What is Live Chat?
Developing an effective and user-friendly website is essential to operating a successful business in today's environment. Live chat software can help your company improve customer service and enhance the user experience on your site.
This ultimate guide to live chat software will help you learn the basics of live chat, the benefits for your business and customers, relevant use cases, and best practices. We'll also give you insights into some of the best live chat options. We spent months researching and testing live chat platforms firsthand to give our in-depth product recommendations.
If you're interested in learning about how to use live chat for your customer service efforts, read our Live Chat for Customer Service article.
Table of Contents
- The Basics of Live Chat
- How Does Live Chat Work?
- Live Chat Use Cases
- Benefits of Live Chat for Business
- Benefits of Live Chat for Customers
- Live Chat Vs. Chatbots
- Evaluating Live Chat Software
- Popular Live Chat Software Tools
- Live Chat Best Practices and Tips for Success
- Take Our Live Chat Quiz
The Basics of Live Chat
Live chat software is software that lets your business engage with customers on your website through real-time messaging. Think about all the times you’ve browsed a web page and noticed a chat box pop up on the bottom right-hand corner, offering a welcome message. This is live chat software.
Customers type messages inside the live chat window, and a customer service agent from your organization will respond to them. This useful tool can aid in everything from communication with first-time visitors to engagement for repeat customers to support for the products and services you offer.
Implementing live chat on your website allows you to personalize the customer experience, improve brand awareness, and create a competitive advantage when it comes to sales and marketing. For many customers, live chat is a much more favorable option than speaking to organizations on the phone or over email. Live chat has the highest satisfaction rate among customer service channels at 83%. Given customers’ preferences for using live chat, it’s a great tool to implement on your website.
How Does Live Chat Work?
There’s more that goes into live chat software than a little window in the bottom corner of your website. While your website visitors will only see a seamless chat interaction, you’ll have to do a bit of work on the back end to get live chat up and running on your website. This work includes installing the chat widget on your website, customizing the window to your preference, and setting up notifications and chatbots if necessary. Doing this work before your chat software goes live will ensure a seamless experience for your customers.
Setting Up Live Chat Software
The first decision you need to make is which vendor you’ll purchase live chat from. We’ll discuss that a bit later in the article and make some recommendations about the best tools for certain customers.
Once you’ve chosen a vendor, you’ll need to make some design choices for your chat widget. Oftentimes, you’ll be able to change the color scheme, add your company logo, decide where on the web page to put the widget, and more. Making these design choices up front will ensure that you’ll be able to seamlessly integrate live chat with your existing website.
After you’ve configured your live chat widget to your preferences, you’ll install it on your website. Luckily, most solutions require you to add a few simple lines of code into the back-end of your website. You don’t need advanced coding experience to do this — most vendors will give quick and easy instructions for you to copy and paste a couple lines of code. Once the code is saved to your website, the chat widget will pop up and customers can start using it instantly.
If your website runs on WordPress, you must connect the live chat software to your dashboard and enable the plugin. Once you activate it, you can follow the setup instructions to enable the live chat on your site.
Operational Support
Make sure you understand the volume of chat requests you’ll receive from customers. The benefit of live chat is that customers can talk with your organization in real time, so you need to hire employees to staff the chat.
Maintaining the appropriate staffing levels is key. With this also comes the responsibility to train staff members to respond to inquiries and ensure that your customers get the best experience possible.
Live Chat Use Cases
While there are many use cases for live chat software, the two most common are customer engagement and customer support. Both are key for encouraging your customers to convert while answering all their questions.
Marketing & Sales
When it comes to conversational marketing, live chat is an amazing tool to increase conversions. Research from Intercom found that companies are 82% more likely to convert visitors if they have a chat conversation with customers. This same study found that these conversions are worth up to 13% more than those that occurred without a chat conversation.
So, how does this work? For example, if someone is spending time browsing your website but has not made a purchase, offering them a demo request through your chat feature can help them move on to the next stage of the buyer’s journey. This gets prospective customers actively engaged in your products and services.
Consider other opportunities for collecting prospective client information via the chat function. Requesting contact information through passive methods like mass emails or paid advertising can often be ineffective, but using a targeted outbound message to engage customers in a conversation can increase your success rate.
The key difference here is that the customer is getting a valuable response or some other tangible benefit — in real-time — by providing their information. They don't have to wait for a follow-up that might never come, and they can ask all the questions they have while the thought of buying your product is still fresh in their minds.
