Published: November 24, 2015 | Comments
This article was editorially updated on 6/28/2022. However, it definitely was written when chat was first becoming a legitimate contact channel for customer service. To see all that we've written about chat, including more recent articles, please click here.
Did you know that chat has been around since 1973? Yep, the first online chat system—called Talkomatic—was created at the University of Illinois. It could accommodate up to five users at a time and was quite popular among its limited set of subscribers.
Chat usage, obviously, has grown significantly since then, as technology has improved and more people have come to appreciate chat’s convenience and functionality. Here are some stats that reflect chat’s rise:
- Chat adoption rates have risen from 38% in 2009 to 58% in 2014, which is a compound annual growth rate of 8.8% over that time. (Source: Forrester)
- Chat volumes are projected to grow at a compound annual growth rate of 24% from 2014 to 2018. (Source: Contact Babel)
- 53% of customers would prefer to use online chat before calling a company for support. (Source: Harris Research)
- Chat has become the leading contact source within the online environment, with 42% of customers using chat versus email (23%) or other social media forum (16%). (Source: J.D. Power)
- 62% of customers expect live chat to be available on mobile devices, and if available, 82% would use it. (Source: Moxie Software)
For chat to work well, the organization has to do it right—an issue Baker Johnson covers in this recent post. And see also Leslie O’Flahavan’s sound advice on hiring chat and email agents—the biggest management challenge to chat, according to many managers.
Why is the popularity of chat on the rise? The answer depends on who you ask. For customers, positives include low effort, convenience (e.g., the ability to communicate in real-time while browsing a company’s website), good service levels (usually!), and, increasingly, personalized service.
Here are some stats that reflect chat’s popularity:
- Live chat has the highest satisfaction levels for any customer service channel, at 73%, compared with 61% for email and 44% for phone. (Source: Econsultancy)
- 72% of customers are satisfied or very satisfied with their customer support experience when shopping online, but the level of satisfaction increases to 92% when live chat is used on a mobile device. (Source: Moxie Software)
- Of those who prefer live chat, 79% said they did so because they get their questions answered quickly, 51% did so because they could multi-task, and 46% agreed it was the most efficient communication method. (Source: Econsultancy)
For businesses, the primary reason is that chat is often a cost-conscious and effective means to provide one-on-one sales and service to customers. A 2015 study conducted by the Aberdeen Group, which compared businesses with live chat compared to those without, revealed the following benefits:
- 34% greater annual improvement in customer satisfaction rate
- 2.4x greater annual increase in cross-sell and up-sell revenue
- 20% greater annual improvement in customer contact abandonment rate
- 9.3x greater annual improvement in agent utilization rate
- 2.6x greater annual improvement in customer care costs
When it comes to online sales, chat is an effective means for customers to find answers while shopping—after all, they are already online and can chat with little effort; and they generally don’t have to endure the hold times sometimes associated with a phone call, nor wait for an email response. This yields some powerful results:
- For customers who chat prior to making a purchase, there is a 10% increase in average order value, a 48% increase in revenue per chat hour, and a 40% conversion rate. (Source: Forrester)
- Website shoppers who utilize chat are worth 4.5x as much as those who do not chat (Source: Boldchat)
- The boost in sales performance provided by live chat is heavily influenced by a sales-friendly demographic. Internet shoppers are more likely to be from a household making more than $50,000 per year, more likely to be frequent shoppers, and far more likely to spend more per year than other shoppers. (Source: Boldchat)
For businesses looking for ways to engage customers, chat should be strongly considered as an important and integrated access channel. And once you have it, continue to strengthen your management of it (forecasting, staffing, quality, et al.)—it’s not going away anytime soon.