6 Reasons Why Your Chat Business Model Could Fail

The following is a guest blog written by Nicholas Klisht, Contact Center Strategist at Nielsen IT Consulting. To learn more about their solutions visit their website www.nielsenitconsulting.com.


If you are launching a chat initiative, then this short blog carries a big lesson. Uncover the six common traps that cause chat business models to fail.

Chat provides a mechanism for customers to obtain assistance online when browsing a website/mobile app. Based on experience with various chat implementations, and speaking with multiple businesses, it’s clear that the business case for chat is not simple.

The original theory was that chat would mirror an IVR/Automated Phone System and deflect calls. Because agents could service multiple customers concurrently, the model appeared to be a win-win. Customers are serviced in their channel of choice and agents are twice or three times as productive. WRONG! It’s been proven across multiple industries that if this is your sole objective, then your chat business model will fail.

Here are the six reasons why your chat business model could fail:

Reason #1: Lack of clarity on the value proposition
If the ultimate goal with chat is to reduce expenses by avoiding calls, take a hard look at this approach. This is not a valuable add to customers. Your value proposition should be focused on providing assistance in the customer’s channel of choice, possibly by making the sales and acquisition process more convenient for customers.

Reason #2: Fixing the wrong problem
Before implementing, question what it is customers are doing online that drives them to call the contact center. Why couldn’t they self-serve in the first place? Too many times companies launch chat to fill a gap in website design. If customers are not able to complete their transaction easily online without assistance, make that a business priority first. This should go for mobile sites and smart phone/tablet apps also.

Reason #3: Key channels are missed
The majority of organizations are focusing chat efforts on traditional, non-mobile websites. We know that a mobile first mentality is critical. A chat business case needs to include deploying chat on mobile site and apps. Google/Ipsos research states that 90% of smartphone users have used their phone to make progress toward a long-term goal or multi-step process, while “out and about”. If you leave mobile out of your business model you’re missing out on a large group of your customers.

Reason #4: A business benefit has not been monetized
Avoiding a call into the contact center is not a source of revenue, it’s cost avoidance. Additionally, it is only a possible estimate based on what the customer may or may not have done if chat is not available. Your benefit needs to be focused on hard numbers, such as conversion rates or “widgets” sold.

Reason #5: Key partners are not considered thoughtfully
Not all chat software/software vendors are created equal. Many companies apt to lean on the vendor they know best or the latest one that came “knocking”. To ensure you have the right solution and partner consider using issuing a request for proposal (RFP).

Reason #6: Key resources are missed
Have you considered all of the internal resources that will be needed? Are the costs of these resources calculated into your cost structure? Workforce management, quality monitoring, management and other internal resources need to be addressed in your business model. If you don’t calculate these up front, you’ll be surprised with your financials.


Guest blog author Nicholas Klisht, Contact Center Strategist at Nielsen IT Consulting

If you’d like to learn more about chat implementations and four tactical tips to ensure your chat project is successful check out http://www.nielsenitconsulting.com/chat-implementation/.