The True Cost of “Free” Live Chat Software

03 Jan 2023 By: Dan Kenitz


A search query for “free live chat software” yields over seven hundred million results on Google. Everyone is looking for free live chat software. If you want a better website than your competitors, that should worry you. One recalls an old quote from George Patton: “If everyone is thinking alike, then somebody isn’t thinking.”

What’s the problem? After all, what’s not to like about something that’s free? Well, there’s this…

To be fair, the logic of “free” makes sense. Use free live chat software – improve your site. There’s no downside, right? You’d be surprised.

An inadequate live chat system on your site won’t only not add anything to your website, but it may actually be harming the way your customers view your brand.

We all like to associate the word “free” with “no cost.” But the truth is, everything has a cost. The real question is whether the cost of your current chatbot is more trouble than it’s worth.

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The Downside to Free Live Chat Software: Increased Customer Frustration

The idea is simple. Add a live chatbot to your website and you’ll have the appearance of 24/7 customer support. If it’s a free service, then it doesn’t “cost” you anything. Nothing but upside, right?

But there is. The appearance of the customer service tool promises customers instant resolutions to their problems. That is one of the reasons customers use live chat. But with that, the expectations of service rise. Free live chat software usually provides a chatbot. The AI tool can answer simple customer inquiries. But even the best chatbots cannot serve as a reliable customer service tool on a permanent basis.

The problem is that using a low-quality chatbot can only exacerbate customer frustration. That’s why we still see high customer preferences for people over chatbots. And only “about half” of respondents to a survey even said they’d turn to a chatbot at all, even if they had a quick customer service need.

This problem is even more pronounced in older generations who aren’t used to chatbots. The over-65 group prefers not to use chatbots at all, according to the surveys. That means that any business that tends to have an older, higher net-worth audience may not be gaining at all by using a chatbot. In fact, they may be adding to the frustration of their potential leads.

But are chatbots just a concern for those of retirement age? The survey found that 60 percent of respondents aged 35-44 believed companies are moving too quickly to chatbot-based customer service.

These days, enough websites have chatbots that people start to tune them out if they don’t provide any real value. This is especially true for older demographics. Ask yourself: is it really “free” if it costs you potential customers?

The Hidden Costs You Don’t See

You’ve heard the old saying: there’s no such thing as a free lunch. Lots of people are willing to offer us something for free, but it usually comes with a catch. “Free, but give me your email address.” “Free, but sign up for my seminar.”
Many “free” things don’t end up being so free. In the case of chatbots, there are hidden costs that you’ll want to weigh first:

  • “Miss” messages. “Miss” messages are those messages that a chatbot can’t process. Every time this happens is a lost opportunity with a customer who isn’t getting a query answered. A customer can become frustrated and exit the site entirely. And it will take additional tweaking to make sure that you have fewer and fewer miss messages over time. Even worse, it’s difficult to identify when “miss” messages occur unless the software comes with advanced analytics. In most cases, it does not as such sophisticated systems usually aren’t free.
  • Low-quality answers. Over one-third of users use chatbots to get sophisticated answers. The problem is that unless you have a particularly advanced chatbot, complex answers are difficult to produce consistently. Free live chat software will typically send customer inquiries to the FAQ without answering the question in full. How many times does this send customers going to the next tab, the next website–in other words, to the competition?
  • Opportunity cost. Let’s say you decide that free chat software is the way to go. Then what? Chances are you’ll use that for a while, focusing on other areas of your web presence that you can improve. But there’s also opportunity cost when you use the free live chat software and not something more sophisticated. These costs don’t show up in the monthly budget, but they’re no less real.
  • Analytics. It takes time and effort to install and then run analytics on your chatbots. This time also includes setting up the chatbots to handle customer questions the appropriate way—especially if you want to send customers to the right answers without frustrating them.

Free Live Chat Software is Great Until…You Realize that Customers Want Humans

“Chatbots are killing customer service. Obliterating it, maybe. If you’re a customer, you probably already know that. The computer programs that conduct clumsy conversations with you when you have a customer question are maddening. But if you work for a company, maybe you won’t believe chatbots are killing customer service until you see the evidence.” Christopher Elliot, Forbes.

There’s an obvious reason businesses flock to free live chat software: they want to grab customers as they arrive at their website. They want to engage customers immediately.

