What is Live Chat Software? Analysis of Features, Benefits and Pricing

What is live chat software?

Live chat software is a service that allows immediate customer support and information. It works as an instant messenger where your customers can communicate with you in real time. A live chat support has the ability to promptly and conveniently answer customer inquiries that can bump up your website conversion rates.

Quality customer service is fundamental to the long-term success of any business. Customers don’t just equate to sales. They are also one of your best bets in spreading the word about your services or products. When it comes to your website, providing good support fosters your relationship with your customers and helps you grow your customer base. One of the challenges customers face in online shopping is being disconnected from a personnel who can answer their questions precisely and promptly. Businesses can mitigate this matter by providing an engaging experience for customers using live chat software.

In this article, we’ll discuss the substantial aspects and definition of live chat software to help you get a better understanding about it when deciding if it’s right for your business and choosing which product matches your business requirements. Here are the topics we’ll cover in detail:

  1. Benefits of live chat software
  2. Features of live chat software
  3. Types of live chat software
  4. Buying factors of live chat software
  5. Examples of live chat software
  6. Pricing of live chat software
  7. Potential issues
  8. Latest trends

Improving your customer service with live chat support

In this fast-paced digital era, customers look for convenience and quick results. Hence, adapting to this dynamic environment and providing prompt solutions set you apart from your competitors. Most research in the industry shows customers appreciate the timely and accessible support. Live chat receives 73% satisfaction levels for any customer service channel. It gets the highest rating compared to email’s 61% and phone’s 44%. Moreover, the American Marketing Association found an average increase of 20% on conversions for B2B companies using live chat.

The percentage of customer satisfaction levels by a survey of 2000 consumers conducted by eDigital Customer Service Benchmark. (Source: Comm100).

In a separate research by Forbes, 92% of customers feel satisfied when using the live chat feature compared to other communication channels including voice (88%), email (85%), and web form (85%). Meanwhile, social media platforms such as Facebook and Twitter got 84% and 77%, respectively.

With that, there is an increasing number of companies and online ventures that integrates live chat on their websites to offer customers quick responses. In the process, this will bolster sales and customer loyalty. Aside from shopping websites, here are some of the industry verticals that use the software in their daily operations:

  1. Travel and hospitality
  2. Education
  3. Medical professionals
  4. Automotive
  5. Real estate
  6. IT solution providers
  7. Airlines
  8. Web hosting companies

Benefits of Live Chat Software

Why use live chat software? Engagement and communication are key factors required for customer satisfaction. Live chat can address this if implemented properly. Knowing the following advantages of live chat software can help you maximize the software’s effectiveness to boost your business operations. Here are some of its benefits:

