We Need to Chat

Training, technology and teamwork help e-retailers derive more sales and profits from live chat.

By: Paul Demery | November 1, 2011

In a single sprawling building in the Chicago suburb of Glenview, Ill., family-owned Abt Electronics Inc. runs a popular consumer electronics and household appliances superstore and an adjacent mini-mall of stores operated under major brands like Apple and Sony. "Most people are surprised to learn we staff the Apple and Sony stores," says Jon Abt, who as one of four co-president Abt brothers keeps a close watch on how Abt's customers are served across its retail properties.

And increasingly, his focus is on how Abt Electronics treats customers on the company's growing e-commerce site, Abt.com, where sales are on track to account for 25% of total sales this year, up from 20% last year.

Abt attributes part of that rise to an ambitious customer service program, which the retailer expanded last year by doubling the number of live chat seats at its on-site contact center. "Customer service is what differentiates us from the bigger retailers," he says.

Converting customers

It also helps to keep customers happy and the online shopping cart ringing in sales. Like other retailers, Abt has found that live chat boosts conversion rates—which are 10-20% higher on Abt.com for shoppers who engage live chat, compared to those who don't—while also helping to make customer service agents more productive and efficient.

At fashion apparel retailer HauteLook, live chat also helps to improve agent efficiency as well as conversion rates. Live chat agents typically handle three live chat sessions concurrently, and from 90 to 120 or more per day. "It's an efficiency we don't get with phone calls," says Chris Purpura, director of member care. A good customer service rep might handle 60 to 70 calls in a day, he adds.

Moreover, more online shoppers are turning to live chat for answering their questions. A recent survey by The E-tailing Group Inc. found that 58% of online shoppers had used live chat on a retail e-commerce site within the past year, up from 54% the prior year.

But while it has become obvious to retailers like Abt and HauteLook that live chat can be a relatively productive and efficient way to handle customer service contacts and boost conversion rates and sales, getting the most out of a live chat program requires careful planning, from employee hiring and training to fine-tuning live chat techniques and incentives.

The personal touch

In ongoing training classes provided by HauteLook, for instance, live chat agents are learning how to be more personal in their communications while also being informative and efficient, Purpura says. "We don't ever want a HauteLook member to wonder if they just received a self-service type of answer to their live chat question," he says.

Prospective customer service agents at HauteLook take a writing test as part of the hiring process. Those who get the job typically start communicating with customers via e-mail, a medium that gives agents time to correspond and develop their skills in gathering information, answering questions and engaging consumers. After a day or two, the agents take on live chat sessions, then start to work the phones.

Abt Electronics has found that many of its new customer service agents arrive with relevant skills from instant messaging with friends and posting on social networks. "It takes them less than a day to understand the live chat system," Abt says.

Still, the retailer finds that it must help them learn to build a dialog with customers through live chat, much as they would on the phone, while also keeping the sessions moving along. Its agents generally answer customer requests for live chat sessions within 30 to 60 seconds, and Abt has found that live chat has boosted cross-selling rates. "If customers chat to ask recommendations on TVs, they'll learn that they also need cables," Abt says.

The retailer has also set up its live chat team to forward chat sessions when necessary to sales specialists, such as in-house experts in automobile radio and navigation products. The retailer has found good cooperation among agents, Abt says, with customer service agents getting bonuses for the number of chats they handle per day, while sales agents earn commissions on purchases.

While some agents turn out to be more effective on the phone communications—often because they thrive on the more personal back-and-forth of phone calls, as opposed to live chat sessions that consumers often abandon without so much as a thank-you—HauteLook is trying to expand on the amount of customer contacts handled by live chat to take advantage of its relatively high productivity.

