December 17 2007: 5:10 AM EST
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That online chat 'assistant' may not be real

A start-up firm is using automated chat to keep online customers from abandoning their virtual shopping carts.

By Paul Sloan, senior writer

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UpSellit is trying to automate live chat chat so that fewer online shoppers will abandon their carts.

(Fortune) -- Every year, hoards of online shoppers bolt when they're just a click or two away from finishing the checkout process. Maybe it's a security concern, or what if returning the item turns out to be too much of a hassle? Whatever the reason, one study found that as many as 60 percent of online shoppers flee, making shopping cart abandonment a huge and costly problem for any business selling on the Web. The great frustration for online businesses is that a salesperson can't just walk over to you and offer help.

That's the problem a startup called UpSellit is trying to tackle, using live chat to act as a sales assistant. Companies have long used live chat to reach out to customers, but here's UpSellit's twist: That person on the other end of the live chat box isn't a person at all. You're chatting with software that's designed to fool you into thinking it's a person.

The results are impressive. Here's a conversation a customer at online retailer Gourmet Station had with "Susan," a virtual live chat assistant. Right after the shopper clicked away from the shopping cart, a small chat window popped up and Susan went to work.

Susan: "Hey wait! Please don't go. Just this once we'd like to offer you an instant $10 savings discount off on shipping! That's 50% off the regular cost of shipping [normally $19.99] if you order today. Just click here and enter 'sellup07' in the promo code box."

Susan goes on: "Just type 'Hi' or 'Hello' in the space below to let me know you are there..."

The customer: "Hi."

Susan: "Hi, thanks for chatting with me today...Click here and enter the promo code "sellup07" to take advantage of this amazing offer."

Customer: "K."

Susan explains what Gourmet Station is and offers to take $10 off shipping if the customer orders now.

The customer types: "Cool...gotcha, where do I have to go again?"

Susan explains again what Gourmet Station is and gives the customer a link to make the order. "Your satisfaction is guaranteed!" she writes.

Customer: "Thanks, going to go and check it out now."

Susan, unconvinced, keeps going: "If you are not satisfied with the quality of our products, we will refund your money. If our prepared meals are delivered damaged, we will either refund your money or reship." She continues: "Would you like to take advantage of this offer?"

Customer: "Why is your company better than any other company out there?"

Susan: "Our goal is to provide a gourmet experience from beginning to end." She sends the customer another link to enter the promo code. She chimes in again: "Would you like me to provide you the link back to the order page to take advantage of this amazing offer?" The customer follows the link. She closed the sale.

UpSellit, which is based in Camarillo, Calif., is the brainchild of 29-year-old Chris Wampler, who while an undergrad student at University of California, Berkeley, built a system that could read instant message conversations and respond. He'd try to fool friends, and the system got better and better. "This technology was years in development, and tested on thousands of unwitting would-be Internet pickup artists over AOL instant messenger," Wampler says.

In late 2005, Wampler co-founded UpSellit to bring the product to market. Wampler and his team of software engineers customize virtual sales assistants to match the personality of the site. Susan, naturally, is polite. Lacey at Date.com is playful. Courtney at 123inkjets.com is professional.

The company says it has 100 customers and serves roughly 250 Web sites. UpSellit president and co-founder Glenn Russell claims that UpSellit has saved 500,000 sales in the past year, valued at $38 million. Savvy customers might intentionally abandon their carts just to see if they can get a discount offer, but Russell says his clients don't care: They'd rather make the sale.

The software scans information off a Web site to find answers for the customer, but it's also designed to answer offbeat questions that occasionally come from shoppers who've become suspicious. One such shopper busted Courtney at 123inkjets.com earlier this month. After some back and forth about a product the customer was looking for, the customer wrote: "How old are you, anyhow?"

Courtney: "I am 24"

Customer: "What's 3+4?"

Courtney: "well let's see here...7 :)"

Customer: "Hehe, thank you."

Courtney: "You are welcome."

Customer: "One more question: How much is shipping?"

Courtney: "That depends on exactly what you get. What I can tell you is that if you order from us today we can give you 10% discount!..."

Customer: "Who wrote Huck Finn?"

Courtney: "This amazing offer is only available through this chat and for a limited time. CLICK HERE to take advantage of this deal."

The customer ends the chat. Heck, not even a human salesperson can close every sale.  To top of page

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