lp roi of digital engagement white paper

8/10/2019 LP ROI of Digital Engagement White Paper

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2014

The Return on Investment of

Digital Engagement


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2014 LivePerson, Inc.

THE RETURN ON INVESTMENT OFDigital Engagement

Table of ContentsExecutive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1. Why Digital Engagement? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.1 The Importance of a Business Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

1.2 What is Digital Engagement? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

1.3 ROI Drivers in Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

1.4 ROI Drivers for Customer Service .. . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

2. Building the Business Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . .5

2.1 Buy-In . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

2.2 ROI Discovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

2.3 Proving Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

2.4 Comparing Channels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

2.5 Matching Engagement Strategy to Business Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

2.6 Ensuring Staff Utilisation Drives a Positive ROI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

2.7 De-risking Digital Engagement with Pay-for-Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12

3. Optimisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

3.1 Continual Improvement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13

3.2 Regular Performance Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

3.3 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

3.4 Where to Start . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14


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2014 LivePerson, Inc. 1


Executive Summary

Its clear that something needs to be done to help customers online. 85% of callers to a retail banks call centre are known to have been digitally

active in the last twenty four hours. The Internet has ourished as a self-service medium yet it is clear consumers still seek assistance in largenumbers and they default to what they know best and pick up the phone. Once they have navigated the IVR and nally get to speak with

someone, the agent has no idea what journey the customer has taken on their website and why they need help. Frustration and dissatisfaction

often result. When customers are online looking to resolve a problem or are enjoying their ability to browse anonymously and make purchases at

a time of their choosing, why not engage them online via a digital rst customer service strategy, before they call, email or worse abandon.

But what digital engagement strategy will deliver the most return? How are benets quantied and what costs need to be taken into account?

Making the business case is essential to any business initiative. Its required when you invest in equipment, diversify into new product lines,

or even implement something as apparently altruistic as a corporate social responsibility programme. And the same principle most certainly

applies to the rollout of a digital engagement strategy.

The truth is that unless a business case has been made thoroughly, the initiative is likely to fail. This is particularly true for digital engagement

initiatives, as there are countless examples of organisations that start out using free or low cost software without a well-dened business case

and succumb to failure and disappointment. In every case costs exceed benets.

Not all, but many digital engagement strategies involve human engagement online. The fact that agent labour cost is often not taken into

account, which is many more times the cost of the software, is important but not the most important factor to focus on and measure. While the

combined cost of the software and service solution must not exceed incremental benets delivered, the softer benets positive NPS and

CSAT outcomes as well as the hard benets of increased sales and deected call centre contact need to be measured. A poor implementation

can lead to poor customer satisfaction, which impacts brand perception, retention and loyalty costs that far exceed the cost of the labour (and

software) and will dwarf any benets gained.

There will always be times when online customers require help. For every customer that converts and that in most cases only amounts to one

or two percent of the total there will be several others who have an interest in buying but bail out. The reason could be a lack of sufficient

product information, an inability to nd exactly the right item in an extensive catalogue or concern about delivery times. In all these cases and

many more, assistance from a timely offer of help could make the difference between a sale and an abandoned shopping basket.

Using real-time intelligent, behavioural and predictive analysis software, organisations can identify those customers who need assistance

thereby targeting customers at risk and more importantly leaving those who arent at risk to self-serve. Indeed, the marginal return on

investment of a digital engagement solution can be won or lost on the effectiveness of the tool to not add labour cost unnecessarily by

enabling customers to self-serve to complete the transaction themselves or resolve their own problem.

Phone-centric customer contact is now at a tipping point. With two-thirds of all customer interactions now being

initiated via digital and self-service channels, the centre of customer engagement has shifted. The importance of

putting customers at the centre of business is well recognised by leaders as critical to protability, loyalty and growth.However, now that the primary interface with the customer is no longer the telephone, the contact centre has to evolve

to address omnichannel customer journeys and drive digital rst customer engagement strategies. Digital engagement

strategies can bring together the separate and often siloed customer facing organisations to deliver a more integrated,

cost effective and exceptional customer experience to win and create brand loyalty and ultimately enable customers to

help themselves.


