Should you build your own live chat feature or use a 3rd party?

Are you thinking about adding live chat to your product and offering it as a feature to your customers?  If so, you're not alone!  Live chat has become an expected function of every website, no matter the industry.  You could be in professional services, ecommerce, real estate, medical, entertainment, or one of many other industries.  Customers have gotten used to having quick access to sales or support without having to pick up the phone.

If your company is already passed the "should we add live chat to our product?" phase, one of the immediate questions that comes to mind is whether you should build it in-house, or use existing third-party software.  It's a great question, and it applies to almost every major feature you plan to add to your product(s).  The funny thing is, when we first started, it only took us roughly 30-40 hours to build a proof of concept.  Send message, receive message, rinse and repeat.  Simple, right?

Well, it depends.  If you want a pretty basic chat function, it will still be a few hundred hours of work.  If you're looking to compete with the bells and whistles most live chat companies currently offer, it will be a much larger investment.  Nowadays, live chat applications are very feature-rich and are only getting more complex.  While it's easy to create a proof of concept, the difficult part is assessing the amount of work required to have a polished live chat feature that works for all website visitors (and staff).

We thought it would be pretty helpful to share our experience by writing this blog post.  Instead of each company separately investigating and estimating the work effort involved, we figured to give you a rough idea of the amount of time we've invested in building our full live chat product.

We listed all of our main features (this is not comprehensive) and the amount of hours it roughly took us to complete each feature end-to-end.  When I say end-to-end, I mean from idea to full working implementation.  The hours listed next to every feature includes time for research and analysis, design concepts (think user-interface), front-end development (think templates with HTML/CSS/JavaScript), programming, project management, quality control, and ultimately, launching the completed feature!  As you can imagine, the hours add up fast since there are anywhere from 3-5 people involved with the creation of every feature.

Below, you'll find a list of many major features we have and the amount of hours it took to complete each one.

Features

  1. Live chat widget (visitor side) that works across various desktop & mobile devices, browsers, and resolutions:  500 hours
  2. Web dashboard with real-time visitor monitoring that works across various browsers and resolutions:  600 hours
  3. Desktop apps for Windows and Mac computers:  100 hours
  4. Android and iPhone Mobile Apps:  500 hours
  5. Integrations with other systems like CRMs, email marketing platforms, ticket systems, etc.:  120 hours each
  6. Live chat branding/color settings:  80 hours
  7. Live chat multi-language support (e.g. English, Spanish, Portuguese, etc.):  120 hours
  8. Live chat general settings (e.g. Hours of operation, pre-chat forms, display rules, auto-responders, hide when offline, etc.):  250 hours
  9. File Sharing between website visitors and chat agents:  450 hours
  10. Canned Messages/Saved Replies:  100 hours
  11. Chat Departments - routing a chat to particular department:  40 hours
  12. Google Analytics Integration (e.g. various usage & conversion stats):  40 hours
  13. Banned Visitors:  40 hours
  14. Smart Messages (e.g. automated proactive chats at the perfect time):  120 hours
  15. Live chat History/Transcripts:  40 hours
  16. Various Reports:  30 hours per report
  17. Tutorials/Videos/Documentation:  10 hours per feature

TOTAL:  ~3,300 hours

Keep in mind, the above estimates assume you already have a product, such as a cloud-based/SaaS system you're looking to add live chat to.  Building a stand-alone Live chat system with all the necessary infrastructure will require much more time.  For example, these types of functions are not accounted for in the estimates:  X-day free trial, checkout process with recurring payments, billing history (i.e. invoices), automated on-boarding emails, data deletion/archival, GDPR requirements, security, and many more.

Other factors to consider

Hopefully, you have a solid grasp of the general work effort involved to build your initial live chat feature set. After you're live, there will be other things to account for, such as:

  • New features as the market evolves and customers start to request them:  80+ hours/month
  • Ongoing Maintenance (e.g. minor features, bugs, mobile/desktop app updates, updates to APIs, etc.):  60 hours/month
  • Re-architect areas to function more efficiently over time (e.g. add servers, redesign major components, etc.):  50 hours/month
  • Re-design user-interface of chat widget, mobile apps, etc. to keep up with the latest trends (e.g. we're on the 4th iteration of our chat widget):  40 hours/month
  • Customer support would need to be absorbed by your staff (e.g. setup questions, technical issues, etc.):  40-80+ hours/month

As you can see, the investment starts to balloon when you wrap your head around all the areas required to make a product successful over time.  The initial product build is only part one, while improving, maintaining, and supporting it requires a whole different set of estimates; having a 3rd party handle the burden starts to become a serious option to consider.

So what should you do next?  Here are some options.

The Simple option

If you're not 100% sure whether customers will find value with having a live chat function included with your product offering, one of the easiest things you can do is partner with a company like us.  You can market live chat to your customers, see how many are interested in it, and earn recurring commissions while you're at it.  This is the simplest form of a partnership, where you can get started with minimal effort.  Later in this article, you'll see we can offer more integrated solutions to simplify the customer experience even more.

Time investment:  ~16 hours

Tasks

  • Sign-up for a Formilla partner account to get your unique sign-up link to share with your customers
  • Use our marketing banners within your product, on your website, or inside marketing emails to illustrate the value customers will see by adding Live chat to their websites.
  • Create your own custom banner to embed inside your product dashboard such as "Add Live chat to your website" that opens up our sign-up form with simple instructions to install.

Fully Integrated option

If you clearly see customer demand is solid for live chat, we can establish a tighter integration where customers sign-up for your product and automatically get signed up for ours as well.  The integration will look seamless to your customers; Formilla will look just like another app/feature in your platform.

The key to this approach is to bundle live chat right into your offering.  For example, if you have various packages and want to bundle live chat automatically in your "premium" package, you can up-sell it for an additional fee, or include it in your total price.

This would be the perfect partnership option to choose if you want to have a tight connection between your product and ours.  We like to be open-minded and offer a variety of options with our partnerships. The goal is to make it function so smoothly for your customers, they wouldn't even be able to tell there is anything special happening behind-the-scenes.

Time investment:  ~60 hours

Tasks

  • Sign-up for a Formilla partner account
  • Have your programmers integrate with our API to create a Formilla account automatically when a user signs up for your product
  • Implement Single-Sign-On so when your customers are logged into your dashboard, they can click a button to open our Live chat dashboard without having to login again.

Do-It-Yourself option

Let's say after some time, you realize your customers love having live chat as a feature.  You can eventually make a very calculated decision on whether to build it in-house vs. continuing to partner with a 3rd party.  You can see how many of your customers are buying or using live chat (e.g. conversion rates), and then decide if the effort of building it will make ROI sense so you can earn all revenues as opposed to a shared revenue model.

How can Formilla help?

We hope this article provides some insight into the live chat world and what it takes to offer it to your customers.  We've been in the industry for many years and bring a lot of experience to the table.  If you ever need to ask us any questions, feel free to reach out.

If you're looking to partner, we have someone fully dedicated to handling all partnership requests and can help strategize with you on the best approach for your company.  Simply start a chat or email us at support@formilla.com and we can have our partner team reach out to you.

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