Chatbot vs. Live Chat: The Ultimate Business Guide 2021

Messaging has become the new normal of brand-customer communication. Whether it concerns lead generation or customer problem solving, chat has been stealing the spotlight from more traditional methods like phone or email. Yet, even in the chat realm, there is an ongoing battle between two methods: chatbot vs live chat. 

One automated, one human dependent, each method offers its own pros and cons, leaving many businesses struggling to decide which one to employ. 

This article will discuss the advantages and challenges of both chatbots and live chat in various business scenarios.

What is the Difference Between Live Chat and Chatbot?

The difference between a chatbot and live chat lies in automation. While both communication solutions are based on real-time typed text exchange, live chat involves speaking with a human agent. At the same time, chatbot conversation is an interaction between a human customer and chatbot software. 

Chatbot and live chat alike can take place on the web or via messaging apps such as Facebook Messenger, WhatsApp, or Telegram. 

Chatbot vs Live Chat: Pros & Cons Breakdown

Since the burst of the pandemic, chat solutions have become the predominant communication and engagement channel for most businesses. 

This section will look at the key points of comparison between the two solutions to offer perspective on their suitability for your business. 

Response time

Making your customers wait is a business equivalent of a death sentence. 

With ever-evolving technology, consumers are becoming less and less forgiving. Once upon a time, being put on hold was a natural part of life. Today, it’s the equivalent of sending your customer to the competitors with a bow tied on top of their head. 

Did you know 59% of consumers are more likely to convert to customers when you answer their queries in under a minute? The longer it takes, the lower is the probability of conversion.  

That’s why live chat took the business by storm when it first became available. While an agent on the phone can only talk to one person at a time, the same agent can handle several chats at once as well as resolve any issue faster.

Live chat empowers your marketing, sales, and customer service teams to:

• Provide faster resolution than a phone, email, or social media
• Leverage pre-written quick responses to deal with repetitive FAQs
• Offer real-time human sales and support assistance
• Faster rerouting to the right team 
  

Still, live chat is only as fast as the availability of your agents. If the demand is overwhelming, even a live chat response is going to take time. 

Chatbots, on the other hand, deliver instant responses regardless of the demand. Moreover, they can engage with visitors 24 hours a day, seven days a week. 

A chatbot can support your business in:

• Providing instant answers to simple queries 24/7
• Qualifying leads and collecting primary customer data in real-time
• Ensuring proactive engagement 
• Rerouting only important/complex queries (or the hottest leads) to your human agents
  

So, which is a better solution, chatbot on website or live chat, highly depends on the use case needs of your business. While chatbots offer ever-present assistants with flawless response rates, they often fall short with more complex demands and queries. On the other hand, employees give your live chat the human touch and attention your customers crave. However, it’s limited to their availability, and your response rate can suffer from increased demands.

If an instant response rate can make a difference in your line of business, go for chatbots.

If your client base is not the most time-sensitive bunch and enjoys human attention, by all means, stick to live chat. 

We recommend the third choice, the golden compromise: Use chatbots to handle all the simple and repetitive tasks like qualifying leads, answering FAQs, and rerouting anything more important to your team. 

Cost-Effectiveness

There is no business in existence that doesn't work hard to increase revenue and reduce its costs.

Hence, cost-effectiveness makes for another decision point when it comes to chatbots vs. live chat stand-off. 

Live chat is a super affordable communication channel that enables your employees to get in touch with prospects and customers in a matter of minutes. It can profoundly affect preventing drop-off throughout the customer journey and so increase your ROI. 

However, the expensive part of live chat is your human employees. If you want to maintain service quality with growing demand, you will need to grow your team. Think of all the salary, training, and infrastructure costs...

On the other hand, a study by Juniper Research claims bots for business will help save more than $8 billion per year by 2022. 

When it comes to money, chatbots can easily help you minimize labor costs by automating all the repetitive tasks and scaling without issue in peak times. You might think that with chatbots, the cost demand comes in the form of development and maintenance. However, the rise of no-code tools democratized conversational tech and made bot development financially accessible to all business sizes. 

Hence, if you are a small or medium business where every penny seems to count, a chatbot might be the solution you need to grow without dangerously straining your budget. The good news is, most chatbot builders include the live chat option and so setting up a bot to human handoff when necessary won’t be an issue. 

