The Ultimate Guide to In-app Chat: Uses, Benefits, and Implementation Methods

Want to add in-app chat to your product but not sure where to begin? You’re not alone.

Chat has gone from a “nice-to-have” add-on to a core experience layer in almost every digital product from telehealth and marketplaces to gaming, edtech, and live commerce.

But here’s the tricky part:

“In-app chat” means very different things depending on your industry, audience, and the depth of communication you need.

This guide breaks down everything you need to know: the use cases, the must-have features, the modern expectations, and the smartest way to implement it without burning months of engineering time.

What is in-app chat?

In-app chat, is a fairly intuitive but often confused term as the essence of what it is could change depending on the product or business use case that it is built for.

At its core, In-app chat refers to an integrated chat functionality within a mobile or web application that enables real-time communication between users or between users and the business.

The functionality and depth of implementation vary significantly based on the industry or vertical of the business. In-app chat is adopted as a core engagement strategy in products within the marketplace, healthcare, gaming, dating, and social community verticals.

For some businesses, predominantly B2B products and services, In-App chat could mean enabling users/customers to engage with the business. This could be to raise an issue with the product or to interact with sales or customer service teams to better understand the product or service.

Top in-app chat use cases

1. Digital Healthcare

Digital healthcare is gaining confidence as it addresses two essential issues.

Beyond messaging, patients can seamlessly switch to calls, share encrypted reports, and maintain continuity of care through persistent conversation histories.

2. Marketplace

There is a marketplace for everything – from taxis, magazines, collectibles, rental properties, pets, pet accessories, and every other thing one can imagine. While the options are abundant, trust sets the best marketplaces apart from the rest. The preferred way to build trust for many marketplaces is to let the buyer and seller interact with each other.

In these scenarios, In-App chat goes beyond regular text conversations by enabling the actual sale to happen within the chat interface. Sellers can share product cards, buyers can submit bids, and payment for the product can all take place within the familiar chat interface.

3. Sports and Gaming

Sports and games without banter are far less fun. Be it a live stream of your favourite football game or a multi-player online video game, a live interactive in-game chat elevates the viewing experience.

Platforms like Steam and Twitch have set high standards for live gaming and streaming experiences.

4. Ed-Tech

Learning has never been as democratised as it is today. The interesting thing about that statement is that it will be true no matter when you read it. With tech truly pushing the boundaries of how learning happens, communication should evolve with it.

In-app chat in ed-tech apps provides a well-rounded learning experience, enabling learners and teachers to converse, brainstorm, and collaborate.

Students can engage with peers, ask instructors questions, and share learning materials instantly. Group chats act as virtual classrooms, and rich-media support enables more dynamic learning. Chat Moderation provides a safe environment for younger learners.

5. Customer Support

User-support communication is another common In-App chat scenario. While some products, like Zendesk and Intercom, provide out-of-the-box solutions, many businesses prefer to build this chat experience in-app to maintain branding, scenarios, and workflows unique to their business.

In-app support chat enables fast responses, reduces resolution time, and creates a seamless customer experience. AI chatbots can handle common queries, while humans take over when needed. Conversation history and file sharing ensure smoother support workflows.

What makes a good in-app chat system?

The range of how good your In-app chat system can be is, in fact, quite broad. It can be super basic, a system that does just the job, or it can even rival the likes of Slack and WhatsApp.

Having helped thousands of businesses build in-app chat systems, we have codified this process.

As a side note, we even have a content series that decodes the components of the in-app chat experience of popular apps. If you are a connoisseur of good opinions on UX and engagement, you will love this one.

Here are the components of a good in-app chat system:

Basic and must-have capabilities of in-app chat

Real-time 1:1, group & broadcast messaging: Your chat should deliver messages instantly:

• whether it’s a private conversation directly with any user

• a group discussion for several users to simultaneously engage in conversations in a channel or

• a broadcast update to thousands of users.

Low-latency performance is key to keeping conversations fluid and natural.

Message history and Sync across devices: Users often switch between devices. A great chat system keeps conversations synchronized across mobile and web, with persistent history available anytime. And they also have the facility to effortlessly sift through their previous messages across all chat conduits.

Read & Delivery Receipts: Users want to know what’s happening to their messages. These indicators provide clarity by showing whether a message was delivered and if the recipient has seen it.

Rich Media Support: Users expect more than text. Support for images, videos, files, documents, and even voice notes helps convey information clearly and quickly.

Typing & Presence Indicators: Seeing that the other person is typing adds a sense of real presence and makes chat feel alive and responsive. And users can display their current status, such as online, away, do not disturb, or invisible, visible to other users.

Alerts and Notifications: Users are notified via push alerts on their devices when they receive a new message or are mentioned in a chat channel.

Chat Moderation: Administrators, be they human, AI, or a combination, can manage chat channels, enforce terms of usage, flag inappropriate messages, or ban users when necessary.

