The Evolution of Chat

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The Evolution
of Chat: The Rise of
Online Advocate-toCustomer Interaction
Over the last four decades, online chat has created
unprecedented opportunities for retailers, but it’s also fallen
short in innovation and in crucial elements of the shopping
experience. Until now.

www.needle.com

In the beginning, customers went to retail stores to buy the things they needed.
When they weren’t sure what to buy, they consulted a friend, a family member, or, as a last
resort, an in-store associate. Their final purchasing decision was largely based on the trust
they held in their friend’s opinion, the views of experts, and their own view of the brands
involved. Whenever possible, they went with the advice of someone with substantial
knowledge about the product: an advocate.
This was how people shopped for the things that mattered most, shoppers seeking
experts to come to the best purchase decision possible. And, although technology would
drastically change the retail experience in the coming years, customers would cling
to the need for expert and authentic advice.

1974 - 1980s

Chat Begins
In the midst of the 1970s, chat arrived.
It bubbled up from the primordial ooze of what would become the World Wide Web
and then the Internet. Birthed at the University of Illinois and squarely named Talkomatic 1,
it let five users per channel communicate via text on the university’s PLATO System.
And chat became popular with PLATO users and then grew into the world’s first dedicated
public online chat service, provided by Compuserve in 1980. Dark screens filled with
command line Unix code scrolled live between co-workers and across connected
computers for special projects. And organizations began to take notice of how chat
could make their teams more productive and communication faster.
Still, even as businesses began to tinker with the possibilities of chat, the world at large
was unaware of the power it could offer.

[No connection yet]
[Connection established with connect@localhost.]
hi john
can you get those reports ran by monday??

hi mandy
yes, monday should be fine.
i am working on pulling the data now.

www.needle.com

The Evolution of Chat



2

Early 1990s

Chat Goes Mainstream
As the Internet went mainstream,
as AOL, Yahoo!, and MSN took over
PCs in homes across the globe, they
brought with them the magic of chat.
Via chat and chat rooms, moms could
check in on kids at college. Sports
fans could chew the fat with each other
about last night’s game. Teenage boys
could test out their pickup lines on
users they thought were teenage girls.
Instead of being used strictly for
business, chat had become a part
of the way people hung out and made
friends. Real human relationships—not
just work projects—could happen
in chat instantly.

1990s - 2010s

Open for Business
If individuals could chat with each other over distances, then why couldn’t businesses use
it to talk to their customers? After all, up to this point, their interactions with customers had
been limited to phone calls, face-to-face meetings, and mail. By adding chat to company
websites, businesses created a whole new touchpoint to market to customers and resolve
their concerns.
The implications of this new capability
were obvious for retail companies.
On any ecommerce website, chat could
act as the online equivalent of an in-store
associate. At the time, however, the task
of building and maintaining a full-blown
chat platform was too intimidating and
costly for many companies to attempt.
It wasn’t long before entrepreneurs
stepped in to fill this need.

Click Here

to chat with us!

Need help?

Click Here
to Chat with us!

On any ecommerce website, chat could act as the
online equivalent of an in-store associate.

Companies popped up quickly, offering white-labeled platform options for brands to use.
With third-party contractors or company employees manning the keyboard, retail chat
platforms could provide support with orders, products, and troubleshooting. Retail
companies saw this success and enthusiastically and universally adopted chat.
Accordingly, the number of companies providing chat support software grew.

www.needle.com

The Evolution of Chat



3

By 2010, over 20 large online chat provider companies had crowded the space with
only minor features differentiating them from one another. This saturated the market and
companies saw the positive results from chat plateau. What more could they do to improve
the buying experience through chat? What was missing?

2010s

Getting Personal
Despite its convenience, website chat had not been innovating and, as shoppers began
to show they wanted live engagement while making buying decisions, companies implemented the same solution they had used for post-purchase support: employees who
previously helped with order tracking and billing questions. There were three potential
issues with this:
1.

They were excellent for post-purchase support
but not trained enough about the products and
how they actually worked to really help visitors

2. They were not trained to ask the best
questions to help the customer find
the best product to fit their needs
3. They are brand employees rather than
fellow customers who were also passionate
brand advocates

70%
of consumers said they trusted brand
endorsements from people they
didn't even know more than
employees of a brand.2

In order to be most effective, an approach to pre-purchase interactions had to be with
knowledgeable, personable product users who were not employed by the brand. Supporting this, data from EConsultancy.com found that 70 percent of consumers said they trusted
brand endorsements from people they didn't even know more than employees of a brand.2
In short, online shoppers needed knowledgeable advocates to help them make their
purchases, just as they had needed them in stores in decades past. And there had been
little innovation to give them that vital piece shoppers had come to expect.

www.needle.com

The Evolution of Chat



4

Even social media and social media-based advocacy fell short of expectations in boosting
sales. Shoppers needed advocates who could be with them in real time at the moment
of their purchase decision, and social media-based advocates were simply too distant
from these points of purchase.3
Getting advocates to more strongly influence customers’ buying decision seemed
a goal too far … or was it?

