What is Live Chat? The Complete Guide

Everything You Need to Know about Live Chat Software

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What is live chat, and why is it the most popular form of customer service available today?

Simply put, live chat offers a convenient way for businesses to communicate with their customers through an instant messaging application. Contact center or service representatives address customer needs through a messenger-based support queue, rather than connecting over a call.

According to some studies, 79% of businesses believe implementing live chat results in increased sales, customer loyalty, and revenue.

Live chat is valuable because it helps to address customer demands as quickly as possible, with minimal effort on the customer’s behalf. Notably, live chat also allows customers connect with companies on a channel they feel the most comfortable with.

What is Live Chat?

Live chat is a form of messaging software used by businesses to create a direct line of communication with their target audience. Usually, customer service and technical support professionals will have access to the back-end of the messaging system, where they can manage multiple conversations at once, and queue up responses.

Live chat is quickly emerging as one of the most popular ways to connect with your target audience, and it usually embeds into existing technology used by the CX environment. For instance, many CRM solutions and contact centre software options come with live-chat functionality.

Notably, live chat is not the same as implementing a chat bot into your website. A chat bot offers customers a way to solve their problems through self-service. Automated responses are given to queries based on existing content the system can access. In live chat, a human being is responsible for managing the conversation.

According to studies, live chat support has the highest customer satisfaction rating of any channel (92%), and 79% of customers say they prefer the instant support of this service.

How Does Live Chat Work?

Live chat technology is available in a range of formats. Some companies access live chat as a standalone service, which can be downloaded and implemented into their website from a SaaS provider. This is a common option for some smaller brands.

In other scenarios, live chat applications are delivered alongside contact center as a service (CCaaS) ecosystem, and Customer Relationship Management (CRM) or help desk technology. Certain website builders and email marketing software solutions also come with live chat access.

Live chat apps work by embedding a widget into your website or application, which allows customers to open up a conversation similar to how they’d start a chat on Facebook or a similar platform. Many services will allow companies to brand their chat app with their colors and logo.

Visitors to the chat app can type text, attach files, and even share emojis. In some cases, it may also be possible to shift a chat conversation into a phone or video call. The operator on the other side of the chat service has more abilities and powers on their side of the system.

Customer service reps can:

  • See multiple chat conversations in one dashboard
  • Track customer conversations and activities on websites in some cases
  • Combine chat information with information from a CRM or email ecosystem
  • Create “canned” responses to give answers to customers as quickly as possible
  • “Ban” customers with moderator capabilities
  • Ask for feedback and reviews using built-in services
  • Look through previous chat histories if the user is a member of the website
  • Access valuable analytics and insights about customer satisfaction

Live chat tools simultaneously offer a way for companies to communicate with their target audience, and an opportunity to track important information about the customer journey too.

The insights collected from live chat tools are excellent for learning more about how the customer conversation works.

How to Use Business Live Chat

The core function of a live chat tool is as a technical support or customer service tools. In a world where customers are busier than ever, they want instant responses to their queries. An instant live chat tool is a perfect way to deliver a fast result, while providing agents with the support they need to access information about a customer for a personal touch.

There are a few different ways to use live chat tools, the most common choice you’ll need to make is to decide whether your service is going to be:

  • Proactive: With proactive live chat technology, you can see when a customer visits your site, and send them an automated message letting them know you’re there to help. This is similar to having a sale assistant ask if you need anything when you’re shopping in the real world. If a customer asks for something, a live chat agent will be alerted on the other side.
  • Reactive: With this methodology, you wait for the customer to initiate the chat from their side. There will be a widget sitting in the bottom corner of the website page, letting your customer know they can reach you for support if necessary. This gives customers more control over their service.

While reactive solutions appeal to a lot of customers, using this approach could mean you end up losing sales in the long-term. Not every customer with a problem or question will want to initiate a chat, and some might not see your chat box.

On the other hand, a proactive solution improves your chances of reaching a wider number of customers quickly, but you also risk annoying customers who don’t want to be distracted when they’re shopping on your store or exploring your website.

The best strategy for most companies will be to consider your options based on the knowledge you already have about your target audience. Your customer profiles and insights will help you to determine whether customers prefer a proactive or reactive approach. You can even segment your audience and take different approaches with each group.

Benefits of Live Chat Apps

Your live chat app isn’t just a tool for communications, it’s a critical solution for building customer experience opportunities. With live chat, you can reach out to your audience when they need you most, and improve your chances of staying one step ahead of the competition.

Let’s look at some of the major benefits of live chat:

  • Speed: 71% of customers believe a fast response from a service team has a significant impact on their customer experience. Live chat allows you to respond to a question immediately, even if you just send an automated respond letting your customer know you’re there and working on whatever they need.
  • Customer acquisition: Proactive live chat support can be an excellent way to reach out your audience and convince them to convert. Some studies suggest consumers using chat are 2.8 times more likely to convert than those who don’t.
  • Customer relationships: A good live chat strategy can help you to build rapport with your target audience, connecting with them on a deeper level. This improves your chances of making sales and earning loyal customers long-term.
  • Reduced repetition: Live chat provides agents with a history of what their customer has been asking about, even if the conversation is passed over to another member of staff. This makes it easier to keep track of the context of the conversation, so your customer doesn’t need to repeat themselves.
  • Productivity: While an agent can only manage a phone call one at a time, it’s possible to handle a number of live chat conversations at once, allowing your agents to address more concerns at a rapid pace. This could mean you end up with better business outcomes.
  • Consistent support: Live chat allows you to combine human agents with chat bots, so you can offer more around-the-clock support. You can even hire remote employees to manage some of the live chat conversations for you when your local agents aren’t available.
  • Competitiveness: Live chat ensures you can offer your customers more of the service they’re looking for on the channels they prefer. This makes it easier to stand out from the competition and show your customer you have their needs in-mind.
  • Business insights: A live chat solution can provide you with an easy way to capture information about your target audience. The more information you collect, the more you know about your customer, their preferences, and how you can deliver the best service.