If you don't have live chat software available to engage with them while they are on your website, you will never know that a prospect was interested in something. You’ll inevitably lose out on many opportunities to engage with customers who could convert.
Here are other ways that live chat can support business goals:
- Customize offers based on specific conditions like geography and browsing history
- Reduce cart abandonment by sending personalized messages and reminders
- Minimize bounce rates by engaging with visitors
Customer Support
When you think of the purpose of live chat software, your mind likely goes to customer support. That’s because live chat is one of the best tools available to help your customers succeed and have a positive experience while browsing your web pages.
According to Microsoft’s State of Customer Service Report, 90% of consumers consider customer service when choosing which brand to shop from. Similarly, almost 60% of customers stated that they would end the relationship with an organization if they had a bad customer service experience.
With live chat, you can ensure that your customers don't feel as though they’re only an open ticket. You’ll have firsthand conversations with your website visitors, which gives them high-quality, attentive service. Live chat technology allows you to make this process conversational and more human so that you can better meet the needs of today's users.
There are so many aspects of customer support that live chat can enhance:
- Walking customers through the purchase process
- Answering questions about an existing order
- Helping customers understand the features of your product
- Explaining pricing structures and available deals
- Providing support for existing users
The list could go on, but the main takeaway is that live chat software is one of the best things a company can implement to provide real-time, top-notch customer service.
Benefits of Live Chat for Business
Now that we’ve gone through the basics of live chat software and potential use cases, let's dive into some of the business-specific benefits these tools can provide. There are quite a few of these, so we’re going to break them into categories: lead generation, increasing sales, strengthening customer relationships, and reducing support tickets.
Generate Leads
Live chat software provides many benefits in terms of lead generation. Visitor monitoring features help you understand where your customers are coming from, which pages they're browsing, how often they look at your products, and how long they spend on your site.
This data can improve your understanding of what your customers are looking for. With this knowledge, adjusting your marketing campaigns and generating personalized offers is much simpler and more targeted.
Live chat software also lets you take a proactive approach to source leads. You no longer have to wait for someone to reach out to your business to talk to them - with the live chat feature, you can send them a message as they look at your pricing page to see if they have any questions. When an agent proactively reaches out, you increase the chances that somebody will respond and provide you with valuable information you can use to qualify them as a lead.
Increase Sales
Live chat software can improve your lead generation, which in turn can increase your sales. Many customers need additional support when they're buying something online, and as a result, customers prefer to purchase from websites that have a live chat feature.
Implementing live chat support during the checkout process can help enhance your conversion rates and ensure that your customers have the opportunity to talk to a real person before they buy something. In the long run, this will help you avoid losing out on sales just because somebody had a question that they didn’t get answered.
Strengthen Customer Relationships
If your customers have a conversation with someone on your website, it will help strengthen their relationship with your brand. The feeling of speaking to a real person who can collaborate with customers and solve their problems can build that bond.
Your customer representatives can gauge their tone and sentiments and adjust their responses as needed to best address the situation. They can use mirroring language to match customer speaking styles, which allows them to build rapport and establish a relationship as a friendly and helpful assistant.
A positive customer experience in your live chat will help you nurture the relationship and encourage brand loyalty.
Reduce the Number of Customer Support Tickets
When the only option you have for customers to resolve issues is through phone calls or email, you likely have to open a support ticket for each instance. This can leave your customer service team with an overwhelming number of requests and it only slows down the process for your customers.
Live chat increases the opportunity for resolving an issue on the first contact, so you might not need to open a support ticket in the first place. Live chat can also reduce the number of support tickets by routing inquiries to the appropriate department. This feature prevents customers from being bounced around from person to person and ensures that the staff member with the right knowledge base manages the request.
You can even provide some self-help solutions for basic requests. For example, when a customer needs an update on their order tracking or a password reset, you can set up a routed path that customers can take to get the process done. These predetermined responses can link them to the appropriate page that can help without needing to involve a live representative.
Benefits of Live Chat for Customers
There are many ways live chat directly benefits your customers and website visitors. There’s heightened convenience in being able to get questions answered instantly, customers get access to real people, and there’s also increased availability.
Convenience
Perhaps the main benefit of live chat for customers is the convenience. People don't want to pick up the phone to call your company when they have a question about a product or pricing — in fact, they would almost prefer not to move forward at all.
There are numbers to back this up. A recent Salesforce study found that over 40% of consumers prefer live chat for support. Their research found that the real-time chat was significantly more convenient when compared to other contact methods.
