What is live chat software?

A guide to understanding what a live chat software is and using it to

improve conversions and increase sales.

What is live chat?

Live chat is a medium that allows your business to engage with your website visitors. You can use a live chat software to initiate conversations with first-time website visitors, interact with returning customers, and support your existing users in real-time. It is a modern, continuous, and contextual way to drive more sales, close more deals, and retain customers for the long haul.

Live chat offers personalized customer experience, better brand interaction, a competitive edge, and a way to feel your customers’ pulse. Implementing live chat solution for your business is beneficial for all customer journeys and across your marketing, sales, and customer support teams.

Live Chat Use Cases

LEAD GENERATION

Engage before your visitors exit using bots and campaigns

CUSTOMER SUPPORT

Support and retain customers. Deliver satisfaction at scale

CUSTOMER ENGAGEMENT

Unlock real growth by converting new users into active customers

Why do you need a live chat software?

Customers need live chat to get quick and convenient answers to their questions on a website. Marketing and sales teams need live chat to collect leads and convert them into customers. Helpdesk teams need live chat to solve customer problems faster, support them better, and engage them better.

Live chat is incredibly valuable for online businesses to capture leads, reduce bounce rate, and bring down the number of shopping cart abandonment. Similarly, live chat software can help B2B businesses to launch campaigns based on user behavior, deploy interactive chatbots to engage with them, or offer proactive support.

Benefits of live chat software

Types of live chat software

You can either use a traditional live chat software for your business, which is limited in its offering or embrace a modern messaging app that is replacing live chat. Traditional live chat software is being obsolete because it offsets the experience customers expect today. Messaging is replacing live chat software because the former is more personal, more convenient, and much more impactful.

There are many things wrong with the archaic live chat tools that don’t work for businesses in today’s modern world. For example, when a chat window or browser tab is closed during a live chat conversation, that’s the end of a chat. You have to start the conversation all over again in a new chat session. Live chat also lends itself to an experience where you can engage with a business only when an agent is available. Live chat tends to be a siloed experience, where conversations are frequently transferred from chat to email or phone without passing the full context. Customers have to explain their issue from the start, repeatedly, during all sessions. The live chat interfaces typically don’t allow sharing of screenshots, emojis, or GIFs — all the visual elements that make conversations more alive and personal.

Buying factors of live chat software

The marketplace for consumer engagement is saturated with live chat software of all shapes and sizes. If you google “live chat software,” in Google Search, you will get one billion thirty million results!

But you don’t have to parse through the entire cosmos of Google Search results to pick the right tool for your business. The most effective way to identify the right chat solution for you is to define your requirements and map them back to the tools that match them. There are a few must-have, non-negotiable things that you should look in a live chat software when you are evaluating to purchase one:

Deployment model

Don’t pick a live chat vendor that host their solution on-premise, unless you have strict operational and regulatory requirements that require you to do so. A cloud-based live chat software is faster to deploy, easier to set up, and integrates well with most modern tools.

Omni-channel capabilities

Pick up a live chat software that offers cross-channel capabilities such as mobile-readiness and integration with the top marketing and customer support software. Live chat shouldn’t be a siloed system; hence, it is necessary it works well with other players in your software stack to improve customer experience.

User-friendliness

When it comes to picking up a good live chat software, it’s very important to judge the book by its cover. Be very picky about the user interface, both on the end-user side and the agent side. Also, evaluate the level of customization the tool offers. E.g., changing the chat widget color, adding your brand logo, disabling features that you don’t want, etc.

Budget

Most businesses struggle to find the right chat tool mostly because of the confusion around pricing. Avoid live chat vendors whose pricing are vague and confusing, or at least get on a call to understand the plans clearly. Our advice, go for a SaaS-based live chat tool that has clear agent-based pricing.

Features

This depends hugely on your use cases. If you are going to use the live chat software for your marketing team, you might want to have features such as automated campaigns, chatbots, and event-based messaging. If your use case is support-heavy, you want to look for intelligent chat routing options, co-browsing and screen-sharing, and priority inbox.

Analytics and reporting

Although most live chat tools come with some level of reporting features by default, not all vendors do a great job at it. Make sure to demo the reporting feature of a live chat tool to understand what advanced insights (e.g, CSAT rating) it offers that could help you improve your existing processes.

Pricing

Live chat pricing can be confusing. It can be tricky to pick a live chat software that checks all the boxes when you have to choose among a sea of vendors selling the same set of features. Since live chat is a returns-driven investment, you should pay good attention to the pricing of the live chat tools you have shortlisted for your business.

Here are a few pointers to consider before you subscribe to a live chat tool:

Free plans

Most of the live chat vendors out there nowadays offer a free trial or freemium plan. Furthermore, many offer a ‘free forever’ plan that lets small business teams use its basic plan for an unlimited time. While the ‘free forever’ plan is not for everyone since you are most likely to outgrow the number of seats or contacts the plan offers, it’s always a good idea to trial a product with a freemium plan to see how it actually fulfills your everyday requirements.

Per agent pricing

Many live chat vendors charge their clients per agent per month, which means they bill their clients monthly based on the number of chat agents that will use the software. It’s a great plan for ambitious businesses on a steep growth trajectory. But if you are deciding on this kind of pricing, be mindful about certain features that might change when you scale up or downsize your agent seats.