  1. Providing convenience to customers. A live chat system lets customers multitask while doing online shopping and waiting for your chat support. The wait time is less than a call center. Providing assistance and resolving issues immediately is crucial because 60% of customers hate waiting for longer than a minute. On average, live chat operators respond within 23 seconds and 46 seconds to solve a customer’s problem. It is also hassle-free to use compared to dialing a 1-800 number and navigating through a maze of numeric options and prompts. Forty-four percent of online consumers reveal one of the most crucial features of a website is having a live person who can answer their questions while in the middle of their online purchase.
  2. Increasing sales. Having a real person who customers can talk to while making a purchase, especially when they’re confused or hesitant, gains your website visitors’ trust and loyalty for a successful sale. In fact, 62% of consumers are more likely to return and purchase again because of the feature. Also, 38% revealed they made a purchase due to the chat session itself. An agent who can provide immediate response to a customer’s question and understand his/her needs can walk them through the sale process and recommend the right products or services which ensures the customer’s shopping cart can make it through check out. This decreases cart abandonment by up to 30%. By increasing conversions at least 20%, purchasing a customer chat software for your sales team also shows to be a good business investment with a 300% ROI rate.
  3. Opting for cost-effectiveness. In business, time is money and it is one aspect that’s covered by a customer chat support. It reduces phone call expenses (in terms of person-per-hour costs and toll charges) and average interaction costs. Doing a live chat is more reasonable than a phone call because a single agent can handle multiple chats at one time. It is even 17-30% cheaper than a phone call. The waiting queue can be cut down to a fraction of the time spent waiting for phone support with a deflection rate of 70% from calls to live chat. This increases sales and efficiency for handling customers simultaneously and also lessens the need for hiring more representatives.
  4. Giving you an edge over competitors. The internet is a highly competitive landscape. A considerably high number of online businesses are still not utilizing a live customer chat software. Out of 1,000 websites, only 9% implements this type of support. Meanwhile, online consumers who use live chat increased from 38% to 58%. Having an edge to your competitors can significantly make you a more desirable choice. Staying ahead of them is also vital, especially since it’s expected to be implemented by more businesses in the coming years because of its cost-effectiveness. Its market worldwide is predicted to further increase to $819.2 million by 2020, indicating that more and more users are considering live chat software a highly preferred customer digital engagement channel.
  5. Addressing customer pain points. Pain points refer to a customer’s need or frustration that’s yet to be fulfilled. Many marketers turn this pain points into profits and sales opportunities by providing a resolution. While most of them try to address this in social media through blog content, using live chat is more personalized. It gives an immediate access for customers to ensure the product performs as well as it’s advertised or inquire about a promotion to give them the discounts they want. The management can also view chat histories to have an insight on their visitor’s common pain points and prepare an effective solution to target them. Furthermore, the chat histories allow supervisors and administrators to discover and find ways for resolving a customer’s problem by sorting, searching, and filtering these pain points quickly.
  6. Accommodating quickly. Nowadays, customers want immediate responses from enterprises no matter its scale. Having live chat is not just for large companies, but it’s catered for small and medium-sized businesses as well. Online transactions are abandoned by 42% of online US consumers if their concerns and problems are not addressed promptly. Delayed responses are frustrating for customers. This can lead customers to abandon their online shopping cart, exit your website, and look for other solutions elsewhere. If your website has knowledge bases and helps articles, you can maximize them by allowing your customer chat support to “push” links through chat windows as these materials may be hard to find for your website visitors.
  7. Boosting customer loyalty and service. Live chat provides high customer satisfaction levels compared to other support channels. It’s easy to see why customers tend to return to a business that makes them feel confident doing transactions with by providing a hassle-free, easy, and instantaneous support. The live chat button itself gives confidence to 90% of customers that they’ll get help when they need it.
  8. Expanding market reach. Most of the time, the reach of your business may be limited to your local area as it’s challenging to have customers who will travel great distances to request services and make purchases. Simply having a website doesn’t ensure more customers will be comfortable in placing orders remotely. However, having a live support reassures customers by being able to contact you easily to arrange purchases and make inquiries. This even includes international customers who can’t reach your company via phone because of expensive international dialing rates. It is also proactive so your agents can send chat requests to your customers manually or automatically using a pre-defined set of rules. This is done through smart and sophisticated monitoring and tracking features that alert your agents of new and recurring website visitors.

A sample live chat dashboard of LiveAgent.

Features of Live Chat Software

What does live chat software do? This software program provides a wide array of functions for your website. Here are some of the key features of a live chat support software:

  1. Proactive chat. A feature where your operators initiate the chat and reach out to your website visitors by offering instant help. This is a powerful tool for increasing customer satisfaction and engagement. It may come with a custom message in an image or small live chat window.
  2. Visitor tracking. This serves as a comprehensive tracking facility that provides you a deeper insight into the behavior of your website’s visitors (who are also your potential clients). It includes information such as the amount of time spent by a visitor in the chat, your agents’ overall activity, conversion tracking, and record of transcript reports, among others.
  3. Chat rating. Customers can rate their chat conversation with your agents. Receiving feedback from your customers provide crucial information on the quality of your support and if there are areas you can improve on for customer satisfaction.
  4. Chat routing. Support agents transfer chats to any free operators or automatically route the customer to the right agent. This is beneficial for your agents so they won’t be slumped when the chat volume rises and your customers will get appropriate and prompt responses.
  5. Operator monitoring. Supervise your operators using relevant insights regarding their performance. This lets you see who among your agents are doing well and who are underperforming. You can use this information to train them and improve the quality of your chat support.
  6. Chat monitoring. This feature lets you track detailed chat conversations in real-time and see who among your agents are currently chatting. Having this control also increases your agents’ efficiency and productivity.
  7. Canned responses. Speed up your agent’s response time by allowing canned responses. Its definition refers to the snippets of text that are frequently used in chats. Saving and reusing them saves time as your agents can utilize it in only a few keystrokes on subsequent chat sessions.
  8. Mobile optimization. Numerous people use their phones when browsing the internet, hence, this feature lets your website provide assistance to various types of your website visitors no matter what device they are using.
  9. Offline forms. This lets your customers reach you even if your chat agents aren’t online 24/7. Message routing creates tickets for offline messages. An example is turning the chat widget into a contact form which will be emailed to an agent when a visitor fills it out.
  10. Smart triggers. This sets a custom trigger for specific circumstances using a smart chat system. For instance, agents are notified about a recurring website visitor so they can commence a proactive chat session.
  11. File transfers. As needed, having an efficient, built-in function for transferring files between chat operators and website visitors ensures convenience. It also has clear controls on compatible file types and file sizes.
  12. Queue times. A feature that provides your visitors a close approximation of the wait time before starting a live chat conversation with your agents, especially when there’s a high volume of chat. Waiting for an indefinite time may lead your visitors to exit the website which can hurt your company’s customer satisfaction level. It may also mean a loss of a potential sale.
  13. Reports and analytics. This is an essential feature so you can monitor significant data such as operator activities, chat histories, conversion tracking, visitor details, and average time spent on chats. These data are essential for determining effective strategies and areas for improvement.

