Why is Chat a Relevant Channel to Reach Your Customers?

Two women drinking orange juice and looking at a mobile phone.

Chat is one of the most desired functions on a website for customer support, yet often the least built-out and developed. Here, we explore how you can use this channel to reach your customers in a digital-first world and how Covid has accelerated Chat relevance.

Online customer channels were once considered a luxury for businesses - until social platforms exploded and businesses started to pay attention to where their customers were spending time.

But when Covid struck, the trend of offering online customer service channels accelerated and it became a necessity. The pandemic forced businesses to digitalize to meet customer needs – a trend that is likely to stay even beyond the pandemic.

A UNCTAD study of 3,700 customers in nine countries found that over 50% of respondents have increased their online shopping. Underlining this, service leaders said that topping the list of their priorities in 2020 was Digital channels and infrastructure, ahead of Customer service representatives and Data, VoC, and customer service metrics, according to Gartner.

Rising importance of Chat as a channel

The conventional means of marketing, offering customer service and developing customer relationships are gravitating away from conventional methods developed for brick-and-mortar. In 2020, global retail sales were estimated at 22.5 trillion USD, nearly 18% of which came from e-commerce (4 trillion USD). This figure is expected to rise in the future, and will have resounding implications for businesses.

For starters, it will mean more questions from customers when they are not able to examine your products or get a demonstration of your services in person. It will also mean more complaints when there is a breakdown in delivery logistics.

This increased volume of customer service inquiries puts a strain on resources, and means longer wait times as customers are put on hold. Across industries, customer service inquiries and escalations surged during the pandemic. Salesforce’s 2020 State of Service report found that for over half (50%) of respondents, the number of inquiries received during the pandemic went up. Despite the increased volume, most companies were not able to hire more staff. Only 19% of respondents said their headcount increased. For the majority (50%), headcount stayed the same, or even decreased (31%).

Not only did the volume of cases increase during the pandemic – so did their complexity. In the same Salesforce report, respondents described customers during the pandemic as more anxious (81% agreed), having more complex cases (75%), and being more difficult to satisfy (66%).

Customers dumped their frustrations and anxieties about the pandemic on agents, as call centers around the world struggled to upskill their agents who had been trained for a pre-Covid-19 world.

In a turbulent world, skills like communication (rated by 76% as very important) and listening skills (71%) were rated by agents as more effective in meeting customers’ needs even ahead of product knowledge (68%). During these extraordinary circumstances, many call centers have begun training agents on empathy.

Yet upskilling and training agents on empathy and more sophisticated people skills is only the tip of the iceberg. In a world where the trend towards digitalization is set to continue and stay for the long run, it will take more for call centers to effectively serve customers.

Chat as the solution for a digital-first world

Chat as a channel for customer service has long been underestimated and underutilized. It is one of the most desired functions on a website for customer support, yet often the least built-out and developed. In the same Salesforce report mentioned earlier, 88% of service professionals surveyed agree that the pandemic has exposed technology gaps in their organizations.

But with the pandemic reducing direct interactions with customers, chat has become an essential alternative for businesses. 32% of decision makers surveyed say that they now use chatbots, a whopping 67% increase from those who were using it in 2018 (Salesforce).

Why is chat becoming such an attractive option? For starters, the versatility of chat allows you to use it at almost every step of the customer journey, from product inquiries to technical troubleshooting and obtaining feedback on the customer experience. All of this can be accomplished with a laptop and an internet connection by agents around the world, without having to be at the office and without additional hardware like headsets and phones. This flexibility allows organizations to have a distributed team of agents working from anywhere, around the globe, 24/7. This offers enormous benefits for organizations who can stay nimble as pandemic-related uncertainty continues.

But perhaps the most powerful opportunity chat offers is the opportunity to triage using automation and AI, such as automating responses to frequently asked questions. With Ultimate, your product can automate up to 80% of written conversations around the clock in over 100 languages. This frees support agents from repetitive requests and releases capacity that can be repurposed for more complex roles.

The concept of triage is not new to the industry — but the level of speed and sophistication that using AI in the triage process can offer is enormous.

This became clear to the industry during the pandemic, with a third of decision makers saying that their organization now uses AI for customer service (up from 24% in 2018).

Chat as an optimal and cost-effective way to increase customer loyalty

Beyond addressing critical customer service issues, chat offers the opportunity for customer service to transform from a cost-center to a revenue driver. A poll by Anderson Consulting showed 62% of online customers would buy more products had live chat and support been available. These seemingly small opportunities can snowball into missed outsized gains.

Addressing consumers’ pain points now not only increases sales conversion rates, but also builds consumer loyalty, which leads to greater profits: Bain and Company found that increasing customer retention rate by 5% increases profits anywhere from 25% to 95%. Additionally, providing great service today reduces future costs of acquiring new customers: Harvard Business Review reported it is anywhere from 5 to 25 times more expensive to acquire a new customer than it is to keep one.

Chat also presents opportunities to learn more about your customers. Carefully designed chatbots that capture rich data points of interactions with customers are nuggets of gold for your organization, without the need to bombard customers with pesky after-sales feedback forms. This data can be aggregated and used to identify gaps in the customer experience and opportunities for improvement, and inform your business strategy for the future.

Implement chat to tackle competition

The pandemic might have reduced facetime for customer interactions, but it does not mean the customer experience needs to be any less human. On the contrary, the pandemic has brought to the forefront an opportunity: to leverage technology to understand, empathize, and engage with customers in a more sophisticated way.

Chat enables customers to get their needs addressed quickly and effectively, while enabling business to deliver a higher quality of service through:

  • More efficient operations,
  • Better data for identifying improvements, and
  • Greater bandwidth to devote to more sophisticated tasks, from dealing with the most challenging customer cases, to setting up and training the technology for continuous improvement.

In the long run, these efficiency gains and higher quality of service will be seen as a key differentiator among competitors, not only in terms of customer service. Ultimately, this will translate to better word-of-mouth marketing and stronger customer loyalty for your brand.

Just as online commerce has become a necessity, the humble chat channel’s coming of age means that it is no longer just a nice-to-have, peripheral icon at the bottom of a website, but a key weapon for businesses in delivering great customer experience.

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