Everything You Need to Know about How to Choose Live Chat Software

19 min read
Mar 13, 2024
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To run a successful business, you need more than just a high-quality service or collection of products. The key ingredient in the recipe for success is a loyal customer base that keeps coming back. Without support and engagement from your audience, your company is likely to flounder.

You need to talk to your customers to forge a strong connection with them. Only then will you learn about their likes and dislikes and be able to build a better experience for them to continue purchasing from your brand.

Fortunately, there are many ways for businesses to communicate with their audience. Email, social media, and phone helplines have had their day in the sun, and now, the most popular platform for client communication is live chat. 

Live chat is the only communication channel that lets brands talk to customers in real time while leveraging assistance from cutting-edge artificial intelligence (AI) technology. With its high satisfaction ratings, a plethora of value-adding features, and an easy-to-use interface, live chat is the next big thing in building strong, mutually beneficial relationships between companies and their customers.

In a competitive business landscape, your brand can get ahead of the competition by offering customers live chat as an option. If you haven’t done so already, then it’s past time that you do. 

Since live chat has the power to transform your operations for good, this decision must be an informed one. In this article, you will learn how to choose live chat software that can benefit your business most.

Let’s begin.

Connect with customers

LiveChat is a complete customer service platform that delights your customers and fuels your sales.

Trusted by 36,000+ companies

Free 14-day trial

The importance of live chat for customer engagement

From a market value of $755.23 million in 2020 to a projected value of $1.7 billion in 2030, it’s clear that companies worldwide are investing significant resources into developing live chat solutions. 

Why is live chat becoming so popular and so quickly?

The answer lies in how live chat software benefits companies and their customers. Businesses no longer need to staff and operate a call center to manage communications. Live chat maximizes resources by interacting with several customers simultaneously and at all hours of the day. 

Connecting with customers through live chat can improve your business’ operational efficiency. Live chat is also known for better lead generation and sales conversion metrics. 

This is not a new trend, either. A 2015 report from the International Customer Management Institute (ICMI) found that customers who use live chat solutions tend to have a 10% higher order value, a 48% increase in revenue per chat hour, and a 40% higher conversion rate.

This is because customers can connect with companies at their own convenience. Even better, they are spared from enduring the long wait times involved with email or phone conversations. Few things turn customers off faster than being made to wait, as anyone who has suffered through interminable on-hold music will agree. It’s actually one of the main reasons customers use live chat, as 42% of respondents to an survey said they prefer live chat since they are never put on hold.

If you wish to connect with your customers meaningfully, hopping onto the live chat bandwagon is the way to go. As more and more customers choose live chat as their preferred channel of communication with brands, the segment is expected to grow by 87% in the next 12 to 18 months.

This means that your business will have a wealth of options when choosing live chat software. Many software as a service (SaaS) providers have developed advanced live chat solutions that companies can integrate with minimal fuss and extra training. But with so many options available today,  how do you pick the right live chat software for your business? 

This is not the choice you make without researching and preparing thoroughly. 

Choosing a live chat software

Your choice of live chat software will unlock a competitive advantage for your business. When customers know they can reach out to your company anytime and expect an actionable response, they are likelier to remain loyal. 

A report from 2022 showed that offering live chat increases the rate of customer retention by 63%. More repeat customers mean more sales, which leads to higher revenue and long-term profits. Demonstrating your commitment to customer service through live chat can do wonders for your brand in such a short time.

Once you integrate a live chat solution, you will immediately start to enjoy its many benefits, each contributing toward the growth of your business:

Increase customer satisfaction levels

Live chat is a critical component of a positive customer experience. Short wait times, personalized assistance, and satisfactory resolutions all make for happy customers. It’s no surprise that live chat has had consistently high ratings as a communication channel: from 2015 to 2022, customer satisfaction levels with live chat services were between 80% and 85%.

Live chat software also serves as a central hub for all communications. This means you can view each customer’s chat history before messaging them through the widget, eliminating the need for the customer to repeat their requests when their query is forwarded to the relevant agent. When you know their concerns, customers will know you are paying attention to their requests. This instills faith that your company will deliver on its promises.

Improve lead generation and customer acquisition

You need to secure a steady stream of new customers for your business to grow. This shouldn't be too difficult with all the modern tools available today. Live chat is beneficial when converting casual website visitors into paying customers for your business.

Remember the statistic that said live chat leads to a 40% higher conversion rate? This means it broadens your customer acquisition pipeline, and you can continuously grow your audience.  

