Why Chat Is Cheaper

No matter how well your company hones its e-mail response system, that medium may not be fast enough for some customers. Many will continue to get their service and support via telephone, at a cost of $6 to $16 per call, according to some estimates.

That's where instant messaging, or "chat" support, comes in. At about $1.60 per incident, chat can be cheaper than e-mail ($2 to $4 per incident) and much less expensive than phone contact. The reason is simple: One customer representative can juggle multiple chat sessions, a feat not possible with the telephone or e-mail. In addition, closing an incident via e-mail tends to require multiple sessions, while a single chat is usually enough to close a report.

New York-based LivePerson Inc. specializes in real-time customer service, with a client roster that includes EarthLink Inc. and QVC Inc. Operating as an application service provider, LivePerson charges $10,000 per month for a one- to 20-seat license. That fee includes analysis tools that let clients closely track chat time per incident, how many informational chats turn into sales (according to LivePerson CEO Rob LoCascio, QVC has an eye-popping 20% conversion rate) and other return on investment metrics.

LoCascio says the only thing preventing chat from overwhelming e-mail as a support tool is e-mail's ubiquity.

But not everyone agrees.

"Companies buying these services are told [representatives] can support four to six customers at a time," says Chris Fletcher, an analyst at Aberdeen Group Inc. in Boston. "But it's naive to think you can take every good call-center agent and make them a good chat agent. A person who's good on a phone isn't always good on a keyboard." Analysts also point out that unlike telephone reps, chat agents need to have decent writing skills at the very least -- which isn't easy to come by in a relatively low-paying, low-education field.

Nevertheless, Pedro Noda, webmaster at American Airlines Federal Credit Union in Fort Worth, Texas, says LivePerson is popular with the credit union's 220,000 members. "Our reps can handle four chats simultaneously," Noda says. "The customers like it because many are overseas and the chat spares them an international phone call."

The credit union handles 4,000 chats each month. "In a survey we do, 98% [of customers] love the system," Noda says. "The other 2% had an attitude coming in."

Ulfelder is a freelance writer in Southboro, Mass. Contact him at sulfelder@yahoo.com.

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