Seamless customer communication is the essence of a great customer experience. As customer expectations evolve, businesses are increasingly focused on optimizing their customer communication.
Selecting the right customer communication tool defines your brand’s relationship with its audience, making the chatbots and live chat choice a critical business decision. This choice isn't a one-size-fits-all; it revolves around how best to engage your customers while meeting their diverse needs. Chatbots offer efficiency and quick responses, while live chat provides the warmth of human interaction.
Understanding the key differences between chatbots and live chat, their benefits, and challenges can help you make an informed decision on which solution best suits your business needs. In this blog, we’ll explore both options with real-world examples and offer guidance on when to use each one.
Table of contents:
- Understanding live chat
- Understanding chatbots
- Chatbots vs live chat: Key differences
- The final verdict
- How to implement live chat and chatbots using SalesIQ
Understanding live chat
What is live chat?
Live chat is a real-time communication tool that allows businesses to engage prospects and customers through instant messaging on their website, mobile app, or instant messaging platforms like WhatsApp, Instagram, and Facebook messenger. Customers can ask questions and receive immediate responses from customer support agents or sales representatives, facilitating prompt assistance and enhancing the overall customer experience.
Benefits of live chat
Human interaction: When it comes to customer communication, nothing beats the warmth and empathy live chat interactions can offer, making for more nuanced conversations and better customer satisfaction.
Flexibility in communication style: Live chat agents can adapt their communication style to match the customer's tone and comprehension level.
Proactive engagement: Live chat enables agents to initiate conversations based on prospects' or customers' behavior on the website or app, offering assistance even before they ask for help, leading to efficient lead nurturing and a better customer experience.
Personalized support: Live chat allows for personalized support interactions based on the customer's specific use case/context and previous purchase or interaction history, thereby improving customer satisfaction.
Reduced abandonment rate: The availability of immediate assistance through live chat at key moments during the purchase cycle can alleviate any concerns prospects may have and reduce abandonment rate.
Addressing complex issues: Live chat agents can handle intricate queries that need deep product knowledge, critical thinking, and problem solving skills.
Increased revenue: Live chat agents can identify cross-sell or upsell opportunities during a conversation, allowing them to leverage these opportunities to drive additional sales
Common challenges of live chat
Availability during peak hours: It can be challenging to ensure all customer inquiries are handled without significant delay during peak hours and without overextending your resources.
Higher response time: While live chat aims to provide instant responses, the sheer volume of chats, complex inquiries, and human limitations in handling multiple chats simultaneously can increase the response time, leading to customer frustration.
Inconsistency in response tone: Over time, with high chat volumes, live chat agents can fall prey to fatigue and burnout, which can significantly impact the tone of responses and the quality of customer interactions.
Multilingual support: With businesses going global, it's necessary to provide support in multiple languages, which can complicate staffing and training.
Measuring effectiveness: Evaluating how well your live chat operation is working can be challenging. Businesses need to establish clear KPIs and live chat metrics to assess and improve live chat performance.
Understanding chatbots
What is a chatbot?
A chatbot is an software program designed to simulate real-time human conversation via text or voice. Chatbots can be integrated with websites, mobile apps, and instant messaging applications to answer customer inquiries, guide users through a product, or assist with transactions without human intervention.
Benefits of chatbots
24/7 availability: Chatbots can provide support at any time of the day, ensuring customers get support outside of regular business hours too.
Cost efficiency: By handling routine inquiries, chatbots can reduce the need for a large live chat team, saving staffing and training costs.
Reduced response time: Chatbots can respond to customer inquiries instantly, improving overall customer satisfaction and reducing wait times.
Scalability: Chatbots can handle any number of chats simultaneously, thereby making it easier for you to manage high chat volumes during peak hours.
Lead capture and qualification: Chatbots can engage with website visitors, ask initial questions, capture leads, and qualify them for followup by sales teams.
Shorter sales cycles: By automating initial inquiries and providing immediate responses, chatbots can streamline the sales process, reducing the time it takes to convert leads into customers.
Consistency in response tone: Chatbots are immune to fatigue or burnout, ensuring consistency in response tone and service quality.
Common challenges of chatbots
Inability to handle complex queries: While chatbots are great for handling large volumes of routine queries, they aren't equipped to respond to complex queries with multiple parameters.
Limited personalization: Even the most advanced AI chatbots can't replace the level of personalization a live chat agent can provide.
Lack of empathy: Chatbots can't understand the tone of a customer and respond accordingly to de-escalate a situation.