Promote proactive outreach

Live chat is most commonly used for customer service and sales. But it’s also an extremely effective marketing tool. Unfortunately, not many businesses are tapping its full potential for proactive customer outreach.

Cold calling, cold emails, and follow-ups—these types of repetitive tasks take up a lot of time and resources, and the results don’t justify the effort in many cases. With live chat solutions, customer outreach is made simple in its elegance. Automated, AI-powered chatbots can initiate interactions with every website visitor. Instead of combing through mail and call lists to find interested customers, live chat draws them in instantaneously.

You can also augment your customer outreach strategy with automated live chat features. Pre-set message templates can be sent when triggered by specific customer behavior. For example, if a visitor has accessed a particular product page on your website more than once, the live chat widget can send a message inviting them to book a free trial or demo.

Customer demands and expectations are constantly evolving. Live chat solutions will help you anticipate their needs and be proactive about meeting them.

Provide in-depth analytics

Another excellent feature of modern live chat SaaS solutions is the level of data visibility. Your website’s live chat widget is more than a mere communication channel. It’s a vital market research tool that gives you essential insights into what your customers are talking about, their issues, and why they are interested in your products or services.

The best live chat software enables your customer service team to track critical metrics. Visitor demographics and details, average chat time, customer service agent performance, response times, and chat volumes are just some of the data points you will get when you start using live chat software.

Ensure faster resolutions

Live chat is all about starting a dialogue with your customers. However, neither party is interested in small talk. Whenever a customer reaches out to a company directly, they have a clear objective. Some want information, others want to purchase, and most often, they seek a solution to a problem.

Customers seek quick results, and slower methods of correspondence like email can lead to frustration. However, with live chat, they can have a conversation with your agents in real time. 

One of the most desirable outcomes in customer service is first contact resolution (FCR). This means that a customer’s query or issue is solved within a single interaction. Out of all the communication channels available for customers today, live chat has one of the most impressive FCR rates. In January 2024, TechJury reported that the average FCR for live chat ranges between 70% and 75%

Reduce costs

Calling a company helpline is one of the most dreaded tasks for any customer. There’s no guarantee of being connected to an agent, and phone support’s notoriously long waiting times have made it fall out of favor in the digital age. 

And it’s not just customers getting tired of phone-based customer support. Businesses are also leaving it behind for a much more cost-effective solution.

Compared to live chat, phone support is unwieldy and expensive. It requires a full team of operators to run efficiently, and keeping lines open at all hours is difficult. In contrast, live chat allows a small team of customer service agents to handle a much larger chat volume. Factor in the assistance from chatbots, and you will quickly see how live chat makes 24/7 customer support affordable, even for small and medium-sized businesses.

Live chat allows you to deliver a high-quality customer experience while reducing operational costs. It empowers your customer service team to add maximum value to the business while eliminating inefficiencies and repetitive tasks.

Connect with customers

LiveChat is a complete customer service platform that delights your customers and fuels your sales.

Trusted by 36,000+ companies

Free 14-day trial

Five steps to choose a live chat software for your business

Are you ready to take customer engagement to the next level? It’s time to find and implement the perfect live chat solution. The list of live chat apps is long and diverse, each with strengths and weaknesses. 

Finding the best live chat software for your business is a slow and deliberate process. Don’t rush your decision because it will significantly impact the overall customer experience. While the right live chat solution can do wonders, unsuitable software will lead to negative results, such as increasing visitor churn and higher rates of chat abandonment.

To choose the best live chat software, you need to take a methodical approach and do it step-by-step:

Step 1. Assess business needs

There’s no doubt that live chat is enjoying unprecedented popularity. B2B and B2C companies are implementing these modern solutions in droves. 

In 2018, an industry report found that the live chat market was comprised of 61% B2B clients and 33% B2C clients, with business-to-government (B2G) and non-profits making up the remainder. 

Are these numbers a good enough reason for you to just go for any live chat software? The short answer is no.

When selecting a live chat app, it’s vital to have an objective and strategy in mind. You need to outline the goals that this new addition will help your company achieve. 

To do so, you need to assess your business needs and keep the following considerations in mind.

Self-hosted vs third-party

The first big decision you have to make is where to host your live chat solution. Can your company manage the technological infrastructure needed to host a live chat software on its own, or will you have to rely on a cloud-based solution? 

The first option (self-hosted) isn’t recommended for companies without a high level of technical expertise. On the other hand, cloud-based solutions are offered by third-party providers, and all you need is a working internet connection. 

