Chatbots vs Live Chat: The Ultimate Customer Service Showdown
The battle between chatbots and live chats in full swing.
Which of the two technologies will come out victorious and dominate as the customer service tool of the future?
In this article, I will start by throwing a bit of a curveball in the current 'chatbots vs live chat' climate. We will also review the pros and cons of each solution, as well as dig a bit deeper into some of their key features.
Table of contents
The pros and cons
Chatbots vs live chat: the quick comparison
If you are too busy to go into the details below, here is the quick and easy comparison between chatbots and live chat.
Chatbots are automated and instant. Users love them because they answer questions immediately. Companies love them because they save money. However, poorly programmed chatbots may slow the actual resolution of issues.
Live chat is very easy and quick to implement. Users love them because they don't have to pick up the phone. However, live chats rely on human agents, which are costly, work slower, and stick to working hours.
Want more? Time to throw a bit of a curveball into this debate.
Not 'either or'. Chatbots after live chat.
If you've read articles on this topic before landing on our website, you've probably read something along the lines of:
'Live chat and chatbots both have great positives but chatbots are more cost-effective in the long run. Please buy your chatbot here (which is conveniently what we sell).'
Now, I'm not trying to tell our competitors off. They have an extremely valid point. We too believe chatbots are more cost-effective in the long run, and overall just better than anything out there.
However, we have enough experience in the business and confidence in the technology to tell you this: the best course of action is live chat first, then chatbots.
Chatbots solve live chat pain points
Chatbots are incredible for customer service.
All the benefits everyone talks about are real, we've seen it first hand. However, the biggest pain points chatbots solve are pain points that arise after a live chat solution has been up and running for a while.
Here are the logical steps businesses with customer service needs should go through:
In more practical terms, here is what you will need to create a worthwhile customer service chatbot solution.
- An experienced chatbot building company (hey, that's us!)
- An economically inefficient customer service process. Servicing those customers costs your business too much and/or you can't satisfy reasonable SLAs.
- A sizeable database of the most frequent questions your customers ask, along with their responses (in plain text or via APIs to your systems).
Now, here is the deal.
If you have neither a live chat or a chatbot and your customer service team (phone/email) are overwhelmed, you could go straight to a chatbot -- but it probably wouldn't be the most cost-effective way to do it.
Our recommendation? Against what you might expect, we would recommend trying a live chat solution out first.
Doing so, you'll unclog the phone lines a bit, get agents to work 3-4-5 live chats at once, and, more importantly, start keeping track of the questions your customers ask.
Then, when this becomes economically inefficient (and we wish you to have that problem), you can come to us. We will have a perfectly laid out plan of attack.
Could you skip live chat?
Of course. We've done it many times before.
The above is just what we would advise. In fact, it is partly the reason behind our implementation of a live chat feature into our chatbot widget.
Should you wish to skip straight to a chatbot, we would advise going down the proof of concept route. This way you can benefit from chatbot technology at a limited cost while gathering the information you need to move towards a more integrated and cost-effective solution.
The chatbot and live chat comparison chart
Let's put the two pieces of technology up against each other.
This comparison chart should do two things:
- Convince you that you need at least one of the two. I cannot fathom a business in 2020 that doesn't have a customer service live chat and/or chatbot.
- Help you pick the one you really need. Bypassing the advice I gave above, this chart will help you visualise what your business actually needs.
| Live chat | Chatbot | |
| Instantaneity | ❌ | ✅ |
| Preparation requirements | ✅ | ❌ |
| Time to implement | ✅ | ✅ |
| Cost | ✅ | - |
| Reduce tickets | ❌ | ✅ |
| Data harvesting | ❌ | ✅ |
| Minimise agent fatigue | ❌ | ✅ |
| Analytics | ✅ | ✅ |
| Advanced analytics | ❌ | ✅ |
| Multitasking | ❌ | ✅ |
| Customer appreciation | ✅ | ✅ |
Calculate the return-on-investment of a customer service chatbot
As we are about to move onto the pros and cons of live chat vs chatbot, it's important you find a framework to calculate the ROI of a customer service chatbot.
Most of the time, live chat and chatbots are used in a customer service setting. It is, indeed, one of the most obvious ways to use this new and exciting technology.
Our team compiled a (free) ROI calculator specifically focused on customer service solutions. You can grab a copy of it here: Customer Service Chatbot ROI Calculator.
The worksheet comes with a handy step by step guide on using it and tips on approaching such a project in your company.
Grab your copy, enter your numbers, and get an estimate of the resources your company could save!
Chatbots vs live chat: pros and cons
Now that you've had a neat overview of the pros and cons of each in the comparison chart above, let's dive a bit deeper into each of them.
Instantaneity
Live chat: con
Chatbot: pro
The biggest appeal for chatbots is their instantaneity. This was already the case back in 2017.
