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News Stories Monday, August 5, 2002   
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Live chat more costly on company’s own system, Gartner says


Companies that run live chat technology on their own computer systems are more likely to run much higher operating costs per session than companies that outsource their operations, says Esteban Kolsky, senior research manager for customer relationship management and e-services at research and analysis firm Gartner Inc., Stamford, Conn.

In a study of 1,200 companies across different industries that use live chat, Gartner found that the average cost of live chat sessions was $7.50, compared to $4.20 for telephone calls.

The study covered all types of web sites, including those used for retail sales, for business-to-business commerce or just for customer service. In figuring costs, Gartner factored in all pertinent operating expenses, including salaries and infrastructure. It didn`t break down numbers just for retail web sites.

Live chat vendors say live chat reps can handle 5 or more sessions simultaneously, resulting in sharply reduced operating costs. But Kolsky says that can be difficult to accomplish.

"For online chat to produce the numbers that vendors are promising in so many sessions per minute, you need to achieve certain levels of economies of scale," he says. "But it’s hard to reach that." Although live chat systems may be designed to let a single rep handle six or more sessions simultaneously, "in real life they can usually handle two or three chats at one time." Although outsourced live chat services may actually run as many as six sessions simultaneously, these sessions may be conducted on behalf of more than one retailer, he says.

Kolsky adds that costs can rise sharply in relation to the complexity of a call or chat session. In the Gartner study, he notes, highly technical requests for information ran as high as $18 per telephone call and $26 per live chat session.

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