The Impact of Demographics on Live Chat Customer Service

(12 minutes to read)

Businesses deciding to implement a new customer service channel must consider a variety of factors before making a choice. This report examines those considerations required for the implementation of online live chat, drawing upon data from a recent Software Advice survey on customer preferences and discussions with companies that currently offer live chat as a customer service channel.

This examination will help businesses learn about the impact of live chat, particularly on certain demographic groups, so they can make more informed decisions about implementation.

Key Findings

  1. Over half (56 percent) of respondents have used live chat at least once to answer a question on a company’s website.
  2. Forty-nine percent of respondents prefer using live chat for online-shopping questions, while 74 percent prefer telephone for complex financial questions.
  3. Regardless of the nature of the question, 56 percent of respondents aged 18 to 34 prefer live chat to phone, compared to 27 percent of respondents aged 35 and older.

Introduction

Regardless of industry, great customer service usually revolves around one common theme: reducing the effort customers expend in order to get their questions answered and problems solved.

The most effective customer service is designed to reduce effort at all stages of the customer journey—not just after a sale or when problems arise. To provide this kind of service, however, companies must not only understand the questions customers have at each stage, but be there to offer answers.

Online live chat is proving to be one of the best service channels for meeting customers’ needs throughout their journey, from first contact through post-sale support. As an online tool, it meets customers in the very place they increasingly turn for answers: the Internet. And unlike other channels such as email, live chat provides instant support, with minimal customer effort required.

However, making the decision to offer live chat does require effort on behalf of a business. Like implementing a new customer service platform, opening a new service channel requires significant investments of time and money; the return on which can be difficult to predict.

With this in mind, we surveyed consumers to learn more about their preferences for and use of live chat. We also spoke with many small and midsize businesses that use live chat to discover what lessons they’ve learned along the way. Taken together, this data can help businesses that are on the fence about implementing live chat make a more informed decision.

Most Have Used Live Chat; Usage Correlates Strongly With Age

When considering the use of live chat as a customer service channel, the first question businesses usually ask is, “If we offer live chat on our site, will customers use it?”

According to our survey, the answer to this is “yes”: 56 percent of respondents report using live chat at least once to get a question answered through a company’s website. Over one-third (39 percent) say they have used it more than once.

Usage of Live Chat to Answer Question

Usage of Live Chat to Answer Question

We next analyzed the data according to a range of common demographic variables. Looking at respondents’ answers compared to their age, gender, income, geographic location etc., the one variable that is most closely correlated with live chat usage is age. Given this, we’ve chosen to highlight the relationship between age and live chat usage in the remainder of this report.

For example, here is a version of the above chart, with responses broken down by age brackets:

Usage of Live Chat, by Age

Usage of Live Chat, by Age

Younger people (ages 18 to 34) are more likely to have used live chat “once,” “a few” or “many times,” while older people (aged 55 and over) are more likely to have “never used” live chat, or to have used it without success (meaning, they were unsuccessful in getting their question answered).

Live Chat Preference Varies by Customer Service Question Type

In our discussions with businesses that offer live chat customer support, we learned that the channel’s success depends, to some degree, on the nature of the question being asked. Live chat excels at providing immediate answers to simple questions, but as the question or support issue becomes more complicated, phone or email support channels gain the advantage.

Some excerpts from our discussions:

⇒ WickerCentral, an online furniture store, says its customers use live chat primarily to ask “more detailed questions about information that isn’t readily available on the Web page or product page.”

⇒ Diamond Envy, an online gemstone retailer, says that “price inquiries can be handled quickly and efficiently via live chat, as well as requests for more information about the appearance (color, clarity etc.) of a stone. However, if a customer wants to see additional photos and/or video of a particular item, of course, that assistance must be provided via email.”

⇒ ZCO Corporation, a mobile application development company, explains that “the most common [live chat] questions are around pricing and process. For example, how much would this app idea cost; what would the design process be like?”

This preference for using live chat to answer pricing and product questions when shopping online is likewise seen in the results of our survey. We asked consumers which channel they would prefer to use in the following scenarios, if both phone and live chat could offer the same end result:

  1. To discuss complex financial information
  2. To perform a simple task, such as updating contact information
  3. To discuss an online purchase

Preferences for Phone vs. Live Chat, by Query Type

Preferences for Phone vs. Live Chat, by Query Type

Live chat is especially well-suited to answering questions customers have while shopping on the Internet. The most obvious reason for this is that the customers are already online, and thus can use live chat with little effort: they don’t need to reach for the phone or worry about hold times, and they can expect a quicker answer than if they called or emailed.

From a business perspective, live chat software offers many functions tailored specifically to the context of online shopping. Customizable triggers, for example, make it easy to automate immediate live chat responses based on a variety of criteria, such as what page a customer is viewing, how long they’ve been on the page, which page they arrived from and so forth.

Customer Age Is a Strong Indicator for Live Chat Preferences

Our survey shows a strong relationship between a consumer’s age and their preference for using live chat versus the phone. This relationship persists across all three types of queries, as evidenced in the general V-shape shared by the following three charts:

Financial Queries: Preferences for Live Chat vs. Phone by Age
Simple Queries: Preferences for Live Chat vs. Phone by Age
Online Shopping Queries: Preferences for Live Chat vs. Phone by Age

Taken together, these results show a direct relationship between a consumer’s age and his or her preference for using live chat instead of the phone to answer their customer service questions. This relationship is clear for all three types of queries we tested, and thus, it’s plausible that it would be present for other query types, as well.

Businesses Consider Age When Deciding to Offer Live Chat

In our discussions with businesses that use live chat, we found that many affirm the relationship between age and preference. Companies that target customers in the middle age ranges, for example, report great success with their live chat channels. There are, however, some outliers.