Live chat does offer a sense of instantaneity, as users can drop a question in there pretty much 24/7. Unfortunately, the humans working behind the live chat feature must abide by reasonable working hours.
This sometimes creates friction and frustration, as the users' expectation (instant help) is often not met.
Preparation requirements
Live chat: pro
Chatbot: con
There are virtually no preparation requirements to implement a live chat. Click, click, pay your subscription, and you're off.
Chatbots, however, require more preparation. You will have to prepare the data, have APIs and webhooks ready (or built), brainstorm its persona, and more.
Of course, in the long run, the time spent preparing your chatbot will be extremely worth it.
Time to implement
Live chat: pro
Chatbot: pro
Implementing a live chat solution is incredibly easy. Most modern live chat platforms (including ours) only take signing up and adding a line of code on your web page.
Editor's note: actually, ours also allows you to implement live chat across all our integrated channels. Yes, that was a bit of a brag.
At ubisend, we've worked hard to make sure implementing one of our tailored chatbot solutions is as easy as that.
Cost
Live chat: pro
Chatbot: neutral
Live chat solutions tend to be relatively cheap at first. Most of the available options are SaaS platform with some sort of free plan and DIY implementation.
Chatbots, on the other hand, require upfront costs. This may be a dissuasive cost to some businesses until they consider the following:
- Live chat solutions have growing costs. Most of the time, you will pay per seat, per interaction, or per resolved tickets.
- Live chat solutions require humans. Sure, they're easy and cheap to implement, but there's a massive workforce 'hidden' cost.
- We do not advise looking into chatbots until your business starts to feel the pains of a live chat solution (aka the two points above). So, if you are looking into a customer service chatbot, it should be assumed the upside would greatly cover the cost.
Reduce tickets
Live chat: con
Chatbot: pro
Ok, let's be real for a minute.
Does live chat actually reduce the number of tickets? Or, does live chat merely move the tickets from one channel (emails/phone) to another?
A chatbot, on the other hand, actively reduces the number of tickets humans have to handle. We've seen customer service chatbots take away 35% of tickets within minutes of implementation.
Data harvesting
Live chat: con
Chatbot: pro
Data harvesting, in this instance, is extracting valuable data from conversations.
As you know, conversations with customers are choke-full of valuable information. Your customer service department is quite literally a goldmine of information about your customers' wants, needs, language, impression of your brand, etc.
This is very complex information to gather at scale. Until you implement a chatbot, that is.
While live chat solutions can help you store conversations between your reps and your customers, it cannot help you much deeper than that.
A chatbot, though, is fully automated and can harvest valuable data at scale.
Minimise agent fatigue
Live chat: con
Chatbot: pro
Unfortunately, live chat rarely reduces agent fatigue.
While a live chat takes queries away from the phone line, they pile up on the actual chat. Agents are also often required to work multiple chats at the same time, something they would not do over the phone.
Chatbots, however, actually relieve the service reps by taking tickets away.
Analytics
Live chat: pro
Chatbot: pro
Since both live chats and chatbots are online tools, one can expect both to present at least some sort of analytics.
All the live chat platforms I have personally tested do have an analytics dashboard. Of course, our chatbots are all shipped with their own custom analytics dashboard as well.
Advanced analytics
Live chat: con
Chatbot: pro
Did you spot the key word in my last sentence?
'Of course, our chatbots are all shipped with their own custom analytics dashboard as well.'
Live chat solutions are part of a larger SaaS platform. This means your analytics dashboard is the same as anyone else's dashboard.
With a chatbot, though, assuming you get it built by a leading company (hi), you should get access to a tailored analytics suite of tools.
The custom dashboard of a sales chatbot
Multitasking
Live chat: con
Chatbot: pro
Can a live chat solution allow for multitasking? Yes, to a certain extent. However, employees are limited in time, resources, and attention. You wouldn't want a customer service rep multitasking beyond 3-4 conversations.
Now, consider a customer service chatbot that can handle hundreds of messages per second with the same level of laser-focused attention.
That is multitasking.
Customer love
Live chat: pro
Chatbot: pro
Finally, the real topic we should all care about when talking customer service: the customers.
Do they prefer either or?
It turns out, customers love live chat... and chatbots.
According to research, 53% of customers would prefer to use online chat before calling a company for support (Harris Research).
According to our own research, 69% of customers prefer using chatbots because they provide instantaneous answers.
Download the 2017 Chatbot Report
Closing thoughts: is it really chatbots versus live chat?
We don't believe so.
Chatbots are the natural progression of live chat solutions.
To businesses overwhelmed with enquiries, a live chat solution will not suffice. It's just moving the pain from one channel to another.
If you are in this situation, a chatbot will take away those pain points while helping your customers stay happy -- and offer more data, flexibility, and customisation.