2010 - Present

Bringing Advocates to Chat
With this quandary in mind, Morgan Lynch began to ponder ways to bring the power
of advocates into chat. In 2009, the Needle co-founder was shopping online for a triathlon
wetsuit. He didn’t know much about wetsuits, but he knew he wanted one that would give
him a competitive edge. He spent hours on search engines, reading through forums and
scouring product reviews to find the best choice. Eventually he really just wanted to talk
to someone credible to help him decide which one to buy, but no website offered the
ability to talk or chat with actual triathletes—just earnest, non-expert contact center
employees. Frustrated with his lack of help options, he and his co-founders set out
to develop a new approach to online interaction that would change the online shopping
chat experience forever.

www.needle.com

The Evolution of Chat



5

In 2010, Needle launched. Lynch summed up the approach this way: "Connect a person
considering a purchase with someone who is genuinely passionate about the product
and the brand. Let them engage in authentic dialogue, then measure the results.”

Morgan

Scuba
Instructor

To be successful, this new approach to chat would have to meet five requirements:

1. It had to be manned by real brand advocates.
In a recent survey, only 13 percent of respondents listed store associates as one of their
top three influencers, down from 21 percent in a similar survey taken in 2010.4 Evolved
chat had to be manned by people with more than a surface knowledge of the products
on the site. These advocates had to be experts and real, genuine users of the products
or services they would be talking about, not just trained to talk about a few product
features. This difference would be crucial to improving the buying process and in developing
the trust that is crucial for brands to develop with their customers. Not only would they be
able to provide impartial advice as a non-employee, but they would also be able to provide
the kind of thorough advice that customers couldn’t find anywhere else. Advice on which
customers could base their most difficult purchasing decisions.

2. It had to ensure the quality of advocates.
Finding this kind of expertise and making sure it met such a high standard would be
no small feat. Whoever took this approach would need to find a way to formally recruit,
train, and certify advocates then recognize and label them as category and product
experts. Such a stringent certification process would be the only way to assure customers
that the advice they would receive would be high quality. In one study, 54% of consumers
said they wanted knowledgeable store associates more than any other service offering.
Yet, more than half (59%) of those surveyed believed themselves to be more
knowledgeable than the person paid to be there.5

www.needle.com

The Evolution of Chat



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3. It had to allow for attentive and honest customer experiences.
In keeping with the expectations of customers, this new chat model had to make these
fully qualified advocates available and ready to help however customers needed it. Going
along with the unbiased yet passionate nature of the advocates, this new chat model had
to allow the advocates to speak openly and honestly about products. Brand Keys’ ranking
of customer loyalty and brands had found that passion could outstrip even the most frugal
of consumer impulses.6 For example, if an athletic apparel company’s running shoe was
honestly not the best choice for a shopper’s immediate need, the advocate had to be free
to recommend another shoe that would be the best choice for the activity, even if it was
less or more expensive or on another site altogether. This is important because trust 7 and
loyalty is earned when a brand is honest, treating shoppers like people and not like a sales
number that serves only the brand’s needs.

4. It had to be designed to feel easy and natural.
Interpersonal interaction with an advocate would only go so far if the platform they were
using kept getting in the way. For this reason, this new chat platform would have to be
intuitive for both advocate and shopper. For maximum effectiveness, the technology had
to mirror the way in-person advocates helped shoppers, by pointing out what made some
products better than others or showing examples. This would require more than mere
text but a platform with features both customer and advocate could use to communicate
visually about products such as displaying images and using tools to mark up those
images and clarify certain details. Also, with increasing numbers of shoppers on their
mobile devices, the new chat had to adapt fluidly to tablets and smartphones.

5. It had to make it easy to measure performance data.
To beat the problems seen with advocacy in social media, the new chat platform needed
to have measuring and reporting on average order value, NPS, conversion, and performance as a top priority. Only then could this new chat actually prove its effectiveness,
instead of asking retail companies to take it in good faith. The ideal chat would be able
to measure not just sales from chats, but incremental revenue and customer satisfaction,
as well. An online sales chat platform is not helpful unless it can address cannibalization
of sales, showing the company the difference between people who really needed
assistance to purchase and those who were going to buy anyway.
Strangely, the vast majority of chat providers would ignore these ideas and settle
for the inherent shortcomings of their services. In the end, only Needle would rise
to the challenge of providing a new service to combine the convenience of chat
with the power of real advocates.

www.needle.com

The Evolution of Chat



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Needle

The Next Evolution in Chat
Built on the criteria above, Needle offers the first real-time advocate-to-customer online
engagement platform, a responsive way to facilitate remarkable experiences between
customers and product advocates. This is how they do it:
1.

