What is live chat?

Live chat is a powerful communication tool. It allows a company’s website visitors to talk to company representatives in real time.

That’s what live chat is, but what does live chat mean?

It means business opportunity.

Any business looking to grow should consider using a live chat service. In fact, live chat might be the most important sales and customer service channel today.

Why? Because it’s often faster, more convenient, and more accessible than any other channel, including phone calls, email, and social media interactions. As a result, live chat tends to lead to extraordinarily high rates of conversion and customer satisfaction.

Did you know, for instance, that live chat is 4.6 times more likely than other channels to convert website visitors into customers?

Best of all, live chat can be dead-simple and cost-effective to set up.

Continue reading to learn…

  • how live chat works
  • 5 live chat benefits
  • the differences between different kinds of live chat services
  • how much live chat services cost
  • and more!

How does live chat work?

If you’ve ever visited a website and happened upon a pop-up box encouraging you to “chat now,” you’ve seen live chat in action. You may have even initiated a chat and received an answer or service you were looking for. Many people regularly use live chat do things like modify orders, book doctor’s appointments, notify their banks of travel plans, and so forth.

On the customer side, live chat is simple. The process is as intuitive as it gets.

  1. A visitor sees a live chat window
  2. The visitor types something
  3. The visitor receives a response
  4. The conversation continues from there

Through live chat, a website visitor can accomplish pretty much anything they could by calling, emailing, or direct-messaging the company. That includes…

  • learning about products, services, and features
  • getting questions answered
  • booking appointments
  • connecting to a salesperson or other individual or department
  • resolving issues
  • troubleshooting
  • sharing feedback

The list goes on. It can all happen directly on a company’s website, in seconds and (depending on the service used) around the clock: 24 hours a day, seven days a week, 52 weeks a year.

Behind the scenes, there’s a person or an automated program—commonly known as a chatbot—responding to the visitor’s query. That person (if it is a person) may be an employee of the company, but frequently they’re a third-party agent. Think of them as a virtual receptionist with a keyboard instead of a headset. Indeed, many virtual receptionist services also provide live chat.

Ultimate chat guide

Find out how you can turn your website into a lead generating machine in our ultimate guide!


What are the business benefits of live chat?

The primary reason to consider using live chat is your customers.

Approximately 42% of all customers prefer chat over other communication channels. Of customers who use chat, 73% report satisfaction with their experiences—the highest level of all customer service channels.

Plus, chat is poised to continue growing in popularity as generations shift, and over half (53%) of all millennials and Gen Zers prefer to use chat. That’s more than twice the number of baby boomers (24%) who prefer it.

Chat is also a powerful differentiator and competitive advantage. Despite the clear and growing popularity of chat, only 14% of companies use it.

(By the way, the stats on this page come from our Ultimate Guide to Live Chat)

Beyond the immediate advantages, businesses that use chat gain numerous benefits. With live chat, you can…

  1. Meet demand around the clock. Over 80% of customers expect a response within an hour. That expectation doesn’t end after 5pm.
  2. Extend the capabilities of your team. You don’t need to increase headcount to provide 24/7 live chat support. Chat service providers can meet this need without unnecessary stress, costs, workforce and security risks, and HR paperwork.
  3. Maximize lead generation. Live chat specialists can be trained by experts in your company’s field, making them capable of handling the types of qualifying questions necessary to generate real leads. Chat specialists are proven to generate more leads than other tools and strategies.
  4. Overcome sales objections. As business-to-consumer communication has shifted away from face-to-face interactions and into the digital world, companies have lost the ability to overcome objections. More than a third (35%) of salespeople say overcoming price objections is one of the biggest challenges to any customer relationship. Live chat gives you the chance to address customers’ specific concerns in real time.
  5. Gather better data about your customers. Live chat specialists are able to form relationships with customers from the moment the chat begins—before your company even needs to request information. Specialists can be trained to gather specific data, answer questions throughout the process, and clarify any misunderstandings that may occur.

It all adds up to increased customer satisfaction, increased revenue, and a maximum business opportunity—at a minimum overhead cost.

Who uses live chat?

Myriad organizations and departments use live chat to connect with website visitors when those visitors are most receptive.

Retailers use live chat to resolve customer service issues and answer questions about orders and products.

Banks and financial companies use live chat to help clients quickly access account services.

Medical offices, law firms, and other professional service firms use live chat to help website visitors schedule meetings and appointments.

Sales and marketing teams use live chat to generate interest and turn prospects into customers.