SaaS live chat solutions have advantages like regular updates, industry-compliant security protocols, and tiered payment plans that help save on operational expenses. 

Company size

The size of your company will also dictate which live chat app is the best fit. How many employees do you have? More importantly, how large is your customer support team? You need to choose a solution that enables them to meet all of your customer needs. 

For example, a startup may only have one or two employees to manage customer support. Simple live chat software that streamlines customer support workflows would be the best choice. 

However, a larger organization could benefit from integrating a more complex, feature-rich live chat software to provide better services.

Use case

Finally, you need to determine the use case for your live chat software before signing up or purchasing a plan. The most common use for live chat is for sales, followed by customer support. Live chat can also be used for marketing or as a knowledge base for employees and customers. 

Depending on the nature of your business, you will need your live chat to perform very specific functions. Carefully consider how live chat software can add value to different areas of your business and which features are most critical.

Answering these questions will help you develop a clear idea of the kind of live chat software your company needs to grow and make your customers happy.

Step 2. Ensure smooth integrations

Live chat isn’t the only tool modern businesses can leverage to streamline and improve their operations. Many companies now rely on a long list of software and cloud-based solutions to handle everything from customer relationship management (CRM) and inventory handling to performance tracking and appointment scheduling.

Apart from popular business tools like Salesforce and Zendesk, businesses also rely on website and ecommerce platforms like Squarespace, BigCommerce, and Shopify. Throw in other applications like Google Analytics, and you will realize that most companies have a tech stack that resembles a tangled digital web.

The best live chat software for your business should have third-party integrations relevant to your operations, especially for CRM, social media, and help desk ticketing systems. When your live chat application seamlessly integrates with the rest of your business tools, you can use it to full effect. 

Step 3. Select the right mix of live chat features

To get the most value out of live chat software, you need to know how to put all its features to use. Most modern live chat solutions come with a suite of advanced tools, which can be confusing for a layperson. Understanding what each feature does will help you decide which will be valuable and irrelevant to your particular use case. 

Here are some commonly listed features among the best live chat software on the market today:

Canned responses

Your customer service agents can significantly speed up their response rates by using preset text snippets for frequently asked questions. Canned responses save a lot of time and effort for both customers and agents.

Chat rating

A critical feature that helps you gauge how well your live chat solution is performing is chat ratings, which are vital for your customer support team. They provide insight into the quality of your customer interactions and how much you are truly helping those who reach out to your brand.

Chat routing

Regardless of how busy your customer service team is, you should never keep your customers waiting. Chat routing is a valuable feature that allows busy customer service agents to transfer customers to others within the team. It also delivers customer transfers to agents who are specially designated to deal with specific issues. 

Chat routing can be a significant advantage if you are looking to simplify your customer support workflows and reduce waiting times.

File transfers

One of the worst things you can do in customer service is give customers incomplete information. Sometimes, text conversations just aren’t enough, and the best live chat software will offer multimedia support. The ability to send images, videos, and files in other formats via the widget is particularly valuable when using live chat for sales purposes.

Mobile optimization

In 2024, most consumers use their mobile devices to browse and shop online. If your live chat widget isn’t designed to be mobile-friendly, it will not appear correctly on their screens, and you risk alienating this massive audience segment. 

Ensure your live chat widget works just as smoothly on smartphones and tablets as it does on laptops and desktops.

Offline forms

These can be useful for smaller companies that don’t have too many active customer support agents. With these, customers can raise an issue and include their contact information so you can reach out later. The chatbot will inform them about the next steps and the estimated time it will take for a customer service representative to get in touch directly.

Operator monitoring

Customer service is a dynamic field, and there’s always room for improvement. Live chat software allows you to track the performance of your customer support agents by recording the number of chats they’ve completed, their customer satisfaction rate, and average response times. 

Chat monitoring features are often on offer, and you can use them to review transcripts of each operator’s interactions or view them in real time.

Proactive chat

There are use cases where companies should bring the live chat to their website visitors instead of waiting for customers to use the live chat. This is where proactive chat invitations come in. It is an excellent tool for sales and marketing, allowing your business to connect with prospects at any point while browsing your website.

Queue times

Despite the best efforts of customer support teams, a communication channel with instantaneous resolutions to all inquiries has yet to be developed. While you should do your best to minimize customer waiting time, some delay is inevitable. 

In order to make this experience smoother, your live chat software should be able to provide an estimate of how long they will need to wait for assistance. 

Reports and analytics

The best live chat software will give you detailed reports on key metrics like operator performance and chat conversion rates. This data can be analyzed to gain valuable and actionable insights to further improve your live chat solution’s performance over time and keep your customers happy.

