Although the telephone was still the most popular communication tool for asking questions in 2017, live chat has become an integral part of the customer contact strategy for many companies. Live chat offers opportunities to increase sales, reduce customer contact costs, and improve business operations based on feedback. Our partner LiveChat Service has written the book ‘Live Chat: More Than Just a Contact Channel’. In this article, we have outlined 11 reasons from the book why live chat is indispensable for webshops.
Reason 1: Significant reduction in emails
With email, 80 percent of people expect a response within 48 hours. Research by ITO indicates that many organizations cannot meet this 48-hour response time. The actual response time is often much longer.
The developments in chat and social media have adjusted customers' usage patterns. Contact methods such as post and email that do not meet these expectations are being removed from usage patterns. This is the reason changes in customer contact occur. Where customers used to massively use email to ask questions to businesses, in recent years, they increasingly use modern customer contact methods. A large leasing company in the Netherlands reports a 28.4 percent reduction in incoming email traffic after implementing live chat. The reason for this is that all basic questions come through the chat.
The expectation is that email will continue to play a significant role in our daily lives in the coming years, even within customer contact. The speed of the contact method will eventually become an obstacle for many people. They will prefer modern, faster forms of digital customer contact.
Reason 2: Tap into increased smartphone usage
Another development that started years ago is the rise of the smartphone. The device is an integral part of daily life. An interesting development in smartphone usage is its rise as a purchasing tool. This is highlighted in many studies, including the 2016 white paper (UPS, 2016). This research indicates that the use of smartphones as a purchasing tool grew from 41 to 44 percent in 2016. The study also shows that due to the increase in smartphone use as a payment tool, it is important for retailers to optimize the online experience on this device. Therefore, many companies choose to provide smartphone shoppers with a digital customer contact tool.
Reason 3: Live chat creates interaction that moves your business forward
Everyone occasionally goes to town or the village to shop. Imagine walking into a store with no staff. No employee greets you kindly and asks if they can help with anything. It's unimaginable. Online, however, this happens 99 percent of the time. Companies offer you the option to email online. But then you're lucky if you receive a response within 3 days. Additionally, there is telephony, which is too much of a barrier for most people. This is how the rise of social media began, low-threshold and relatively fast. As a result, live chat is widely used at the moment. This is the direct translation of the physical store employee to the website. The live chat greets the visitor and asks if they can help with anything. This provides online extra service valued by people shopping in town.
Describing a situation without retail staff shows why the absence of digital staff is such a remarkable phenomenon. When you walk into a store, there is always an employee who greets you and asks if they can help. Even if you don't need help right away, the greeting at least gives the feeling of being welcome. When you don't see your size hanging in the clothing store, you hesitate for no moment to ask an employee. But if there was no greeting upon entry, and the employee stood behind the counter with their phone in hand, you would walk away and likely not return quickly.
Live chat isn't just an opportunity for customers to communicate with employees, it also allows for a friendly greeting. This makes the visitor feel welcome. When the visitor has a question about, for instance, a product or delivery time, they will be more inclined to use live chat due to the friendly greeting. Visitors get immediate, cost-free, and quick answers. The low threshold of the contact method increases the likelihood of visitor conversion.
Reason 4: More efficient handling of customer queries
Live chat fundamentally distinguishes itself from the most used customer contact method: the telephone. With live chat, a chat operator can contact multiple visitors simultaneously. A telephone operator can conduct only one phone conversation at a time. This means an employee's efficiency is much higher than with telephone customer contact. As a result, customers are not put on hold and do not have to wait for the long response time of an email.
Reason 5: Live chat = more conversions
Various studies have been conducted on the influence of live chat on conversion. Each of these studies demonstrates a positive relationship between live chat and increased conversion. The results of these studies vary, but the overall conclusion is: live chat increases conversion. The degree of conversion depends, of course, on various factors, including the industry, company, associated customers, and visitors. The way live chat is deployed and the level of chat operators are important. Nevertheless, evidence shows that conversion increases occur regardless of industry, company, etc. Below research agencies have shown through extensive research that companies with live chat convert more than companies without live chat.
