Chatbot Vs. Live Chat: Which Is Winning The Customer Service Game & Why?

Implementing live chat in business websites increased average order value by 14%1 and website pages views per session to 263%.

51%2 customers prefer chatbots in customer support over emails, given they are easy to communicate to. 

Both these statistics project a very welcoming stance for the respective channels. But which one is preferred over the other? Will live chat benefit your business the most, or will a chatbot do the trick for you? The staggering reception both these models get indicates one thing – chat is crucial to customer support. In fact, 63% of millennials3 prefer chat for their customer support rather than other traditional channels. 

Chats have brought in the ability to provide consistent customer service in businesses. But what happens when you don’t consider the factors that influence how the channels respond to different business scenarios?  For example, if there’s downtime at your e-commerce website, and your chatbot is not equipped to inform your customers proactively and alert your development team, your customer satisfaction (CSAT) is going to take a hit, even though it wasn’t necessarily the bot’s mistake. To avoid such mistakes, we have curated a list of factors that influence customer support and to understand how live chat and chatbots position themselves in various situations.

#1 Types of Incoming Questions

Chatbots are a great tool to filter out basic level 1 and how-to questions. They can also be used to walk customers through the product/ service you offer and direct them to the corresponding knowledge base article. In cases like e-commerce websites, chatbots are useful to guide customers through their shopping venture by suggesting products based on their preferences. A case of failed payment/payment options/shipping questions could also help.

But if your average customer queries are unique and complicated, opting for a live chat that is handled by trained agents would make a better choice.

#2 Customer Demographic

As mentioned earlier, around 63% of millennials prefer to chat over other modes of communication. The younger demographic is also accommodating of chatbots when they make minor errors. But when you have a customer base that consists of a major share of older age groups, having customer service that provides assistance through traditional methods would prove fruitful. In such cases, if you have to opt for a chat customer service, go for a live-chat widget.

#3 Frequency of Queries

The main reason chat has grown a liking among the crowds is for the instant responses they fetch. The average expectation for first response time in chat ranges from 6 to 15 seconds. So if you’re opting for a live chat in customer service, here’s what you have to do to maintain low first call resolution time:

– Make sure at least one agent is available to immediately respond during active hours. 

– Use a ticket assigning system to avoid overlap or confusion.

– Conduct regular product training sessions for your agents to cut down the time spent to search for solutions to support issues. 

On the other hand, chatbots are a great way to drive up first call resolution, as they can handle multiple queries at once and be at service round the clock. Studies suggest that chatbots help businesses cut down first call resolution time by answering up to 80%4 of customer queries.

#4 Cost Efficiency

Cost plays an important role in providing customer service. Chatbots have been recorded to cut down 30% in customer support costs5. They also provide 24-hour customer service, and address emergency issues round the clock. 

Live chat has also been cited to reduce costs when deployed over other common channels of support. For example, acquiring a toll-free number, paying the call charges and making it available in a large region costs can cost 50% more than installing a live chat system to your website. 

But when it comes to a chatbot or live chat, chatbots are one of the most efficient in terms of the value it offers for that cost compared to any other channel, since they cut down agent onboarding and training costs.

#5 Self-service

Self-service has been favored by customers in recent times for its on-demand service and the reduced dependency. Having a detailed knowledgebase/FAQ section improves customer satisfaction, says our customer happiness benchmark report, 2019. A detailed knowledge base also means that your business is more customer-centric and allows customers to understand product technicalities at their own pace. 

When you have a detailed knowledge base at your customers’ disposal, chatbots would be well-equipped to handle customer support. In addition, you can also track frequently opened FAQs and what the customers are searching for, which in turn helps you to put out well-defined FAQs. Thus, with a detailed knowledge base, chatbots would work well for businesses.

The gravity of chat as a support channel was well documented way back in 2010 by Forrester with its study on how Wells Fargo6 put chat to good use and had a double-digit increase in converted shoppers. To make the most of chat on both channels, we have curated a list of best practices that will get your business to make the most of customer support and stay ahead of the curve. 

Proactive Engagement

Chats have gained popularity among customers and brands alike because they broke the invisible wall that traditional channels had. Emails and calls require customers to initiate conversations, while with a chat the agents start providing proactive assistance. A simple “May I help you?” can get conversations started and help customers. Research suggests that site visitors who engage in chats are 2x more likely to convert into businesses and spend 60%7 more on e-commerce websites. 


Show Empathy

When agents start communicating with empathy, customers feel heard. Empathetic agents are more adept to customer needs and assist with compassion. By making empathetic conversations, your customers feel satisfied with your support, irrespective of the final outcome. 

While we’re at it, you might be wondering if chatbots can assist with empathy. There have been multiple instances where chatbots were built to assist with empathy and have provided better service by understanding customer needs better. 

Chat Support

By practicing empathy, the agent in the above chat took instant action and updated the customer with the necessary information, to make their experience better. 

Be Easy to Reach

Though chat has a growing popularity among customers, not many use it when they need to contact customer service, as chat windows in most websites are not easy to locate. Make your chat window easily accessible yet doesn’t block the website content or hinder viewability.  Proactively engaging with the customers is also one way to be readily accessible to customers. 


Document Customer Conversations

Emails remain the top customer preference even while having the slowest response rate out of all channels. This is because with emails you can track the history of the conversation. Transcribing customer chat conversations can give you an insight into user behavior and provide support in the future with context. This transcript can also be mailed to your customers for their reference. 

Closing Thoughts

Both chatbots and live chat have promising benefits in customer support, as they are both versatile and cost-effective. Chat, as a customer support channel has made customer conversations more nuanced and has made businesses cut down their response times. 

To get the best of both worlds, integrating both chat systems by employing chatbots to deal with basic questions and use live chat to address detailed queries, would create a well-equipped business ecosystem.

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