E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
Training, technology and teamwork help e-retailers derive more sales and profits from live chat.
In a single sprawling building in the Chicago suburb of Glenview, Ill., family-owned Abt Electronics Inc. runs a popular consumer electronics and household appliances superstore and an adjacent mini-mall of stores operated under major brands like Apple and Sony. "Most people are surprised to learn we staff the Apple and Sony stores," says Jon Abt, who as one of four co-president Abt brothers keeps a close watch on how Abt's customers are served across its retail properties.
And increasingly, his focus is on how Abt Electronics treats customers on the company's growing e-commerce site, Abt.com, where sales are on track to account for 25% of total sales this year, up from 20% last year.
Abt attributes part of that rise to an ambitious customer service program, which the retailer expanded last year by doubling the number of live chat seats at its on-site contact center. "Customer service is what differentiates us from the bigger retailers," he says.
It also helps to keep customers happy and the online shopping cart ringing in sales. Like other retailers, Abt has found that live chat boosts conversion rates—which are 10-20% higher on Abt.com for shoppers who engage live chat, compared to those who don't—while also helping to make customer service agents more productive and efficient.
At fashion apparel retailer HauteLook, live chat also helps to improve agent efficiency as well as conversion rates. Live chat agents typically handle three live chat sessions concurrently, and from 90 to 120 or more per day. "It's an efficiency we don't get with phone calls," says Chris Purpura, director of member care. A good customer service rep might handle 60 to 70 calls in a day, he adds.
Moreover, more online shoppers are turning to live chat for answering their questions. A recent survey by The E-tailing Group Inc. found that 58% of online shoppers had used live chat on a retail e-commerce site within the past year, up from 54% the prior year.
But while it has become obvious to retailers like Abt and HauteLook that live chat can be a relatively productive and efficient way to handle customer service contacts and boost conversion rates and sales, getting the most out of a live chat program requires careful planning, from employee hiring and training to fine-tuning live chat techniques and incentives.
The personal touch
In ongoing training classes provided by HauteLook, for instance, live chat agents are learning how to be more personal in their communications while also being informative and efficient, Purpura says. "We don't ever want a HauteLook member to wonder if they just received a self-service type of answer to their live chat question," he says.
Prospective customer service agents at HauteLook take a writing test as part of the hiring process. Those who get the job typically start communicating with customers via e-mail, a medium that gives agents time to correspond and develop their skills in gathering information, answering questions and engaging consumers. After a day or two, the agents take on live chat sessions, then start to work the phones.
Abt Electronics has found that many of its new customer service agents arrive with relevant skills from instant messaging with friends and posting on social networks. "It takes them less than a day to understand the live chat system," Abt says.
Still, the retailer finds that it must help them learn to build a dialog with customers through live chat, much as they would on the phone, while also keeping the sessions moving along. Its agents generally answer customer requests for live chat sessions within 30 to 60 seconds, and Abt has found that live chat has boosted cross-selling rates. "If customers chat to ask recommendations on TVs, they'll learn that they also need cables," Abt says.
The retailer has also set up its live chat team to forward chat sessions when necessary to sales specialists, such as in-house experts in automobile radio and navigation products. The retailer has found good cooperation among agents, Abt says, with customer service agents getting bonuses for the number of chats they handle per day, while sales agents earn commissions on purchases.
While some agents turn out to be more effective on the phone communications—often because they thrive on the more personal back-and-forth of phone calls, as opposed to live chat sessions that consumers often abandon without so much as a thank-you—HauteLook is trying to expand on the amount of customer contacts handled by live chat to take advantage of its relatively high productivity.
And that's even though, for now, customers still prefer to communicate by phone. In ongoing surveys of customers who contact HauteLook's customer service agents and receive automated feedback forms through the retailer's RightNow Technologies Inc. customer relationship management system, over 90% rate phone calls with agents as satisfactory, compared to about 80% for live chat sessions. E-mail's satisfactory level is too low to mention—which is not unexpected from a medium that can take a day or more for a customer to receive an answer, Purpura says.
To help kick up its live chat satisfactory ratings, HauteLook is putting agents through new training classes to develop more standard responses that can save time, while also helping agents develop a friendly as well as helpful style of live chatting.
For chat sessions about HauteLook Getaways, for instance, agents are learning to quickly describe the attractions of vacation destinations, such as the features of particular hotels and golf courses. When customers on the daily deal fashion apparel site address more pressing issues, such as why it can take days to get delivery of a purchased item, agents have learned to better explain in a friendly manner that limited-time sales are often tied to the sudden availability of products from apparel designers and suppliers, and that it can take an extra day or two to get those items shipped.