If you only focus on increasing revenue but not profit, you can end up growing yourself out of business. Increasing revenue is easy by driving more traffic with expensive advertising or discounting your products below what competitors sell for.
But profit is all that matters. The money left over after all of your expenses is what you can use to continue to grow the business or support yourself. Unfortunately, it's hard to know how to grow your profits while also growing the overall business. It's not as simple as just increasing prices to increase profits. At a certain price, sales will slow down.
You can use live chat conversations to drive additional profits. You can use these conversations to sell directly in the conversation and increase individual order value. But you can also use the insights you get from live chat to massively increase the profit of your entire business.
In this post, we'll walk through how we do it so you can apply this to your store.
When you are talking to somebody directly about their interest in your products, it's much easier to cross-sell or upsell. The conversion rates are much higher. With good live chat, you can send the person a notification about another product that could meet their needs well.
You can be very strategic with what products you cross-sell or upsell based on the visitors' interests but also which products are most profitable for your business. For example, you might find that men's shirts are a good product to cross-sell because they are profitable but you can also tell if this is somebody who is likely to buy them and be happy with the purchase. You can send someone an offer for another product in your store like a hat or belt if they are looking at the shirt page.
This can drive a lot more revenue and profits from the conversations you have in live chat.
You can find out what products are best to cross-sell and upsell based on live chat conversations. Then, you can automate the entire process and make it a part of your upsell software.
For example, let's say that men's shirt is profitable for your business overall. But you also know that they are more likely to buy another product if they show an interest in buying one. You can do this type of analysis on a daily basis and then you can apply this to your business automatically.
Once you know what works best based on the interest of visitors and what products they are looking at, you can set up your cross-sell and upsell apps to perform much more effectively thru automation. This will increase profits for every customer interaction and return on investment from your live chat system, even though these sales don't even involve chat.
You can find out how valuable your products are or how interested prospects are based on what they say in live chat conversations. Again, you will want to use these insights in addition to what your analytics and shopping behavior tells you.
You can find out which products are most valuable by simply looking at the value of each order or how many sales it generates for your business. You can also look at the behavior of people who chat with agents versus those who don't. And of course what they say in chats.
You will probably find that people who chat with agents spend more and are more profitable. You can then use this to price your products higher for people who are most valuable to your business -- or at least those who chat with agents.
By strategically pricing your products, you can generate a ton of extra revenue for every order. But it's also a matter of pricing products wisely and not leaving money on the table. An extra $1 or more can be thousands of dollars over time.
By constantly testing and optimizing pricing for profits, you can massively increase the profit of your business without increasing your marketing spending.
Don't just think of live chat as a customer service tool. Think of it as a way to drive additional profit with specific customers and a way to provide insights to massively increase profits across the entire business through cross-selling and pricing optimization.
All of these strategies will help you make a ton of extra revenue over time. With good insight, you can also use this information to improve your product and marketing efforts as well. By making better decisions across the entire business, you will enjoy massive results and profits from using live chat as more than just a customer service tool.
We run 24/7 live chat teams for over 100 stores and are constantly optimizing the performance of chat as a sales driver while providing insights that help our clients increase revenue, profit, and streamline customer service.
Here are a few resources to learn more: