ONLINE INTIMACY – Developing the Potential of Live Chat –

By: Lynne Taddeo

Several converging trends suggest that it is time to begin thinking seriously about live chat as a crucial component of the customer experience. Consider the following:

This year, Gartner estimates that 25% of all customer interactions will take place via Web-based communications (including email, live chat, web callback, etc.). By 2003, Forrester estimates this number at 56%.

  • At a time in which customer loyalty continues to elude online merchants, companies are finding that “superior online customer service has emerged as a key and – in many cases – the only means for businesses to differentiate themselves from the competition.” In fact, Bizrate reports that consumers cited “quality of customer support [as] the single most important factor driving repeat online sales, outstripping factors such as on-time delivery, ease of ordering, selection, and even price by healthy margins.”
  • Many consumers persist in their desire for a human element in the online experience. Yankelovich finds that 63 percent of people online say they won’t buy anything until there is more human interaction involved.” And a study by NFO Interactive found that nearly 35 percent of Internet shoppers said they would purchase a greater volume of products online if they could speak with a CSR at the time of their purchasing decision.”
  • Online chat is a more efficient medium than telephone: 1-800-Flowers reports that chat agents can handle four concurrent customers within about six minutes. Telephone inquiries average three minutes per call, thus half as efficient.

Thus, at a time when Web-based communications are becoming an ever greater part of the customer experience, when companies have the power to differentiate themselves by the quality of their customer service, and when consumers are clambering for a human touch in the online world, live chat offers an exciting and operationally efficient medium through which companies can connect with customers.

Corporations are catching on to the potential of live chat. Currently, only 2 out of 130 sites in a recent study offer live chat as an option. Yet IDC predicts that 70% of large corporations will install instant messaging software during the next 12 months and Yankee Group states that “live online interaction is the most frequently cited option among features to be added to corporate web sites in the next 12 months”. Retail sites that have initiated chat and personal shopper options include,,,,,,, and

Consumers enjoy live chat for the immediacy, intimacy, and convenience it offers. Browsers can easily obtain complex information from a customer service representative with a few clicks of the mouse. Our research revealed that many consumers prefer chat to telephone if asking intimate questions such as querying a retail representative on the cut of a garment or how sizes run. Chat offers the “immediate gratification” that analysts regard as fundamental to the appeal of the Web. And at a time when most home users continue to connect to the Internet via their single home phone line, the ability to communicate with a representative without having to log off the web to place a phone call is much more convenient. Even for those with multiple phone lines, Broadband or DSL, chat response times are often faster and far more appealing than the prospect of dialing a contact center, navigating through a VRU, and waiting for a representative to take one’s call. Moreover, live chat provides representatives the opportunity to build customer relationships with each interaction by giving customers “what they want, when they want it and how they want it.” Representatives can immediately push client-driven content directly to the customer’s desktop in a way, which is meaningful, tailored, and compelling.

Yet as with any current communication medium open to today’s consumers, companies must establish service and performance standards to ensure that representatives take advantage of the relationship-building potential of live chat without bungling the opportunity. In establishing these standards, keep the following guidelines in mind:

  1. Respond Fast. The Web experience is all about immediacy and consumers unflaggingly demonstrate that they hate delays and will go elsewhere if forced to wait too long. Simple queries should be answered within 30-60 seconds, while up to 120 seconds of wait time is acceptable for customers asking more complex questions. If fully answering the customer’s question will take longer than two minutes, set the appropriate expectation with the user by explaining that you are happy to research their question, but it may take up to x minutes to fully address
  2. Provide meaningful and pertinent information. Live chat provides representatives with the opportunity to “wow” their customers with detailed, meaningful, and confidently delivered product information. Yet it is equally important to answer the customer’s question in a concise and relevant manner. Avoid the pratfall of barraging chat customers with product information that is ancillary to their original request.
  3. Respect the customer’s choice of medium. One of the best practices to emerge this year is Eddie Bauer’s commitment to let the customer choose which medium they want to utilize and to provide superior customer service without attempting to move the customer to a more automated and cost-effective channel. I recently engaged with a live chat representative who offered to help me find the product I was looking for at a rather high-end retailer’s site. Anticipating appropriate screens pushed to my desktop, which detailed my product options, I was acutely disappointed to be directed to the site’s search engine for self-service. Customers engage live chat for a reason. They either can’t find the information they are looking for or require more detailed and tailored assistance. Respect their choice of medium and fulfill their needs through the channel they have chosen.
  4. Proper grammar, spelling and courtesies are compulsory. Customers will easily form a poor impression of a company whose agents cannot spell or follow the rules of proper usage. Although chat is a fast-paced medium, attention to such details is crucial. In addition, agents must use proper courtesies such as thanking the customer for their interest, etc.
  5. Continually update site FAQs to eliminate redundancy. Web customers generally prefer self-service and will answer their own questions if possible. By updating site FAQ’s to reflect common chat queries, companies can eliminate redundancy and allow chat agents to focus on complex inquiries and genuine human personalization.
  6. Offer live chat to all users. Although chat is a more time-efficient medium than telephone, there is a human cost to its usage. For this reason, many sites are considering offering live chat only to their most valuable customers. While this strategy may be invisible in the short-term, we believe that it will backfire in the long run. With the growing ubiquity of instant messaging and the growth of live chat on retail sites, customer expectations will rise and consumers will eventually demand live chat. In addition, customers are “catching on” to CRM-based personalization efforts, which often result in high-net worth customers’ calls being answered promptly while “less valuable” customers suffer long delays. While similar tools can customize Web-site options to only offer high-touch service to the most valuable customers, such tactics are offensive to ordinary consumers, jeopardize customer acquisition efforts and damage brand image.
  7. Finally, monitor chat agents’ interactions to ensure consistent quality. While customers crave a human touch in today’s web-based commerce, it is precisely the human element of chat that can leave your organization vulnerable to miscues. It is advisable to monitor a sample of your chat agents’ interactions to assess user-perceived speed, ensure consistency to basic protocols (spelling, grammar, courtesy), test product knowledge, and gauge responsiveness to customer requests. Third-party assessments may be preferable, as they prevent supervisor bias and provide an objective view of how your organization is viewed from the outside.

Multi-channel customer service offers companies unprecedented opportunity to develop profitable and long-term relationships with their customers. Customers who take advantage of multiple touch points are known to spend more with those organizations – Eddie Bauer reported that the value of clients utilizing multiple touch points does not increase in a linear fashion, but exponentially. And at a time when customers seek live human communication to enrich the web experience, “live chat provides the highest level of customer touch . . . to every Web visitor”. By taking advantage of this medium and practicing the above, companies will be poised to significantly enrich their overall customer experience, resulting in greater retention and revenue.

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About Eric Larse

Eric Larse is co-founder of Seattle-based Kinesis CEM, LLC, which helps clients plan and execute their customer experience strategies through the intelligent use of customer satisfaction surveys and mystery shopping, linked with training and incentive programs. Visit Kinesis at:

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