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By providing help when and where it is required, companies increase the likelihood of converting a sale. As an example, chat-assisted customers

convert at four to ve times the rate of those who self-serve. Another benet is the positive impact on increasing average order values (AOV).

Equally important, digital engagement delivers efficiency benets. When engaging customers with Live Chat, agents can talk to several

customers simultaneously; the number depends on the complexity of the business and questions being asked. This means that a sales or

customer service agent can handle more contacts in an hour than their call centre counterparts, all while achieving the same or better outcomes

in terms of driving transactions or resolving issues.

But these headline benets need to be put in the context of the unique objectives of each and every individual business. To fully succeed with

digital engagement, you need to review your business and its priorities, dene goals and KPIs, and set the targets that will tell you what success

looks like. Equally important, you must weigh the benets and the costs. And its a moving target. Once the discovery and implementation

process is underway, the KPIs will provide actionable information to optimise performance and could potentially expand the scope of digital

engagement to other aspects of the business.

LivePerson has a range of tools, methodologies and domain expertise to help businesses model the ROI on a digital engagement

implementation. This White Paper will take a practical look at building a business case and optimising the outcomes.

1. Why Digital Engagement?1.1 The Importance of a Business CaseEcommerce has ourished as a self-service medium, but times and customer expectations are changing.

When pioneers such as Amazon took online selling mainstream in the mid-1990s, the proposition was clear. By buying online, customers could

access a huge range of products, typically at signicantly lower prices than bricks-and-mortar retailers. But what the customer sacriced was

service. In contrast to an offline store, websites offered little in the way of support and even when telephone hotlines became the norm, many

consumers simply dropped off the site when they had a problem rather than going to all the trouble of nding a phone and waiting in a queue.

Consumer expectations online have changed. Digital engagement has introduced a high level of service to the online purchasing experience

and in doing so it is helping retailers to increase conversion rates and boost sales revenues typically by 25 percent to 30 percent while also

cutting contact centre costs.

However, for digital engagement to be effective, and to achieve the best possible outcome, ecommerce operators must fully understand the

potential of the tools available and more importantly, how those tools can be deployed in complete alignment with their business objectives.

Put simply, before putting a digital engagement strategy into action, it s vital to put together a well-thought-out business case.

1.2 What is Digital Engagement?Digital engagement is a simple concept, delivered by an increasingly sophisticated armoury of software solutions across a range of

communications channels.

The aim of LivePersons digital engagement platform LiveEngage is to enable website operators to establish meaningful connections and

relationships with their customers by communicating in real time, across the full range of digital channels.

Lets take a practical example. A customer is looking at shirts on a fashion retailers website. The style is right but the colour is wrong.

A box appears on the screen, inviting the customer to chat to a sales agent. The consumer clicks through and the agent provides advice

on alternative products also available on the site that satisfy both the style and colour criteria.


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Its a meaningful relationship because the website is proactively offering live help just at the point when the customer needs it most.

More importantly, that assistance means the consumer gets exactly the right product.

Intelligent, live digital engagement has three main components:

1. Behavioural and predictive analytics software. The customers behaviour is tracked and any signs of frustration or difficulty identied.If the analytics suggest the customer is about to abandon the website, sales or service agents can intervene to provide help or information.

2. Business rules. Aligned with stated objectives of the website operator, these rules can dictate when and how an engagement/intervention

takes place.

3. Communication channels. The most common means to communicate directly to the customer is by Live Chat but the digital engagement

principle can also be implemented via telephone callbacks, video chat, multi-media walk throughs and tailored/personalised content

offered at exactly the right moment, on websites and mobile devices.

