Is Live Chat the Future of Customer Service?

Customer service is important to every company in every vertical everywhere; it is a measurable benchmark that is constantly being eyed by company executives worldwide.  There has been research done by numerous companies in numerous verticals in an attempt to measure customer satisfaction.  Just about everyone at one time or another has called their bank, or credit card company, hosting company,  phone company and more and been asked if they would like to participate in a customer satisfaction survey.  It goes without saying that if the customer is not happy, they are most likely not going to continue to do business with  a company, which is why so many companies work so hard at determining if the customer is happy.

With success comes the burden of having to service the customer which up to now has meant having a call center with customer service agents.  One of the biggest issues that companies have faced is customers complaining about being on hold or not able to get a customer service rep on the phone.  This is not unique to any one type of company, it happens everywhere and it is not an uncommon situation for customers having to wait for up to 30 minutes to get someone on the phone due to the huge influx of incoming calls. The resolution to this problem in the past has always been a complicated one, and while the answer may seem simple, which is to hire more agents, it’s really not always that simple. Hiring more agents mean spending more money and a company has to consider whether that is cost effective and if it is in the budget.  And even if it is, it still may not be that simple, is there enough capacity to accommodate the hiring of new agents?  Are there enough seats, phone lines, will the dialer be able to handle the additional work load?

Thanks to modern technology there are solutions to the customer service issue, and that solution is “Live Chat”.  Live Chat is an online communication interface which allows a customer to speak to a customer service agent online using an instant message system.  It alleviates many of the customer service issues that have existed in the past.

LivePerson is a publicly traded company that is a leader in the live chat market and has been in business since 1995 and went public in 2000.  I called LivePerson asking to speak to someone because I was writing an article on live chat services and they directed me to their Corporate Communications Director Amy Inlow, who was more than willing to talk to me and was very helpful.

I asked Amy how many clients they had and she told me they had 8500 customers with an aggregated  10 million chats per month.   I asked Amy if to her knowledge any company had completely abandoned using traditional customer service and sales contact centers and had gravitated totally to Live Chat and she said that she was not aware of any; however she said many companies have made Live Chat their primary method of customer service.  Traditional customer service is limited to an agent talking to one customer at a time, I asked her how many customers could an agent talk to using Live Chat and she replied that using LivePerson an agent could comfortable have three to four concurrent chats at the same time and that having this ability creates operational efficiency which leads to an overall reduced cost in terms of customer service.  She said, “Chat is a critical communications channel due to the real time component, and while online customers can have their  questions answered at the point they need help, chat provides that real time communication that other channels may not, which is why it is so effective.”

Amy gave me access to research that was conducted just last month by Forrester Research, Inc. (Making Proactive Chat Work, by Diane Clarkson for eBusiness & Channel Strategy Professionals, June 4, 2010) which provided some very interesting statistical information.  According to this research 44% of online customers say that having questions answered while in the middle of an online purchase is one of the most important features that a website can offer.  Nearly one in five online customers have used chat in a customer service aspect in the last year and that 57% of these customers stated that they would likely abandon a purchase if they cannot find the answer to their questions quickly.  The report stated that 19% of online consumers have used chat for customer support and that 29% are interested in using it and that the 53% difference between the combination of use and interest is most likely due to chats low availability compared with other customer service channels.  27% agreed that they would like having a chat box appear asking if they needed any help and while this number is small compared to the 71% that would prefer to initiate contact for customer service Forrester believes that the number of people who would like it would grow in appeal as the number of proactive chat invitations increase.



It appears that Live Chat is definitely becoming more popular, and is cost effective, with the average cost being around $100 per month per agent, with discounts for bulk purchasing.

During my research I found myself at which uses Live Chat by LivePerson and through their Live Chat I was able to talk to “Cherry” who was more than happy to answer my questions.  I asked Cherry if Dell’s customers seemed to be satisfied with customer service using the Live Chat platform and she said that they ask every customer at the end of the chat if they were satisfied with the level of service and that the majority of them are pleased.  I then asked  Cherry if she thought that Dell’s customers would rather use Live Chat than calling in on the phone and she said that in her experience customers prefer using the chat especially customers that are on the go because they do not have time to sit in a phone queue waiting to be helped.  The last question that I asked Cherry was has she had any positive feedback from customers on Live Chat and she said that she has had quite a bit of positive comments made especially mentioning having the ability to send them reference links in real time.

A few years ago I did some consulting for a manufacturing company that had a small customer service department with around six customer service agents.  Their relations with their customers was a nightmare because the average hold time was over 30 minutes and sometimes as high as forty five minutes with as many as 30 or 40 people on hold at once.   They had a website but it was not utilized much and was not put together very well.  I brought in a web design professional and under my direction the website was completely redesigned with a live chat application installed.  I had the customer service department telephone greeting message changed to advise callers that they could get faster service at the website.  I had two of the six agents assigned to nothing but Live Chat with the other three rotating and at the end of three months the average queue time was less than one minute with only about five people in the queue at any given time.  This is evidence to me that Live Chat is effective even on a small scale and that while the jury might still be out on the final decision on Live Chat that so far it is looking good and that Live Chat may be the future “standard” for customer service.

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About Joe Melle

Joe Melle has founded and ran several successful businesses, and has had an interesting career in direct contact media, call center operations, sales operations, customer service operations, customer retention, and quality assurance; he has written over 140 business articles, previously served as a part time adjunct professor for a university teaching business, marketing, and management courses to both graduate and post graduate students.Email Me

1 thought on “Is Live Chat the Future of Customer Service?

  1. Hi joe! very informative post, totally agree on what you mentioned above. As a live chat app user i can confirm that live chat is a future of customer service. Thanks for the great post.

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