Roy Reyer, owner of Radar Roy Enterprises Inc., an online car accessories company, has offered live chat since 2005. His customers are mostly men between the ages of 35 and 55.

“They use live chat all the time,” Reyer says. Comparing live chat to phone, he adds that “they both work equally well, but our live chat is quicker, and people are more apt to use it as they instantly get their questions answered.”

Another company, Everblue, provides sustainability training and certification. Marketing Manager Lesley Cowie explains that its audience is primarily men aged 35 to 55.

“These individuals often come from occupations that include architect, engineer, construction manager, general contractor, home inspector, home builder or facilities manager,” Cowie says. “I don’t believe that there has been too much of a learning curve for our audience to use live chat. We’ve been pleased with the number of individuals who reach out to us through live chat on a daily basis.”

In our discussions, we also found that, while customer age is an important factor, it is not the only one. There are cases in which the convenience and immediacy of live chat make it the preferred channel, even when the target demographic has a general preference for phone.

Patrick Freuler, founder of online hearing aid vendor Audicus, explains that his customers do make regular use of live chat. But, he notes, “Because our age demographic is a bit older, they often use live chat to ask obvious questions that are usually right in front of them, [such as], ‘How do I get a hearing aid?’”

This is a clear example of using live chat to meet customers early on in the customer journey. It’s a way to encourage customers to make a purchase while offering convenience and requiring very little effort on their part.

Top Advantages of Live Chat: Convenience, No Wait Times

Our survey identifies convenience and the desire to avoid hold times as the two main reasons for choosing live chat. Both of these reasons highlight the importance of implementing a customer service strategy that reduces the amount of effort required by the customer.

Behind these, multitasking was chosen by 15 percent of 25- to 34-year-olds, and the option to receive an email transcript of the live chat conversation was chosen by 14 percent of 18- to 24-year-olds.

Primary Reason for Choosing Live Chat vs. Phone

Primary Reason for Choosing Live Chat vs. Phone

Many businesses we spoke with single out the convenience of live chat as the primary reason their customers choose to use it. One retailer points out parallels between live chat and two other very popular forms of communication:

“Live chat is an added convenience, especially for those who are used to texting and instant messaging,” explains Diamond Envy’s Marketing Manager, Emily Duke. “It provides instant gratification (during business hours) that email service sometimes cannot. It’s also a helpful solution for those who prefer not to call to ask their questions for whatever reason.”

Live Chat Lowers the Barrier to First Contact

Providing more effortless service is, of course, a worthwhile strategic goal in and of itself. More practically speaking, most companies seek the things that effortless service leads to, such as increased conversions and a growing customer base.

Many businesses we spoke with say that customers are often more motivated to ask a question via live chat.

“I think people are intimidated to get on the phone with a sales rep and ask about pricing or process questions too early, because they don’t want to get hard-sold when they are just fact-finding,” explains Katie Meurin, marketing director of ZCO Corporation. “Live chat allows them to get answers with no delay, but also gives them the ‘out’ of being able to sign on and off chat as they please.”

Another business owner, Jared Staver of Staver Law Group in Chicago, points out that live chat presents a lower barrier to first contact with a customer.

“I think many potential new clients prefer the live chat function over [using] the phone, because it’s a little less direct,” he says.

“I find it takes away some of the perceived pressures of speaking with an attorney. When compared with email, live chat is much more effective for new business prospects. It provides instant gratification; in other words, the potential client doesn’t have to wait for a response email, and takes solace knowing they are speaking with someone in real time.”

Jared Staver, Staver Law Group

Businesses Say Live Chat Implementation Is Quick and Painless

Selecting a software platform for customer service and support can be a daunting challenge for many businesses. After a system is chosen and implemented, many businesses are motivated to continue using it regardless of the challenges they encounter, largely to avoid the need to transition to a new system.

Live chat, on the other hand, is usually provided as an add-on service that can be integrated with a company’s existing customer relationship management (CRM) platform or Web portal. And, according to the businesses we spoke with, getting live chat up and running is a generally painless procedure; none described any difficulty with this software implementation.

Indeed, many describe the process in a similar fashion to Reyer, who says that his business “selected a chat provider, then installed their script. It took less than 10 minutes to install.”

Some companies do note that after implementation, workflow process changes may be necessary.

“We ran into some process issues about responding to the chats in a timely manner, and making sure to turn it off if we stepped away from our desks,” Meurin explains.

In our talks with businesses about the impact of live chat, a few suggestions for best practices arose. They include:

  • Respond to new chats as quickly as possible—don’t leave customers waiting.
  • Disable live chat when the business is closed or whenever agents are unavailable.
  • Make a list of model responses for the most commonly asked questions.
  • Train agents to use the brand voice whenever possible.
  • Have management review chat transcripts to improve agent interactions.
  • Experiment with where and when the live chat button appears on the website.
  • Consider using automatic triggers to proactively offer live chat.
  • Recognize the limitations of live chat and be prepared to switch to email or phone when necessary.

Conclusions

A majority of U.S. adults surveyed have used live chat at least once—and many express a clear preference for it over more traditional customer service channels. Indeed, live chat offers benefits that other channels don’t. As an online service channel, live chat meets customers exactly where most of them seek pre-sales product information and post-sales support. Because of this, receiving support via live chat requires considerably less effort for most customers than phone or email support.

Businesses, too, are finding great value in live chat support. It lowers the barrier to first contact for prospective clients, and offers immediate support answers to existing customers. Companies with a customer base centered on the lower age-range bracket—the demographic with the strongest preference for live chat—consistently express success with their implementations. But even more noteworthy is that companies with customers in the highest age-range brackets also report success.

Together, these two sources of data present a compelling case in favor of live chat implementation. Companies on the fence about implementing live chat should consider this when making a decision.

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