Types of Live Chat Software

How does live chat software work? In essence, it works based on your specific needs and objectives. Customers have an accompanying purpose or goal of accomplishment when they make an inquiry. Providing the right response and information is crucial for an effective customer support. In order to build a competent live chat support, identifying which type you must engage is important. Check out these types below:

  1. Live text chat support. Most applications offer text-only chat support. This boasts high conversation rate and engagement as it is preferred by many customers. Most of them don’t offer added costs. 
  2. Live video, voice and text support. Customers can see and speak with your agents. A primary advantage of this type is providing a more personal engagement with your customers. This fosters a sense of credibility between your agent and your customer. An example of a situation where this is beneficial is during an e-commerce transaction when a customer has to pay for a large amount of money, hence, he/she wants to verify if you’re company is reliable or not.
  3. Video, voice, text, and co-browsing. In addition to the types mentioned above is a feature called co-browsing. This process involves your customer and customer service agent to navigate an application together in real-time on the web. They can view and access the website or digital file together at the same time. It is worth noting that co-browsing is different from screen sharing—where only one party can control the screen. This is valuable for filling out online forms and providing a peace of mind for clients that their personal details are not carried over and saved.

Drift’s performance rating dashboard.

Buying Factors of Live Chat Software

Identifying the purpose of live chat software and ensuring it matches with your business goals and objectives is essential for maximizing the system and achieving success. With the numerous products available, it can be challenging to choose one. Here are the things to look for when choosing a live chat support software for your business:

  1. Cloud-based vs. self-hosted. There are key differences between these deployment options. Self-hosted (on-premise) services are hosted on your organization’s own technical infrastructures. A cloud-hosted software is facilitated by the internet and it resides on a third-party server. While choosing one depends on your business requirements, there’s a reason why many products nowadays are available as cloud-hosted apps. It has regular updates, no needed IT infrastructure, accessibility anytime and anywhere, security and bug control, 24/7 support, and data backups and recovery.
  2. Easy customization. Branding is important for businesses, therefore, all elements of your website must deliver a consistent visual experience, including your live chat interface. Choosing one that is customizable is essential so you can promote your brand image cohesively through personalizing languages, chat banners, styles, colors, and fonts, among others.
  3. Value vs. price. When considering pricing plans, going for the cheapest option is not necessarily the best choice. While other products and packages may come at a higher price tag, its advanced features may give value to your business and offer higher returns in the long run.
  4. Third-party software integrations. Seamlessly integrating your software with current business tools is crucial for a convenient and hassle-free data flow. Taking into consideration how well a software integrates with various relevant, feature-packed applications helps you stay ahead of the competition.
  5. Onboarding. Choose a tool that’s easy to use so you won’t have to undergo a long learning curve in understanding and setting it up. There are many options that can be easily integrated into your website by copy-pasting chat codes on the web page which lets you initiate it within a few minutes.
  6. Simple or multi-channel support. Consider your business requirements on what type of chat support you need. Some offer additional features and functions to provide 360-degree support such as integrations of call-back support, knowledge base, and NPS surveys.
  7. Mobile support. It is important for a customer chat support to be mobile-ready with the number of people accessing websites through their phones. It must be available for all platforms and devices to cater all your customers. Having native apps on iOS and Android is also valuable.
  8. Security. Being protected from cyber hacking and data breaches is an absolute priority for businesses. The vendor’s active firewall, infrastructure in use, data backup plan, and privacy policies are only some of the things you must inquire about before making a purchase.
  9. 24/7 support. Having a reliable software through phone, email, or chat is crucial when choosing a live chat system as it reflects how well their product works. It is important to be able to reach out to your vendor 24/7, 365 days a year and ask for assistance when you need it.

