What is Live Chat? Definition, Examples, & How It Works

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Picture this: a customer has just received an item that they ordered from your website – only to realize that it’s the wrong size or color.

You might wonder: “What’s the most efficient way to speak to this customer in order to rectify their issue?”

You’re not alone. Many business owners are trying to navigate the complexities of customer service, especially in this digital age. 

Well, have you ever thought about using a live chat feature? Live chat can be a lifesaver for many customer-related queries and concerns. 

In this article, we’ll talk about how live chat works, provide examples of chatting and discuss the benefits of live chat for a company’s customer service efficiency. 

At the end, you’ll feel more than prepared to decide if a live chat feature will improve your business operations.

LiveChat

LiveChat is a complete customer service platform that delights your customers and fuels your sales.

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Key Takeaways

  • Live chat for customer service is a feature that enables customers to digitally connect and talk with customer service agents.
  • Live chat begins with a customer initiating a chat through your customer service link. Once a customer is in the chat window, they can type their questions and be directly connected to a customer service representative who can pull up their information and resolve their issue.
  • Chatbots are not the same as live chat, as chatbots display automated messages for general inquiries.
  • Live chat has multiple benefits for businesses such as automation, higher conversation, and instant communication with customers.

What is live chat customer service?

Live chat definition

Live chat for customer service is a feature that enables customers to digitally connect and talk with customer service agents. 

These customers may have questions about their orders, complaints about their deliveries, and other matters that can be addressed online.

How does live chat work?

Live chat begins with a customer initiating a chat through your customer service link. 

This is usually either a chat window that will pop up as soon as they enter the customer service portion of your website or a “live chat” button that appears (depending on your website design). 

Once a customer is in the chat window, they can type their questions and be directly connected to a customer service representative who can pull up their information and resolve their issue. 

Live chat is great for efficiency and documentation purposes, among other things.

Live Chat Examples

For example, Amazon employs a live chat feature that enables their customers to chat with representatives when they have questions or concerns about their orders. 

Each customer is assigned to a live chat agent who is tasked with reviewing their information and resolving the matter at hand.

Chatbot vs. Live Chat

Chatbots are not the same as live chat, as chatbots display automated messages for general inquiries.

Take a look at the chart comparing the two customer service tactics below:

ChatbotLive Chat
Robot (not AI)Real person
Automated messagesPersonalized messages
No employees requiredEmployees required

Further reading: Chatbot vs. live chat

Benefits of Live Chat

Live chat has multiple benefits for businesses, such as automation, higher conversation, and instant communication with customers.

  • Automation – Live chat provides an automatic connection between customer and agent, which means that customer issues will be resolved more quickly.
  • Higher conversions – If potential customers are on the fence about buying an item, live chatting with a representative may convert them into purchasers. 
  • Building a database of contacts – Live chatters can be cataloged by the chatting system, which may provide your organization with a built-in database of contacts.
  • Instant communication with customers – In terms of efficiency, live chat is the best way to connect with customers instantaneously. Once the customer starts a chat, a customer service agent can immediately join and begin to assist the customer.  
  • Omni-channel experience – The omni-channel experience offered by live chat aligns with a new strategy of businesses to provide integrated customer service options across multiple channels (phone, website, or in-person). 
  • Improve customer journeys – The journey that a customer takes through the experience of shopping with your organization is essential to your retention of them and their part in word-of-mouth marketing. Live chat always improves customer satisfaction through its efficiency and ease of use.
  • Reduced average handling time – The average time spent on customer issues can drag a business down in terms of productivity. Live chat can reduce the average handling time per customer, which may make the entire business model more productive. 
  • Integrates with your CRM – Customer relationship management systems (or CRMs) are tools that businesses use to monitor and update their marketing and customer service strategies. Therefore, you can integrate the data gathered from live chat into your CRM.

Live Chat Features

Live chat comes with great features for both companies and customers, such as live typing, transcripts, and a live view of website visitors. 

  • Live typing – It can feel frustrating for customers if it’s unclear whether the customer service agent is in the process of responding after they’ve asked a question. Live chat fixes this issue, as customers can see as soon as an agent is typing.
  • Live view of website visitors – For business owners, live chat can offer a real-time view of the website visitors and can record those numbers for marketing and conversion efforts. 
  • Transcripts – Live chat can produce transcripts of conversations between customers and agents, which is ideal for documentation purposes.
  • Automated responses – Although live chat and chatbots are separated by live chat’s use of real people, an automated message can be generated in live chat that details which position the customer is in line or the average wait time. 
  • Customer surveys – At the end of each customer/agent interaction, you may include a customer survey prompt that can ask simple questions about their experience with the live chat service or with the company in general.

Best Practices

If you choose to implement a live chat feature, it is important to know and understand live chat etiquette to make the most of this technology. 

  1. Have an offline strategy – If your systems are offline, it is important that you can handle customer service dilemmas while you work on rebooting your technology.
  2. Provide faster customer support – If you decide to implement live chat, make sure that your customer support is becoming faster. This way, customers can see the improved efficiency, which may make them more likely to be repeat buyers. 
  3. Educate your customers – Take the live chat opportunity to educate your customers on your products or to answer their questions. However, if the customer does not engage with the live chat, don’t inundate them with messages.
  4. Initiate proactive sales – If you notice that a customer is spending time in a certain section of the website, you can initiate a live chat pop-up to remind them that they are more than welcome to consult an agent if they have questions. 
  5. Collect feedback – You can integrate your CRM with your live chat service, as mentioned above. As you collect feedback, you can see how efficient the live chat approach is, and what might need to be changed.

Best Live Chat Providers

Are you ready to get started with a live chat service for your business?

Great! Take a look at these live chat providers that are top-of-the-line for customer service:

LiveChat

LiveChat homepage

LiveChat is as simple to use as the website name is to remember.

LiveChat will delight your customers and improve your sales through their seamless integration of live chat into your current customer service protocol. 

Sign up for LiveChat for free!

Help Scout

Help Scout homepage

Help Scout is a great live chat provider that puts all of your customer service activities in one efficient place. 

In fact, people who use Help Scout can expect to increase their customer interaction rate by 50%!

Start your free trial of Help Scout!

Tidio

Tidio homepage

Tidio’s live chat angle involves the integration of artificial intelligence (AI) and live customer service. 

Conversational AI is the focus of the next generation of customer service, as it feels like talking to a real person but saves time and money by circumventing the hiring process.

Get started with Tidio for free!

Should I use live chat for my business?

Although every business’s approach to customer service is different, live chat is a game changer for every organization – especially in the realm of efficient problem-solving and customer relationship management. 

Be sure to check out the 3 recommendations for live chat services and choose the provider that aligns the most closely with your business objectives. 

Also, you’ll find additional questions and answers below in the FAQ section.

Good luck in all of your customer service-related endeavors!

FAQs

What is the function of live chat?

Live chat functions to streamline your customer service interactions by allowing customers to easily chat with representatives and have their questions resolved on the spot.

Who is live chat best for?

Live chat is best for businesses that are producing a lot of sales and would like to interact with customers more readily.

What you shouldn’t use live chat for?

Don’t use live chat to solve legal matters and always maintain a positive or neutral attitude when talking to customers, as all interactions can be recorded from either side.

LiveChat

LiveChat is a complete customer service platform that delights your customers and fuels your sales.

Sign up free

Donny is the founder of SMB Guide. He is a seasoned small business owner and entrepreneur, with over 17+ years of experience growing and building companies. He is a well traveled and multi-faceted individual with several successful six figure business exits.