It's easier for customers to interrupt the session and come back when they have the information they need or continue browsing the web when they interact through the chat. Customers also like that they can share their screens or send screenshots through live chat to convey the issues they are having.
Access to Real People
Engaging with a human is a significant benefit that live chat provides to customers. Sometimes a human touch is all customers need to feel comfortable with your brand and move forward with making a purchase.
It also helps that the live chat recognizes a customer’s account information before the conversation gets started. This capability prevents users from having to repeat themselves or move from one department to another. Similarly, if a high-value customer is browsing your website, it benefits them to have an assigned sales representative that can recognize their needs and proactively answer questions.
Live Chat Vs. Chatbots
Live chat software often includes chatbot capabilities. Chatbots are tools that use artificial intelligence to provide computer-generated responses. They can carry out simple conversations with customers, provide quick answers to frequently asked questions, and capture customer contact information.
As a business owner, it’s up to you to decide how to combine live chat and chatbots. In most cases, it makes sense to combine both because each choice has different strengths and weaknesses when it comes to availability, economics, and customer satisfaction.
To give you an idea of how chatbots are configured, the image below shows the chatbot builder from Crisp. What you’ll do is set rules that the bot will follow. For example, the chatbot in the image below was designed to either route customers to an operator or to send customers a link to the Helpdesk depending on answers to a previously asked question. Certain chatbots like this one will allow you to test that the bot is working the way you want it to, as seen on the right side of the image.
Availability
When it comes to availability, chatbots have an advantage. It's not likely that you will be able to staff humans on your website 24/7, but an AI tool can serve your customers around the clock.
Even if someone is available to respond to the chat request, it can be helpful to have a chatbot interact with them first so that you can route them to the appropriate representative. Chatbots also help cut down response times because if they can answer a customer’s question without needing human intervention, the results will be immediate.
Economics
You probably guessed that setting up a chatbot is much cheaper than hiring full-time staff to answer live chat messages. This makes scaling your live chat process quite difficult, depending on the volume of requests you are getting each day.
However, when you combine a chatbot with live chat, you can scale your operations faster and reduce the number of staff you need on hand to respond to your customers. Some tools like Smith.ai and tawk.to also offer chat agents for hire at a cheaper rate than it would cost your company to onboard and train a customer service representative in-house.
Customer Satisfaction
There is no doubt that many customers would prefer to have a conversation with a person rather than a chatbot. Chatbots are not yet sophisticated enough to provide the same human touch, so if you want to maximize customer satisfaction, you will still need real people ready to respond to their requests when necessary. Chatbots can frustrate customers if the proper routing rules aren’t set, as customers can get stuck in a loop of selecting responses with a chatbot with no way to contact a real person.
For the most part, your website viewers will understand if no one is available in the middle of the night, so for these situations, a chatbot should suffice. However, if a visitor needs to speak to a live person, the chatbot can submit a request to have somebody contact them as soon as they are available.
In general, the best option is to use a combination of both: start with the chatbot and then route customers to the proper department.
Evaluating Live Chat Software
There are many live chat software platforms available on the market today, and all are ideal for different customers. There are three things you’ll need to consider: key features, pricing, and available integrations. It should be noted that most of the time, a higher price means that there are more features.
Key Features
Think about key features that you’ll need from your live chat software. Your intended use case should drive your search, as the ultimate goal is to find the best software for your unique business needs.
For example, will you want a chatbot to handle after-hours customer questions? Are you interested in co-browsing with your website visitors? These questions should drive your search for the right software for your business.
Price
As with any major business investment, price should be one of your most important considerations. Live chat software ranges from entirely free to hundreds of dollars per month. Make sure you know what your budget is. Many live chat software products are priced on a per-agent basis — that is, you’ll get charged for every user. Other tools are priced per feature.
Although the price is important and you should explore the most affordable options, you should complete a cost-benefit analysis to determine whether saving a few dollars is worth compromising functionality.
Integrations
You should be able to link your live chat software to your databases so that you can collect information and perform in-depth analyses about your customers. Other integrations include tools that connect to your e-commerce stores, analytics platforms, and additional technology that you leverage for your business operations. For example, you should be able to track what the viewer was doing on your website so you can create some context for the conversation. Based on what they were looking at, you may be able to offer them a demo or guide them towards the pricing page at the appropriate time.
Make sure that you thoroughly understand how the live chat software will integrate with your current business processes as well. You don't want to end up with a system that doesn't talk to your existing software applications. Most live chat tools display their current API integrations lists on their websites, so you should always check if there are standing integrations with your existing systems.