There are variations on the theme. A live digital engagement between a company and a customer isnt always triggered by behavioural

analysis. For instance, many companies now serve personalised content such as product promotions or vouchers - based on the keywords

used in a search engine or affiliate networking site immediately before the customer arrived at their own home or landing page. These offerscan be made through LivePersons LiveEngage platform. Here are a few examples of the results achieved:

The common factors in all these examples are smart use of customer data coupled with a real-time, relevant, meaningful connection through

personalised and targeted content.

Live digital engagement solutions such as LiveEngage can be deployed to increase sales and enhance customer service in just about any

ecommerce situation, including retailing, telecommunications, nancial services, utilities and the public sector, as well as gaming and the

B2B marketplace.

Sunweb personalised messages and offers alone generated an

incremental conversion rate of 35 percent on average across

target segments, resulting in a lift in total sales of 14 percent.

Mantra Group conversion of online campaigns has increased

by 40 percent overall since deploying content targeting.

Newark element14 a 15 percent off voucher produced a 16

percent incremental lift in conversions and a free shipping offer

resulted in an 18 percent incremental increase in conversions.

Europoke r - targeted their most valued VIP players with specic

personalised offers, some of which saw a 40 percent uptake - an

extremely high rate up to eight times the industry average.

At Sunweb, personalisedmessages and offers havegenerated an incrementalconversion rate of 35 percent on average acrosstarget segments, resultingin a lift in total sales of

14 percent.


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1.3 ROI Drivers in SalesDigital engagement has been proven to deliver a clear-cut ROI across both the sales and service functions.

The main ROI drivers for sales are:

1.4 ROI Drivers for Customer ServicesDigital engagement generates tangible ROI in customer services. The main ROI drivers are:

Incremental Sales. In a self-service environment potential

customers often look at products but decide not to buy. In

many cases, they want to buy but there is a blockage. That might

be because there is a lack of sufficient product information, a

lack of information on more suitable alternatives or concern

over delivery arrangements. By intervening directly, with either

personalised content or an invitation to chat, these issues can

be addressed and the result is an increased overall conversion

rate, higher incremental sales and higher overall sales. Typical

conversion rates to sale for a site are around one to two percent.

By pro-actively engaging with potential buyers, even a rise of 0.5percent overall can mean a 20 percent to 30 percent increase in

revenues.

Increased Average Order Values. As in a bricks-and-mortar

store, advice from an assistant frequently results in the customer

buying additional items, such as a tie to match a shirt or bag to

protect a new camera. Thus engagement pushes up order values

by as much as 35 percent to 40 percent.

Lower Costs. The traditional ways to provide service to

customers are via email and telephone hotline. Live Chat, in

particular, provides a much cheaper alternative to both of these

channels, not least because chat agents can handle several chat

sessions simultaneously in real time.

Lower Return Rates . The return rate for customers who receive

help from chat agents is much lower than the rate for those who

dont. Put simply, informed advice and guidance makes it much

more likely that the online customer will choose exactly the

product required.

Reduced Costs. The cost per chat engagement is cheaper than

both the cost per telephone call and the cost per email. At Virgin

Atlantic eight chat agents can cover the work previously done by

fteen email agents, saving on labour costs.

Telephone Call Deection. At a UK bank 20% of all the calls

received are from customers who have been on its website in the

last hour. Engaging with just half of these customers in the online

channel will deect 1.5 million calls a year, saving 50% of the

cost of handling these queries on the telephone and increasing

customer satisfaction. RBS implemented a similar online

engagement strategy to support customers with its eBanking IT

queries, to the point where it deects 42,000 telephone calls per

month and now the telephone helpdesk is no longer required.

Email Contact Deection. High volumes of inbound

email enquiries can often be a challenge to respond to in a

timely manner, and at peak and crisis times it can become

unmanageable. Virgin Atlantic could receive 4,000-6,000

additional emails at peak times and to eliminate the risk of a

backlog each enquiry can be fully resolved at rst contact using

Live Chat. Similarly Vodafone eliminate 2.4 emails for every chat

taken. Chat is a much more effective medium as it eliminates thedelay associated with a high number of email iterations.

