By: Dale Knauss, Show Producer
Want to know the secret behind retail giant CompUSA’s ten-fold increase in online conversion rates? How about the methods that internet retailers such as Backcountry.com, WhiteFence.com, and gourmetstation.com have used to increase their conversion rates by 15-20% while increasing their average order by 25-30%? Does this all sound good to be true? It isn’t, in fact many of these results are being duplicated daily by online retailers and e-commerce sellers using live chat programs.
Live chat has recently gained popularity as a way to provide customer service to online shoppers without the need for more expensive phone support or slow moving email support. It allows retailers to give customers that final push to get over any issues that might be stopping them from entering in their credit card information. Customers with questions about the products they are looking to buy can alleviate their fears by talking to a person rather than getting lost in the shuffle of a website.
Another interesting effect of a live chat feature is the trust built by the two parties. An online chat associate essentially replaces in-store sales staff and can make product suggestions to confused customers and even recommend additional products which might be useful based on what the customer is looking at. For instance, someone who has asked a chat provider about screwdrivers might get a personalized recommendation about what type of screws to buy. It is because of this type of interaction that many live chat users report average order sizes to be between 25% and 30% higher for people who choose to use live chat.
In addition to the obvious benefits to customer service and communication that live chat provides, the technology also allows for some interesting techniques which are not possible using other methods of customer service. A great example of this is a company’s ability to determine exactly when to initiate a chat with a client. Using web analytics, the company can determine the usual buying patterns and then develop their chat program to activate and contact a user automatically should they deviate from the usual path. Companies can also use this strategy to only talk to people on certain pages like the checkout page. This helps to prevent potential customers from leaving a site without buying anything. Additionally, chat can be blocked for users outside of the country, or for people who are from organizations who are known to do research rather than buy stuff.
There are also a number of companies that prefer passive chat and only have their customers contact them. This gets rid of a common complaint about live chat, that people can feel hassled, and it also saves money on the number of customer service reps needed to talk to people.
Another great benefit of live chat is its ability to allow service reps to send useful links directly to the customer. This allows the company to have potential buyers directed to the exact location on the website that was made to answer a given question. Additionally, service people are able to handle up to four live chats at any time.
These benefits all add up to big savings in customer service costs compared to phone service, as well as the huge conversion rates and order rates discussed earlier.
Despite the many advantages to online retailers that live chat provides, a surprisingly low number of e-commerce sellers actually use chatting services. The numbers range from anywhere from 28% to 32% who report currently offering any sort of online chat, however that number represents a significant increase from previous years.
The reasons for a slow adoption of this promising technology are numerous, though there are some common ideas that have prevented many from entering the live chat arena. The costs of chatting, which can range from free for some of the do-it-yourself options to 10% of the sales price for more substantial offerings including trained service reps and customized software, is often cited as a significant barrier to entry. Another big issue is the idea that chats are only viable for big ticket items or for products that generally already require support offline and are therefore ineffective to many online retailers.
While these objectives might have some merit, there is a wide range of software and services based around chat at many different price points available for many different types of e-commerce seller. Additionally, many of these services allow companies to implement of test run of their product for free to gauge results before investing in a live chat solution.
Types of Live Chat Solutions
As mentioned earlier, live chat is not a product that is only accessible to big corporations. In fact, almost anyone with a website and an interest in increasing their conversion rates can afford to implement some form of live chat. The options range from self hosted, low cost software that simply provides a no-frill option for customers to chat with you online, all the way to outsourced sales reps using the latest customized technology to target, communicate with, and up-sell your customers, keeping a commission for themselves of course.
Take a look at the various live chat solutions and find one that fits in with your budget and your marketing plan. Remember to compare not just pricing but also the features and benefits that each solution will offer you. A cheap option might seem optimal at first, but once you consider the savings and increased conversion rates, you might find that one of the higher priced options is actually a better value for your company.
Live Chat Software
This type of solution can be the cheapest option for small online retailers as some programs require only a one time licensing fee rather than a monthly fee. Therefore the only ongoing expense to these companies is the cost of internal customer service reps. There are also some more advanced web-based programs that are more expensive but are also generally more advanced and provide more support.
By choosing to not contract out customer service, companies can save money by using existing personnel to handle chat. Alternatively, many companies simply want more control over their customer service reps so they choose to handle and train them internally.
Here are some of the top live chat software programs:
Automated Chat
Automated chat is often looked at as a cheaper alternative to live chat because it removes the cost of customer service people while still answering many commonly asked questions and improving conversion rates. Using advanced scripting software, automated chat interprets a customer’s question based on certain keywords and then spits out the most likely useful answer.
This type of program is often much more cost effective then live chat, particularly for smaller priced items for which companies cannot justify the cost of employing full time customer service reps to sell. It’s silly to spend the $4 to $6 that some companies spend on a single live chat to sell an item that only had a $4 to $6 profit margin to begin with. Once you have written the script for your automated chat system, it requires very little in the way of maintenance and you will generally only be charged a small monthly fee after the initial investment.
Here are some of the top automated chat companies:
Outsourced Live Chat
Outsourcing your live chat solutions allows you to trust in people who are experts in this relatively new field of online chat. Using an experienced provider to staff, train, and manage customer service representatives allows you to focus on other areas of your business. The administrative hassles saved and expertise gained by using these companies often more than makes up for the large fees that they charge.
Using Live Chat is an excellent weapon in any online retailer’s arsenal. With a number of pricing and feature options, this proven way to increase conversion rates, decrease shopping cart abandonment, and increase average orders is available to businesses at all levels.
Be sure to thoroughly research all of your live chat options before choosing the right service and provider for your company. These are the people who will be responsible for customer service on your website you need them to handle it effectively.
If you need help in choosing and implementing the right live chat solution for your business RSS Ray can help. We can work with you to understand your needs and goals, select the right product to fit your company, and then create a plan for running your new live chat system most effectively. Contact us today.
Tags: Automated Chat, Customer Relationship Management, customer service, eCommerce, Live Chat, Upselling