Threaded & Quoted Replies: These features make conversations cleaner and more structured especially in group chats where multiple discussions happen simultaneously.

Advanced Engagement capabilities for your in-app chat 

Smart Notifications: Notifications should be meaningful, helping users take action without overwhelming them. Smart routing and contextual alerts improve engagement without causing fatigue.

AI-Assisted Smart Replies: Quick suggestion-based replies powered by AI help users respond faster and keep conversations moving.

End-to-End Encryption: Users can chat with full confidence, knowing their conversations are secure with our end-to-end encryption.

Voice & Video Calling: Great chat systems allow users to escalate conversations seamlessly from text to voice or video when a richer interaction is needed.

Reactions & Emojis: Lightweight reactions let users respond instantly without typing, making conversations more expressive and fun.

Multi-Tenant Chat: For platforms serving multiple customer accounts, multi-tenant support helps isolate and manage each tenant’s chat environment effectively.

Insights & Analytics: Analytics provide visibility into chat health, user activity, and message patterns, invaluable for improving product experience and engagement.

Developing an in-app chat

This is the million-dollar question, literally. Many teams consider building their own chat system, but the reality is far more challenging than it appears.

As discussed above, the functionality and finesse of your in-app chat can be anywhere across the spectrum. Depending on how close in-app chat is to your core business, you can choose to spend the time and resources in perfecting it.

The Case for Building From Scratch

As business stakeholders, we sometimes believe our situation is so unique that it’s best to solve all problems on our own. After all, who better understands our business, customers, and use cases?

This can be a slippery slope to avoid, particularly in the case of In-app chat.

Here are a few reasons why the building in-house approach could quickly backfire:

1. Chat is not your core product

Investing in developing a chat feature in-house means diverting resources away from your core product. Your team's efforts, time, and expertise should be focused on your product's key value proposition and its continuous improvement. Building a chat feature from scratch can take significant time and effort that could be better spent enhancing your main product offering.

2. Slower time to market

Creating an in-app chat feature in-house is a time-consuming process. It involves multiple stages, including design, development, testing, and deployment. This can significantly delay your product's time to market. On the other hand, implementing pre-built chat SDKs or APIs can help you get your product to market much more quickly.

3. Huge upkeep cost

Maintaining and updating an in-house chat feature can be expensive. It requires continuous monitoring to ensure smooth operation, periodic updates to add new features or fix bugs, and regular security checks to protect user data. These tasks require a dedicated team, leading to significant operational costs.

4. Scaling challenges:

As your user base grows, so do the demands on your in-app chat feature. Scaling an in-house chat solution can be a complex and challenging process involving infrastructure upgrades, cost escalations, and potential downtime. A third-party chat solution, on the other hand, is built to handle such scalability issues, allowing your product to grow without worry.

5. You will miss out on Innovation:

Chat solution providers are dedicated to staying at the forefront of communication innovation. By building a chat feature in-house, you risk missing out on these innovations, as your development team might not have the capacity or expertise to incorporate such features quickly and efficiently.

Using a Chat SDK/ API tool

Chat SDKs have evolved significantly in the last decade making it very easy for businesses to incorporate in-app chat as part of their product. This not only simplifies the development and upkeep but lets you deliver a best-in-class communication experience to your users. We have a dedicated blog that helps you evaluate the best chat SDK providers out there. The TL: DR version is as follows:

1. Ease of Integration

Determine how seamlessly the chat SDK can be integrated into your existing infrastructure. Look for clear documentation, support for your tech stack, and straightforward setup processes.

2. Robust Messaging Features

Evaluate if the SDK offers a range of messaging features like private chats, group chats, multimedia messages, and real-time updates. These features enhance the user experience and cater to varied communication needs.

3. Engagement and Interaction

Assess how the SDK can foster user engagement and interaction. Built-in features like reactions, emoji support, read receipts, and typing indicators can greatly enhance the chat experience.

4. UI Kits

Look for SDKs that provide pre-designed UI components. These UI kits can significantly speed up development time and ensure a pleasing, intuitive interface which enhances user experience.

5. Reliability and Performance

Ensure the SDK offers high uptime, fast message delivery, and can scale to handle a growing user base. User experience greatly depends on the chat feature's reliability and performance.

6. Security and Compliance

Check that the SDK meets industry security standards and maintains user data privacy. Compliance with regulations like GDPR, CCPA, and HIPAA (for healthcare) is essential for protecting user information.

7. Pricing

Evaluate the cost-effectiveness of the solution. Consider not only the initial cost but also consider long-term expenses that come with scaling, maintenance, and additional features.

In summary, in-app chat is a crucial aspect of user engagement and seamless communication in today's digital sphere. While building it in-house can be daunting, leveraging third-party SDKs can simplify implementation, ensure top-notch features, and maintain security. For businesses aiming to significantly enhance user communication and experience, choosing the right in-app chat solution like CometChat is the way to go.