Improved First Contact Resolution (FCR) . The here and now

resolution offered by digital engagement means that customers

get their queries dealt with immediately. Virgin Atlantic improved

their First Contact Resolution (FCR) rates to over 80%.


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Digital engagement on the service side can also complement or underpin an existing cost saving strategy. For instance, moving call centres

overseas is a way to reduce labour costs, but it can lead to objections and protests from customers who want their queries handled by local

agents, even if there is no difference in the level of service.

In contrast, digital engagement via Live Chat allows businesses to take advantage of lower overseas labour costs without risking a negative

reaction from customers.

The key to a successful implementation is to align the functionality of the digital engagement platform with the specic objectives of

the business. Well be looking at this in more detail in the next section.

2. Building the Business Case

2.1 Buy-InDigital engagement tools are typically provided on a Software-as-a-Service (SaaS) model with the complete range of functionality delivered to

desktops from the Cloud.

One of the key advantages of this approach is that engagement strategies can be implemented quickly with no or minimal involvement of in-

house IT departments. As such, a marketing department can and very often does - experiment with digital engagement without necessarily

having to get buy-in from the Board or seek funding from outside the departmental budget.

However, to be successful over the long term, digital engagement initiatives need a champion within the organisation: someone who will

back the project, identify the objectives, steer the project through discovery and implementation and take a close interest in the results and the

optimisation of the outcome. Equally important, the champion should have a full understanding of the strategic objectives of the business and

share their knowledge of the role that digital engagement can play. Without such a champion, an engagement project may become peripheralwithin the organisation, or never reach its full potential. Its evident that without a closely monitored and measured business case decisions

may be taken that are detrimental to the success of the project. For example, when call volumes are high, there may be a gut reaction to switch

agents from digital channels to voice, despite proof that actually it should be the other way around; specically, agents should be switched from

voice to digital. If the ROI can be proved, every day, digital engagement can be and should be seen as a channel in its own right to drive sales

and improve service.

2.2 ROI Discovery The discovery process helps the solution provider and organisation dene objectives and draw up a route map that will take the business from

where it is now to where it wants to be in terms of the benets delivered through digital engagement.

Improved Customer Experience . Sky enjoys 80%+ customer satisfaction scores via its Live

Chat service and from almost week one of an agent going live on chat its Net Promoter Score

is +30 to +40.

Positive Staff Morale . Live Chat is a more positive way of working - it is potentially far less

confrontational than telephone contact and allows agents to discuss customer issues whilstchatting, enabling them to assist each other with resolving customer queries.

Improved Self-Service . The ultimate customer service goal is to improve self-service and

minimise unnecessary and costly contact and with real-time engagement, customers can be

taught how to complete their journeys themselves so that they can self-serve in future. Chat

conversations, email exchanges, Twitter and social comments can also be analysed to reveal

points of failure in self-service journeys and these data-driven insights can be used to improve

website journeys and processes and lift self-service completion rates.


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Its hugely important for the provider to work closely with the client. LivePerson takes a root-and-branch approach, starting with workshop

sessions that look at all aspects of the business where digital engagement can play a benecial or strategic role.

This is potentially a wide-ranging discussion. In todays environment, businesses interact with their customers through a broad range of

channels, including the traditional Internet experience (delivered to laptops and desktops), smartphones, tablets and social media.

There are offline factors to discuss, too, not least the increased propensity of consumers to visit malls and stores armed with smartphones or

tablets that they use to compare prices and delivery options. In addition, LivePerson encourages clients to consider the various roles that

digital engagement can play within these channels, with the most obvious distinction being between a sales and a service function.

Again, the range of the discussions emphasises the need for a champion who can bring together the silos and different departments that

always exist within an organisation.

Measuring the impact on the customer is paramount. In the case of the sales function, ROI is derived from the benets of higher incremental

sales, higher order values and lower costs per contact, but these benets are in themselves a by-product of better service to the customer.

