Interactive Chat Improves Sales, Customer Service

Memorysuppliers.com offers more than just electronic-device memory cards. It also offers one-to-one, 24-hour-a-day chat.

With four people dedicated to chat and email responses, Memorysuppliers.com is one of thousands of ecommerce companies adding chat to its marketing and customer service mix. And why not? A February 2008 study from Forrester Research, “The ROI of Interactive Chat”, found merchants with click-to-chat options (also known as “reactive” chat) earn a 15 percent return on investment (ROI) on the chat service itself. Merchants with chat invitations and pop-up windows tied to user actions (also known as “proactive” chat), meanwhile, earn a whopping 105 percent ROI.

“Chat was mainly initiated for customer support, for any type of question for those who don’t want to wait for an email response or talk on the phone,” said Yan Bashkin, operations manager for Northfield, Ill.-based electronics-memory-card e-retailer Memorysuppliers.com. “Then we worked in coupon codes, just to track how many chat users are actually interested in buying and what they’re looking for.”

The results: A 66 percent boost in closed sales using chat coupon codes since transitioning to 24-hour chat (versus business-hour chat) a few weeks ago. Baskin said it more than pays for itself.

What Kind of Shopper Wants to Chat?

Out of nearly 2,000 online customers responding to the newest North American Technographics’ Retail Benchmark survey, 24 percent said the thing they liked most about chat was its immediacy. There was no finding the phone, dialing a number, or waiting for an emailed response. Meanwhile:

• 16 percent wanted information personalized to their situation.
• 13 percent wanted answers to simple questions, ones they felt would have been a waste on a call center’s time.
• 8 percent just didn’t want to tie up their own phone line.
• 9 percent used chat for faster product research.
• 7 percent liked the feeling of being anonymous while getting the basics out of the way before talking to a live operator.
• 7 percent specifically liked being presented with a pop-up window to engage in a chat session.

Using Chat

Chat still has a learning curve to reach the needs of every consumer. A lingering 13 percent of those surveyed said chat just wasn’t useful for them. For those who do use and like it, however, Forrester Researcher Chip Gliedman found that “in addition to closing otherwise lost customers, personal engagement … at the time of purchase adds the potential to persuasively up-sell or cross-sell additional products or services. As a result, the average transaction size for on online purchase can increase.”

Up-front costs for live chat vary. There are free offerings like Volusion’s basic one-on-one chat software, which can only handle five chats at a time and doesn’t have the reporting or customization of Volusion’s $29.95-per-operator Premium Edition. Hosted solutions are available such as Velaro’s Live Chat product, which charges a minimum $49.95 per operator per month, or Boldchat.com’s per-operator $29 to $99 products. There are even artificial-intelligence agents like the “Save a Sale” SMARTagent from UpSellit, a commission-based pre-programmed chat bot designed to close abandoned sales.

“Having any sort of live agent or chat can become a costly proposition,” said Eric Karofsky, principal strategist at the interactive agency Molecular Inc., which develops web widgets, mobile devices, and digital design from offices in Boston, New York and San Francisco. “I’ve seen prices that average out to under $1 per chat session to $7 per chat—a wide range. Furthering the issue is the quality of those chat agents. Very often, retention is a key problem—training and retraining people is a loaded cost. There’s also the issues of spelling errors, grammar errors, and chat agents that take too long or don’t know the answers.”

Indeed, researchers have found that chat customers ask similar questions. That’s why many merchants, like Memorysuppliers.com, are turning to rosters of standard messages even in live chat. Bashkin said, “We use canned responses like ‘Hello, How many I help you?’ and wording for the discount offers and, for consumers asking about specific products, canned product overviews.” With the addition of canned verbiage, it’s “not that expensive” to provide real-time chat support, said Bashkin. “Our chat software system [from Chatstat.com] costs about $100 a month, and then we have our designated staff expenses.”

Whether using live operators or a computer program, the key to sales optimization is in customization. “Most important is the ability to control the software yourself,” said Ross Haskell, director of marketing for Wichita, Kansas-based Boldchat.com, a chat tool tied to analytics software. “A good analogy would be Google AdWords, where I can log into my account and change the words in real time based upon what words are working and which ones aren’t. I then can report on those changes. Chat implementation is similar. You need to have the ability to try something, measure and shift. The key to optimization is having the capability and software to support that.”

The magic number for catching customers most likely to engage in chat is around 50 second at an ecommerce site, Haskell said. But be forewarned. When Memorysuppliers.com tested a pop-up chat prompt that appeared after 45 seconds on the site “five out of 50 customers surveyed said it annoyed them,” Bashkin reports. It didn’t however, appear to impact sales.

“At the end of the day, chat helps both us and our customers,” Bashkin said. “Mainly it saves everybody time. If it’s a small question and the customer doesn’t want to call in or wait, they may be at work, or still shopping…. it saves time.”