Ease of Implementation

When it comes to ease of implementation, the live chat takes the lead as most of the tools on the market let you launch the live chat literally in an instant. Besides training your team to manage the live chat, you can offer the service to your customers from one they to another. 

Of course, in the case of chatbots, you need to count on a development period. Creating a chatbot requires a bit more planning and effort. The use case for which you want to use it usually dictates its complexity as well as the length of the development process. 

The good news is, making a chatbot doesn’t take as long as it used to. 

Firstly, AI is not necessary for a bot to be successful and functional. More often than not, a simple rule-based conversational experience does the trick. Secondly, both AI and rule-based bots can be built without coding using tools like Landbot which means you can be in control of your bot and its development even if you lack technical expertise.

Availability & Multitasking

Having 24/7 marketing, sales & customer is pretty good for business. Actually, it’s becoming more of a requirement than an option. Making leads wait to be qualified or requiring customers to wait for query resolutions can cost you dearly. 

According to a PWC report, even when customers love a company or product, an incredible 59% will simply walk away after having several bad experiences. Moreover, 17% will leave just after just one bad experience.

When it comes to being there for your leads and customers 24/7, chatbots hold a great advantage over live chat. 

By automating sales tasks such as lead qualifications, meeting setup, or content search naturally and engagingly, you can: 

• Qualify leads in real-time, pointing them on a personalized journey based on their score (either referring them to helpful content, closing a sale, or allowing them to set up a meeting).
• Offer relevant and practical answers when and where it matters without delay & reduce the number of support tickets your team will receive. 
  

You can let the bots respond and sort through every inquiry allowing your team to focus on those that can truly make the difference. 

Scalability

Live chat allows companies to scale more easily when switching from phone support. However, since it’s still dependent on human employees, its scalability is still limited. 

Hence, businesses relying solely on live chat will face the challenges of hiring more human resources, arranging onboarding and training, improving company infrastructure, and related costs. 

Using a chatbot allows you to hold the challenges mentioned above in check. Bots enable you to scale conversations while keeping tabs on your resources and costs. While you might need to grow your team eventually, with bots, you are able to do it at a more manageable pace.

Chatbots cannot handle all of the issues that may come up along the customer journey, but they can help you balance the scalability. By managing the routine tasks that make most business communication in a conversational way that is so innate to humans, they offer both personalization speed regardless of the pressure of demand. 

For example, the State of Customer Service Report by Helpshift showed that while the number of messages handled by bots more than doubled in peak month, the number of messages handled by human agents remain roughly the same:

In peak months, what truly increased were routine inquiries. Without chatbots, the customer support teams would have been overwhelmed, and the service quality would have suffered. Thanks to combining the two solutions, complex queries were forwarded to live chat agents who had time to deal with them, thanks to bots taking care of the rest.

Accuracy 

When it comes to accuracy, both chatbots and live chat can earn some good points -  in different areas, of course. 

Since chatbots provide users with pre-programmed answers, you can be sure that all your prospects and customers receive identical answers. It helps avoid discrepancies that may happen due to human error.

On the other hand, chatbots often fall short when it comes to handling complex queries or capturing deeper context. Thus, sometimes, the information they provide might be inaccurate or inappropriate for a given situation.

In ensuring accuracy, live chat comes out as a winner. 

Still, if you want to create a balance between scalability and accuracy, using chatbots as an intelligent filter to aid your human team is a smart way to go. 

Human Touch & Involvement

Chatbot technology advanced incredibly in the past decade. Bots are ever more friendly and natural. Nevertheless, we are far from making them indistinguishable from humans. In fact, most of the advancements in making chatbots more acceptable and natural happened thanks to improving our understanding of conversations as a user interface rather than making AI more human. 

Live chat offers a perfect combination of instant attention and human touch. The conversational nature of live chat makes the experience interactive and inherently human from the get-go. Based on customer history, your agents are also able to personalize the interactions with a friendly tone and relevant questions. 

However, if you simply can’t afford to rely on live chat solely, there are ways you can humanize your chatbot. For example, you can: 

• Give your chatbot a friendly persona & personality reflecting your brand image and values;
• Integrate the chatbot with your CRM system so it can access and import customer data to personalize the conversation in real-time; 
• Enrich the conversation with emoji, images, gifs, and other interactive UI elements to make it more fun;
• Enable bot-to-human handover when chatbot fails to resolve the issue.