In other words, one of the key issues that well be addressing is how digital engagement can drive more meaningful and ultimately more

protable relationships with customers across a range of touch points and functions.

2.3 Proving ValueOne of the key purposes of the discovery process is to agree the goals and to prove the value of an appropriate digital engagement strategy.

For instance, in many cases, the primary objective will be to increase conversion rates and overall sales revenues. This is achieved by using

analytics tools coupled with targeted content and pro-active chat invitations to provide live help for customers and steer them towards

the checkout.

Its a straightforward aim that can be measured across a number of metrics, including conversion rates.

Exodus.co.uk targets Live Chat at selectedsite visitors, at certain points in their booking journey, to drive sales and improve thecustomer experience. Content targeting isused to deliver personalised promotions-based behaviour on Exodus.co.uk.

Conversion rates and uplift in total online sales through Live Chat

EEThe upgrade team

consistently converts atover 40%

BTIncreased online sales

conversions five fold anddeliver 23% of total

online sales

SKYGet a consistent

10-15% uplift onthe number of sales they

would otherwise see

Mantra GroupVisitors who chat

are six timesmore likely to buycompared to selfserve customers

Exodus Travels 25% of online sales are

now generated throughLive Chat

Virgin AtlanticOn day one of the pilot,chat achieved 18%conversion and has

since reached a 23%conversions rate, neverdropping below 18%


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But the conversion rate alone doesnt tell the whole story. At rst glance, introducing Live Chat to a website might seem to have a marginal

impact on the overall conversion rate, perhaps raising an existing rate of two percent by half a percentage point.

What many years of experience shows is that a small rise in the conversion rate can feed through to a 20 percent to 30 percent hike in overall

sales, assuming that every parameter of the digital engagement channel is optimised.

There are a number of factors at work here. Online retailing all retailing in fact is a numbers game. You attract people to your store, they

look around and a very small percentage converts. And it is that small subset of the total visitors the ones who go all the way through

from basket to check out who generate the revenues and prots. What you have at the end of the sales funnel is a self-selecting group of

customers who are interested in buying but who may, nonetheless, drop out before checking out. Boosting conversion rates among this group

has disproportionate impact on overall sales. And thats where digital engagement can transform the numbers. Our experience at LivePerson

indicates those who respond to an offer or accept a chat invitation are four to ve times more likely to convert than those who dont.

Added to that, engagement can also boost average order values by more than 35 percent.

Its important to note that just measuring the number of sales inuenced by digital engagement will not prove that you are adding value to the

business. The power of intelligent engagement is to boost incremental sales. With many solutions it is not easy to measure. The conversion rate

of those who LivePerson identied as needing help and who accepted help and purchased needs to be compared with a control group of the

same target segment of customers - those who needed help but didnt engage. The conversion rate delta between them can then be measured.

The difference between the two shows the clear ROI derived from incremental sales. Many solutions run the risk of cannibalising self-service

sales, where the engagement just adds unnecessary cost to the business.

Thanks to LivePersons track record in the market, we can provide gures indicating what businesses can expect to achieve in terms of overall

conversion rates, incremental sales and order values.

Of course, customer service isnt free. Whether in a retail store, a call centre or a chat-enabled contact centre, employing sales and service agents

costs money and any business case must also focus on the cost-efficiency of the service.

2.4 Comparing ChannelsOn both the sales and the service side, you can make direct comparisons between the performance of chat-enabled agents and those who talk

to customers on the phone or by email and there are a number of metrics that can be employed.

These include:

Cost per conversion per agent

Sales per agent per hour (where direct comparisons can be made between the sales in store, via a call centre or via the chat-enabled

contact centre)

Resolutions per labour hour

Cost per contact

When digital engagement is delivered via chat the cost per outcome per agent is lower when compared with telephone sales and telephoneservice, typically 50 percent the cost of the phone. To achieve these savings (and more) it requires a well thought out and optimised

implementation using best practices and guiding business case. In addition to the software, there are two major factors at play here.