UI and UX designers use live chat to collect feedback about design decisions and improve the customer journey.

Companies of all shapes and sizes use live chat to…

  • onboard new clients and customers
  • learn more about the people visiting their websites
  • invite visitors to take advantage of exclusive deals
  • answer questions and guide visitors to the information they’re looking for
  • offer help and services on demand

What types of live chat services exist?

To implement live chat, all a business has to do is hire a chat provider, perform some very basic initial setup, and then let the chat window do the work.

That said, not every live chat service is the same, or offers the same features and benefits. Different kinds of solutions exist for different industries and business needs.

Generally speaking, live chat services fall into two categories:

  1. Human-powered chat solutions leverage teams of customer service professionals. Real people respond to each chat. They may be located anywhere, and they may or may not follow a script, but they’re genuine human beings sitting in front of a screen and communicating with website visitors in the present moment. Live, two-way conversations are happening.
  2. Automated chat solutions remove the human being on the company’s end. A chatbot handles the exchange instead. If it’s programmed with artificial intelligence (AI), the bot may be able to perform some basic customer service functions. Otherwise, it’s essentially a self-service machine for the person initiating the chat. The conversation is one-way and uses little, if any, information about the chatter and chat context.

Which service is right for your business?

For virtually every business, the right chat service is a human-powered one staffed by trained professionals fluent in the primary language of the customers or clients the business serves.

Chatbots are almost never a good idea outside of use in websites with extremely high traffic rates and little need to engage visitors live. AI can’t replace human interactions—it just isn’t there yet. Automated solutions frequently fail to deliver satisfactory customer experiences outside of meeting the most basic needs.

More importantly, customers don’t like chatbots. A majority (73%) of consumers prefer live chat to automated systems. Roughly two out of three say chatbots are only “somewhat effective” or “not effective at all” in resolving their issues.

When consumers have negative experiences with a chatbot, 73% will never interact with the chatbot again. And 61% find negative chatbot experiences exponentially more frustrating than poor human-to-human customer service interactions.

What humans can do that chatbots can’t:

  • Create personal connections with customers
  • Incentivize potential buyers to provide contact information
  • Engage in friendly, non-scripted conversations
  • Understand context and proactively solve problems
  • Facilitate live call transfers to your sales team
  • Represent your business and brand professionally

Language barriers aren’t just a challenge for bots—they can be a challenge for live agents as well when companies offshore their chat services. International labor certainly offers cost efficiencies over domestic workers, but many agents working in offices overseas only have adequate knowledge of the language your customers speak. A lack of fluency creates gaps in the understanding of colloquial phrasing, sarcasm, and other small details essential to building relationships. It’s difficult for a non-fluent speaker to effectively communicate the nuances of brand identity and apply them to a real-time conversation with a customer.

Language barriers can also cause lag. Offshore specialists may need to pause to carefully read and translate customers’ chats. Even when specialists can respond quickly, they’re frequently overworked, as low-cost chat providers compel staff to handle multiple clients at one time, resulting in errors and delays. Outsourced live chat is a recipe for loss of quality and brand inconsistency.

What fluent chat specialists offer that offshore labor can’t:

  • Native-level language fluency
  • Cultural lens and context
  • Focused time and support
  • Customized and specialized service
  • Enhanced quality and satisfaction
  • Increased security and privacy

Think twice before going DIY.

You may be wondering if you can implement live chat yourself, without the help of a third party. The answer is yes, it is possible to use plugins to add and manage chat on your site—but be careful and consider the following:

  • There’s a great deal of technical knowledge involved in installing and configuring chat on your own. If you’re not an experienced coder, you could break your site or cause errors.
  • A representative of your company will need to always be on-call to accept chats 24/7, or for the duration of your open hours. If you take too long to respond, you risk turning visitors away—they’ll assume you’re too busy or disorganized to take their business.
  • You’ll need to be able to type quickly and communicate professionally. There’s no room for errors, typos, or misunderstandings. A chat box staffed by someone ill-prepared to communicate is worse than no chat box at all.

Live chat solutions with Ruby.

Trusted by more than 10,000 small businesses to deliver an exceptional customer experience, Ruby offers live, virtual receptionist and chat services, provided by professional, US-based agents.

On average, Ruby customers experience…

  • 20%+ boost in new business leads
  • 10 hours+ of distraction-free time gained back per month
  • 10%+ increase in customer happiness

Want to learn more? Download our guide for the full scoop!

Related articles

Did you enjoy reading this post? Then you will probably enjoy these too!

Business growth
Business growth