Research by Userlike indicates that chatters convert 2 to 5 times more often.
Forrester indicates that live chat increases conversion by 20 percent.
Reason 6: More sales opportunities as a result of low barrier to contact
Customer contact methods such as chat services, WhatsApp, and social media allow for immediate answers to visitors' questions. The possibility of quick contact makes customer contact more accessible. While writing an email or picking up the phone, and especially writing a letter, is too much effort for many people. This means that customers reach out who would probably not proceed to a purchase otherwise. Research by eDigital Research has shown that the easier a company makes it for (potential) customers to contact them, the more satisfied they are. Live chat responds well to that desire because it allows the customer to make anonymous contact while visiting the website. The study also shows that live chat scores highest on customer satisfaction among all customer contact methods.
Reason 7: Customers return
Engaging in a conversation with staff ensures that the customer or visitor to your webshop feels a connection with the company. When they are helped kindly and well, they will be more willing to use your webshop again.
Reason 8: Engage with the new generation
Research by eDigital Research shows that people between 18 and 34 use live chat the most and have the most positive opinion about it. The use of live chat is partly motivated by the risk of not using live chat. By not using live chat, businesses risk not only losing customers to competitors but also losing the opportunity to uncover the needs of the most outspoken part of society, people aged 18 to 34.
Research by Retail Research from 2013 shows that from 2020, 30 percent of all retail purchases will be made by 'millennials' (people born from 2000 onwards). This group of people has grown up with the internet as the primary means of communication and expects companies to do the same. This group will only grow larger compared to people who prefer traditional communication methods like telephony.
Reason 9: Reduction in cart abandonment rate
The Baymond Institute (2015) collected data from 31 different studies about cart abandonment in online stores. The average abandonment rate found was 68 percent. This means that more than two-thirds of potential purchases in the cart are lost, totaling approximately 4 trillion dollars. Research by Forrester Research (2013) shows that 57 percent of visitors are almost certain to complete the purchase if they can receive an answer to a question immediately.
Live chat is quick and enables personal contact at the moment customers are about to make a purchase. By quickly answering questions during the purchase process, the cart abandonment rate is significantly reduced, and sales increase.
According to a report by BI Intelligence, 63 percent of abandoned carts are recoverable. An important fact because a small reduction in the abandonment rate directly translates into a significant increase in revenue. A 60 percent abandonment rate reduced to 56 percent means a 10 percent increase in sales.
Reason 10: Increase in average purchase amount
Live chat results in significant increases in the average purchase amount. A case study by Forrester Research (2010) where a retail company was investigated before and after using live chat, shows that the average purchase amount with live chat is 20 percent higher than without it. In a more recent study from 2015 by Boldchat, even an increase of 60 percent compared to before the use of live chat was observed. It offers opportunities to apply techniques such as upselling, cross-selling, and special offers.
Reason 11: Cost reduction
Integrating live chat into the organization results in cost savings compared to telephony. Several reasons support this:
Live chat provides better support, leading to a decrease in incoming phone calls.
Chat operators can handle multiple chats simultaneously, whereas a telephone operator can conduct only one conversation at a time.
Chat operators can perform other tasks while waiting for responses.
Live chat is cheaper and easier to implement than telephony. The lower costs lie in employing fewer staff because chat operators, as mentioned, can handle multiple chats simultaneously. Aside from staff, implementing live chat only requires software that costs a few pounds a month.
The content of this article is compiled based on the book ‘Live Chat: More Than Just a Contact Channel’ by Nick Blom, Edvin Oklopcic, and Sietse Busser. This book provides an interesting insight into the advantages and application of live chat for retailers active online. The book can be ordered via this link.