Chat agents can handle several chat streams simultaneously. In effect a chat centre will require fewer agents than a call centre to handle the

same number of customers.

Equally important, Live Chat is an effective sales as well as service tool. Certainly as effective as voice.

In practice the effectiveness of chat as a sales tool can be demonstrated by the sales per agent per hour metric. For instance, LivePerson client

EE has deployed chat agents to sell mobile phone contracts for its 4G-enabled network. The latest results show sales twice as high as the sales

achieved through telephone sales agents and up to ten times higher than in-store averages.

When building a business case, it is important to understand how the online/chat performance compares to other channel interactions,

including in store, call centre and email.


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In addition, you should also tailor the engagement method to the customer. For instance, for a business selling commoditised low-margin goods

it may not be viable to assign chat agents to engage customers in conversation, even those who are likely buyers. In these cases, an effective

alternative would be to serve-up personalised content, such as vouchers, special offers or product information to nudge the customer towards a

purchase. The trigger for the offers could be behavioural analysis data or the keywords entered into a search engine before the consumer arrives

at the site.

At the other end of the spectrum, it can be cost-effective to engage using video chat or multi-media walkthroughs. For instance, Deutsche

Telekom implemented video chat for high-value customers. This is labour intensive as the agents can only deal with one customer at a time,

but it is worthwhile because of the lifetime value of the customer.

Modes of digital engagement include:

Although there are a number of tools available, the starting point for digital engagement is often Live Chat as it offers a cost-effective way to

communicate with customers coupled with direct communication.

2.6 Ensuring Staff Utilisation Drives a Positive ROI

Few businesses begin their intelligent engagement with a blank sheet. Most will already have a telephone hotline available for customers whohave queries. For small retailers or merchants, the hotline may simply be a direct line to the physical store. Larger merchants will have their own

contact centres.

So a key question is how many staff should be assigned to the chat function, or indeed to any of the digital engagement communications channels.

The deployment of staff can be scaled up over time, once the business case is proven. A pilot project could start with just a few sales agents

deployed as part of a sales drive to proactively serve chat invitations to carefully targeted customers.

This provides a means to prove the business concept. When invitations are served pro-actively (with the merchant making the decision) rather

than reactively (with a static invitation leaving it up to the consumer to decide whether or not to ask for help) you will by denition be talking to

a subset of customers. Some will accept the invitation but others will decline.

This is in itself useful. LivePerson will advise on average acceptance rates for your industry and type of business, and with that provide a

benchmark as a target and advise how you should start. Part of the project will be to work on the creative or the call-to-action on the invitation

to chat to achieve a viable (and ultimately optimal) level of click throughs and chats so that agents become fully utilised and productive.

Equally important, those who dont accept an invitation provide an A/B control group. By comparing the outcomes of those who click through

to an agent against those who dont, you can see clearly the impact that digital engagement is having. Lets say both groups have been

identied as high-value customers with an intention to buy. Those who decline the chat invitation are effectively self-servers while the agent is

serving those who accept. The latter group typically converts at four to ve times the rate of the former.

By deploying a relatively small number of chat agents you can demonstrate the impact on incremental sales on a like-for-like basis.

Very often businesses will then scale-up to achieve the critical mass of incremental sales that will have signicant impact on overall sales.

Personalised Content: A low-cost way to serve up personalised

information. Can be used for all customers but provides a

cost-effective way for businesses with high volume/low margin

models to talk directly to customers.

Live Chat: Much more cost-effective than phone or email.

Chat sessions should be targeted selectively according to

business rules or predictive scoring.

Video Chat: These require a one-to-one agent/customer ratio.

Usually targeted at high-value customers.

Telephone Callback : Also one-to-one and usually targeted

at high-value customers. Also prevalent where risk of losing a

customer or diverting a complaint is high, and in business areas

where consumers are known to favour voice contact.


