marketing folks keeping their goals in mind. You’d agree that anonymous to lead conversion is the primary goal for a marketer and although live chat tools available today does a good job of enabling you to talk to anonymous visitors, (and some of them doing it beautifully well giving you information on who you’re talking with) , things pretty much end there.

    As in, you know who you’re talking with, you can talk to them and possibly get them engaged, but that is it. There is still an open end to those conversations. You aren’t necessarily converting them but more of just engagement.

    We at HappyFox Chat, wanted to take a stab at this problem and provide live chat as your only tool required to convert (convert as in convert to a solid lead like any other marketing/sales channel) anonymous visitors to leads.

    The way we do it is by enabling you to integrate deeply (not a band aid basic solution but deep integration) with your marketing and sales apps.

    For instance, we let you integrate with salesforce right from your live chat window. What that means is, whenever someone starts chatting with you, you’d be able to see who this person is, if he is in your sales funnel, what status he’s in, what are his previous conversations (tickets), what are his previous orders (via Shopify or other e-commerce platforms) and pretty much everything about this person you’re talking to.

    What this means is that you no longer have to open ten different tabs to look up who you’re talking with. You have all the information you need about him right within the chat window so you don’t have to ask him/her redundant questions.

    So, how does it help in converting?

    Well, this is the killer part.

    HappyFox Chat lets you integrate with your third party app that you can create leads right within the chat window during or after a conversation. For example. let’s say you have MailChimp integration done with live chat (pretty easy, just a single click to install the app on live chat from our app store), then once the conversation is ended, you’d be able to ask the person a question to add him to any of your lists. No subscription boxes, what so ever. One click and he gets added to your email subscription list right from the chat window.

    Same thing with Salesforce integration.

    With one click, you’re able to add the person you’re having a conversation with, right into your Salesforce lead list. Simple as that!

    We are aiming at integrating with 100+ apps by 2015 and most of the apps are already available. Like Shopify integration( Free), Salesforce integration, Google Analytics integration, WordPress integration etc!

    And to your point of “One live chat agent replacing 15 customer support agents”… We believe that customer support is not just a department but everyone’s job at the company. And we want to enable everyone in your company to be able to talk to customers. And not restrict it to a few people or have you to pay for “extra agents”.

    So, HappyFox Chat is giving away FREE 10 agents on every account. No strings attached.

    Free App integrations and a super fast, lite weight tool with customazable sleek interface and UI. It’s a Free to life tool, that fits everyone and help you take live chat to a totally different level.

    Thanks again for this insightful article, I’m sharing it with everyone in the team. Thanks!

    Check out HappyFox Chat here – http://www.happyfoxchat.com

  3. Lots of solid stats here Sujan – nice job! We’ve been running live chat systems for a lot of sites (i.e. we’re a live chat service – https://helpflow.net) and have been seeing really strong results. We see 3-9X conversion rate for visitors we chat with vs visitors that don’t chat, and 20X+ ROI for our customers on the cost of our service (we track $ produced from visitors we chatted with before they bought).

    We have some big content plans coming up for next quarter. Would love to collaborate!

    Keep up the awesome work!

    Jon

  4. Great post, Sujan.

    We agree that chat is an excellent channel. We built Help.com Chat to help companies scale their live chat presence and provide great service over chat as they continue to grow. Our customers care a lot about reporting, scalability, and integrating chat with other systems they use, and that’s what we focus on as we continue building our product.

    Cheers,

    Chris

  5. Hi Sujan,

    Many thanks for sharing this. Shoppers on an eCommerce site are not robots but human beings and they respond to attention when they need help. I like the scenario you have of shopping in a brick and mortar shop where you just look for the nearest staff of the store and ask your question.

    It’s very insightful to learn about the kind of measurable data that live chat software’s can offer and I particularly find using it to analyse pages for problems very helpful.

  6. It is indeed important to make it easy for the customer to reach out to you! A customer support platform can be integrated within the application to aid app users and resolve any complaints that they might have. Among others, devContact (www.devcontact.com) is a support desk that is built specifically for mobile apps and can be easily integrated for free. It offers a wide range of features including live chats, FAQs, analytics and push notifications. This will help deliver a better overall user experience with the mobile application. A well written post which has provided great insights! 🙂

  7. “Hey Sujan!

    This is a complete article! great job! The statistics speaks everything about the importance of live chat solution on a website. I use https://www.live2support.com/ for my website and it has greatly helped my organization in upselling products, avoiding refunds and increasing the customer satisfaction. I think every product/service selling company should have live chat solution because it is really helpful not just for an organization but for users as well.

    Cheers!”

  8. Hi All,

    Fantastic article with captivating stats along with insightfull comments!

    Quick question to all of you.

    Would this solution work for SaaS based B2B startup with Product market fit stage where traffic is extremely low yet? And solution is not perceived on the market as expected for the time being due to high degree innovation?

    Your views are higly appreciatted.
    Thank You

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