Intuitively, stores that sell online should be making a killing during the COVID-19 pandemic. After all, everyone is stuck at home — and understandably more willing to shop online instead of at a traditional retailer to avoid putting themselves and others at medical risk. But the truth is, most smaller online stores have seen better days.
The primary challenge is that smaller shops often don’t have the logistics networks that companies like Amazon do. Consequently, they’re seeing substantially delayed delivery timelines, especially if they ship internationally. Customers obviously aren’t thrilled about that reality. And in many cases, they’re requesting refunds at a staggering rate.
I saw this play out firsthand in April. At that point, my stores were down 20% or in some cases even 30% in revenue. Needless to say, my team was freaking out. But there’s one thing we did that helped us increase our revenue over 200% since the pandemic, decrease refund requests and even strengthen our existing customer relationships.
We implemented a 24-hour live chat in all of our stores. Here’s why it worked for us and why every digital brand should be doing it too.
Avoid the common ‘unreachability’ frustration
When I started my first online store in 2006, challenges that bogged my team down often meant that my team’s first priority became resolving those challenges so that we could serve our customers faster. But admittedly, when these challenges came up, it became more difficult to balance communicating with our customers and resolving the issues that prevented us from fulfilling their orders quickly.
While we always knew something needed to change, the real wakeup call was in 2015, when we pushed so many ads we ended up being overwhelmed by over 7,000 support tickets. At that point, we just didn’t have the customer support backend to get back to everyone quickly and personally. In my experience, hundreds if not thousands of small online stores face this challenge at some scale or another, especially during the COVID-19 pandemic.
Now, with 14 years of experience under my belt, I can wholeheartedly say that the end customer should never be left in the dark about what’s happening. Every online store should be letting their customers know if there’s a hiccup in the supply chain, even if it means they’ll request a refund or won’t buy from you in the first place.
That’s why having 24-hour live chat first sounded like a double-edged sword to us but ended up being a wonderful decision. Especially during the COVID-19 pandemic, we wanted to make sure that our website visitors were aware before they bought that their products would see a delivery delay. By having these expectations clear in the first place we were able to build trust with new customers and keep our loyal clientele in the loop through more intimate channels like email.
Decrease refund rates and build mutual empathy at the same time
Maybe the most frustrating part of the buying process is making a purchase, not being satisfied, and having to return the product. For online stores during COVID-19, the refund rates appear to be primarily driven by delayed delivery timelines. I’ve seen a lot of stores try to avoid being transparent about this fact (e.g., put it in fine print on the checkout page) and truly pay the price later — both in revenue and in relationships.
By implementing a live support chat that runs 24 hours a day, there is a guarantee that your website visitors, wherever they reside, are able to ask questions prior to their purchase. Doing so has actually allowed us to make refund rates even lower than what they were before the COVID-19 pandemic hit, despite the longer delivery timelines.
An example that stands out to me is a furious message from a customer: “I want a refund. I’ve been waiting so long.” It was totally understandable — a disruption for a supplier we work with caused a huge shipment delay on our end.
But having that quick live chat support (as opposed to emailing the customer back) allowed us to explain the circumstances and salvage that sale by checking our systems and letting our customer know that indeed her product was already in transit.
That example really just scratches the surface but gives a good idea of how powerful live chat can be — especially at scale.
Substantially increase repeat purchase rate
Speaking of establishing mutual understanding between a team and its customers, this is really a piece that a lot of brands are missing during this crisis. I’ve seen a lot of short-sighted decisions meant to help companies make a quick buck (e.g., not allowing software credits to roll over past a certain date), but a time like this is a great opportunity to play the long game.
Customers don’t just forget about the companies that treated them well — and when budgets pick back up post-crisis, they’ll be more likely to return to the vendors who gave them a good experience. And this is the case for both consumer and enterprise customers.
Live chat support is a great way to handle these relationships. While many decision-makers may be reluctant to send an email to a generic inbox, figuring that their email will never be looked at, live support can help brands handle FAQs and individual edge cases at ease and with speed.
Crunching the numbers: Why the strategy is an investment, not a cost
While you might think implementing 24-hour live chat support would cost a lot of money, that’s actually not the case. It’s truly an investment. Here’s what the numbers look like at my stores.
We use Zendesk for our live chat software, which costs $30 per agent per month. The actual customer support cost per agent is $600-$700 per month. Each of our stores needs three agents, each of whom cover one 8-hour shift per day.
Our live chat support has helped my stores reduce the refund rate (which is typically 5%) by approximately 25%; our average ticket size is $80 and we do approximately 1,000 orders per day.
So our 24-hour live chat support system is actually helping us save close to $36,000 a month with only about $2,000 invested. And that massive return on investment doesn’t even include a boost in conversion rates or the intangible benefits of building better relationships with our customers.