Live Chat Pops Up as a Preferred Customer Service Channel

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In a multichannel world, phone and email customer interactions reign supreme, trailed by mobile and social. But what about live chat? Surprisingly, live chat is a low-ranking channel on the customer service totem pole, despite offering myriad benefits, including low customer effort, decreased contact center costs, minimal implementation effort, and strong appeal to the coveted Millennial demographic. Software Advice, an IT consulting firm, recently released survey results about live chat. Craig Borowski, a market research associate with the firm, spoke with Smart Customer Service about why it's worth a second look.

Smart Customer Service: What are some key findings from the research?

Craig Borowski: We found that 49 percent [of people] said that they prefer using live chat for online shopping questions, but 74 percent said that they would rather use the phone for more complex financial questions, and 39 percent said they used online chat more than once.

SCS: Is customer age a factor for using live chat?

CB: Yes. The younger the person was, the more likely they were to use live chat. Regardless of what kind of question a customer asked, 56 percent of 18-to-34-year-olds preferred live chat [to] using the phone, compared to 27 percent who were 35 and older. Also, people 55 and older said that they either never used live chat or tried but weren't successful. There's a cultural difference, a generational gap in preferences of Millennials and older consumers. Millennials are early adopters of other real-time, chat-based communication channels such as text messaging. At first glance this might not seem surprising, but when you see that same relationship played out across all sorts of different customer service contexts, then this becomes a bit more compelling.

SCS: What surprised you the most about this research?

CB: What stood out to me was the overall number of people who have used live chat before. Over half of the respondents (56 percent) reported using live chat at least once to get a question answered through a company's Web site. We weren't sure this would be the case.

SCS: Why do you think people prefer live chat to using other channels, like the phone or email?

CB: People indicated that the convenience and the desire to not be on hold were the two main reasons for choosing live chat. Fourteen percent of 18-to-24-year-olds said that they prefer live chat because they multitask, and they also liked that they can get a transcript of a live chat conversation sent to their email.

It was also interesting to see how many people prefer live chat for simple transactions, such as making changes to accounts, shopping, and questions about delivery and shipments, questions that can be answered quickly.

SCS: The cost of calling into a contact center and speaking with an agent is higher than if a customer uses live chat, yet adoption has been slow. What do you think is going on?

CB: There seems to be an unawareness of live chat. In customer service in general, there's a great deal of focus on traditional channels, such as phone and email. A lot of times, companies believe that providing great customer service comes down to improving those two channels rather than looking at newer options like live chat.

During my research, I spoke with quite a few live chat agents in a variety of industries, and it's not uncommon for one agent to handle seven to 10 different chats at the same time. The chats, individually, take up less of an agent's time than a single phone call. It's a much more efficient use of agents' time, and that is one of the things that are drawing attention to live chat.

When companies do focus on newer channels, I think that a lot of times they get wrapped up in the trendy channel-of-the-month type thing, which lately has been social media. I'm not dismissing social media as an important channel, but I think that it's overshadowed by live chat, which probably has greater potential in the long run.

SCS: Why is there more potential with live chat?

CB: Basically, it comes down to customer effort; live chat improves the customer experience. It's a really easy way to get instant answers to questions and, compared to other channels, it doesn't require the same time commitment.

Live chat also has great potential because it meets customers at the point of the buying cycle where they're going to have questions. If, for example, an online retailer doesn't offer live chat and a customer has a question about a product they've purchased, the're going to have to be funneled into email or phone support. And if a customer hasn't made a purchase yet, it doesn't make sense to call customer support.

By offering intelligently integrated live chat where agents can keep track of how many times a Web site visitor has checked out a product or visited an FAQ  

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