Live Chat is a type of social interaction tool for the internet that allows the sending and receiving of short text messages between two remote PC's connected to the internet. The concept has been around since the 80's and by the mid-90's had become a very highly popular way of interacting with people all over the world.

Initially, the ability to 'chat' using text messages was available to use for anyone by simply installing basic chat based software like mIRC and later bundled in messengers like Yahoo and MSN. As time went by, advancements in chipsets and internet technology as well as bandwidth brought about an upsurge in popularity with many vendors offering smaller high functionality chat softwares, some of which enabled voice chat or VoIP.

More recently, voice chat was introduced on the web. Hosted on web servers and enabled within HTML pages on websites to provide basic chat functionality. This was a blessing for web commerce.

How Live-chat becomes an all round web commerce tool

Customer support over websites has been a difficult prospect as long as e-commerce websites (such as retailers) have existed. Initially, e-mail and comment forms were used (and are still being used today) to enable visitors on websites to leave queries and contact customer support officers. Later on, phone based customer support was used to serve website customers. A major issue with these customer support models is that queries can only be answered with a delay. How short this delay will be is inversely proportional to the number of customer services officers (meaning higher cost). With these models, there were several other problems.

Comment forms and e-mail: email black holes

With these in place, it is easy to handle a low volume of requests and queries from customers. However, as time goes by, the volume increases with increasing numbers of visitors and therefore an increasing clientele. What follows is fairly simple to understand from a web businesses perspective. Either a larger team (meaning more costs incurred for customer support in salaries/benefits and workspace) is required or customer queries are responded to with long delays (there are just so many e-mails/comments a customer services officer can respond to in a given time) or not responded to at all (email black holes). The delay is costly in terms of losing business, dissatisfied or angry customers and therefore detrimental to the web business both in the short term and long term.

Phone or VoIP phone support: Please wait while we connect you to the operator

Phone set-ups are expensive, and while VoIP is cheaper, a larger team is still required to handle a larger volume of incoming calls (again higher cost). A single operator can only really talk to one customer at a time, and the costs incurred to maintain a phone setup (bills, workspace and salaries etc) are high.

How Live Chat helps e-commerce and online customer support

Live chat however manages to circumvent these problems due to its unique nature and can also be used as a sales support tool. The concept is easy to understand with respect to the problems outlined above. An operator communicating via chat on a website can actually approach visitors and offer assistance, garnering customer confidence. Such a chat based operator can easily multitask, chatting with several customers at a time and therefore remove the need for a larger customer support team and be able to market the products and services of offer on the website at the same time. This allows chat-based support to encompass many functions at the same time while the web business incurs a fraction of the cost.