Smart triggers

Your choice of software should significantly streamline your customer support team’s workflows by automatically initiating interactions after event-based triggers. This way, you can tailor the approach to a conversation based on what the user is looking at or doing on your website. 

Visitor tracking

Real-time visitor monitoring is one of the best ways to better understand audience preferences and behavior. Once you know how visitors are interacting with your website, you can optimize your customer engagement strategies to gain their attention and engage them through the sales pipeline.

This is by no means an exhaustive list of all the features that come with live chat software. However, these are some of the most critical ones for businesses looking to take the customer experience to another level. 

Step 4. Choose a scalable solution

It’s important to remember that customer service and engagement is an ongoing process. While you may decide that a certain live chat software meets all your needs at present, you should also consider if it will be able to do so as your company grows. 

Expanding your customer base means you will need more comprehensive live chat solutions in the future. This is why choosing software that you can easily scale up or down according to your requirements is important.

Step 5. Find a price that fits your budget

After completing all the steps mentioned above, it’s time to work out how implementing live chat software will affect your budget. The diverse live chat software marketplace has pricing options ranging from free to plans costing thousands of dollars.

Along with the wide range of prices, providers have different payment plans. Some operate on a monthly subscription, while others are billed annually. You may encounter charges per agent, while others have enterprise-level solutions at fixed prices. 

The price is your final consideration before you choose live chat software for your business. Thanks to the number of apps on the market, finding one that suits your budget shouldn’t be a problem.

Best practices when offering live chat for customers

Live chat software is a flexible business tool that can be customized to fit your needs. You can leverage its features to create a signature customer experience that uniquely reflects your brand. 

To do so, you need to follow some of these best practices when it comes to live chat for customer service:

Balance automation with a human touch

The best live chat software comes with powerful AI capabilities. However, customers will always prefer interacting with a real human over a robot. 

Remember that automation in live chats is meant to augment and not replace genuine human interactions.

Build a user-friendly interface

Firstly, and most obviously, live chat software must be easy for customers to navigate. However, the software backend should also be easy to use for your agents and IT team so that response times and resolution rates stay high.

Offer multi-channel support for live chat

Customers expect a consistent experience when interacting with a company across various platforms. From their perspective, it’s quite frustrating to have to repeat their request every time they are transferred from one channel to the next. 

Make sure you offer reliable multi-channel support across web, mobile, and social media to keep your customers happy and eager to engage with your agents.

Connect with your live chat software provider

When you invest in the best possible live chat solution, you have the assurance that you’re partnering with experts. It’s worth connecting directly with your software provider to fine-tune the features and functions of the service. 

Collaboration leads to positive results, and your provider should provide robust customer support services of their own.

Invest in training for customer service teams

Any live chat solution is only as good as the people using it. To make sure your software is living up to its full potential, take the time to introduce your customer support team to its various features and ensure they use them to maximum effect.

Five reasons why LiveChat is the best solution for customer engagement

While there are many choices, one of the best live chat software available is LiveChat. It’s a versatile customer engagement tool that boasts many unique selling points, all of which make it suitable for various businesses in a range of industries. 

Let’s look at five convincing reasons why you should choose LiveChat as your next powerful communication channel:

Pre-set messages

LiveChat allows agents to use canned responses and smart triggers to ensure fruitful customer interactions. This leads to higher engagement, longer website dwell times, and more sales.

Multi-channel communication

Reach your customers where they are with LiveChat. The software integrates with WhatsApp Business, Messenger, Apple Messages for Business, and more.

Diverse platform integrations

Website hosting platforms, online payment methods, enterprise software—LiveChat comes with an expansive list of 200 integrations that add value to your business. Send your customers relevant product recommendations, connect them to their desired agents, and track their satisfaction levels through your existing CRM with LiveChat.

Powerful AI automation

LiveChat has several AI features that make customer support easier. Features like AI Assist, Chat Summary, and Live Assistant reduce the number of tedious tasks for your customer service agents, freeing their time to focus on more complex work.

Insightful reports

LiveChat grants users a deep understanding of customer engagement data. Its reports include simple data visualizations that track various key metrics and break down complex information into actionable insights.

If you want to see how LiveChat can benefit your business, you can sign up for a free 14-day trial through the website. Once you’ve experienced its advantages first-hand, you’ll be more than ready to choose from one of its four attractively priced payment plans. 

Choose LiveChat and build a better relationship with your customers!