Popular Live Chat Software Tools
We personally researched and tested more than a dozen live chat tools. Here are some popular choices for you to consider.
1. HelpCrunch: For Businesses of All Sizes
HelpCrunch is a modern and powerful live chat tool that’s one of the top tools we tested. There are features like live chat, email campaigns, and website pop-ups. While there’s no chatbot feature, it’s powerful, intuitive, and comes at a great price.
2. LiveChat: For Large or Enterprise Businesses
LiveChat is an expensive tool that’s ideal for large businesses or technology-forward companies. It’s a bit more difficult to learn to use than some of the more basic tools, but offers easy chatbot builders along with advanced details.
3. Tawk.to: For Free Live Chat & Chat Agents For Hire
Tawk.to offers the best free live chat software on the market. Over three million users choose tawk.to for free live chat capabilities. Along with the free features, there are chat agents for hire, which might be a great choice for your business if you don’t already have a dedicated customer support team.
4. Gist: For Live Chat, Email Marketing, and Pop-Ups
Gist offers a robust free plan, has easy-to-build forms and pop-ups, and offers advanced cross-channel messaging and marketing capabilities. It’s ideal for anyone searching for a mid-tier customer messaging solution with event tracking.
5. Crisp: For $95 All-in-One Functionality
Crisp is a live chat software with live chat, co-browsing, email marketing, and chatbot features. When we tested the mobile application we found that it worked quite well and that the advanced plan is a good value for the price.
Live Chat Best Practices and Tips for Success
As with any tool you implement for your business, it’s only successful when implemented and utilized properly. These top five best practices will ensure that your live chat software is a worthwhile investment for both your customers and your business.
Create Engagement Rules
Proactive messaging is key for generating customer interest. Creating engagement rules allows you to automatically send messages to website visitors at appropriate times. This means that you can program your live chat software to send messages after a certain number of seconds, a certain number of page clicks, or for certain pages.
You can send abandoned cart messages to prompt conversions, provide lingering customers with a discount code, or send messages to boost engagement on high-converting pages. It’s key to make messages gentle rather than aggressive, so customers won’t get annoyed by the intensity.
Time Messages Based on Analytics
This next best practice aligns closely with setting up the rules we just described above. The idea here is to time your messages based on what you know about consumer behavior. By prompting your consumer at the right time, you can help them when they’re stuck and encourage them to take the next step.
This can take many forms. For example, what if a customer added items to their cart but has been inactive on your website for more than 5 or 10 minutes? They could have gotten distracted and started doing something else. Send them a message to remind them about the items in their cart and to ask if there's anything you can do to help them complete the purchase.
It’s key to prompt customers without overdoing it. Don't rush and send them a message one second after they’ve gotten on your site and avoid sending multiple chat invitations at once. No one wants to be bombarded with messages while they're just browsing, and doing so could cause them to lose interest and leave.
Offer Multilingual Support
Offering multilingual support is a best practice that can help you deepen your engagement levels with different target audiences. When you connect with somebody in their native language, you can immediately build rapport and help them feel more at ease.
Make sure that the software you choose offers support for the languages that your customers speak. This means that you don’t have to hire an employee that speaks each one of these languages since you can leverage technology to use real-time translation. It's important to know that sometimes translated text can be misinterpreted or incorrect, so be sure to let your customers know if you're using automatic translation.
Provide Self-Help Options
Most customers want questions answered at all hours, and even the few minutes it could take an agent to join the chat could mean losing an impatient customer. Add self-help options to your live chat widget to keep customers engaged. Many tools will allow you to integrate your FAQ page or Knowledge Base directly in the window so customers can resolve issues themselves.
Providing self-help options can reduce the chat volume for your support team—if a customer can read an answer to their question rather than taking a chat agent’s time, it’ll save time on both sides.
Create Reports to Measure Success
No solution will be perfect right off the bat, and the strategy you employ at first may not be the strategy that’s best for your customers and business. Utilize reports and data to measure your success by defining KPIs like average handle times, customer satisfaction ratings, or shopping cart abandonment rates. Tracking these measures will allow you to identify areas of improvement to better serve your customers.
All in all, live chat is an excellent addition to any website. Customers will appreciate having easy access to members of your team, and if used correctly, live chat can be used to promote new products, drive sales, and provide customer support.
Take Our Live Chat Quiz
If you’re interested in live chat software and want to know which one will be best for you and your business, check out our live chat quiz. We’ve tested and reviewed over a dozen tools and created this quiz to simplify your decision.