Needle identifies, recruits, trains, and certifies already-existing advocates who are
passionate category and product experts—everything they need to directly engage
shoppers in real time on Needle’s proprietary online interaction platform.

2. Needle’s technology tracks shopper behavior and then identifies and invites those
who are most likely to need help. It also knows not to disrupt those who are likely
to buy anyway or are just “passing by.”
3. This works effortlessly on any device—PC, tablet, or smartphone. The responsive
interface provides the engagement experience best suited to the size of the
customer’s browser window. The Needle interface is kept seamless, non-intrusive,
and intuitive.
4. A rich feature set—including drawing and recommendation tools—lets the advocate
easily guide the shopper to the right products and services while engaging them in
authentic, friendly dialogue. It’s an experience that is powerful, memorable, and sets
you apart.
5. As the shopper is engaged by an advocate, these engagements are measured in
real time, and the results are immediate and material. Metrics—such as conversion
and AOV—surge. You capture incremental revenue and drive significant ROI.
In short, the Needle chat platform lets shoppers carry the store with them wherever
they go and access an expert in their pocket whenever they need assistance. Unlike
the impersonal chat experiences of the past, these advocates create a positive experience
that is relevant, helpful, and informative and builds trust in a brand. The kind of trust that
will keep customers coming back for more.

+25%
CONVERSION

www.needle.com

A leading green parenting brand, gDiapers was experiencing
increasing volume on its site, but visitors were dropping
off before converting. By recruiting some of gDiapers’
most passionate gMums and gDads to engage in chat
with shoppers who have questions about how the diapering
system works–advocates who understand the gDiapers
mission and have deep experience with the company’s
products–dDiapers has seen a 25% increase in coversion.

The Evolution of Chat



8

The New Chat in the Real World
Coming up with new ideas for chat is one thing; actually succeeding in a real-world setting
is another thing completely. With more and more approaches to online sales and marketing becoming commoditized, more and more companies will have to differentiate their
strategies from other retailers. A new platform or approach cannot be added simply for
its shiny features. It must demonstrate that it can be material to the business, provide a lift
in AOV, and prove an increase in incremental revenue and satisfied customers. It is time
for evolved chat. It’s time for live authentic online engagements, to usher in the next wave
of customer experience: advocate-assisted commerce.
As expected, the results of Needle’s new approach to chat have been overwhelmingly
positive.
“Having a product that gets people connected with others who are like them and can
share the experiences that they had did wonders for the overall customer experience,”
said Rob Casas, VP of e-Commerce at Norwegian Cruise Line and Needle customer.
“[This] is probably the single most influential thing we can do to help a customer interact
with us and book a cruise.”
“The authentic narrative of the customer is more influential than anything else I can think
of,” he reiterated.
With this unique strategy and technology, Needle’s engaged advocates have helped
dozens of well-known brands to soar in their most important metrics such as:

• Increases NPS by as much as 20 percent
• The Needle platform delivers between 5x and 30x ROI
• Conversion with Needle versus self-service
increases by 5 to 15x
• AOV improves by 15 to 30 percent
• CSAT scores soars to 9 or above
• 65 to 90 percent of advocate-driven
revenue is net-new
With these results, Needle has turned traditional chat into unique online engagement that
is poised to deliver the personal, informed help online shoppers have been lacking and,
in turn, drive greater online sales revenue and customer satisfaction.

www.needle.com

The Evolution of Chat



9

If you’re ready to see how Needle can
get these results for your company,
request a demo today.

needle.com
801.858.0868

Works Cited
1
2
3
4

5
6

7

www.needle.com

http://thinkofit.com/plato/dwplato.htm
Jake Hird. “Online consumers trust real people, not companies.” Econsultancy.com.
July, 2009.
"Ten New Realities of Customer Engagement to Account for When Developing
a Digital Strategy." Gartner.com. Gartner, 28 June 2013. Web.
Kilcourse, Brian. “Sneak Peak: RSR’s Upcoming Workforce Management Benchmark.”
Retail System Research. Dec. 4, 2012. https://www.rsrresearch.com/2012/12/04/sneak-peek-rsrs-upcoming-workforce-management-benchmark/
Kilcourse, Brian. “Sneak Peak.”
Clancy, Kevin and Paquette, Eric. “Measuring and Motivating Brand Advocates:
The State of the Science.” The Copernicus Marketing Genius Series. http://issuu.com/
copernicus1/docs/brand_advocates_online_ed
http://resources.bazaarvoice.com/rs/bazaarvoice/images/201202_Millennials_
whitepaper.pdf

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www.needle.com

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