Lack of context: Chatbots often fail to grasp the context of a conversation and can lead to irrelevant responses. For example, if a user initially asks 'Can you help me with my order' and later says 'And what about the delivery time?' the chatbot may not understand that the user is talking about the same order and may respond with a generic delivery timeframe.
Chatbots vs live chat: Key differences
| Parameter | Chatbots | Live chat |
|---|---|---|
| Response speed | Uniformly instant responses | Response speed can vary based on volume of chats, how long the agents have been working, and the complexity of questions. |
| Query handling | Can answer simple straightforward queries but struggle with complex queries. | Capable of handling more complex or nuanced queries too. |
| Personalization | Only basic personalization that's programmed into the chatbot. | Human agents can provide a high level of personalization |
| Availability | Available 24/7 | Limited to agent working hours |
| Consistency | Consistent responses to routine queries | Can fall prey to fatigue or burnout resulting in inconsistent quality in responses |
| User experience | Provides consistent and instant responses for routine queries but lacks empathy | Generally offers a more personalized and empathetic experience |
| Scalability | Highly scalable | Limited by the availability of human agents and how well they can multitask |
| Cost | Typically low operational cost | Higher cost due to staffing and training requirements |
Let's now look at each of the parameters in the above chatbot vs live chat table in detail.
Response speed
Chatbots can deliver instant responses to routine queries like 'What are the interest rates you offer for a savings deposit?", eliminating wait time altogether.
The response speed for live chat on the other hand, varies based on the volume of chats, how long the agents have been working, and the complexity of questions. For example, a well-run live chat team can provide quick responses during normal working hours, but during a holiday sale, the influx of inquiries may overwhelm agents, and agents may be overworked, resulting in lower response speed and a longer wait time. Or if the customer has a complex product and pricing requirement, the agent may take time to research the specific case, resulting in a lower response speed.
Query handling
Chatbots excel at providing instant responses to routine and straightforward queries like 'Do you have a store in Chicago?'. But when faced with complex queries with a lot of parameters to consider like ''Can you help me plan a relaxed two-week trip to Europe that includes historical sites, beach time, cafe hopping, and is family and pet-friendly, all within a budget of $3,000?'', a chatbot may fail to connect the various elements mentioned and can give a generic suggestions for Europe trip destinations.
Live chat can address a wide range of complexity when it comes to inquiries. When faced with intricate questions like this, a live chat agent will be able to respond with a more personalized approach like "Absolutely! Let’s break it down. I recommend starting in Paris for a few days to explore historical sites like the Louvre, then heading to Nice for some beach time. For cafe hopping, you could spend a couple of days in Florence, which is family-friendly. I can help find family and pet-friendly accommodations and activities within your budget."
Personalization
Chatbots run on predefined scripts, offering basic personalization that depends on the input they receive and the bot script. For example, a chatbot can identify the customer's name and identify that it's an existing customer and reply with "Welcome back Sarah" but fail to connect the customer's purchase history and older support interactions, and the conversation can still remain surface level.
Live chat, on the other hand, offers a great deal of personalization as live chat agents can understand context, refer to customers' purchase history, and provide tailored recommendations like "Hello Sarah! Since you purchased our organic skincare line, you might love our new night cream that complements your routine perfectly. Would you like more details?"
Availability
Chatbots work round-the-clock and can provide immediate assistance to prospects and customers irrespective of the day or time.
The availability of live chat, however, is typically limited to business hours or shift timings of live chat agents. Recruiting agents and planning a roster to provide uninterrupted service 24/7 can be very expensive.
Consistency
Consistency in interaction quality is crucial in building trust in the minds of customers. Chatbots operate on predefined scripts and algorithms, which means that customers can expect uniform answers to their queries no matter what time of the day it is or if it's during peak season.
Live chat agents, on the other hand, can be overworked and all prey to fatigue and burnout, which can affect the quality of their responses. For example, an agent who otherwise patiently listens to customers and gives detailed responses may rush to finish chats at the end of a busy day, potentially overlooking important details. Also, different agents have different communication styles that can also lead to inconsistencies.
User experience
Chatbots provide a streamlined, efficient user experience when faced with routine queries like "Do you offer free shipping" or "I need to track my order" but can lack the understanding and empathy needed to de-escalate the situations involving frustrated customers. For instance, if a customer asks, "How long will you take to refund my order? I've literally been waiting for weeks," a chatbot may respond with generic answers like "It typically takes 2-4 business days to process a refund" that can lead to further frustration.