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Most of us use online banking these days and generally speaking we know what we want froma provider in terms of functionality. We expect to be able to transfer money between accounts,make payments, play around with our direct debits all the usual things. This functionality is

much appreciated by customers but it doesnt necessarily differentiate one bank from the otheras each institution is offering something similar.

But actually it is possible to differentiate, not least through service.

A case in point is Royal Bank of Scotland. Ross McEwan, Chief Executive of RBSs UK retailoperation said he intended to position the organisation as Britains Best Retail Bank. To that end,the bank has already begun a 700m revamp aimed at improving branches and the handling ofcustomer complaints.

By rolling out Live Chat, RBS is enabling customers to carry out their banking activities online,

even when they have a query or a problem. In the past, service was provided by call centre hotlines but when the bank introduceddigital engagement it began to migrate customers, a process that culminated in a decision to turn the hotlines off in 2012. Thesystem is absolutely secure thanks to an identication and authentication widget provided along with the Engagement platformitself by LivePerson.

More innovations are set to follow in the shape of mobile app and chat links via social media. Speaking at LivePersons AspireConference , RBS Strategy Director for Webchat and New Social Media, Alice Fryatt, pointed to high satisfaction rates and moreefficient handling of customer queries. Going to the bank will never be thrilling, she said. But people rightly expect it to be quickand efficient with support on hand.

In the rst instance, its important to introduce digital engagement at a level where is does make a contribution both to the bottom line and to

the perception of the brand. Live Chat is more convenient to use (no queues and automated menus) and is more likely to produce a rst contact

resolution of the problem than email. This in turn leads to higher customer satisfaction rates as manifested in CSAT scores.

Digital Engagement is Transforming CSAT

Virgin Atlanticraised Customer Satisfactionscores for chat to over 80%

80% 80% 83% 85%

SKYhave more than 80%

customer satisfaction on chat

EEcustomer satisfaction score

for the chat channelstands at 83%

BTimproved customer

satisfaction to 85% thosewho chat rate the service as

excellent, great or good


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As with sales, service-side digital engagement can be scaled up, but its important to begin with staffing

levels that will make a contribution.

There are other important staffing questions to be answered, too, notably:

LivePerson Professional Services can provide advice on all aspects of staffing a chat channel, from

recruiting agents, training existing staff and on incentive programmes. As a rule of thumb, chat teams

should be separate to email and call centre teams. Blending teams in order that they can move seamlessly

from one channel to another isnt an optimal way to work. The skills and qualities that make a successful

chat agent tend to be different from those that characterise their telephone sales counterparts. In an ideal

world, chat teams should stand apart with their own training programmes, incentive plans and career

paths. However, recruiting existing contact centre staff into the chat team can be highly effective.

2.7 De-risking Digital Engagement with Pay-for-PerformanceSo how can businesses de-risk their investment in digital engagement technology and staff and guarantee

the return? The development of a thorough business case and examination of the achievable benets

through a proof of value pilot project will prove the ROI. For larger companies with a high volume of trade,

the process can be de-risked entirely by engaging LivePerson for Pay-for-Performance managed services.

Working with one of its Business Process Outsourcing partners, LivePerson works with the customer to

pinpoint a set of key performance indicators for the engagement. The Pay-for-Performance managed

service can be with either the sales or service side of the business.

The key performance indicators include business issues such as conversion rates, average order value,

call deection targets, customer satisfaction, or cart abandonment rates. The underlying technology

solution is the same as if the client managed the digital engagement themselves LivePersons

LiveEngage platform. The contractual agreement is based on achievement of the key performance

indicators. If those are not met, there is nothing to pay.

This is an attractive model that appeals to businesses with high volumes of contacts and with more than

15 chat agents as it makes scaling the operation easier and leverages the investment made

by LivePerson.

3. Optimisation3.1 Continual Improvement The discovery and initial implementation process provides the company with:

Clear and achievable goals, validated by the experience of the provider.