Examples of Live Chat Software

Now that you know what is live chat software, you’re ready to look at some products to consider. Here are 5 of the leading examples of live chat software:

  1. Freshdesk. It is an intuitive customer support software rich with features that are designed to save time by automating repetitive tasks, centralize all your customer conversations, and resolve issues faster with an effective collaboration. It provides solutions specifically catered to the needs of enterprises and SMBs. Enterprises get faster collaboration between numerous teams in order to deliver high-quality customer support. SMBs, meanwhile, can focus on growing their business as the software takes care of the company’s support operations. Freshdesk has a rich set of features to easily keep track of conversations through effectively managing tickets. It employs live chat on your helpdesk without any required integration or setup. Additionally, it routes chats with the right agents and experts, identifies where your customers are from, and tracks performance using chat reports.
  2. LiveAgent. A highly reviewed help desk software for small and medium-sized businesses, LiveAgent provides a wide range of features to centralize all your customer requests from various channels. It offers a built-in online chat support with no external applications. The real-time chat adds human factor to your website. It also has proactive chat invitations with a custom pop up message and time to talk with your customers as they are interacting on your website. Other features include customizable live chat buttons, button animations, invitation gallery, window docking, contact form gallery, overview, history, distribution, real-time typing view, embedded tracking, and max queue length. Offline support portal is also available for reducing customer support costs and workload.
  3. Zoho SalesIQ. A part of Zoho’s suite of solutions, this live customer chat software also incorporates analytics and website visitor tracking. Engaging with your customers is made easy as it tracks your visitor’s digital footprints and identifies if they are new or recurring visitors to help you construct the right proactive chats. Some of its key features include initiating automatic intelligent triggers, real-time lead scoring (whether they are hot, warm or cold prospects), and real-time traffic monitoring. This magnifies visitor engagement as you can locate customers and prospects, analyze the source where they entered your website, and know which products or pages they’re looking at. It also integrates seamlessly with the rest of Zoho CRM tools to convert data into actionable leads and drive engagement.
  4. Freshchat. This is a modern messaging approach to live chats with top features including bots and campaigns, conversations, routing, self-service, team productivity, integrations, and mobile compatibilities. Its priority inbox, custom views, unlimited contacts, message channels, web messengers, and team widgets allow for a continuous and familiar messaging experience for your customers. It is equipped with robust features that bring customer conversations to a more personalized level. This latest addition to the Freshworks suite facilitates engagement and communication using targeted strategies and solutions for a more effective approach. The smart tech automates tasks and leap captures, improves team collaboration, auto-assigns conversations with the right agent, measures business growth, and makes the system accessible to all users.
  5. Drift. It offers a unique platform as a conversation-driven marketing software. It discards the traditional sales and marketing strategies of using forms and follow-ups. Instead, it turns conversations into conversions to connect your business with effective leads in real time. Bots, specifically Drift’s LeadBot™, serve as your intelligent personal assistant that automates marketing, qualifies your site visitors, and identifies the right sales agent a customer must converse with before booking a meeting. It is built for teams that are always on-the-go with intuitive mobile and browser apps. Integrating with your existing sales and marketing stack (including marketing automation, email platforms, CRM, messaging, and knowledge base, among others) is accomplished seamlessly.
  6. RichCall. This live communication solution arms customer service agents with video and collaboration tools in order to help them more effectively engage with customers, whether used for sales and marketing pitches or resolving customer issues. It also supports file sharing and text chat for customer communications. Through these functionalities, they can better explain their presentations. With this visual way of customer communications, customers will no longer be left imaging how your products work. RichCall boasts a high 99.99% uptime to ensure all customers can reach your experts at all times. This tool can be deployed in any place with heavy foot traffic, from video kiosks to banks.

Zoho Sales IQ’s simple and clean sample dashboard.

