Image via WikipediaI've got to admit to a bias towards small business. I want to see small business be as effective at using the Net as "the Big Boys."A few days ago, one of my clients said, "Can you put online chat on my site? I've heard it's the best way to make a sale."
I'd talked to this guy about a number of options for his site: animated FAQs, online chat, and messaging. Like most small business owners, when he found out it would cost him a monthly fee, he suddenly was looking for the door and his watch. So I asked, "How many sales do you think you'll make if I do?"
It wasn't really fair. He had no idea how many sales he'd make from online chat. Recognizing I had to get him out of a corner, I said, "How much do you make on a sale?"
That same expression. Now this one he should have known: I'd given him a spreadsheet with a complete breakdown of pricing and profits. Obviously, he hadn't looked it over or just didn't think of it in terms of average profit.
Fortunately, I had. But I was interested to see what his number would be. After all, I don't know the sales he's made. I just get a fee for my work.
Like anything else, the online chat facility has to be considered in terms of ROI - How much is it gonna pay to play?
When you're just starting out, you gotta try stuff to see if it works for you. You need to think realistically though. It's not just a monthly fee, or a per-minute use fee, there's also your own time involved.
Online chat costs
If someone is asking about something, it's time to go find out about it. Soo...
I had always looked at online chat as a means of making a site more 'sticky' - meaning it would keep potential Customers around longer. Turns out that was a pretty naive perspective,
Let's look at the upside first.
From the Internet Retailer:
Orvis, a multi-channel outdoor gear and apparel retailer, invites customers to chat only when they are on certain pages, such as customer service. “We have a lot of stuff on the customer service page,” says Brad Wolansky, vice president of e-commerce. “If 15 seconds go by and you’re still on that page, you’re probably looking for something and haven’t found it.”Mr Wolansky is getting sales from 20% of his Customers he chats with. Considering that 68% of visitors will abandon the shopping cart before checking out, he's saving a lot of sales, too. He's effectively reduced the number of abandoned shopping carts by 15% or so - based on the averages.
Orvis also offers chat to customers lingering on the checkout page. But the retailer does not offer chat on product pages, where visitors may linger reading reviews, examining photos, watching videos and comparing products. “Sitting there for a long time is not an indication you have a problem,” Wolansky says. “I don’t want to bother you.” Wolansky says customers who chat convert 15% to 20% of the time, roughly triple the rate of e-mail.
It's interesting when and why Orvis will offer to chat. Picking up on lingering customers on the checkout page is a great idea. And Orvis will offer to help a (potential) Customer understand his customer service page too, which adds a lot to Orvis' credibility and reputation for integrity.
That's long tail advertising. It just goes on and on.
Kevin Kohn at LivePerson Inc. claimed that 15% of site visitors accept invitations to chat.
One thing about averages and ranges: They are just averages and ranges. Your business may do much better. (It could do worse, of course, but why expect the negative?)
- 20% of web chats result in a completed purchase
- Web chatters spend approximately 35% more per order
- 30%-40% of Web site traffic includes self-service shoppers (consumers who make purchase decisions without vendor assistance)
If we can estimate the average sale online is about $25.00 with a conservative markup of 50%, or about $8.00 and change, it would take at least 5 new sales each month to break even - on just the cost of the software.
There may also be setup fees, costs for employees to attend, training costs and other niggling costs.
SEO/SEM in Australia is a special issue for so many reasons. Join me was we explore. It will be a fascinating and informative journey.
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