started out three years ago as an online retail site for plumbing supplies and fixtures. Since then, it’s grown, and entered new markets. “We’ve branched out into everything home improvement,” says Joshua Mauldin, customer service manager. “And now we’re about to launch a new site for outdoor adventure supplies.”

Customer service is one big reason for PlumberSurplus’ success, he says. “Our intent is to deliver an in-store experience to an online customer. We’ve found the best way to do it is with chat. Over the phone, it’s difficult to convey things like color, and what a product actually looks like.”

E-commerce originally adopted online chat as a way to provide customer service at lower cost than by phone, notes Dorine Andrews, an organizational change management consultant and former assistant professor at the University of Baltimore. “The whole concept was that customer service reps would be able to deal with three or four people at a time.”

Chat does more than control costs

But as online retailers, chat software, and customers themselves have gained in sophistication, chat has become much more than just a way to control costs. Done right, it can provide a higher level of customer service. And it can increase sales.

“Normally, in self-service online retail is 2 to 4 percent of visitors buy, depending on the brand,” says Kevin Kohn, executive vice president of marketing at LivePerson, Inc., which provides customer service chat software. “When we engage customers via chat, we see that go up to anywhere from the high teens to about 30 percent.”

But chat customer service can be a hindrance as well as a help -- it can alienate customers with long waits and generic pre-scripted responses as easily as it can draw them in. How can you make sure your e-business is doing chat right? Here are some tips that can help:

1. Don’t have chatting reps also answer phones. Unless your company is truly tiny, have different customer service reps responding to chat and phone inquiries. For instance, PlumberSurplus’ eight-person customer service staff divides into chat and phone teams each day. “That way, we can have each person focused on one thing on a daily basis,” Mauldin says.

2. Don’t overload reps with too many chats at once. How many is too many? “It’s commensurate to the complexity of the product or service,” Kohn says. “On a banking site, where a high-net-worth customer is asking questions about a complicated financial product, it should be one to one.”

At the other end of the spectrum, PlumberSurplus, with its rapid growth, sometimes has reps handle as many as seven chats at once. “But seven is the absolute maximum,” Mauldin says. “We would like it to be one to one, but to be cost-effective, we usually wind up with about two or three to one, and that generally makes for a happy customer.” And, he adds, answering chat inquiries is an absolute priority. “If I have six reps on live chat and it’s still busy, I’ll get on there myself,” he says.

3. Don’t have a chat button on the site unless there’s someone standing by. One of the quickest ways to alienate customers is to have them click a button that says “Chat now” only to find there’s no one to chat with. Fortunately, today’s customer service chat software can either remove the chat interface, or replace it with something that says “Leave us a message,” when there are no chat reps logged on to the system.

4. Use scripts -- wisely. A customer who posts something like, “WHY ISN’T YOUR #@*& PRODUCT WORKING” will only be further infuriated by a scripted response such as, “I’m happy to help you. Let’s work together to resolve this problem.”

Make no mistake, customers can tell when reps are using canned responses. On the other hand, if your company gets 200 queries a day asking for the status of an order, it makes no sense to have the rep type, “Please wait a moment while I check that for you,” each time.

The solution is to use scripts to convey specific information, such as how to diagnose a malfunctioning product, but not to deliver platitudes. And always have reps type fresh responses if a customer is using all caps or otherwise indicating frustration.

5. Go beyond chat.  One of chat’s great advantages is that reps and customers can literally be on the same page. Customer service chat can give reps the chance to either “push” webpages (by including links in their chat messages) or actually take over the customer’s browser -- with his or her permission. Both can be effective ways to give customers targeted information about your products.

“I wanted to buy a bathing suit for my wife when she was pregnant,” Kohn says. Since this fell well outside his usual expertise, he went to an online retail site and asked a customer service rep for some suggestions. “The rep asked for permission to take over my browser, took me to a page of maternity bathing suits and highlighted the one that was most popular. And I bought it.”

Taking the initiative

Imagine you’re a customer in an electronics store. You’ve spent the last ten minutes carefully examining a laptop. Then you walk over to a different laptop and look it over as well, comparing features back and forth between the two. “At that point, a good sales representative would intuitively know to walk over and offer assistance,” Kohn says.

Good chat customer service software can help virtual retailers do something similar, by identifying prospective buyers according to their online behavior. Based on those criteria, customer service representatives can ask to initiate chat conversations, for instance, by inquiring if the customer has questions.

“You don’t want to engage someone who would be buying anyway,” Kohn says. “You’re looking for those who are serious about buying, but aren’t pulling the trigger. That might be someone who’s been to the site several times, or put something in a shopping cart without checking out, or used a significant search term to find the site. There are many of these behaviors that go beyond just browsing the pages.”

This tactic can be particularly effective if the rep who starts the conversation is an expert on the product being considered, Mauldin notes, so PlumberSurplus tries to match the rep to the customer in this situation. “We’ve had good success doing that,” he says.

In fact, he says, “Lately, we’ve been so incredibly busy I’ve actually had to scale it back.”