Pricing based on volume

This is similar to per agent pricing, but the cost here depends on your website traffic. It might not work great for e-commerce websites that expect and encourage a spike in traffic during holiday seasons and special sales. However, this type of pricing is great for niche businesses that have steady traffic and want predictability in their live chat spending.

Pay-per-lead pricing

This pricing model works great for marketing teams who want to use a live chat tool to generate leads. It’s a variable pricing model where you don’t have to pay a flat fee every month or year. Instead, you have to pay only for the number of leads that you generate over a month or a year. The lead pricing can vary anywhere from $18 to $40 per lead, depending on the vendor.

Live chat software trends

Businesses are adopting live chat for their sales, marketing, and customer support needs at scale because it’s disrupting the traditional customer engagement model. Live chat is filling a huge void in the customer experience sector. Live chat has the power to touch customers’ lives, influence their decisions, and drive more sales. It’s trending as the hottest tool in the business world for a reason. Live chat is gaining traction among businesses across the board. Its adoption rates grew from 38% in 2009 to 58% in 2014.

Live chat has 73% customer satisfaction, much better than email (61%) and phone (44%). This is likely due to a combination of factors, like personalization and speed. 42% of customers across all industries say that live chat is their preferred method of interacting with brands. For support in general, at least 53% of customers prefer online chat than other channels of support. For B2B markets, live chat increases conversions by 20%. B2B customers who initiate a chat with a business are 3X more likely to buy than those who don’t engage in an interaction. For e-commerce websites, live chat help curb cart abandonment by 40%. And it doesn’t stop there — customers who use live chat support spend an average of 60% more per purchase than those who don’t.

What features to look for in a live chat tool?

A fool-proof lead capturing mechanism

A live chat widget should stay invisible and non-intrusive on the website, all the while being there to welcome visitors when they need help or support. A live chat software should be able to do so by capturing lead information and automate it to your CRM system for your sales team to act on in the future.

A modern live chat tool does all this by launching triggered messages based on user and event properties, deploying interactive chatbots at the right time, and sending in-app contextual campaigns. Your sales and marketing teams can follow-up on the leads to close more deals and make more sales.

Learn more about lead engagement

A convenient, familiar experience

Your live chat tool should come with a zero learning curve for your consumers to use. It should offer the continuous, contextual, and instant messaging-like conversations that consumers are familiar with using in their everyday lives. Furthermore, it should offer the convenience of time and speed to map their queries to the right team through the right message channels.

On the business side, it should allow your sales and support teams to have a comprehensive view of all conversations in one dashboard so that they can prioritize responses and work more efficiently. Having a great product interface is equally important on the agent side for your teams to offer engaging conversations that feel natural and friendly.

Learn about friendlier conversations

A fulfilling self-service experience

A live chat tool shouldn’t be just about agent-to-customer chat experience, but also a customer journey of exploring information at their own pace. A modern live chat tool should include self-service offerings such as Frequently Asked Questions (FAQs), self-help guides, tutorials, and help videos for customers to find quick and easy answers to their concerns.

Freshchat offers businesses to embed integrated or page-based FAQs within their chat widget so that customers don’t have to leave a page to find answers. It also allows businesses to create FAQ content in more than 31 languages to help them break the language barrier with their global customer base. Customers can also upvote or downvote FAQ articles as a form of feedback to allow businesses to improve their content.

Learn more Freshchat’s self-service offering

Unbridled team collaboration

While live chat is a doorway for your customers to talk to your brand from a closer proximity, it should also be a tool to make your team more productive and collaborative in their everyday tasks. It should allow your sales and support teams to categorize conversations, prioritize threads, tag team members, attach private notes (visible only to the team), and do much more.

Freshchat live chat tool takes team collaboration to the next level by offering IntelliAssign, a rule-based, automated task routing feature that allows you to load balance chat conversations among agents or teams based on their workload or expertise. This allows teams to perform at their optimum level while making sure that customers get the best experience they deserve when engaging with your brand.

Learn more about IntelliAssign

Reports and analytics

A live chat software is essentially a business-enabling tool that should be able to produce measurable metrics for improvement and optimization. It should provide useful data points for decision-makers to analyze and identify the best practices and anomalies in their live chat operations.

It should enable live chat teams to look back at their performance such as their first response time, customer satisfaction rating, and a visual insight into their processes. A live chat software should be able to produce data on the real-time chat volume, conversation trends, and historical metrics for business teams to learn from and calibrate their performance.

Learn about Freshchat reports

Seamless integration

A live chat tool should fit into your all-star business toolkit and connect with all software that are pivotal to your daily operations. It should integrate with your existing CRM software to manage lead and nurture them, your helpdesk software to offer great customer support, and other business-critical apps.

A live chat tool should come with the best of all worlds to help your business pull and push data seamlessly and help you make data-driven decisions. It should function as one of the spokes in the wheels of your business instead of a standalone, siloed product that is hard to work with.

Learn about Freshchat integrations

Want to get the best live chat software for your business?

Try Freshchat, a cloud-based CRM for your marketing, sales, and support teams. Freshchat helps businesses of all sizes engage more meaningfully with their customers with an easy-to-use messaging app.