Harnessing the Power of Live Chat

Updated: Nov 20, 2023 | Angel Manalad | 3 mins. read

Classified sites like Carsales have conditioned people that as soon as a lead (contact information) is entered into a form on a site, a salesperson will call them up and try to sell them something. As a result, over the years, lead volume and conversion rates of lead forms have been gradually declining. Vehicle buyers hold onto their contact details longer and try to control their first contact with the dealer. First contact is often by phone and as a walk-in.

At the same time as conversion rates have been dropping, the focus of effective CRM and lead management has been rising. Successful sales in the digital era rely on effectively managing prospects from the moment of first contact through to sales, service and then repeat purchase.

Live chat is a powerful tool for generating additional leads from your website. Offering real-time engagement, live chat allows you to respond to site visitors’ queries immediately, eliminating wait times and enhancing the customer experience and increasing the likelihood of converting visitors to customers.

But with the recent growth of AI, one question remains: what is the best way to manage your live chat? Do you do it yourself, rely on a chatbot, or hire someone to do it for you? In this article, we will explore the pros and cons of each approach and offer some insight on the best way to implement live chat into your lead management.

Why Do You Need Live Chat?

The average conversion rate (i.e. convert a visitor to a lead) for a website is under 3% – that’s 97% of potential customers who visit a site and don’t convert.

Chat is a very effective strategy to deal with declining leads as visitors can see live chat as a softer way to engage with the site than submitting a lead form.

Imagine walking into a physical showroom and being met by a helpful salesperson ready to guide you, answer questions, and make suggestions tailored to your needs. Now, translate that to the digital world: your website is your Digital Showroom, and live chat functions as your ever-present digital salesperson. Live Chat can actively greet visitors, initiating a meaningful conversation that helps identify their requirements, for example, it can be used to qualify visitors and ask questions such as:

‘What are you looking for?’

‘Do you have a trade-in?’

‘What is your budget?’

“do you need finance?”

Live chat transforms your website from a passive digital brochure to a dynamic sales platform by offering immediate engagement, effectively converting casual browsers into engaged leads. This active engagement method significantly boosts website conversion rates, turning passive interest into engaged leads and enquiries!

In addition, the modern consumer is constantly on the go and values convenience and accessibility. With live chat, your business can provide 24/7 support, ensuring that no matter when or where your customers are.

In our experience, live chat can give businesses a 30% boost in conversions – a remarkable increase and one that is potentially worth tens of thousands in sales. Now that you understand what’s on offer, let’s dive into some of the options for live chat.

Self-Managed Live Chat:

Data from the auto industry has shown that the first few minutes are crucial when responding to an inquiry, and the best salespeople will aim to respond in 10 minutes or less.

Source: eProfitfocus 2022 Australian Car dealer benchmarks

With live chat, that 10-minute window can be reduced to a minute or less, and with a self-managed live chat, you can respond to each unique inquiry as it arrives personally. Although potential customers highly value this personalised service, it is also inefficient from a business perspective unless you are a high-volume dealership or part of a larger group that can build a dedicated team for this task.

If you’re the GM of a dealership, your focus needs to be on growing the business, not spending your day responding to enquiries. Additionally, a self-managed live chat inevitably runs the risk of creating longer delays in your lead management, as customers are forced to wait for a response every time you step away from the chat, whether that’s to have your lunch or respond to something within the dealership that needs your attention.

Another downside of self-managed live chat is that it is usually placed in the hands of someone (such as a receptionist) who already has another job. Although they will be very engaged for the first few days, inevitably, their other duties take priority, and they quickly drift away from managing the live chat.

So, while self-managed chat may offer a cheap solution, it quickly adds little value to your business and frequently leads to frustrated customers.

Chatbots: Efficient But Not Always Effective

Chatbots are automated programs/plugins that use an algorithm to respond to numerous inquiries simultaneously and match them with the best response. While chatbots are highly efficient and have the advantage of being online 24/7 (meaning no delays for customers), they can be limited in interpreting an inquiry and matching it with the best answer or solution.

The fact that chatbots are always online offers an additional benefit because a significant portion of enquiries and leads come outside of business hours: 39% on carsales and roughly 30% on Machines4U. In our own experience, we have seen up to 60% of live chats come outside of business hours on client sites that have live chat installed.

Despite this, the biggest downside of chatbots is the simple fact that they aren’t human. Customers today constantly deal with chatbots, robocalls and automated customer support, all leading to frustration and dissatisfaction because they can’t speak to a human.

Though chatbots might present a cheaper and more efficient alternative to employing a real person, a bad experience with a chatbot can sour a potential customer on your business and hurt your ability to convert leads into sales.

Live Chat Agents: The Power of a Real Person

A live chat agent is a customer support person who only deals with live chat inquiries, and represents a middle-ground between managing your live chat yourself and handing it off to a chatbot. The most significant benefit of a live chat agent is that they possess the knowledge and intuition of a real person, allowing them to adapt their response to the needs of the individual customer.

Compared to chatbots, live chat agents can respond to inquiries with greater empathy and a more personal touch, offer a more natural chat experience with the customer on the other side, and solve more complex problems that a chatbot might not be equipped for.

This last point is often the greatest friction point with chatbots, which are great at dealing with generic inquiries but lack the ability to respond to issues that don’t fit the framework they are trained on.

For instance, a live chat agent can tailor their response and set the correct expectations when an issue needs to be referred to the Sales or Support teams. In contrast, a chatbot might take the conversation in the wrong direction or around in circles, creating a bad experience for the customer that puts them off your business entirely.

So, What's the Best Live Chat Software?

As with all decisions, the right approach will depend on the needs of your business. If you’re a small dealership that only receives a few inquiries a day, it’s entirely possible to self-manage your live chat within working hours.

As a general rule, human interaction is always preferable to an automatic one, and wherever possible, we recommend using real, live chat agents to handle your inquiries and provide real-time customer support.

However, if your business is very large or lacks the budget to employ enough people to deal with your inquiries, then a chatbot (or a chatbot that screens and funnels inquiries to live chat agents) might be the best option for managing your leads and inquiries.

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