Pricing of Live Chat Software

The cost of live chat software varies for different vendors since they are also equipped with its own tools and features. Most of them offer a free trial period that ranges from 14 to 30 days to let you get the hang of the software and see if it matches your needs. Below are sample pricing plans of the leading live chat systems in the niche:

  1. Freshdesk. Pricing comes in five options to cater your organization’s size. It starts with a free plan with the basic features like basic phone, social channel, knowledge base, email channel, and access to app gallery. For more powerful features, you may purchase the premium plans that range from $25 to $99 per agent per month. Choosing annual billing gives you lower monthly prices that start from $19 to $89 per agent.
  2. LiveAgent. Available in three subscription packages (Ticket, Ticket+Chat, and All-Inclusive). The cost starts at $12/agent/month and can reach up to $59/agent/month as more advanced features are added. Those who opt to purchase a downloadable license may install the system on their own server and pay a one-time fee that starts at $11,950.
  3. Zoho SalesIQ. In addition to a free trial, it allows up to 2 users a free subscription plan that are equipped with basic features and limited storage. The Basic plan is priced at $17 per month billed annually (3 users), Professional for $53 per month billed annually (5 users), and Enterprise costs $115 per month billed annually (10 users). The higher the plan, the more advanced its features are.
  4. Freshchat. Sprout is offered for free with basic features. Blossom, Garden, and Estate offer higher and more innovative features priced at $15, $24, and $39 per team member per month, respectively. This is to tailor different business needs and scales. The pricing plans are billed monthly or annually (with 20% off discount).
  5. Drift. It comes with different pricing plans to cater different types of users. The free plan includes basic live chat, one seat, and 100 contacts. Starter plan ($50/month) enables sending targeted inbound messages to website visitors, Pro ($250/month) increases qualified leads using Outbound messages and Bots, while Enterprise ($1,000/month) is packed with all the advanced features and the best leads.
  6. RichCall. For $500, you can take advantage of 4 concurrent connections. The rate is cheaper if you opt for more licenses.

Potential Issues

After discussing what is live chat software, it’s time to tackle the roadblocks you might experience. Not all software programs are created equal. There are circumstances when technical difficulties and situational challenges arise. Here are some of the potential issues you may encounter with the software:

  1. Internet connection issues. This applies especially to a chat support that includes video, voice, and co-browsing as these require faster internet connections. The slow internet may depreciate the clarity in hampering the conversation that distorts questions and answers between the customer and agent. Meanwhile, text-only chat rarely experiences this matter.
  2. Chat agents not replying immediately. Replying in a timely manner is crucial. Otherwise, it defeats the purpose of engaging the system. Customers don’t want to wait too long for a response and they are more likely to leave if your chat agent doesn’t respond in a timely manner. Ensure your representatives are active and quick to reply.
  3. User preference. Not all users will like it or know how to use it, especially for older visitors. Having a user-friendly interface helps solve this issue. Offering other channels such as email and phone support is also essential.

The demand and popularity of online channels get a rapid increase as more and more people use the internet to purchase products and services. The advancing technology ensures to keep up with the recent consumer demands for higher satisfactory levels of your clients. Below are some of the latest trends of live chat systems that continue to evolve:

  1. Co-browsing and screen-sharing. This is a great tool for users to interact with the website in real-time together for better guidance and assistance. Your agents may even assist completing tasks on behalf of your customers.
  2. Social media integration. Enabling a live chat tool on your social media increases your customer reach as many consumers widely use social media channels to interact with their preferred brands. This also cuts down time in redirecting the customer to your website.
  3. CRM integration. This improves your customer service quality by getting background information of your customer through chat histories. This saves every chat and converts your customers into a potential sales lead.
  4. Initiating chat. Reaching out to customers first is an excellent proactive technique as some customers may hesitate to chat first. Shoppers are 6.3 times more likely to be converted into customers if they are invited to a chat.
  5. Automated pop-up message. This fosters customer engagement as you can customize a pop-up message for regular website visitors. You may even use this feature for visitors who browse a specific content and make an offer.
Christopher Robinson

By Christopher Robinson

Christopher Robinson is a senior productivity research analyst who specializes in optimizing online collaboration and project management using Scrum and agile approaches. In his work, he always emphasizes the need for distributed work training and the formation of efficient work habits. His work was mentioned in various business publications, including Entrepreneur and InfoQ. He’s a strong proponent of the GTD model. He has been cooperating with the FinancesOnline team for 5 years now, and his publications always focus on practical aspects of productivity tools that can have an actual, transformative impact on a company.

Joann Bloom says:

Nice Article! I agree with writer research live chat have lots of benefits in a website that's my personal experience. I used LiveAdmins Live chat software on my website to Provide good and quality customer service to website user that's my main object. The major benefit I gained is my Online sale increase by 60% and help to retain old customers to timely solve their issue.

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