New live-chat software helps Web merchants convert browsers into buyers.
The customer enters McGrath Acura of Westmont, Ill. Within seconds, the salesperson pounces.
"Hello. My name is Grace. How can I help you?"
"Just looking," the visitor replies.
"Let me help you with that," Grace continues. "Are you looking for new or preowned?"
It's a conversation you'd expect to hear at any auto dealership. Except that this didn't happen in the show room. The exchange took place online, at acurabymcgrath.com. Last year, general manager Ken Girard added a new feature to the dealership's website: live chat. Now, instead of waiting for a visitor to click on a button and ask for help, a service agent detects the visitor's presence on the website and initiates a real-time conversation. "It really sets our site apart," Girard says.
For most of its brief history, online shopping has been a largely anonymous process, with Web-based merchants content to wait for browsers to initiate an interaction. But now, more businesses are adding technology that allows them to step up and make the first move and offer a virtual "May I help you?" The idea is to introduce a human factor into virtual shopping. "People like to buy from people," says Farrakh Azhar, CEO of Live Admins, a Chicago-based company that helped Acura of Westmont create its live-chat experience. "It's the same as walking into a store and having a staff person greet you. It makes a connection, a one-on-one conversation."
Even now, years into the Internet revolution, e-shopping remains a dicey business. Research shows that 98% of visitors leave without making a purchase. Indeed, about half of all Web shoppers who put an item into a virtual shopping cart leave without buying it, according to the E-Tailing Group. "As an industry, we need to look at why 98% of the people who visit us leave without making a transaction," says Robert LoCascio, CEO of New York City-based LivePerson, a provider of inbound and outbound chat technology. "Especially since the rate of impulse buying is much higher in the offline world. Why are we still at 2%?"
He and others insist that the answer lies in making virtual salesmanship more proactive. Web shoppers should not have to sacrifice service for the privilege of shopping in their bunny slippers at 2 a.m., LoCascio says: "We can do more."
Mark Denham, CEO of 247 Workspace, is onboard. The company, a seller of office furniture based in Los Gatos, Calif., added chat to its website in early 2005. The goal was to provide more qualified leads to the company's sales reps. Because most customers are other business owners looking for things such as conference tables and cubicles, the sales process is often long and complex, involving a great deal of back-and-forth between the sales rep and the buyers. "There are a lot of choices and particulars in our sales process," Denham says. "We were finding that having an individual try to sort through 600 pages on our website was overwhelming."
The outbound chat aims to simplify things. It looks a lot like Instant Messenger, though customers don't have to download software for it to work. Not every visitor to the site gets a greeting. But if you hang around for a few minutes or get seven or eight pages deep into the content, a live agent will say hello and offer to help. In most cases, the agents simply help visitors find the information they're looking for. "Individuals who have engaged in text chats have a much higher sales probability than a standard lead," Denham says. "Once we engage in a conversation, we find the probability of a sale goes up dramatically."
Other companies use the tactic with a bit more restraint. Jesse Kelsey, marketing project manager of eRug.com, says he loves to shop online precisely because he knows he won't have to fight off a lot of pushy salespeople. So his company, based in Redwood City, Calif., is designing a live-chat system that will give shoppers an unmolested five minutes. After that, a text box will appear, saying, "If there's anything we can do to help, our design consultants are here for you." The company's four design consultants will do the chatting, and Kelsey promises that it will be a soft sell. "We offer to help, but we don't scare the customer away. We don't want to turn anybody off," he says.
That's a wise mindset, says Martha Rogers, founding partner of Peppers and Rogers, a management consulting firm in Norwalk, Conn. Approaching Web shoppers, according to Rogers, is a dangerous game. "One reason people shop online is because they don't want to be harassed by the sales help," she says. "If they want live help, they know where to get it. The idea that salespeople can now follow you around online is not very appealing."
Maybe not to all shoppers, but anecdotal evidence suggests live-chat technology works. The Internet service provider Earthlink boasts that 15% of its initiated chats result in a customer signing up. E-Trade Mortgage, based in Arlington, Va., added an "invite to chat" program in early 2004. In the first six months, the program improved customer satisfaction ratings and the company found chatters were more likely than nonchatters to become customers. And it also works for smaller outfits--which can get the service for as little as $99 a month. Rackspace, a Web services provider in San Antonio, gets about 80% of new sales via an initiated chat session, according to founder Patrick Condon. And LoCascio found 25% of visitors to his site who were engaged in a chat ended up buying something. "Humanizing the experience helps make the sale," he says.