Online Sales

Why using ‘live chat’ could improve your customer service and even boost sales

Kirsten Robb /

Australians are an impatient bunch when it comes to online shopping.

According to a recent study, if Aussies don’t get real-time help within 78 seconds of landing on a website, they are likely to grab their phone or fire off an email to get their questions answered quickly. And if no one is waiting on the other end, they will not be happy shoppers.

Since the internet now compels businesses to communicate via new methods, features such as real-time customer assistance, or ‘live chat’, have become increasingly popular in the global sales arena.

Australia’s lagging behind

Australia has been relatively slow to adopt the trend, with companies in the US and Europe using live chat for several years to answer customer enquiries and, ultimately, help sell their products.

While the idea has started to pick up pace within the Australian retail, bank and telco sectors, a recent report from research company Fifth Quadrant shows live chat is vastly underused by Australian companies.

Currently, only 26% of organisations have implemented a live chat service, with only a further 26% planning to implement it in the next 12 months.

But the stats point to a potential money-spinner for businesses, with 49% of consumers surveyed saying they had made a purchase as a direct result of a live chat.

Lauren Freedman, president of the e-tailing group, has been tracking live chat across the world since 2008 and says that while the adoption curve has been a gradual one, live chat has proven to be effective in satisfying customers and converting potential interest into a sale.

“It will take time to be adopted as first retailers realise it can work across many brands, a variety of market segments and that consumers prefer this means of communication,” Freedman told SmartCompany.

She says live chat not only differentiates businesses from their competition, it quickly gives shoppers answers when they are in a “buying” mode.

“Often consumers have just a simple question that can be the difference between a conversion KPI and an abandonment fatality. It’s all about timing for shoppers.”

Targeting multi-taskers

A service that helped to solve his customers’ timing issues was a no-brainer for Adam Jacobs, the managing director and co-founder of online fashion retailer The Iconic, who was an early adopter of live chat in Australia.  

“When you think about our target market, and think about how they use our website, typically they’re multitasking,” says Jacobs.

“Our shoppers are savvy people, maybe they’re at work, maybe they’re at home watching TV, they might have multiple tabs open or they could be listening to music, and they’re used to using different chat applications while performing those tasks.

“So we thought, surely it makes sense that they would want to chat with us, because that’s the way they naturally want to communicate with people when they’re using technology.”

Jacobs said from its first trial, customers loved using live chat because it was a more personalised and convenient service.

“It doesn’t interrupt what they’re doing. I dare say a lot of them are at work and don’t want their team knowing that they’re online shopping.”

Now, The Iconic’s customer service team has up to 1000 customers contacting them a day on chat, and at least a couple of hundred on slower days.

They first launched with a reactive version of live chat, where the customer service team responds to incoming inquiries, but soon employed a proactive system that approached their customers when they landed on the site.

Jacobs likened it to a salesperson approaching a customer on the shop floor; only in the digital version of the interaction, there was no immediate pressure placed on the consumer to buy.

He says while The Iconic didn’t use sale metrics to measure conversions because it used live chat as a “service tool” rather than a “sales tool”, it did appear to be effective in closing sales.

Certainly, the use of live chat lends itself to The Iconic’s younger demographic, with Fifth Quadrant’s survey showing use is highest amongst 18-to-29-year-olds (41% utilised the service) and 30-to-39-year-olds (46% utilised the service).

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Kirsten Robb

Kirsten Robb is a former journalist at SmartCompany. Previously, she worked at News Corp as a property reporter for Leader Newspapers and the Herald Sun, and holds a Masters of Journalism at Melbourne University.

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