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Industry Research : Web Chat Good for Customer Service, But Use with Caution
Web chat is now a staple of many websites, spruiked as capable of increasing sales and customer satisfaction. But every such initiative incurs costs and the gains aren't always obvious.
According to research firm Fifth Quadrant, one in four Australian organisations already use the simple online text-based chat option. In the next 12 months, 16 per cent plan to implement it and 19 per cent plan to increase usage.
Consumers seem to like it too. The survey found 49 per cent of respondents reported purchasing a product as a direct result of a web chat interaction. More than 60 per cent of organisations that used it regarded the deployment as successful.
"Amongst organisations that have implemented web chat [52 per cent] report experiencing an increase in sales conversion ... [and] a further 43 per cent report experiencing a decrease in call centre volumes and 38 per cent an increase in customer satisfaction," the report commissioned by web chat company Boldchat said.
US based LivePerson operates a cloud service that adds chat functionality to websites. It has been in Australia for three years and according to Dustin Dean, VP and general manager ANZ, has established a strong presence among Australia's largest enterprises.
"The five largest banks are customers, as is the largest telco, and the three largest airlines, the two largest retail conglomerates and many of their sub-brands," he told IT Pro.
The technology tracks customer activity on a website and determines when to initiate live chat. Dean likened having web chat without the functionality provided by LivePerson to "having sales people just stand around in a store waiting for someone to ask a question. They never know why they are going to ask a question or what question they are going to ask."
Jetstar first used web chat in 2011 to help customers booking holiday packages and in July 2012 extended usage to help those having trouble completing online flight bookings.
Jetstar’s head of customer care, Ian Watson, told IT Pro the company was pleased with results.
"Live chat is now the most popular service channel we offer," he said. "Live chat has proved to be a genuine win-win as it has allowed customers to get their queries answered quicker while also enabling us to reduce our costs." The airlines has now rolled chat out across its Asia Pacific operations, in Japanese, Mandarin and Cantonese.
Hotel and resort operator Mantra Group also claims to have reaped significant benefits from web chat. It was getting 750,000 visitors per month to its website, but conversations to bookings were low. After implementing web chat it reported that 15 per cent of 10,000 monthly visitors engaged via chat converted to sales.
However Guy Cranswick, an advisor with IBRS, said that providing live chat could be quite resource intensive and companies needed to make sure they were gaining a net benefit from the technology, not masking other issues such as poor web design.
"Clearly what you want is more self-service at lower cost and higher margin," he said.
"Perhaps some of the issues [that cause customers to initiate web chat] could be solved by a better website. There may be problems in site layout and design and hierarchies of messages. If the expectation is that people have to be nursed through the same problem every time that is not good."
He said analysis of web chat should provide valuable insights into shortcomings in web design. "You can get a lot of information out of web chat for the web development team to look at structure, navigation and signage, clarity and process."
Cranswick was also sceptical about the value claimed for web chat in terms of increased customer loyalty.
LivePerson surveyed 1000 Australians on their use of web chat, concluding: "Sixty-eight per cent of Australian consumers are more likely to be loyal to a brand that provides live, human assistance at critical moments, with a further 88 per cent of respondents indicating their perception of a brand improves when live chat is available."
Cranswick likened this to a valet service. "I'd be loyal to a site that took care of me with a valet, but is that sustainable? They talk about loyalty but they don’t put a value on it."
He suggested that web chat would be most effective for high-value services where there is the potential for upsell.
"If you are operating web chat for a relatively low margin business where price is everything, you probably won't see much benefit from it, but if you are selling things like financial services or holidays there is the potential to upsell and create loyalty because people are spending more money and will be much more concerned about how they are spending that money."
Posted by Veronica Silva Cusi, news correspondent
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Published: Wednesday, April 30, 2014