It makes sense. After all, 64% of Internet users say the 24-hour accessibility of chat services is one of the main appeals. The problem is that websites use this as an excuse to berate any new visit like a pushy salesperson.

But here’s the thing. A survey in 2018 found that people still prefer human agents. They don’t care how fast your chatbot is if they plan on ignoring it in the first place.
The good news is that chat is the preferred medium for “quick” customer service inquiries. About half of the 500 respondents wanted to chat in such cases, even over other options like phones, emails, and social media.

True: people want speed. When people log onto a site and expect support, 32 percent worry that the humans will be “less available.” We’ve all experienced being put on hold or playing with a customer service menu to try and reach a person as fast as possible.

But why doesn’t chatbot software do enough for most people? Consider the following, according to the survey:

  • Over 40 percent of respondents felt that the answers chatbots provided weren’t as detailed.
  • 60 percent of American respondents give up on a chatbot because the issue is too complex or unusual to be addressed by the bot.
  • A full 41 percent of the time, the bot only refers users to the FAQs—something that the individual could have done themselves.
  • Over 22 percent of UK respondents reported that the bot took too long to respond.

The Problems with Using Ordinary Chatbot Services

Take your average free live chat software, slap it on your site, and you’re golden, right? Not quite. These days, chat software is so ubiquitous that customers are already used to them, which leads to changing expectations. Here are some things you’ll have to keep in mind if you do want to offer the kind of customer service that these software services offer:

  • People are looking for a human anyway. The idea behind a chatbot is to give people a quick option for asking questions. But if people are looking for a human anyway, does it really achieve much? The majority of people give up on a bot if its answers don’t resolve the problem right away. In the end, the chatbot is often as helpful as publishing an FAQ page.
  • Basic chatbot won’t do. Until AI gets to a level of sophistication that beats real live human interaction, we’re stuck in a world where chatbots simply can’t deliver the complexity that some customers need. If your website represents something that can be a major investment for people—like education or real estate—then you know that your customers need more than the FAQ. They might have a specific issue they need to take up with you. Only 13% of people predicted that they would want help from a chatbot with more expensive items/services.
  • Chatbots don’t help conversions. Can you point to free chat software offering higher conversions once you installed it? If so, you might be ahead of the game. Chat software is a good way to quickly engage with someone, but when it comes to making conversions, it’s always important to make sure that the answers are as custom-tailored to the customer as possible. And that’s simply not as easy with a chatbot that’s pre-programmed with specific responses.

Beyond the Ordinary: Live Chat Software that Makes a Difference

Besides the availability of humans on the other side of the screen, customers seek modern conveniences. These include the ability to text, use social media messenger, or connect through Google Business messages. Omnichannel customer support is an important concept to customers. Sometimes an agent can better resolve a chat over a quick voice call and the ability to switch depreciates a business from the competition. Other necessary live chat software features include the ability to transfer files and share sensitive information, language translation, and use of historic customer information, among others. Analytics and reporting help a business understand its customers and their needs better, so it’s also an important feature.

None of these useful tools come with free live chat software. Most free offerings, as mentioned earlier, come with a basic chatbot and little to no features. A business that is serious about its customer experience provides customers with customer service software that helps them, not one that aggravates and frustrates website visitors.

When It Makes Sense to Incorporate Chat Onto Your Site

We can’t deny it: chat on your website makes sense. Customers arrive and they want to be engaged. And there are all sorts of statistics that point to chat’s usefulness, including the following.

  • Chatbots reduce customer service costs (by as much as 30%, according to some statistics). If you struggle with these costs and constantly have customers angry that they can’t find a way to reach you, incorporating chat elements onto your site can be an effective way to keep them around without having to lift a finger.
  • Time management. Speaking of not lifting a finger—if you want to set up a system to get yourself home by 5 o’clock, having your website handle new inquiries 24 hours a day is an effective way to ensure that people who have questions still feel that there are at least some recourse.
  • Live chat. Call us biased, but live chat—customer service chats with real people—are not only an immediate difference-maker but can help lead to conversions and better solutions for anyone logging onto your site.
  • Outsourced live chat communications. Sometimes business owners must do what they do best – run a business. They might not have time or enough staff to man live chat communications. In that case, outsourcing customer service might be the answer.

The true cost of “free” live chat software might not show up on your business card statement, but it will have an impact on your bottom line. So if you choose to add this tool to your website – which you should – consider quality options.

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