Growing satisfaction

And that's even though, for now, customers still prefer to communicate by phone. In ongoing surveys of customers who contact HauteLook's customer service agents and receive automated feedback forms through the retailer's RightNow Technologies Inc. customer relationship management system, over 90% rate phone calls with agents as satisfactory, compared to about 80% for live chat sessions. E-mail's satisfactory level is too low to mention—which is not unexpected from a medium that can take a day or more for a customer to receive an answer, Purpura says.

To help kick up its live chat satisfactory ratings, HauteLook is putting agents through new training classes to develop more standard responses that can save time, while also helping agents develop a friendly as well as helpful style of live chatting.

For chat sessions about HauteLook Getaways, for instance, agents are learning to quickly describe the attractions of vacation destinations, such as the features of particular hotels and golf courses. When customers on the daily deal fashion apparel site address more pressing issues, such as why it can take days to get delivery of a purchased item, agents have learned to better explain in a friendly manner that limited-time sales are often tied to the sudden availability of products from apparel designers and suppliers, and that it can take an extra day or two to get those items shipped.

Purpura hopes the training will lead to chat sessions that tell shoppers what they need to know while providing friendly chit-chat—a tactic that is more challenging in live chat sessions than in phone calls, where it's easier to engage in friendly small talk while researching a customer's question, Purpura says.

The trick to chat

The trick for live chat agents, he adds, is to try to put in writing the kind of empathy for customers' concerns that comes more easily on the phone. "We point out the positive, that this is how we can offer such a great deal," Purpura says.

So far, live chat is showing positive results, though its effectiveness in engaging, satisfying and converting shoppers can vary with the kind of shopping they're doing, Purpura says.

When fashion apparel shoppers log onto fashion apparel site HauteLook.com looking for a limited-time deal, for example, few of them take the time to contact a customer service agent for help with a purchase. Most are too concerned about simply locking in a deal on a trendy apparel outfit before it's too late, Purpura says. Most customer service contacts at the daily deal apparel site deal with shipping and other post-orders matters.

But when it comes to choosing a travel deal on HauteLook Getaways, about 90% of shoppers who seek help from a customer service agent are seeking assistance in making a purchase, with about 70% of them opting for live chat, he says.

And that's good for HauteLook Getaways, because among travel shoppers who engage in a live chat session, about 13% complete a transaction, compared to 9% to 10% who convert after clicking a Discussion tab on a Getaways web page, which lets visitors ask questions of other consumers, a process than can take up to a day to produce an answer. Getaways travel deals are typically available for a few days before they expire.

Pushing performance

But HauteLook wants even higher conversions. "13% conversion rate is about what I expected from live chat, but I'd like to see improvement," Purpura says.

He also expects to raise live chat's customer satisfaction ratings, he adds.

As another way to improve live chat performance, he plans to work with RightNow to let live chat reps as well as other customer service agents use an internal live chat help desk system to quickly check information from staff experts on such matters as product design, inventory availability and shipping status. With all internal as well as external live chat sessions recorded in the RightNow system, the help desk will enable HauteLook to analyze how well its agents' questions are being answered, and whether agents are frequently asking the same questions, Purpura says.

As HauteLook improves its use of live chat, it's also offering chat on more places on its web site, including product and checkout pages, as well as in its Apple and Android mobile apps. Although the retailer doesn't offer live chat on social network pages, it sees customer communications through live chat, phone, e-mail and social media all complementing one another.

HauteLook is continuing to work with RightNow to integrate communication records from all of these communication channels, enabling its customer service agents to respond to customers' past questions regardless of where they placed them. "Our live chat agents can see a customer's past questions on Facebook, live chat sessions, phone calls and e-mail messages," Purpura says, "and say ÔI see you called last week. Did you get that taken care of? Is there anything else I can help you with?'"

Abt Electronics has also found its live chat system, from Bold Software LLC, to be a good way to monitor customers' questions over time. "If we see the same questions pop up over and over in live chat, we may realize there's a problem we need to correct," Abt says.

That's just one example of how retailers like HauteLook and Abt are building on what they've learned to make live chat even more effective in the future.