Customer Satisfaction

Both live chat and chatbot technologies make for a unique customer experience tailored to the needs of a modern consumer. 

Both can have positive and negative impacts on customer satisfaction. Though, which one will depend more on your management and application of the given channel than the channel itself. 

For instance, in terms of customer support, live chat is considered more efficient when it comes to addressing complex customer issues without any confusion. As for now, humans are still much better problem solvers than any software. On the other hand, chatbot technology can give your CSAT score a boost simply for its 24/7 availability and speed in delivering answers to routine but pertinent questions. 

When it comes to lead generation and scoring, chatbots can collect and assess data much faster and more efficiently than any live chat will ever be able to do. However, letting the hot lead get stuck with a bot forever can be detrimental.

Hence, when it comes to customer satisfaction, it’s not about finding the winner in the “chatbot vs. live chat” stand-off. It’s about finding the right time and place for each of the channels. 

Relying solely on live chat when you don't have enough agents available will be as much of a killjoy as dumping all the work on the limited capabilities of a conversational assistant. 

Like in many other situations in life and business, it’s rarely about EITHER-OR. 

Make smart decisions!

Proactive Outreach to Increase Leads/Sales 

Chat solutions are one of the best strategies to increase leads and conversions on your website.

They proactively encourage website visitors to get in touch and ask questions and so create more opportunities for engagement and conversion.

Live chat can be helpful but only when it comes to small-scale marketing campaigns. Too many leads coming in at once is likely to overwhelm your team and backfire. 

Chatbots, in particular, are masters of proactive outreach, popping up as you scroll down landing pages, offering help. Not only do they save visitors’ time by bringing answers and relevant content to them (instead of letting them wander around and lose interest), they provide your business with real-time scoring possibilities. 

Thanks to their conversational nature, the usual negative effect of lead forms fields have on prospects is non-existent. Answering questions as part of a conversation seems natural and in the lead's best interest. Hence, you are not only able to collect more information but leverage it in real-time. 

Leads that qualify can be transferred to human agents, while those who are not ready to buy can be sent on a tailored nurture journey. 

Statistics to Consider

Not convinced about the effect chatbot or live chat can have on your business quite yet? 

Here are few statistics to think about:

Chatbots

• Even low engagement chatbots see 35-40% response rates; The best-performing bot experiences can result in 80-90% response rates. 
• Chatbots saw a 92% usage boost since 2019, which turned them into the communication channel with the most significant growth; 87.2% of consumers rate typical bot experiences between neutral to positive; Consumer willingness to use bots for purchases rose from 17.1% in 2019 to 41.3% in 2020 (in fact, In 2020, 41.3% of consumers claimed they used bots to complete purchases);
• Bots can help companies save up to 30% of their usual customer support costs;
• 27% of consumers were not sure if the last customer service interaction they had was with a chatbot or a real person;
• 40% of consumers claimed not having a preference for using a chatbot or a human for help, provided they receive the support they need.
  

Live Chat

• Live chat helps to communicate with businesses in real-time, generating satisfaction levels of 73%, compared to just 61% for email and 44% for phone; 
• 50% of consumers claim that having a live agent answer their questions in the middle of a purchase is one of the most crucial features a brand can offer;
• Live chat leads to a 48% boost in revenue per chat hour and a 40% boost in conversion rate.
• 53% of consumers are likely to abandon their online purchases when they can’t find quick answers to their queries. 
• Live chat support is able to boost conversions, reduce cart abandonment and increase sales.So, what’s your decision?

Chatbot vs Live Chat: Balance is Key

So, what’s your decision?

At Landbot, we feel strongly about striking the right balance. ‍

Don’t think of chatbot vs live chat as a fight but as a collaboration. Each communication method poses its own set of strengths and weaknesses. Combining them allows you to highlight the strengths and minimize those weaknesses.

Employ chatbots in the front line of your communication strategy. Let them work as the buffer, the sieve that catches all the routine questions and unqualified leads letting your team focus on prospects and queries that can make a genuine difference!‍

Build a chatbot for your website today. 

But don’t stop there!

Empower it with chatbot-to-human handoff capability...