How Effective is Live Chat?

Live chat can be a powerful tool for customer service. With the right technology, you’ll be able to serve your customer on a channel that suits them, and turbocharge your business productivity. In some cases, a live chat solution can save you between 17% and 30% on your resources and costs compared to using a phone call service alone.

Business live chat has been shown to increase the conversion rates for your company by a factor of around three to five. Additionally, you can increase your ROI by up to 6000%.

The key to success is making sure you have the right strategy in place. It’s not enough to just choose and install a live chat tool, you also need to:

  • Create new service policies: Creating service policies will ensure your team members follow the same guidelines and rules when serving your target audience.
  • Implement security: Determine how you’re going to collect and manage the data provided by your target audience to ensure you remain compliant with industry standards.
  • Provide training: make sure your team members are up-to-date on how to use any live chat technology you’re going to be providing.

Live Chat Technology: Options for your CX Strategy

As mentioned above, the growing demand for live chat has led to a rising number of potential live chat offerings from a range of different vendors. First, when choosing a live chat service, you’ll need to decide whether you want your solution to be part of your customer service tools, like a CRM, helpdesk, or CCaaS ecosystem, or whether you want to implement the tech separately.

Keep in mind, even if your live chat system doesn’t come built into other tools, it should still integrate with your existing technology so you can have a more end-to-end environment for data tracking. It’s also worth knowing what features you’re going to look for. Common features include:

  • Canned responses: Pre-built responses to save time when answering your customers
  • Knowledgebase: Access to a comprehensive selection of useful documents for support
  • Ticket creation: Ticket creation options when a service request needs to be passed on
  • Rating and reviews: The ability for customers to offer feedback about their live chat service
  • Visitor tracking: insights into the pages your customers have visited on your website
  • Analytics: An overview of employee performance and customer trends
  • Chat tags and keywords: To help you search for common answers to questions
  • Flexibility: Access to mobile dashboards and apps for monitoring on the move
  • Translation features: The ability to support customers in multiple languages
  • Chat logging: Storage for chat conversations and data exportation
  • Chat transfers: The ability to send chats to other members of staff

Some of the most popular live chat solutions include:

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Probably the best-known live chat software available today, LiveChat enhances customer support options for your website visitors by placing a simple chat widget onto your site. There are thousands of companies already using this chat window today.

LiveChat is wonderfully customizable, with lots of ways to enhance your online chat experiences based on your e-commerce brand. You can qualify leads with AI automation, access live chat feature sets for analytics and customer engagement, and ensure your support agents have an easy-to-use chat experience, with a convenient backend.

Pricing starts at $16 per month per agent when you pay annually. The communication channel comes with a place at $33 per month and an Enterprise package too.

Pros 👍

  • Great for first time live chat users
  • Lots of metrics to keep track of
  • Integrations with lots of tools to enhance your chat session
  • Plenty of customization options
  • Monitoring, ticketing, and FAQs
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Another well-known solution for enhancing your live chat workflow, HubSpot’s live chat offering comes as part as a comprehensive set of tools for routing and managing conversations. You can access a built-in CRM solution, and integrate with a range of existing tools, like Facebook and Shopify. There’s also support for AI tools to help empower your support team.

HubSpot comes with notifications for various forms of communications, as well as chat transcripts, proactive chat support, and a host of valuable tools for analytics. You can also customize your chat widget to suit the personality and image of your brand.

HubSpot’s solution also works perfectly alongside the wide range of other communication channel options from the company. Pricing starts with a “free forever” plan for small companies. The exact price of your premium plan will depend on which HubSpot “hub” you choose. Options start at $45 per month.

Pros 👍

  • Free forever plan for people with limited budgets
  • Integration with your CRM technology
  • Powerful range of external features
  • Access to a full customization process
  • AI and human agent support
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Another excellent chat option if you don’t want to rely exclusively on WhatsApp and Facebook messenger for your chat invitations, Userlike is great for growing brands. The solution can integrate with other chat tools for a range of use cases, and it’s designed to be compliant with the latest privacy and protection guidelines throughout the world, including GDPR.

Userlike comes with a range of important features, including context forwarding, so you can move information throughout your support channel and provide users with all the information they need when a customer clicks on your chat button.

There are customization options for your chat solution’s design, and you can even set up routing rules based on the unique skills of your sales team, so you’re more likely to deliver a great response time. Pricing starts with a free package for just one user. After that, you’ll spend around £90 per month for 4 users, and prices increase based on number of seats and features.

Pros 👍

  • Integration with a range of channels
  • Unlimited conversations and contacts
  • Live translation and analytics features
  • Screen sharing and video calls available
  • Excellent advanced routing
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Investing in Live Chat

The best live chat software and a comprehensive plan for connecting with customers online can really make your business stand out. With integrations for social media, channels like WordPress, and more, a live chat tool can ensure you boost your satisfaction rate in the digital world.

Whether you choose a service from Zendesk or LiveChat, there are tons of tools out there, each with their own unique customization, pre-chat and analytics features. As live chat becomes increasingly popular, it seems likely all companies will eventually need to consider investing in one of the top live chat solutions themselves.


Bogdan Rancea

Bogdan is a founding member of Inspired Mag, having accumulated almost 6 years of experience over this period. In his spare time he likes to study classical music and explore visual arts. He’s quite obsessed with fixies as well. He owns 5 already.

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