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Talking the Talk — Before the Sale
The execution of live chat can make or break the conversion.
Posted Oct 5, 2010
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Many potential live-chat users think of the technology primarily as a medium of support — a cost-efficient way to respond to shipping questions, billing queries, and other issues that emerge after a transaction has taken place. While live chat certainly can address these problems, the technology is increasingly applicable to presale activities as well — and the manner in which live chat is executed can be the difference between a conversion and a lost opportunity.

[Editors' Note: For more insight into the proactive elements of CRM — including proactive live chat — see CRM magazine's special October 2010 issue.]

In a recent survey of more than 1,000 United States–based Internet shoppers, the majority of the respondents reported having had live chats with at least one merchant. In fact, 66 percent were more likely to have engaged in their most-recent live chat before making a purchase; last year, only 59 percent of respondents could say that. Perhaps most significant was the expanding share of respondents who claimed to have purchased as a direct consequence of live-chat interaction — a figure that rose by six percentage points.

If perception is reality — and every marketer knows it usually is — then the survey's overall findings about live chat's effectiveness are equally telling:

  • 56 percent of those surveyed agreed that live chat was a more-efficient communication method than the phone;
  • 66 percent agreed that it was more efficient than email.

Among those who had engaged in a chat before, the response was even more convincing:

  • 68 percent of this group thought chat was more efficient than the phone;
  • 79 percent thought it a better way to communicate than email.

If the majority of all shoppers on your site think live chat is a better way to communicate — and if a subgroup of those shoppers think it's much better — then clearly the technology is far more than merely an after-sale support strategy.

SalesNexus, for example, is a provider of online contact management software that competes with software-as-a-service pioneer Salesforce.com. Where SalesNexus differentiates itself, its executives say, is with a laser-like focus on high-touch methods of sales and support. SalesNexus Chief Executive Officer Craig Klein says that prospects who communicate via chat before a purchase decision are more willing to provide their names and numbers, as well as give permission for a salesperson to contact them. Typically, 20 percent of SalesNexus leads turn into sales, but live chat pushes that figure above 50 percent.

Cosmetics Web site e.l.f. (a.k.a. "eyes, lips, face") offers another interesting example of applying live chat before the sale, relying on live chat for differentiation among its peer group. Customer service representatives aren't the only ones answering chats; product pages feature make-up artists responding to questions about eyeliner technique and blush application. It's unique and absolutely tailored to help visitors find the right products to buy.

And if you're based in Virginia while the majority of your prospects are from outside the U.S., what's an effective way to speak their language — literally? Registrar Corp., which offers clients fixed-fee services to comply with U.S. Food and Drug Administration regulations, has live-chat operators available around the world 24 hours a day, seven days a week, to chat with prospects in any of several languages. The U.S. office alone supports nine languages, as staffers answer questions about U.S. regulations on such topics as food and beverage, medical devices, cosmetics, and pharmaceuticals.

Given the global nature of Registrar Corp.'s business, its live chat relies heavily on an automatic chat distribution (ACD) feature. "Features such as ACD make it possible for us to route incoming chat requests, ensuring that we connect the customer with the correct resource," says David Lennarz, the company's senior vice president. "It's incredibly valuable to us to have a chat coming in from Italy picked up by a native Italian speaker. ACD enables us to route chats to the right office to operators with the right language ability and regulatory knowledge."

And while many mistakenly think of proactive chat invitations as intrusive or annoying, the same research found that 52 percent of online shoppers were receptive to receiving proactive chat invitations during their shopping experience. And it turns out that appreciation rises along with the size of the transaction: Receptiveness jumped to 72 percent among those who reported average transactions in excess of $150.

In business for 12 years, Boston Green Goods (BGG) owns a portfolio of healthy-living catalogue and Internet properties. AllergyBuyersClub.com is the flagship division of the company, focusing on products for allergy relief and a healthy home.

"We started using proactive chat in 2005 and it works well for us," says Robert Scott, BGG's chief operations officer. "When people visit our sites, they're using the site to do shopping comparisons or delve into product evaluations. And proactive chat feeds into this. Our goal is not to pressure people, but to educate and add value. People welcome that. Our hands-on approach enables us to take the customer experience to the next level — providing better service and more-valuable information."

Live chat, offered either proactively or reactively, is becoming more critical — and more heavily relied-upon — in the never-ending drive to acquire new customers. Research shows it — and, more important, users know it.

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About the Author

Ross Haskell (ross@boldsoft.com) joined Bold Software as director of marketing in 2008. In this capacity, Haskell oversees all department functions including brand management, marketing strategic planning, product requirements documentation, market research, collateral development, advertising, and customer communications. More information can be found at www.boldsoft.com; to download the full report on the effectiveness of live chat, please go to http://sn.im/oct10-chat (free registration required).

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Please note that the Viewpoints listed in CRM magazine and appearing on destinationCRM.com represent the perspective of the authors, and not necessarily those of the magazine or its editors

You may leave a public comment regarding this article by clicking on "Comments" below.

If you would like to submit a Viewpoint for consideration on a topic related to customer relationship management, please email viewpoints@destinationCRM.com.

For the rest of the October 2010 issue of CRM magazine, please click here.

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