In contrast, a live chat agent can actively listen, understand emotions, and provide a more empathetic and supportive experience to frustrated customers and turn the above situation around by responding with "I'm really sorry to hear that you've had to wait so long for your refund. I understand how frustrating that can be. Please give me a minute to check the cause of the delay quickly and see how I can expedite the refund process for you."
Scalability
Chatbots outshine live chat when it comes to scalability as they can manage an unlimited number of routine chats simultaneously without compromising the quality or speed of responses.
Live chat is costly and challenging to scale up as agents can only respond to 2-3 chats simultaneously without compromising on speed and quality. This means that during busy periods, businesses may need to hire additional agents to meet customer demand, leading to increased staffing and training costs.
Cost
Building a chatbot typically requires investment in software development or a subscription to a chatbot platform. Costs can range from a few dollars to several hundreds, depending on the chatbot software you choose. Some providers also charge based on the number of conversations or resolutions. But there's no other major cost associated with chatbots once they're set up.
Live chat also requires investment in software development or a subscription to a live chat software. Beyond these initial costs, businesses must also factor in the ongoing expenses associated with hiring, training, and managing live chat agents.
The final verdict
Live chat vs chatbots isn't a one-size-fits-all decision; it depends on your business model, customer expectations, and the complexity of the queries you receive. Let's take a look at when to use each option.
When to use live chat
Live chat is best suited for businesses that require a personal touch and deal with complex inquiries. For example, in industries like real estate or luxury goods where purchase involves significant investment, live chat allows agents to build rapport and trust with potential buyers, leading to higher conversion rates.
Check out our detailed blog on live chat best practices to ensure your live chat game is top-notch.
When to use chatbots
Chatbots are ideal for scenarios where speed and efficiency are critical, particularly for handling high volumes of straightforward queries. For instance, appointment scheduling, FAQs, returns and refunds, order confirmations, and tracking are straight-forward areas where chatbots excel. That's not all—we have an entire article on chatbot use cases that explores a variety of applications across different industries.
When to combine live chat and chatbots
As chatbots and live chat have complementing pros and cons, most businesses may find that a hybrid model works best for them. This allows you to leverage the strengths of both solutions and mitigate live chat and chatbot challenges. For example, chatbots can be used for responding to commonly asked questions, after-hours support, and for initial query triage, while complex questions and escalations can be handed over to human live chat agents.
How to implement live chat and chatbots using SalesIQ
With SalesIQ—Zoho's advanced live chat and chatbot software, you can implement live chat and chatbots on your website, mobile app, and even instant messaging platforms like WhatsApp, Instagram, Facebook Messenger, LINE, WeChat, and Telegram.
Here’s a step-by-step guide to implementing live chat with SalesIQ:
Sign up for a free 15-day trial of SalesIQ.
Customize the chat widget and window to match your website or brand by choosing the right style, color, position, font, and adding your logo.
Add your team to SalesIQ and assign the right roles and permissions.
Embed the live chat widget on your website and/or mobile app. You can also integrate your IM apps with SalesIQ.
You're now all set to start responding to customer queries.
Here’s a step-by-step guide to implementing a chatbot with SalesIQ:
Identify what you need your chatbot to do—whether it is lead generation, customer support, product recommendations, or answering FAQs.
Assess the complexity of customer inquiries your chatbot needs to handle. For straightforward queries that can be predicted, you can build a custom chatbot using our codeless or scripted chatbot builder. If you need your bot to handle a wide variety of routine questions, we have a ready-to-deploy AI chatbot called Answer bot, or you can even integrate the two for a hybrid chatbot. You can also power your chatbot with any other AI technology you may already be using like IBM Watson, Dialogflow, Microsoft Azure, Haptik, and Zia Skills.
Following steps 1-5 in the above live chat implementation guide, choose the type of chatbot builder that suits your needs and set up your chatbot flow.
Test and iterate until you're happy with your bot's performance.
Deploy your chatbot and watch the magic unfold.
Now, if you want to combine live chat and chatbots, simply enable agent hand-off in your chatbot flow, as shown below.
If you're building a scripted chatbot, we've covered agent hand-off there too.
There's no perfect time like the present to optimize your customer experience. Implement live chat and chatbots today to ensure your customers receive the assistance they need—when they need it! If you need any help along the way, just reach out to us via live chat inside the product.
Let us know in the comments below how it works for you.
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