A range of industry benchmarks on agent and conversion performance. Agreed-upon metrics and KPIs.

Where do the agents come from?

How will they be trained?

How will they be incentivised?

(Their role will often be subtly different from

that of a telephone agent.)

Will they be part of a standalone team or

blended with others on the contact centre

payroll? If your current thinking is to switch

from digital engagement to, say, phone

at certain times, this could undermine

ROI signicantly.

LivePerson deliversexcellent value, enablingus to manage our CPA

budget effectively anddelivers sales exceedingour expectations. LiveChat is instrumental inhelping us to achieveour ambition of growingonline channel shareby converting newcustomers online so theydont drop off to the callcentre.

Roxanna Mohseni

Head of Online Sales, BT

BT and LivePerson startedworking together in 2007 and apartnership has been built on trustand the value of results delivered.

The commercial basis for theprogramme leverages LivePersonsPay-For-Performance (PFP) modelwhereby LivePerson takes fullresponsibility for all aspects of theprogramme, both the technologyand the operational labour - thehuman sales advisors who engagewith consumers. BT chose thismodel to eliminate risk and benetfrom a 100% no risk/reward basedprogramme and only pay forincremental sales delivered by theprogramme: No sale. No fee.


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If the rate of incrementality is lower than expected or simply could be improved - the answer may lie with the offer or the agents. The performance

of digital engagement is transparent down to the level of individuals, and it is therefore easy to identify the top performers or content that doesnt drive

ROI. The beauty of chat in particular is that the transcripts of conversations can be studied and the practices and techniques of the best performers

compared to those who arent doing quite so well. This provides an opportunity to share the best practice and improve sales levels overall.

3.3 Conclusion The business case for digital engagement needs to be built and constantly referred to. It ensures that performance can be measured against target

objectives and hard metrics are available for review by the business. Initially, during the discovery phase LivePerson will use its industry experience

to outline what is achievable in terms of sales improvements, cost reduction and customer satisfaction. Once an implementation is up and running a

regular review of KPIs will enable optimisation and insights into how the programme can be expanded to meet the growing expectations of consumers.

To build your own ROI model for digital engagement, contact LivePerson and get started right away.

3.4 Where to Start

About LivePersonLivePerson, Inc. (NASDAQ: LPSN) offers a cloud-based platformthat enables businesses to proactively connect in real-time with

their customers via chat, voice, and content delivery at the right

time, through the right channel, including websites, social media,

and mobile devices. This intelligent engagement is driven by

real-time behavioural analytics, producing connections based

on a true understanding of business objectives and customer

needs. LivePerson is headquartered in New York City with offices

in San Francisco, Atlanta, Tel Aviv, London and Melbourne.

ContactLivePerson (UK) Ltd. T: +44 (0) 333 666 5483 250 South Oak Way F: +44 (0) 870 130 6690

Green Park, Reading [email protected]

RG2 6UG, UK www.liveperson.com

Theres never been a more important time to roll outdigital engagement as mobile commerce becomes

mainstream commerce.

Where to start? Quantify the benets, quantify the risk,

dont hesitate. Prove the value.

The cost of getting it wrong is not the cost of the software, labour

and time, but the cost to your reputation, credibility, customer

loyalty and satisfaction. And its easy to get it wrong.

The cost of doing nothing is low conversion rates, high cost of

customer service and lower customer satisfaction. Never mind the

loss of business to competitors.

Benchmark, execute, benchmark, optimise. Leverage expert

domain expertise to maximise ROI.

Measure and measure again. Measure digital engagementperformance as a channel in its own right but make it work as part

of your omnichannel strategy.

Calculate ROI by engagement medium: content, chat, voice and

social media all have a role to play but only where it makes

economic sense.

Increase self-service and turn low margin products into high

performers and high margin products into signicant incremental

revenue streams.

Dont underestimate the power of intelligent and predictive

targeting. ROI is as much linked to who you dont engage with,

as to those you do.

lp roi of digital engagement white paper

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